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EXHIBIT 4(b)
BRUSH WELLMAN INC.
and
AMERITRUST COMPANY NATIONAL ASSOCIATION
RIGHTS AGREEMENT
Dated as of January 26, 1988
(Amended February 28, 1989)
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TABLE OF CONTENTS
PAGE
RECITALS............................................... 1
Section 1. Certain Definitions........................ 2
Section 2. Appointment of Rights Agent................ 9
Section 3. Issue of Right Certificates................ 9
Section 4. Form of Right Certificates................. 13
Section 5. Countersignature and Registration.......... 14
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates......................... 15
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.................. 17
Section 8. Cancellation and Destruction of
Right Certificates......................... 20
Section 9. Reservation and Availability of
Preferred Shares........................... 21
Section 10. Preferred Shares Record Date............... 24
Section 11. Adjustment of Purchase Price, Number
and Type of Shares or Number of Rights..... 25
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares.................. 51
Section 13. Notice of Adjusted Purchase Price
or Number or Type of Shares to
Holders of Rights.......................... 52
Section 14. Fractional Rights and Fractional
Shares..................................... 52
Section 15. Rights of Action........................... 55
Section 16. Agreement of Rights Holders................ 56
Section 17. Right Certificate Holder Not Deemed
a Shareholder.............................. 57
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TABLE OF CONTENTS
(continued)
PAGE
Section 18. Concerning the Rights Agent............... 58
Section 19. Merger or Consolidation or Change
of Name of Rights Agent................... 59
Section 20. Duties of Rights Agent.................... 60
Section 21. Change of Rights Agent.................... 65
Section 22. Issuance of New Right Certificates........ 67
Section 23. Redemption................................ 67
Section 24. Notice of Certain Events.................. 69
Section 25. Notices................................... 71
Section 26. Supplements and Amendments................ 72
Section 27. Successors................................ 73
Section 28. Benefits of this Agreement................ 74
Section 29. Action by the Board of Directors.......... 75
Section 30. Severability.............................. 75
Section 31. Governing Law............................. 75
Section 32. Counterparts.............................. 75
Section 33. Descriptive Headings...................... 76
Exhibit A.............................................. A-1
Exhibit B.............................................. B-1
Exhibit C.............................................. C-1
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RIGHTS AGREEMENT
This RIGHTS AGREEMENT dated as of January 26, 1988 (this "Agreement") is
made and entered into by and between Brush Wellman Inc., an Ohio corporation
(the "Company"), and Ameritrust Company National Association (the "Rights
Agent").
RECITALS
WHEREAS, on January 26, 1988, the Board of Directors of the Company
authorized and declared a dividend distribution of one right ("Right") for each
share of Common Stock, $1.00 par value, of the Company (the "Common Shares")
outstanding as of the close of business on February 8, 1988 (the "Record Date"),
each Right initially representing the right to purchase one one-hundredth of a
Preferred Share (as hereinafter defined), upon the terms and subject to the
conditions herein set forth, and further authorized and directed the issuance of
one Right with respect to each Common Share that shall become outstanding for
any reason between the Record Date and the earliest of the Distribution Date
(or, in the case of Common Shares issued upon the conversion of any convertible
securities which the Company may hereafter issue, or upon exercise of existing
and future employee stock options, prior to the fifteenth day after the
Distribution Date), the Expiration Date or the Final Expiration Date (as such
terms are hereinafter defined).
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WHEREAS, the Company and the Rights Agent originally executed this Rights
Agreement on January 26, 1988; the Company and the Rights Agent desire to make
certain amendments to (and restate) this Rights Agreement; the following is the
Rights Agreement as so amended and restated; and all references thereto shall
refer to the Rights Agreement as amended on February 28, 1989 but to be dated as
of January 26, 1988.
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 shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, after the Record Date,
shall be the Beneficial Owner (as such term is hereinafter defined) of 20
percent or more of the Common Shares then outstanding; provided, however,
that an Acquiring Person shall not include the Company, any Subsidiary, any
employee benefit or stock ownership plan of the Company, any Person or
entity organized, appointed or established by the Company for or pursuant
to the terms of any such plan or an Authorized Shareholder.
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(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2, as in effect on the date of this
Agreement, of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(c) "Authorization Statute" shall mean Section 1701.831 of the Ohio
Revised Code, as it may be amended from time to time, so long as the
provisions of such Section 1701.831 are applicable to the acquisition of
Common Shares.
(d) "Authorized Shareholder" shall mean any Person (other than the
Company, any Subsidiary or any employee benefit or stock ownership plan of
the Company or any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan), alone or
together with its Affiliates and Associates, that shall, at any time after
the date of this Agreement, become the Beneficial Owner of 20 percent or
more of the Common Shares then outstanding (or of any other percentage of
the Common Shares which requires compliance with the Authorization Statute)
after (i) receiving the prior authorization (or authorizations) required to
Beneficially Own such Common Shares pursuant to the Authorization Statute
and (ii) otherwise complying in full with the requirements of the
Authorization Statute.
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(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 beneficially owns, directly or indirectly;
(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) pursuant to any agreement (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities),
arrangement or understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights (other than
these Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for purchase or payment; or (B) the right to vote or dispose of,
whether pursuant to any agreement, arrangement or
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understanding (whether or not in writing) or otherwise; 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 (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities), arrangement or understanding (whether
or not in writing), for the purpose of acquiring, holding, voting
(except as described below) or disposing of any voting securities of
the Company;
provided, however, that a Person shall not be deemed the Beneficial Owner of,
nor to beneficially own, any security if such Person has the right to vote such
security pursuant to an agreement, arrangement or understanding which (1) arises
solely from a revocable proxy given to such Person in response to a public proxy
or consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor report).
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(f) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the States of Ohio or New York 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., New York
time, on such date; provided, however, that if such date is not a Business Day
it shall mean 5:00 P.M., New York time, on the next succeeding Business Day.
(h) "Common Shares" when used with reference to the Company shall mean the
shares of Common Stock of the Company; provided, however, that, if the Company
is the continuing or surviving corporation in a transaction described in Section
11(d)(ii) hereof, "Common Shares" when used with reference to the Company shall
mean the capital stock with the greatest aggregate voting power of the Company,
or, if the Company is a subsidiary of another corporation or other legal entity
having equity securities, the corporation or other legal entity having equity
securities which ultimately controls the Company. "Common Shares" when used with
reference to any corporation or other legal entity having equity securities,
other than the Company, shall mean the capital stock with the greatest aggregate
voting power of such corporation or other legal entity having equity securities,
or, if such corporation or
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other legal entity having equity securities is a subsidiary
of another corporation or other legal entity having equity
securities, the corporation or other legal entity having
equity securities which ultimately controls such
first-mentioned corporation or other legal entity having
equity securities.
(i) "Distribution Date" shall have the meaning set forth in Section 3
hereof.
(j) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(k) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(l) "Flip-in Event" shall mean any event described in clauses (A), (B) or
(C) of Section 11(a)(ii) hereof.
(m) "Flip-over Event" shall mean any event described in subsections (i),
(ii) or (iii) of Section 11(d).
(n) "Person" shall mean any individual, firm, corporation, partnership,
joint venture or other enterprise or entity of any kind, and shall include any
successor (by merger or otherwise) of such Person.
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(o) "Preferred Shares" shall mean shares of Serial Preferred Stock, Series
A, without par value, of the Company having the rights and preferences set forth
in Exhibit A to this Agreement.
(p) "Purchase Price" shall have the meaning set forth in Section 7(b)
hereof.
(q) "Right Certificate" shall have the meaning set forth in Section 3(a)
hereof.
(r) "Share Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person (by press release, filing
made with the Securities and Exchange Commission or otherwise) that an Acquiring
Person has become such.
(s) "Subsidiary" of any Person shall mean any corporation or other
enterprise or entity of any kind of which a majority of the voting power of the
voting equity securities or equity interests is owned, directly or indirectly,
by such Person.
(t) "Triggering Event" shall mean any Flip-in Event or Flip-over Event.
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Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall also be, prior to the Distribution
Date, the holders of the Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment and
hereby certifies that it complies with the requirements of the New York Stock
Exchange governing transfer agents and registrars. The Company may from time to
time act as Co-Rights Agent or appoint such Co-Rights Agents as it may deem
necessary or desirable. Any actions which may be taken by the Rights Agent
pursuant to the terms of this Agreement may be taken by any such Co-Rights
Agent.
Section 3. Issue of Right Certificates. (a) Until the earlier of (i) the
tenth calendar day (or such later date as may be specified by a majority of the
Directors then in office) after the Share Acquisition Date, (ii) the tenth
calendar day (or such later date as may be specified by a majority of the
Directors then in office) after the date of the commencement of a tender or
exchange offer (as determined by reference to Rule 14d-2(a) under the Exchange
Act) 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 organized, appointed or established by the Company for or pursuant to the
terms of any such plan), the consummation of which would result in beneficial
ownership by such Person of 20
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percent or more of the outstanding Common Shares or (iii) the date of the
occurrence of a Triggering Event (the earlier of such dates being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates representing Common Shares registered in the names of the record
holders thereof (which certificates representing Common Shares shall also be
deemed to be Right Certificates) and not by separate Right Certificates, and (y)
the right to receive Right Certificates will be transferable only in connection
with the transfer of Common Shares on the stock transfer books of the Company
maintained by the Company or its appointed transfer agent. As soon as
practicable after the Distribution Date, the Rights Agent will send, by
first-class, insured, postage prepaid mail, to each record holder of Common
Shares as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, a Right Certificate in
substantially the form of Exhibit B hereto (a "Right Certificate"), evidencing
one Right for each Common Share so held, subject to adjustment as herein
provided, together with a notice setting forth the Purchase Price as in effect
on the Distribution Date. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) Promptly after February 28, 1989, the Company will send a copy of a
Summary of Rights to Purchase Preferred Shares in substantially the form
attached hereto as Exhibit C
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as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage:
This Certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Brush Wellman
Inc. and Ameritrust Company National Association, dated as of January
26, 1988, as the same may be amended from time to time in accordance
with its terms (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of Brush Wellman Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by
this certificate. Brush Wellman Inc. will mail to the holder of this
Certificate a copy of the Rights Agreement without charge within five
business days after receipt of a written request therefor. Under certain
circumstances as set forth in the Rights Agreement, Rights beneficially
owned by an Acquiring Person or an Authorized Shareholder or any
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) and any subsequent holder of such Rights may become null and
void.
With respect to certificates bearing the legend described above, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
surrender for transfer of the Rights associated with the Common Shares
represented thereby.
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Section 4. Form of Right Certificates. (a) The Right Certificates (and the
forms of election to purchase and of assignment to be printed on the reverse
thereof) shall be substantially the same as Exhibit B hereto with such changes,
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 this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to Sections 11 and 22 hereof,
the Right Certificates, whenever issued, shall be dated as of the Distribution
Date, and on their face shall entitle the holders thereof to purchase such
number of one one-hundredths of a Preferred Share as shall be set forth therein
at the Purchase Price per one one-hundredth of a share set forth therein, but
the number of such shares and the Purchase Price shall be subject to adjustment
as provided herein.
(b) Any Right Certificate issued pursuant hereto that represents Rights
beneficially owned by an Acquiring Person or Authorized Shareholder or any
Associate or Affiliate thereof and any Right Certificate issued at any time upon
the transfer of any Rights to an Acquiring Person or Authorized Shareholder or
any Associate or Affiliate thereof or to any nominee of such Acquiring Person,
Authorized Shareholder, Associate or
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Affiliate shall be subject to and contain the following legend or such similar
legend as the Company may deem appropriate and as is not inconsistent with this
Agreement, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed, or to
conform to usage:
The Rights represented by this Right Certificate are or were issued to,
or beneficially owned by, a Person who is or was an Acquiring Person or
an Authorized Shareholder or an Affiliate or an Associate of an
Acquiring Person or an Authorized Shareholder (as such terms are defined
in the Rights Agreement). This Right Certificate and the Rights
represented hereby may become null and void in the circumstances
specified in Section 11(a)(ii) or Section 11(d) of the Rights Agreement.
Section 5. Countersignature and Registration. (a) The Right Certificates shall
be executed on behalf of the Company by its Chairman of the Board, President or
any Vice President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof, and shall be attested
by the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such
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Right Certificates, nevertheless, may be countersigned by the Rights Agent, and
issued and delivered by the Company with the same force and effect as though the
person who signed such Right Certificates had not ceased to be such officer of
the Company; and any Right Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Right Certificate,
shall be a proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Rights Agreement any such person
was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office or offices designated as the appropriate place
for surrender of 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 Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the earlier of
the Expiration Date or the Final Expiration Date, any Right Certificate or
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Right Certificates may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered holder
to purchase a like amount of Preferred Shares (or other securities) as the Right
Certificate or Right Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent or at any
other office 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 countersign and
deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any
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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 reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the 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; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the principal office of the Rights Agent or at any other
office of the Rights Agent designated for such purpose, together with payment of
the Purchase Price for each one one-hundredth of a Preferred Share (or other
securities) as to which such
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surrendered Rights are exercised, at or prior to the Close of Business on the
earlier of (i) January 26, 1998 (the "Final Expiration Date"), or (ii) the date
on which the Rights are redeemed as provided in Section 23 hereof (such earlier
date being herein referred to as the "Expiration Date").
(b) The purchase price for each one one-hundredth of a Preferred Share (the
"Purchase Price") pursuant to the exercise of a Right shall initially be $100,
shall be subject to adjustment from time to time as provided in Section 11
hereof and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof in cash, or by certified check
or bank draft payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
Shares (or make available, if the Rights Agent is the transfer agent)
certificates representing the number of Preferred Shares to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the total number
of
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Preferred Shares issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a Preferred Share as are to be
purchased (in which case certificates for the Preferred Shares represented by
such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company will direct the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of the issuance of fractional shares in accordance with
Section 14 hereof or the amount of cash to be paid in lieu of the issuance of
Common Shares in accordance with Sections 11(a)(iii) or 11(d) hereof, (iii)
promptly after receipt of such certificates (or depositary receipts, when
appropriate), 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 Shares) of the Company pursuant to Section 11
hereof, the Company will make all arrangements necessary so that such other
securities are available for distribution by the Rights Agent, if and when
appropriate.
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(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported transfer or
exercise unless such registered holder shall have (i) completed and signed the
certificate following the form of assignment or election to purchase set forth
on the reverse side of the Right Certificate surrendered for such assignment or
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 to any of its
stock transfer agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Right Certificates shall be issued in lieu thereof except as
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expressly permitted by this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Shares. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Shares, the number of
Preferred Shares that will be sufficient to permit the exercise pursuant to
Section 7 hereof of all outstanding Rights; such number of Preferred Shares
reserved and kept available shall be adjusted from time to time, if and to the
extent required, upon the occurrence of any of the events described in Section
11 hereof.
(b) So long as the Company's Preferred Shares (or other securities) may be
listed on a national securities exchange, the Company shall endeavor to cause,
from and after such time as the Rights become exercisable, all Preferred Shares
(or other securities) reserved for issuance upon exercise of the Rights to be
listed on such exchange upon official notice of issuance.
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(c) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Preferred Shares (or other securities)
delivered upon exercise of Rights shall be, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), duly
and validly authorized and issued, fully paid, nonassessable and freely
tradeable shares, free and clear of any liens, encumbrances or other adverse
claims other than the Company's right to redeem the Preferred Shares pursuant to
the express terms thereof.
(d) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges that may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares (or other securities) upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax that may be
payable in respect of any transfer or delivery of Right Certificates to a person
other than, or the issuance or delivery of certificates or depositary receipts
representing the Preferred Shares (or other securities) in a name other than
that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise, or to issue or deliver any certificates for Preferred
Shares (or other securities) upon the exercise of any Rights until any such tax
shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender)
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or until it has been established to the Company's satisfaction that no such tax
is due.
(e) The Company shall use its best efforts to (i) file on an appropriate
form, as soon as is required by law following the Distribution Date, a
registration statement under the Securities Act of 1933 (the "Act") with respect
to the securities purchasable upon exercise of the Rights, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable for such
securities, and (B) the Expiration Date. The Company will also use its best
efforts to take such action as may be appropriate under the securities or "blue
sky" laws of the various states in connection with the exercisability of the
Rights. The Company may temporarily suspend, for a period of time not to exceed
ninety (90) days after the date set forth in clause (i) of the first sentence of
this Section 9(e), the exercisability of the Rights in order to prepare and file
such registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the
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contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained or the
exercise of the Rights shall not be permitted under applicable law.
Section 10. Preferred Shares Record Date. Each person in whose name any
certificate representing Preferred Shares (or other securities) is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Preferred Shares (or other securities) represented
thereby on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Shares (or other securities) transfer books of the Company are closed,
such person shall be deemed to have become the record holder of such securities
on, and such certificate shall be dated, the next succeeding Business Day on
which the Preferred Shares (or other securities) transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled to any rights of a shareholder of the
Company with respect to securities 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
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notice of any proceedings of the Company, except as provided erein.
Section 11. Adjustment of Purchase Price, Number and Type of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a)(i) In the event that the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of shares, or (D) issue
any shares of its capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) or in Section 11(d) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and/or
the number and/or 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
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and at a time when the Preferred Shares transfer books of the Company were open,
he or she would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof or Section 11(d) 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) or Section 11(d)
hereof.
(ii) In the event that
(A) any Acquiring Person or Authorized Shareholder or any Associate or
Affiliate of any Acquiring Person or Authorized Shareholder, at any time
after the date of this Agreement, directly or indirectly, shall (1) merge
into the Company or otherwise combine with the Company and the Company
shall be the continuing or surviving corporation of such merger or
combination, other than in a transaction subject to Section 11(d)(ii)
hereof, (2) merge or otherwise combine with any Subsidiary of the Company,
(3) in one or more transactions (other than in connection with the exercise
of Rights or the exercise or conversion of securities exercisable or
convertible into capital stock of the Company or any of its Subsidiaries)
transfer any assets to the Company or any of its Subsidiaries in exchange
(in
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whole or in part) for shares of any class of capital stock of the Company
or any of its Subsidiaries or for securities exercisable for or convertible
into shares of any class of capital stock of the Company or any of its
Subsidiaries, or otherwise obtain from the Company or any of its
Subsidiaries, with or without consideration, any additional shares of any
class of capital stock of the Company or any of its Subsidiaries or
securities exercisable for or convertible into shares of any class of
capital stock of the Company or any of its Subsidiaries (other than as part
of a pro rata distribution to all holders of such shares of any class of
capital stock of the Company, or any of its Subsidiaries), (4) sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose
(in one or more transactions), to, from, with, or of, as the case may be,
the Company or any of its Subsidiaries, other than in a transaction subject
to Section 11(d) hereof, assets, including securities, on terms and
conditions less favorable to the Company than the Company would be able to
obtain in arm's-length negotiation with an unaffiliated third party, (5)
receive any compensation from the Company or any of its Subsidiaries other
than compensation as a director or for full-time employment as a regular
employee, in either case, at rates in accordance with the Company's (or its
Subsidiaries') past practices, or (6) receive the benefit, directly or
indirectly (except proportionately as a shareholder), of any loans,
advances, guarantees, pledges
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or other financial assistance or any tax credits or other tax advantage
provided by the Company or any of its Subsidiaries, or
(B) during such time as there is an Acquiring Person or an Authorized
Shareholder, there shall be any reclassification of securities (including
any reverse stock split), or recapitalization of the Company, or any merger
or consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or any of its
Subsidiaries (whether or not with or into or otherwise involving an
Acquiring Person or an Authorized Shareholder), other than a transaction
subject to Section 11(d) hereof, which has the effect, directly or
indirectly, of increasing by more than one percent the proportionate share
of the outstanding shares of any class of equity securities or of
securities exercisable for or convertible into equity securities of the
Company or any of its Subsidiaries that is directly or indirectly
beneficially owned by any Acquiring Person or Authorized Shareholder or any
Associate or Affiliate of any Acquiring Person or Authorized Shareholder,
or
(C) any Person (other than the Company, any Subsidiary or any employee
benefit or stock ownership plan of the Company or any Person or entity
organized, appointed
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or established by the Company for or pursuant to the terms of any such
plan), alone or together with its Affiliates and Associates, shall, at any
time after the date of this Agreement, become the Beneficial Owner (other
than in a transaction subject to Section 11(d) hereof) of 20 percent or
more of the Common Shares then outstanding or any other percentage of the
Common Shares the acquisition of which requires compliance with the
Authorization Statute, (excluding, however, any case where both (v) the
Authorization Statute is in full force and effect and applies to the
acquisition of Common Shares by such Person and (w) such Person obtains the
prior authorization (or authorizations) of the Company's shareholders
pursuant to, and otherwise complies in full with, the Authorization Statute
prior to becoming the Beneficial Owner of 20 percent or more, or any other
percentage specified in such Authorization Statute, of the Common Shares
then outstanding),
then and thereafter, and in each such case, each holder of a Right, except as
provided below, shall have a right to receive, upon exercise thereof in
accordance with the terms of this Agreement at an exercise price per Right equal
to the product of the then current Purchase Price multiplied by the number of
one one-hundredths of a Preferred Share for which a Right is then exercisable,
in lieu of Preferred Shares, such number of Common Shares as shall equal the
result obtained by (x)
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multiplying the then current Purchase Price by the number of one one-hundredths
of a Preferred Share for which a Right is then exercisable and dividing that
product by (y) 50 percent of the current per share market price of the Common
Shares (determined pursuant to Section 11(e) hereof) on the date of the
occurrence of any Flip-in Event. Notwithstanding the foregoing, upon the
occurrence of any Flip-in Event, any Rights that are or were at any time
beneficially owned by any Acquiring Person or Authorized Shareholder or any
Associate or Affiliate of such Acquiring Person or Authorized Shareholder (which
Acquiring Person, Authorized Shareholder, Associate or Affiliate is engaging in
one or more of the transactions set forth in subparagraph (ii)(A) above, or
realizing the benefit set forth in subparagraph (ii)(B) above, or owning the
Common Shares described in subparagraph (ii)(C) above, as the case may be) after
the date upon which such Acquiring Person or Authorized Shareholder became such,
shall become void and any holder of such Rights shall thereafter have no right
to exercise such Rights under any provision of this Agreement. The Company shall
not enter into any transaction of the kind listed in this subparagraph (ii) if
at the time of such transaction there are any rights, warrants, instruments or
securities outstanding or any agreements or arrangements which, as a result of
the consummation of such transactions, would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
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33
(iii) In the event that there shall not be sufficient authorized but
unissued Common Shares or authorized and issued Common Shares held in treasury
to permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall take all such action as may be necessary to
authorize additional Common Shares for issuance upon exercise of the Rights;
provided, however, if the Company is unable so to cause the authorization of
additional Common Shares then, notwithstanding any other provision of this
Agreement, in lieu of issuing such additional Common Shares and requiring
payment therefor, upon exercise of the Rights, the Company shall pay, with
respect to each Right, to the extent permitted by applicable law and any
agreements or instruments in effect on the Share Acquisition Date to which it is
a party, cash at a rate per Right equal to the product of the Purchase Price in
effect at the time of exercise multiplied by the number of one one-hundredths of
a Preferred Share for which a Right was exercisable immediately prior to the
first occurrence of any Flip-in Event. To the extent that any legal or
contractual restrictions prevent the Company from paying the full amount of cash
payable in accordance with the foregoing sentence, the Company shall pay to
holders of the Rights as to which such payments are being made all amounts which
are not then restricted on a pro rata basis. The Company shall continue to make
payments on a pro rata basis as funds become available until such payments have
been paid in full.
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34
(b)(i) In the event that the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than the
current per share market price of the Preferred Shares (as determined pursuant
to Section 11(e) hereof) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred shares so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price and the
denominator of which shall be the number of Preferred Shares outstanding on such
record date plus the number of additional Preferred Shares and/or equivalent
preferred shares to be offered for subscription or purchase (or into which the
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convertible securities so to be offered are initially convertible). In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. Preferred Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(ii) In the event that, after the Distribution Date, the Company shall fix
a record date for the issuance of rights, options or warrants to all holders of
Common Shares entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Common Shares (or shares
having the same rights, privileges and preferences as the Common Shares
("equivalent common shares")) or securities convertible into Common Shares or
equivalent common shares at a price per Common Share or equivalent common share
(or having a conversion price per share, if a security convertible into Common
Shares or equivalent common shares) less than the
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36
current per share market price of the Common Shares (as determined pursuant to
Section 11(e) hereof) on such record date, the purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of Common Shares outstanding on such record date plus
the number of Common Shares which the aggregate offering price of the total
number of Common Shares and/or equivalent common shares so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and the denominator of
which shall be the number of Common Shares outstanding on such record date plus
the number of additional Common Shares and/or equivalent common shares to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such subscription price may
be paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes. Common Shares owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed; and
in the event that such rights, options or warrants are not so issued,
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37
the Purchase Price shall be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(c)(i) In the event that the Company shall fix a record date for the
making of a distribution to all holders of the Preferred Shares (including any
such distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a periodic cash dividend at a rate not in excess
of 125 percent of the rate of the last cash dividend theretofore paid), assets,
stock (other than a dividend payable in Preferred Shares) or subscription
rights, options or warrants (excluding those referred to in Section 11(b)(i)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the current per
share market price of the Preferred Shares (as determined pursuant to Section
11(e) hereof) on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes) of the portion of the cash, assets, stock or evidences of
indebtedness so to be distributed (in the case of periodic cash dividends at a
rate in excess of 125 percent of the rate of the last cash dividend theretofore
paid, only that
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portion in excess of 125 percent of such rate) or of such subscription rights,
options or warrants applicable to one Preferred Share, and the denominator of
which shall be such current per share market price of the Preferred Shares. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(ii) In the event that, after the Distribution Date, the Company shall fix
a record date for the making of a distribution to all holders of the Common
Shares (including any such distribution made in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness, cash (other than a periodic cash dividend at a rate
not in excess of 125 percent of the rate of the last cash dividend theretofore
paid), assets, stock (other than a dividend payable in Common Shares) or
subscription rights, options or warrants (excluding those referred to in Section
11(b)(ii) hereof), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
current per share market price of the Common Shares (as determined pursuant to
Section 11(e) hereof) on such record date, less the fair market value (as
determined in good faith
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39
by the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all
purposes) of the portion of the cash, assets, stock or evidences of indebtedness
so to be distributed (in the case of periodic cash dividends at a rate in excess
of 125 percent of the rate of the last cash dividend theretofore paid, only that
portion in excess of 125 percent of such rate) or of such subscription rights,
options or warrants applicable to one Common Share, and the denominator of which
shall be such current per share market price of the Common Shares. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) In the event that, directly or indirectly, (i) the Company shall
consolidate with, or merge with or into, any Acquiring Person or Authorized
Shareholder or any Associate or Affiliate of any Acquiring Person or Authorized
Shareholder and the Company shall not be the continuing or surviving corporation
of such merger or combination, (ii) any Acquiring Person or Authorized
Shareholder or any Associate or Affiliate of any Acquiring Person or Authorized
Shareholder shall consolidate with the Company, or merge with or into the
Company and the Company shall be the continuing or surviving corporation of such
merger or consolidation and, in connection
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40
with such merger or consolidation, all or part of the Common Shares shall be
changed into or exchanged for stock or other securities of such other Person or
cash or any other property, or (iii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one or more transactions, assets or earning power aggregating 50 percent or
more of the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to any Acquiring Person or Authorized Shareholder or any Associate
or Affiliate of any Acquiring Person or Authorized Shareholder, then, and in
each such case, proper provision shall be made so that (A) except as provided
below, each holder of a Right shall thereafter have the right to receive, upon
the exercise thereof in accordance with the terms of this Agreement at an
exercise price per Right equal to the product of the then current Purchase Price
multiplied by the then number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in lieu of Preferred Shares, such number of
validly authorized and issued, fully paid, nonassessable and freely tradeable
Common Shares of such surviving, resulting or acquiring Person (including the
Company as the continuing or surviving corporation of a transaction described in
clause (ii) above), as the case may be, free and clear of any liens,
encumbrances and other adverse claims and not subject to any rights of call or
first refusal, as shall be equal to the result obtained by (x) multiplying the
then current Purchase Price by the number of one one-hundredths of a Preferred
Share
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for which a Right is then exercisable and dividing that product by (y) 50
percent of the current per share market price of the Common Shares of such
Person (determined pursuant to Section 11(e) hereof) on the date of the
consummation of such Flip-over Event; (B) the issuer of such Common Shares shall
thereafter be liable for, and shall assume, by virtue of such Flip-over Event,
all the obligations and duties of the Company pursuant to this Agreement; (C)
the term "Company" shall thereafter be deemed to refer to such issuer; and (D)
such issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares to permit the exercise
of all outstanding Rights) 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 possible, to its Common Shares thereafter
deliverable upon the exercise of the Rights. Notwithstanding the foregoing, if
the surviving, resulting or acquiring Person in any of the events listed above
in subparagraphs (i) through (iii), inclusive, is not a corporation or other
legal entity having equity securities, then, and in each such case, if such
surviving, resulting or acquiring Person is directly or indirectly wholly owned
by a corporation or other legal entity having equity securities, then all
references to Common Shares of such surviving, resulting or acquiring Person in
this Section 11(d) shall be deemed to be references to the Common Shares of the
corporation or other legal entity having equity securities which ultimately
controls such Person, and if there is no such
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corporation or other legal entity having equity securities, (Y) proper provision
shall be made so that such surviving resulting or acquiring Person shall create
or otherwise make available for purposes of the exercise of the Rights in
accordance with the terms of this Agreement, a type or types of security or
securities having a fair market value at least equal to the economic value of
the Common Shares which each holder of a Right would have been entitled to
receive if such surviving, resulting or acquiring Person had been a corporation
or other legal entity having equity securities; and (Z) all other provisions of
this Section 11(d) shall apply to the issuer of such securities as if such
securities were Common Shares. The Company shall not consummate any of the
transactions listed above in subparagraphs (i) through (iii), inclusive, unless
prior thereto the Company and the issuer of the Common Shares or other
securities, as the case may be, shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the foregoing, or if at the time of
such transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements that, as a result of the
consummation of such transaction, would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights. Notwithstanding
the foregoing, upon the occurrence of any Flip-over Event, any Rights that are
or were at any time beneficially owned by any Acquiring Person or Authorized
Shareholder or any Associate or Affiliate of such Acquiring
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Person or Authorized Shareholder (which Acquiring Person, Authorized
Shareholder, Associate or Affiliate is engaging in one or more of the
transactions set forth in subparagraphs (i) through (iii), inclusive, above)
after the date upon which such Acquiring Person or Authorized Shareholder became
such, shall become void and any holder of such Rights shall thereafter have no
right to exercise such Rights under this Agreement. The provisions of this
Section 11(d) shall similarly apply to successive mergers or consolidations or
sales or other transfers.
In the event that the Company shall be the continuing or surviving
corporation in a merger or consolidation referred to in subparagraph (ii) above
and Common Shares of the Company are required to be issued upon exercise of the
Rights following such merger or consolidation, and if there shall not be
sufficient authorized but unissued Common Shares or authorized and issued Common
Shares held in treasury to permit the exercise in full of the Rights in
accordance with the foregoing, the Company shall take all such action as may be
necessary to authorize additional Common Shares for issuance upon exercise of
the Rights; provided, however, if the Company is unable to cause the
authorization of additional Common Shares, then, notwithstanding any other
provision of this Agreement, in lieu of issuing such additional Common Shares
and requiring payment therefor, upon exercise of the Rights, the Company shall
pay, with respect to each Right, to the extent
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permitted by applicable law and any agreements or instruments in effect on the
Share Acquisition Date to which it is a party, cash at a rate per Right equal to
the product of the Purchase Price in effect at the time of exercise multiplied
by the number of one one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to the occurrence of the merger or consolidation
referred to in subparagraph (ii) above. To the extent that any legal or
contractual restrictions prevent the Company from paying the full amount of cash
payable in accordance with the foregoing sentence, the Company shall pay to
holders of the Rights as to which such payments are being made all amounts which
are not then restricted on a pro rata basis. The Company shall continue to make
payments on a pro rata basis as funds become available until such payments have
been paid in full.
(e) (i) For the purpose of any computation hereunder, the "current per
share market price" of Common Shares on any date shall be deemed to be the
average of the daily closing prices per share of such Common Shares for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date; provided, however, that in the event that the current per share
market price of the Common Shares is determined during a period following the
announcement by the issuer of such Common Shares of (A) a dividend or
distribution on such Common Shares payable in such Common Shares or securities
convertible into such Common Shares (other than the
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Rights), or (B) any subdivision, combination or reclassification of such Common
Shares, and prior to the expiration of 30 Trading Days after the ex-dividend
date for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the "current
market price" shall be appropriately adjusted to take into account ex-dividend
trading or to reflect the current market price per Common Share equivalent. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Common Shares are
not listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Common Shares are listed or admitted to trading or, if the Common Shares are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
system then in use, or, if on any such date the Common Shares are not quoted by
any such organization, the average of the closing bid and asked
-43-
46
prices as furnished by a professional market maker making a market in the Common
Shares selected by the Board of Directors of the Company. The term "Trading Day"
shall mean any day on which the principal national securities exchange on which
the Common Shares are listed or admitted to trading is open for the transaction
of business or, if the Common Shares are not listed or admitted to trading on
any national securities exchange, a Business Day. If the Common Shares are not
publicly held or not so listed or traded, or not the subject of available bid
and asked quotes, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current per share
market price" of the Preferred Shares shall be determined in the same manner as
set forth above for Common Shares in clause (i) of this Section 11(e) (other
than the last sentence thereof). If the current per share market price of the
Preferred Shares cannot be determined in the manner provided above, the "current
per share market price" of the Preferred Shares shall be conclusively deemed to
be the current per share market price of the Common Shares multiplied by one
hundred (as such may be appropriately adjusted to reflect any stock split, stock
dividend, recapitalization or similar transaction relating to the Common
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47
Shares occurring after the date of this Agreement). If neither the Common Shares
nor the Preferred Shares are publicly held or so listed or traded, or the
subject of available bid and asked quotes, "current per share market price"
shall mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the "current market price" of one one-hundredth of a
Preferred Share shall be equal to the "current market price" of one Preferred
Share divided by 100.
(f) Except as set forth below, no adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or decrease of at
least 1 percent in such price; provided, however, that any adjustments which by
reason of this Section 11(f) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the nearest
ten-thousandth of a Common Share or other share or one-millionth of a Preferred
Share, as the case may be. Notwithstanding the first sentence of this Section
11(f), any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction which requires
such adjustment, or (ii) the Expiration Date.
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48
(g) If as a result of an adjustment made pursuant to Sections 11(a) or
11(d) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than Preferred
Shares, thereafter the number of such other shares so receivable upon exercise
of any Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
shares contained in this Section 11 and the provisions of Sections 7, 9, 10 and
14 hereof with respect to the Preferred Shares shall apply on like terms to any
such other shares.
(h) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Preferred Shares
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(i) Unless the Company shall have exercised its election as provided in
Section 11(j) hereof, upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a Preferred Share (calculated to the nearest one one-millionth
of
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a Preferred Share) obtained by (i) multiplying (x) the number of one
one-hundredths of a Preferred Share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(j) The Company may elect, on or after the date of any adjustment of the
Purchase Price, to adjust the number of Rights in substitution for any
adjustment in the number of Preferred Shares purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one one-hundredths of a Preferred
Share for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been
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issued, shall be at least 10 calendar 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(j), 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 Purchase 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.
(k) Irrespective of any adjustment or change in the Purchase Price or the
number or kind of shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per one one-hundredth of a share and the number of shares
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which were expressed in the initial Right Certificate issued hereunder.
(l) Before taking any action that would cause an adjustment reducing the
Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
(m) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date the
Preferred Shares or other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Shares or other capital
stock or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
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(n) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the date of this Agreement and
prior to the Distribution Date (i) declare a dividend on the outstanding Common
Shares payable in Common Shares, (ii) subdivide the outstanding Common Shares,
(iii) combine the outstanding Common Shares into a smaller number of shares, or
(iv) issue any shares of its capital stock in a reclassification of the
outstanding Common Shares, the number of Rights associated with each Common
Share then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each Common Share following any such event
shall equal the result obtained by multiplying the number of Rights associated
with each Common Share immediately prior to such event by a fraction the
numerator of which shall be the total number of Common Shares outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of Common Shares outstanding immediately following the
occurrence of such event.
(o) Anything in Sections 11 (a) through (n), inclusive, hereof to the
contrary notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that the Company in its sole discretion
shall determine to be advisable in order that
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any consolidation or subdivision of the Preferred Shares, issuance wholly for
cash of any of the Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares, 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 Shares shall not
be taxable to such shareholders.
(p) Notwithstanding any other provision of this Agreement, no adjustment to
the Purchase Price, the number of shares of capital stock (or fractions of a
share) for which a Right is exercisable or the number of Rights outstanding
shall be made or be effective if such adjustment would have the effect of
reducing or limiting the benefits the holders of the Rights would have had
absent such adjustment, including, without limitation, the benefits under
Sections 11(a)(ii) and 11(d) hereof, unless the terms of this Agreement are
amended so as to preserve such benefits.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 hereof, the Company
shall promptly prepare a certificate setting forth such adjustment (including a
description of any Rights which have become void as a result thereof) and a
brief statement of the facts accounting for such
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adjustment and promptly file with the Rights Agent and with each transfer agent
for the Preferred Shares and Common Shares a copy of such certificate.
Section 13. Notice of Adjusted Purchase Price or Number or Type of Shares
to Holders of Rights. Whenever an adjustment is made as provided in Section 11
hereof after the Distribution Date, the Company shall mail a brief summary of
such adjustment to each holder of a Right Certificate in accordance with Section
25 hereof.
Section 14. Fractional Rights and Fractional Shares. (a) The Company shall
not be required to issue fractions of Rights or to distribute Right Certificates
which evidence fractional Rights. In lieu of such fractional Rights, there shall
be paid as promptly as practicable to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated
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transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights the fair value of the
Rights on such date as determined in good faith by the Board of Directors of the
Company shall be used and shall be conclusive. for all purposes.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a
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Preferred Share). Fractions of Preferred Shares in integral multiples of one
one-hundredth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts pursuant to an appropriate agreement between
the Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Shares represented by such depositary receipts. In lieu of
fractional Preferred Shares that are not integral multiples of one one-hundredth
of a Preferred Share, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one
one-hundredth of a Preferred Share. For purposes of this Section 14(b), the
current market value of one one-hundredth of a Preferred Share shall be the
closing price of one one-hundredth of a Preferred Share (as determined pursuant
to Section 11(e)(ii) hereof) for the Trading Day immediately prior to the date
of such exercise.
(c) Following the occurrence of an event described in Section 11(a)(ii) or
Section 11(d), the Company shall not be required to issue fractions of Common
Shares upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares, the Company may
pay to the registered holders of Right
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Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one Common Share. For purposes of this
Section 14(c), the current market value of one Common Share
shall be the closing price of a Common Share (as determined
pursuant to the second sentence of Section 11(e)(i) hereof) for
the Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as otherwise provided by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by such
Right Certificate in the manner provided in such Right Certificate
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and in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations under this
Agreement, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Share
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certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificate or the associated Common Share certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. 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 Preferred Shares or any other
securities of the Company which may at any time be issuable on
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the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, suit, action, proceeding or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the
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costs and expenses of defending against any claim of liability arising
therefrom, directly or indirectly.
The Rights Agent shall be protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of
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Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Right Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement
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upon the following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, the Treasurer or the Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own negligence,
bad faith or willful misconduct.
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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 and delivery 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 adjustment required under the provisions of
Section 11 hereof (including any adjustment which results in Rights becoming
void) 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 actual notice of any such adjustment or voidance); nor shall
it by any act hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any Preferred Shares or other securities to
be issued pursuant to this Agreement or any Right Certificate or as to whether
any Preferred Shares or other securities will,
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when issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the
Secretary or the Treasurer, of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein
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shall preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof. The Rights Agent shall not be under any duty
or responsibility to insure compliance with any applicable federal or state
securities laws in connection with the issuance, transfer or exchange of Right
Certificates.
(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
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election to purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 or 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 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares and Preferred Shares by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares and Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any
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Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of the States of Ohio or New
York (or of any other state of the United States so long as such corporation is
authorized to do business as a banking institution in the States of Ohio or New
York), in good standing, having a principal office in the States of Ohio or New
York, which is authorized under such laws to exercise corporate trust powers and
is subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100 million and which shall otherwise meet any requirements
imposed by the New York Stock Exchange on transfer agents and registrars. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares and
Preferred Shares, and mail a notice thereof in writing to the
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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 its Board of Directors to reflect any adjustment or change in
the Purchase Price per share and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 23. Redemption. (a) The Board of Directors of the Company may, at
its option, at any time prior to 5:00 P.M., Cleveland, Ohio time, on the earlier
of (i) the occurrence of a Triggering Event or (ii) the Final Expiration Date,
redeem all but not less than all of the then-outstanding Rights at a redemption
price of $.03 per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price").
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(b) In addition, if at any time (including, without limitation, after the
Distribution Date) a Person shall obtain the prior authorization of the
Company's shareholders required pursuant to the Authorization Statute for a
transaction in which such Person will make a fully financed offer for all
outstanding Common Shares offering only cash, then, in connection with the
consummation of such transaction, the Directors of the Company shall (even
though the right of redemption may have otherwise expired) redeem all, but not
less than all, of the Rights at the Redemption Price.
(c) Immediately upon the effective date of the action of the Board of
Directors of the Company ordering the redemption of the Rights, and without any
further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall publicly
announce such action. Within 10 calendar days after ordering the redemption of
the Rights, the Company shall give notice of such redemption to the holders of
the then-outstanding Rights by mailing such notice to all such holders at their
last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Shares. Any notice which is mailed in the manner herein provided
shall be deemed given,
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whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be made.
(d) At any time following the Share Acquisition Date, the Directors of
the Company may relinquish their right to redeem the Rights under paragraph (a)
above by duly adopting a resolution to that effect subject, however, to Section
23(b) hereof. Promptly after adoption of such a resolution, the Company shall
publicly announce such action. Immediately upon adoption of such resolution, the
rights of the Directors under Section 23(a) shall terminate without further
action and without any notice.
Section 24. Notice of Certain Events. In case, after the Distribution Date,
the Company shall propose (a) to pay any dividend payable in stock of any class
to the holders of Preferred Shares or to make any other distribution to the
holders of Preferred Shares (other than a periodic cash dividend at a rate not
in excess of 125 percent of the rate of the last periodic cash dividend
theretofore paid), or (b) to offer to the holders of Preferred Shares rights,
options or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights or
options, or (c) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding
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Preferred Shares), or (d) to effect any consolidation or merger into or with, or
to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of more than 50 percent of the assets or earning power of the Company and its
Subsidiaries, taken as a whole, to any other Person or Persons, or (e) to effect
the liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Right Certificate, in
accordance with Section 25 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution or
offering of rights, options 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 Preferred Shares, if any such date is to be fixed,
and such notice shall be so given, in the case of any action covered by clause
(a) or (b) above, at least 20 calendar days prior to the record date for
determining holders of the Preferred Shares for purposes of such action, and, in
the case of any such other action, at least 20 calendar days prior to the date
of the taking of such proposed action or the date of participation therein by
the holders of the Preferred Shares, whichever shall be the earlier.
In case any of the events set forth in Section 11(a)(ii) or Section 11(d)
hereof shall occur, then, in any
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such case, the Company shall as soon as practicable thereafter give to the
Rights Agent and each holder of a Right Certificate, in accordance with Section
25 hereof, a notice of the occurrence of such event, which shall specify the
event and the consequences of the event to holders of Rights.
Section 25. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Brush Wellman Inc.
1200 Hanna Building
Cleveland, Ohio 44115
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Ameritrust Company National Association
Corporate Trust Division
P.O. Box 6477
Cleveland, Ohio 44101
Attention: Stock Transfer Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent
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by first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Rights Agent.
Section 26. Supplements and Amendments. Prior to the Distribution Date and
subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates
representing Common Shares. From and after the Distribution Date and subject to
the penultimate sentence of this Section 26, the Company and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders 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 provision herein, (iii) to
shorten or lengthen any time period hereunder, or (iv) to change or supplement
the provisions hereunder in any manner which the Company may deem desirable,
including, without limitation, the addition of other events requiring adjustment
to the Rights under Section 11(a)(ii) or 11(d) or procedures relating to the
redemption of the Rights, which change, amendment or supplement shall not
adversely affect the interests of the holders of Right Certificates (other than
an Acquiring Person or Authorized Shareholder or an Affiliate or Associate of
any such person); provided, this Agreement may not be supplemented or amended to
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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 (subject, however, to Section 23(b) hereof), or (B) any other time
period unless such lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, or the benefits to, the holders of Rights. Upon the
delivery of a certificate from an officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
26, the Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price, the Final Expiration Date, the
Purchase Price, or the number of one one-hundredths of a Preferred Share for
which a Right is exercisable. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of the
holders of Common Shares.
Section 27. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder. The Company
covenants and agrees that it shall not (i) consolidate with, (ii) merge with or
into, or (iii) sell or transfer to, in one or more transactions, assets or
earning power aggregating more than 50 percent of the assets or earning power of
the Company
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and its Subsidiaries, taken as a whole, any Acquiring Person or Authorized
Shareholder or any Affiliates or Associates of such Acquiring Person or
Authorized Shareholder if at the time of or after such consolidation, merger or
sale there would be any charter or by-law provisions or any rights, options,
warrants or other instruments or securities outstanding or agreements in effect
or any other actions taken which would eliminate or otherwise diminish the
benefits intended to be afforded by the Rights without the affirmative vote of
the holders of at least 80 percent of the then-outstanding Rights beneficially
owned by Persons other than such Acquiring Person or Authorized Shareholder or
any Affiliates or Associates of such Acquiring Person or Authorized Shareholder.
The Company shall not consummate any such consolidation, merger or sale unless
prior thereto the Company and such other Person shall have executed and
delivered to the Rights Agent a supplemental agreement evidencing compliance
with this Section.
Section 28. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates.
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Section 29. Action by the Board of Directors. Whenever any action hereunder
or in connection with the Rights is required or permitted to be taken by the
Board of Directors of the Company, such action may be taken by the Executive
Committee of the Board of Directors or by any other duly authorized committee
thereof.
Section 30. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the internal substantive
laws of the State of Ohio and for all purposes shall be governed by and
construed in accordance with the internal substantive laws of such State
applicable to contracts to be made and performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all
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such counterparts shall together constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
BRUSH WELLMAN INC.
[SEAL]
Attest:
By /s/ Clark G. Waite By /s/ Raymond A. Foos
--------------------------- ----------------------------
Secretary Chairman of the Board,
President and Chief
Executive Officer
[SEAL]
Attest: AMERITRUST COMPANY NATIONAL
ASSOCIATION
By /s/ Neal J. Gerstenschlager By /s/ Victor W. LaTessa
---------------------------- ----------------------------
Neal J. Gerstenschlager Victor W. LaTessa
Senior Trust Officer Trust Officer
& Assistant Secretary & Assistant Secretary
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Exhibit A
CERTIFICATE OF
ADOPTION OF AMENDMENT
TO AMENDED ARTICLES OF INCORPORATION
of
BRUSH WELLMAN INC.
We, Raymond A. Foos, Chairman of the Board, President and Chief Executive
Officer, and Clark G. Waite, Secretary, of Brush Wellman Inc., an Ohio
corporation (the "Corporation"), do hereby certify that pursuant to the
authority conferred upon the Board of Directors by the Amended Articles of
Incorporation of the Corporation, the said Board of Directors at a meeting duly
called and held on February 28, 1989, at which a quorum was present and acting
throughout, adopted the following resolution to amend the Amended Articles of
Incorporation of the Corporation pursuant to Section 1701.70(B)(1) of the Ohio
Revised Code:
RESOLVED, that Division A of Article FOURTH of the Amended Articles of
Incorporation of this Corporation, which was added to Article FOURTH of the
Amended Articles of Incorporation on January 26, 1988, be, and it hereby is,
amended and restated as set forth below:
DIVISION A-1
SERIAL PREFERRED STOCK, SERIES A
Section 1. There is established hereby a series of Serial Preferred Stock
that shall be designated "Serial Preferred Stock, Series A" (hereinafter
sometimes called this "Series" or the "Series A Preferred Shares") and that
shall have the terms set forth in this Division A-1.
Section 2. The number of shares of this Series shall be 450,000.
Section 3. (a) The holders of record of Series A Preferred Shares shall be
entitled to receive, when and as declared by the Board of Directors in
accordance with the terms hereof, out of funds legally available for the
purpose, cumulative quarterly dividends payable in cash on the first day
80
of January, April, July and October in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a Series A Preferred
Share or fraction of a Series A Preferred Share in an amount per share (rounded
to the nearest cent) equal to the lesser of (i) $1.50 or (ii) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 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
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 Series A Preferred Share or fraction of a Series A Preferred Share. In
the event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the amount to
which holders of Series A Preferred Shares were entitled immediately prior to
such event under clause (ii) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Dividends shall begin to accrue and be cumulative on outstanding Series
A Preferred Shares from the Quarterly Dividend Payment Date next preceding the
date of issue of such Series A Preferred Shares, 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 A Preferred Shares 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. No dividends
shall be paid upon or declared and set apart for any Series A Preferred Shares
for any dividend period unless at the same time a dividend for the same dividend
period, ratably in proportion to the respective annual dividend rates fixed
therefor, shall be paid upon or declared and set apart for all Serial Preferred
Stock of all
A-2
81
series then outstanding and entitled to receive such dividend. The Board of
Directors may fix a record date for the determination of holders of Series A
Preferred Shares entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 40 days prior to the
date fixed for the payment thereof.
Section 4. Subject to the provisions of Section 6(b)(iii) of Division A and
in accordance with Section 4 of Division A, the Series A Preferred Shares shall
be redeemable from time to time at the option of the Board of Directors of the
Corporation, as a whole or in part, at any time at a redemption price per share
equal to one hundred times the then applicable Purchase Price as defined in that
certain Rights Agreement, dated as of January 26, 1988 between the Corporation
and AmeriTrust Company National Association (the "Rights Agreement"), as the
same may be from time to time amended in accordance with its terms, which
Purchase Price is $100 as of January 26, 1988, subject to adjustment from time
to time as provided in the Rights Agreement. Copies of the Rights Agreement are
available from the Company upon request. In the event that fewer than all of the
outstanding Series A Preferred Shares are to be redeemed, the number of shares
to be redeemed shall be as determined by the Board of Directors and the shares
to be redeemed shall be selected pro rata or by lot in such manner as shall be
determined by the Board of Directors.
Section 5. (a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation (hereinafter
referred to as a "Liquidation"), no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon Liquidation) to
the Series A Preferred Shares, unless, prior thereto, the holders of Series A
Preferred Shares shall have received at least an amount per share equal to one
hundred times the then applicable Purchase Price as defined in the Rights
Agreement, as the same may be from time to time amended in accordance with its
terms which Purchase Price is $100 as of January 26, 1988, subject to adjustment
from time to time as provided in the Rights Agreement, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not earned or
declared, to the date of such payment, provided that the holders of shares of
Series A Preferred Shares shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of Common
Stock (the "Series A Liquidation Preference").
(b) In the event, however, that the net assets of the Corporation are not
sufficient to pay in full the amount of the Series A Liquidation Preference and
the liquidation preferences of all other series of Serial Preferred Stock, if
A-3
82
any, which rank on a parity with the Series A Preferred Shares as to
distribution of assets in Liquidation all shares of this Series and of such
other series of Serial Preferred Stock shall share ratably in the distribution
of assets (or proceeds thereof) in Liquidation in proportion to the full amounts
to which they are respectively entitled.
(c) In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in Common Stock, or effect a subdivision or
combination or consolidation of the outstanding Common Stock (by
reclassification or otherwise than by payment of a dividend in Common Stock)
into a greater or lesser number of shares of Common Stock, then in each such
case the amount to which holders of Series A Preferred Shares were entitled
immediately prior to such event pursuant to the proviso set forth in paragraph
(a) above, 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.
(d) The merger or consolidation of the Corporation into or with any other
corporation, or the merger of any other corporation into it, or the sale, lease
or conveyance of all or substantially all the property or business of the
Corporation, shall not be deemed to be a Liquidation for the purposes of this
Section 5.
Section 6. The Series A Preferred Shares shall not be convertible into
Common Stock.
IN WITNESS WHEREOF, Raymond A. Foos, Chairman of the Board, President and
Chief Executive Officer, and Clark G. Waite, Secretary, of Brush Wellman Inc.,
acting for and on behalf of the Corporation, have hereunto subscribed their
names this 28th day of February, 1989.
------------------------------
Chairman of the Board,
President and Chief Executive
Officer
------------------------------
Secretary
A-4
83
Exhibit B
[Form of Right Certificate]
Certificate No. R-
Rights
-------------------
NOT EXERCISABLE AFTER JANUARY 26, 1998 OR EARLIER IF REDEEMED. THE RIGHTS
ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.03 PER RIGHT
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY
THIS CERTIFICATE ARE OR WERE ISSUED TO, OR BENEFICIALLY OWNED BY, A PERSON
WHO IS OR WAS AN ACQUIRING PERSON OR AN AUTHORIZED SHAREHOLDER OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON OR AN AUTHORIZED SHAREHOLDER
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 11(a)(ii) OR SECTION 11(d) OF THE RIGHTS
AGREEMENT.*]
Right Certificate
BRUSH WELLMAN INC.
This certifies that _____________________ , or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of January 26, 1988 and amended on February 28,
1989 (the "Rights Agreement") between Brush Wellman Inc., an Ohio corporation
(the "Company"), and Ameritrust Company National Association (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is
- -------------------
* The portion of the legend in brackets shall be inserted only if applicable.
B-1
84
defined in the Rights Agreement) and prior to 5:00 P.M. (New York time) on
January 26, 1998 at the principal office of the Rights Agent designated for such
purpose, one one-hundredth of a fully paid nonassessable share of Serial
Preferred Stock, Series A, without par value (the "Preferred Shares"), of the
Company, at a purchase price of $100 per one one-hundredth of a Preferred Share
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of shares which may
be purchased upon exercise thereof) set forth above, and the Purchase Price per
one one-hundredth of a Preferred Share set forth above, are the number and
Purchase Price as of January 26, 1988, based on the Preferred Shares as
constituted at such date.
Upon the occurrence of certain events specified in Sections 11(a)(ii) and
11(d) of the Rights Agreement, if any of the Rights evidenced by this Right
Certificate are or were at any time beneficially owned by an Acquiring Person or
an Authorized Shareholder or any Affiliate or Associate of an Acquiring Person
or Authorized Shareholder (as such terms are defined in the Rights Agreement)
after the date upon which such Acquiring Person or Authorized Shareholder became
such, such Rights shall become null and void and no holder shall have any
B-2
85
right to exercise such Rights from and after the occurrence of such specified
events.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of capital shares 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. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are available from the Company upon request.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Preferred Shares as the Rights
B-3
86
evidenced by the Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of $.03 per Right.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter
B-4
87
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 the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Right Certificate shall have been exercised as provided
in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of , 19 .
ATTEST: BRUSH WELLMAN INC.
By
- ----------------------------- ----------------------------
Secretary Title:
Countersigned:
By
---------------------------
Authorized Signature
B-5
88
[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: _____________________ , 19______
___________________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a person who
B-6
89
is or was an Acquiring Person or an Authorized Shareholder or an Affiliate or
Associate of any such Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Right Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Authorized
Shareholder or an Affiliate or Associate of any such Person.
Dated: , 19
----------------- -- ------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment 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.
B-7
90
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Right
Certificate.)
To Brush Wellman Inc.:
The undersigned hereby irrevocably elects to exercise ______________ Rights
represented by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of such 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 number
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
Dated: , 19
----------------- --
------------------------------
Signature
B-8
91
(Signature must conform in all
respects to name of holder as
specified on the face of this
Right Certificate)
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 exercised by or on behalf of a Person who is or was an Acquiring Person or
an Authorized Shareholder or an Affiliate or Associate of any such Person (as
such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Right Certificate from any
person who is, was or became an Acquiring Person or an Authorized Shareholder or
an Affiliate or Associate of any such Person.
Dated: , 19
---------------- -- ------------------------------
Signature
Signature Guaranteed:
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.
B-9
92
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On January 26, 1988, the Board of Directors of Brush Wellman Inc. (the
"Company") declared a dividend distribution of one right (a "Right") for each
outstanding share of Common Stock, $1.00 par value, of the Company (the "Common
Shares"). The distribution was paid on February 8, 1988 (the "Record Date") to
the stockholders of record as of the close of business on the Record Date. Each
Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Serial Preferred Stock, Series A, without par value,
of the Company (the "Preferred Shares"), at a price of $100 (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement dated as of January 26, 1988, as amended, (the
"Rights Agreement") between the Company and Ameritrust Company National
Association, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days (or such later date as may be
specified by a majority of the Directors then in office) following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 20 percent or more of the outstanding Common Shares without
obtaining shareholder authorization pursuant to and otherwise complying in full
with Section 1701.831 of the Ohio Revised Code, as it may be amended from time
to time (the "Authorization Statute"), (ii) 10 days (or such later date as may
be specified by a majority of the Directors then in office) following the
commencement of a tender offer or exchange offer for 20 percent or more of such
outstanding Common Shares or (iii) the first occurrence of certain events
described below which would result in the Rights becoming exercisable to
purchase Common Shares or common stock of another person (the earlier of such
dates being hereinafter called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Share certificates outstanding as
of the Record Date, by such Common Share certificate with a copy of this Summary
of Rights attached thereto. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the Common
Shares. Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Share certificates issued after the Record Date upon
transfer or new issuance of Common Shares will contain a notation
93
incorporating the Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender for transfer of
any certificates for Common Shares outstanding as of the Record Date, even
without a copy of this Summary of Rights attached thereto, will also constitute
the transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on January 26, 1998, unless earlier redeemed by the Company as described
below.
The Purchase Price payable, and the number of Preferred Shares 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
Shares, (ii) upon the grant to holders of the Preferred Shares or the Common
Shares of certain rights, options or warrants to subscribe for Preferred Shares
or Common Shares, as the case may be, or convertible securities at less than the
current market price of the Preferred Shares or the Common Shares, as the case
may be, or (iii) upon the distribution to holders of the Preferred Shares or the
Common Shares of evidences of indebtedness, cash (excluding periodic cash
dividends at a rate not in excess of 125 percent of the rate of the last cash
dividend theretofore paid), assets, stock (excluding dividends payable in
Preferred Shares or Common Shares, as the case may be) or of subscription
rights, options or warrants (other than those referred to above).
In the event that (i) an Acquiring Person or an Authorized Shareholder
(which is a person or group of affiliates or associated persons that have
acquired 20% or more of the Common Shares of the Company and has complied in
full with the requirements of the Authorization Statute) merges into the Company
and the Company's Common Shares are not changed or exchanged or engages in one
of a number of self-dealing transactions specified in the Rights Agreement, (ii)
during such time as there is an Acquiring Person or Authorized Shareholder,
there is a reclassification of securities or other transaction which increases
by more than one percent the proportionate amount of Company securities owned by
the Acquiring Person or Authorized Shareholder, or (iii) if a person or group of
affiliated or associated persons becomes the beneficial owner of 20 percent or
more of the
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Company's Common Shares the acquisition of which requires compliance with the
Authorization Statute, (excluding however, any case where both (a) the
Authorization Statute is in full force and effect and applies to the acquisition
of Common Shares by such person and (b) such person obtains the prior
authorization (or authorizations) of the Company's shareholders pursuant to, and
otherwise complies in full with, the Authorization Statute), proper provision
shall be made so that each holder of a Right, other than Rights that are or were
beneficially owned by such person after the date upon which the Acquiring Person
or Authorized Shareholder became such (which will thereafter be void), will
thereafter have the right to receive upon exercise thereof at the then current
exercise price of the Right, that number of Common Shares having a market value
of two times the exercise price of the Right (or, under certain circumstances,
an amount of cash equal to the Purchase Price).
In the event that the Company is acquired by an Acquiring Person or an
Authorized Shareholder in a merger or other business combination transaction or
50 percent or more of its assets or earning power are sold to an Acquiring
Person or an Authorized Shareholder, proper provision shall be made so that each
holder of a Right, other than Rights that are or were beneficially owned by the
Acquiring Person or Authorized Shareholder after the date upon which the
Acquiring Person or Authorized Shareholder became such (which will thereafter be
void), shall thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price, that number of shares of common stock (or,
under certain circumstances, an economically equivalent security or securities)
of the surviving, resulting or acquiring person which at the time of such
transaction would have a market value of two times the Purchase Price (or, under
certain circumstances, an amount of cash equal to the Purchase Price).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1
percent in such Purchase Price. No fractional Preferred Shares will be issued
(other than fractions which are integral multiples of one one-hundredth of a
Preferred Share or smaller fractions, which may, at the election of the Company,
be evidenced by depositary receipts), and in lieu thereof, a payment in cash
will be made based on the market price of the Preferred Shares on the last
trading day prior to the date of exercise.
The Company may redeem the Rights in whole, but not in part, at a price of
$.03 per Right (the "Redemption Price"), at any time prior to the close of
business on the earlier of (i) the first occurrence of certain events described
above
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which would result in the Rights becoming exercisable to purchase Common Shares
or common stock of another person or (ii) January 26, 1998. In addition, the
Directors are required to redeem the Rights in whole in connection with the
consummation of a transaction in which a person or group makes a fully-financed
cash offer for all outstanding Common Shares which is lawful in every material
respect and such transaction is authorized by the shareholders of the Company
pursuant to the Authorization Statute. Immediately upon the effective date of
the action of the Board of Directors of the Company electing to redeem 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 Company will
give notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
on the Registry Books of the Rights Agent.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
Prior to the Distribution Date, the Rights Agreement may be amended or
supplemented by the Company and the Rights Agent, without the approval of any
holders of Rights, in any manner, except for an amendment or supplement which
would change the Redemption Price or the Final Expiration Date, the Purchase
Price, or reduce the number of one one-hundredths of a Preferred Share for which
a Right is then exercisable. After the Distribution Date, the Rights Agreement
may be so amended or supplemented to cure ambiguity, correct or supplement
defective or inconsistent provisions or otherwise as the Company may deem
necessary or desirable and shall not adversely affect the interests of the
Rights holders.
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
January 26, 1988. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.
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