SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
TREDEGAR CORPORATION
(Exact name of registrant as specified in its charter)
Virginia 54-1497771
(State of incorporation or (IRS employer
organization) identification no.)
1100 Boulders Parkway
Richmond, Virginia 23225
(Address of principal executive (Zip code)
offices)
If this form relates to the If this form relates to the
registration of a class of registration of a class of
securities pursuant to Section securities pursuant to Section
12(b) of the Exchange Act and is 12(g) of the Exchange Act and is
effective pursuant to General effective pursuant to General
Instruction A.(c), please check Instruction A.(d), please check
the following box. [ ] the following box. [X]
Securities Act registration statement file number to which this
form relates: None
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None N/A
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights
(Title of class)
1
Item 1. Description of Registrant's Securities to be Registered.
On May 20, 1999, the Board of Directors of Tredegar Corporation, a
corporation organized under the laws of Virginia (the "Company"), approved a
Rights Agreement, dated as of and to be effective as of June 30, 1999 (the
"Rights Agreement"), between the Company and American Stock Transfer & Trust
Company, as Rights Agent, having the principal terms summarized below. In
accordance with the Rights Agreement, the Board also declared a dividend
distribution of one right ("Right") for each outstanding share of common stock
of the Company (the "Common Stock") to shareholders of record at the close of
business on June 18, 1999 (the "Record Date").
Each Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of the Company's Series A Participating Cumulative
Preferred Stock ("Preferred Stock"). Each one one-hundredth of a share (a
"Unit") of Preferred Stock is structured to be the equivalent of one share of
Common Stock of the Company ("Common Stock"). Shareholders will receive one
Right per share of Common Stock held of record at the close of business on the
Record Date. The exercise price of the Right will be $150 subject to adjustment
(the "Purchase Price").
Rights will also attach to shares of Common Stock issued after the Record
Date but prior to the Distribution Date (as defined below) unless the Board of
Directors determines otherwise at the time of issuance. The description and
terms of the Rights are set forth in the Rights Agreement.
The Rights will be appurtenant to the shares of Common Stock and will be
evidenced by Common Stock certificates, and no separate certificates evidencing
the Rights (the "Rights Certificates") will be distributed initially. The Rights
will separate from the Common Stock and a distribution of the Rights
Certificates will occur (the "Distribution Date") upon the earlier of (i) 10
business days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 10% or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date"), or (ii) 10
business days following the commencement of a tender offer or exchange offer
that would result in a person or group beneficially becoming an Acquiring
Person. Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with such Common
Stock certificates, (ii) any Common Stock certificates issued after June 30,
1999, will contain a legend incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on June 30, 2009, unless earlier redeemed or exchanged
by the Company as described below. As soon as practicable after the Distribution
Date, Rights Certificates will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date, and thereafter such
separate Rights Certificates alone will represent the Rights.
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While each Right will initially provide for the acquisition of one Unit of
Preferred Stock at the Purchase Price, the Agreement provides that if any person
becomes an Acquiring Person, proper provision shall be made so that each holder
of a Right (except as set forth below) will thereafter have the right to
receive, upon exercise and payment of the Purchase Price, Preferred Stock or, at
the option of the Company, Common Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal to twice the
amount of the Purchase Price.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger, statutory share exchange, or other business
combination in which the Company is not the surviving corporation, or (ii) 50%
or more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except as set forth below) shall thereafter have the right to
receive, upon exercise and payment of the Purchase Price, common stock of the
acquiring company having a value equal to twice the Purchase Price. The events
set forth in this paragraph and in the immediately preceding paragraph are
referred to as the "Triggering Events."
Upon the occurrence of a Triggering Event that entitles Rights holders to
purchase securities or assets of the Company, Rights that are or were owned by
the Acquiring Person, or any affiliate or associate of such Acquiring Person, on
or after such Acquiring Person's Stock Acquisition Date shall be null and void
and shall not thereafter be exercised by any person (including subsequent
transferees). Upon the occurrence of a Triggering Event that entitles Rights
holders to purchase common stock of a third party, or upon the authorization of
an Exchange (as defined below), Rights that are or were owned by any Acquiring
Person or any affiliate or associate of any Acquiring Person on or after such
Acquiring Person's Stock Acquisition Date shall be null and void and shall not
thereafter be exercised by any person (including subsequent transferees).
The Purchase Price payable, and the number of shares of Preferred Stock,
Common Stock or other securities or property issuable upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution.
At any time (including a time after any person becomes an Acquiring
Person), the Company may exchange all or part of the Rights (except as set forth
below) for shares of Common Stock (an "Exchange") at an exchange ratio of one
share per Right, as appropriately adjusted to reflect any stock split or similar
transaction.
At any time until ten days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"). Under certain circumstances set forth in the
Rights Agreement, the decision to make an Exchange or to redeem the Rights shall
require the concurrence of a majority of the Continuing Directors (as defined
below). Additionally, the Company may thereafter but prior to the occurrence of
a Triggering Event redeem the Rights in whole, but not in part, at the
Redemption Price provided that such redemption is incidental to a merger or
other business combination transaction involving the Company that is approved by
a majority of the Continuing Directors, does not involve an Acquiring Person,
and in which all holders of Common Stock are treated alike. After the redemption
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period has expired, the Company's right of redemption may be reinstated if an
Acquiring Person reduces his beneficial ownership to less than 10% of the
outstanding shares of Common Stock in a transaction or series of transactions
not involving the Company. Immediately upon the action of the Board ordering
redemption of the Rights, with, where required, the concurrence of the
Continuing Directors, the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
The term "Continuing Directors" means any member of the Board who was a
member of the Board immediately before the adoption of the Rights Agreement, and
any person who is subsequently elected to the Board if such person is
recommended or approved by a majority of the Continuing Directors, but does not
include an Acquiring Person, or an affiliate or associate of an Acquiring
Person, or any representative of the foregoing entities.
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. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Preferred Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
Other than certain provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by the
Board prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board (in certain
circumstances, only with the concurrence of the Continuing Directors) in order
to cure any ambiguity, to make certain other changes that do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the Rights
Agreement; provided, however, no amendment to adjust the time period governing
redemption may be made at such time as the Rights are not redeemable.
The Rights Agreement (which includes as Exhibit A the form of Rights
Certificate) is attached to this Registration Statement as an exhibit and is
incorporated herein by reference. The foregoing description of the Rights is
qualified in its entirety by reference to the Rights Agreement and its exhibits.
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Item 2. Exhibits.
The following exhibits are filed as a part hereof:
1. Rights Agreement, dated as of June 30, 1999, between the Company and
American Stock Transfer & Trust Company, as Rights Agent.
2. Form of Rights Certificate (included as Exhibit A to the Rights Agreement).
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
TREDEGAR CORPORATION
(Registrant)
By: /s/ Norman A. Scher
___________________________________________
Name: Norman A. Scher
Title: Executive VP & CEO
Dated: June 16, 1999
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EXHIBIT INDEX
Sequentially
Exhibit No. Description Numbered Pages
- -------------- --------------------------------------------- --------------
99.1 Rights Agreement, dated as of June 30,
1999, between the Company and American
Stock Transfer & Trust, as Rights Agent
Form of Rights Certificate (included as
Exhibit A to the Rights Agreement)
7
EXHIBIT 99.1
TREDEGAR CORPORATION
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
Rights Agent
Rights Agreement
Dated as of June 30, 1999
8
Table of Contents
Page
Section 1. Certain Definitions...............................................1
Section 2. Appointment of Rights Agent.......................................5
Section 3. Issue of Rights and Rights Certificates...........................5
Section 4. Form of Rights Certificates.......................................7
Section 5. Countersignature and Registration.................................8
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates...........................................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights;
Restriction on Transfer of Rights......................................9
Section 8. Cancellation and Destruction of Rights Certificates..............11
Section 9. Reservation and Availability of Preferred Stock..................11
Section 10. Preferred Stock Record Date.....................................12
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights...................................................13
Section 12. Certificates of Adjusted Purchase Price or Number of Shares.....20
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.........................................................20
Section 14. Fractional Rights and Fractional Shares.........................22
Section 15. Rights of Action................................................23
Section 16. Agreement of Rights Holders.....................................23
Section 17. Rights Certificate Holder Not Deemed a Shareholder..............24
Section 18. Concerning the Rights Agent.....................................24
Section 19. Merger or Consolidation or Change of Name of Rights Agent.......25
Section 20. Duties of Rights Agent..........................................25
Section 21. Change of Rights Agent..........................................27
9
Section 22. Issuance of New Rights Certificates.............................28
Section 23. Redemption and Termination......................................28
Section 24. Exchange........................................................30
Section 25. Notice of Certain Events........................................31
Section 26. Notices.........................................................31
Section 27. Supplements and Amendments......................................32
Section 28. Successors......................................................33
Section 29. Determinations and Actions by the Board of Directors, etc.......33
Section 30. Benefits of this Agreement......................................33
Section 31. Severability....................................................34
Section 32. Governing Law...................................................34
Section 33. Counterparts....................................................34
Section 34. Descriptive Headings............................................34
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
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RIGHTS AGREEMENT
This Agreement, dated as of June 30, 1999 (the "Agreement"), between
TREDEGAR CORPORATION, a Virginia corporation (the "Company"), and American Stock
Transfer & Trust Company, a New York corporation (the "Rights Agent"), provides
as follows:
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has authorized and declared
a dividend distribution of one Right (as hereinafter defined) for each
outstanding share of Common Stock of the Company to shareholders of record at
the Close of Business (as hereafter defined) on the Record Date (as hereinafter
defined) and has authorized the issuance of one Right (as such number may
hereinafter be adjusted as provided herein) for each share of Common Stock that
shall be issued between the Record Date and the earliest of the Distribution
Date, the Redemption Date or the Expiration Date (as such terms are hereinafter
defined) unless the Board of Directors provides to the contrary before or at the
time of issuance of any such Common Stock, each Right initially representing the
right to purchase one Unit of Preferred Stock, (as hereinafter defined), and
being in the form of the Rights Certificate attached hereto as Exhibit A, upon
the terms and subject to the conditions hereof (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person who or which, alone or together
with all Affiliates and Associates of such Person, shall at any time be the
Beneficial Owner of either or both of (i) 10% or more of the shares of Common
Stock then outstanding or (ii) 10% or more of the Rights then outstanding, but
shall not include (a) the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan; (b) any Person or any "group" whose beneficial
ownership of capital stock of the Company is reported on Amendment No. 4 to the
Schedule 13(d), as amended, filed with respect to the Company on March 20, 1997,
any spouses, children and lineal descendants of such Persons; any trusts created
for the benefit of such Persons, and any combination of Persons described in
this clause (b); or (c) any such Person who has become and is such a Beneficial
Owner solely because (1) of a reduction in the aggregate number of shares of
Common Stock outstanding due to a repurchase of shares of Common Stock by the
Company since the last date on which such Person acquired Beneficial Ownership
of any shares of Common Stock or (2) it acquired such Beneficial Ownership of in
the good faith belief that such acquisition would not (A) cause such Beneficial
Ownership to exceed 10% of the shares of Common Stock then outstanding and such
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Person relied in good faith in computing the percentage of its Beneficial
Ownership on publicly filed reports or documents of the Company that are
inaccurate or out-of-date or (B) otherwise cause a Distribution Date or the
adjustment provided for in Section 11(a) to occur. Notwithstanding clause (b)(2)
of the preceding sentence, if any Person that is not an Acquiring Person due to
such clause (b)(2) does not reduce its percentage of Beneficial Ownership of
shares of Common Stock to less than 10% by the Close of Business on the fifth
Business Day after notice from the Company (the date of notice being the first
day) that such Person's Beneficial Ownership of shares of Common Stock so
exceeds 10%, such Person shall, at the end of such five Business Day period,
become an Acquiring Person (and such clause (b)(2) shall no longer apply to such
Person). For purposes of this definition, the determination whether any Person
acted in "good faith" shall be conclusively determined by the Board of Directors
of the Company, acting by a vote of those directors of the Company whose
approval would be required to redeem the Rights under Section 23.
(b) "Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to
"beneficially own," any securities:
(i) that such Person or any of such Person's Affiliates or Associates is deemed
to "beneficially own" within the meaning of Rule 13d-3 of the General Rules and
Regulations under the Exchange Act;
(ii) that such Person or any of such Person's Affiliates or Associates, directly
or indirectly, has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed to be the "Beneficial
Owner" of, or to "beneficially own," (A) securities tendered pursuant to a
tender or exchange offer made by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for purchase or
exchange or (B) securities issuable upon exercise of the Rights.
(iii) that such Person or any of such Person's Affiliates or Associates,
directly or indirectly, has the right to vote, including pursuant to any
agreement, arrangement or understanding, whether or not in writing; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph (iii) as a result of an
agreement, arrangement or understanding to vote such security if such agreement,
arrangement or understanding: (A) arises solely from a revocable proxy given in
response to a public proxy solicitation made pursuant to, and in accordance
with, the applicable provisions of the General Rules and Regulations under the
Exchange Act, and (B) the beneficial ownership of such security is not also then
reportable by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iv) that are beneficially owned, directly or indirectly, by any other Person
(or any Affiliate or Associate thereof) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in the
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proviso to subparagraph (iii) of this paragraph (c)) or disposing of any voting
securities of the Company; provided, however, that notwithstanding any provision
of this Section 1(c), any Person engaged in business as an underwriter of
securities who acquires any securities of the Company through such Person's
participation in good faith in a firm commitment underwriting registered under
the Securities Act of 1933, as amended (the "Act"), shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," such securities until the
expiration of 40 days after the date of acquisition; and provided, further, that
in no case shall an officer or director of the Company be deemed (x) the
beneficial owner of any securities beneficially owned by another officer or
director of the Company solely by reason of actions undertaken by such persons
in their capacity as officers or directors of the Company; or (y) the beneficial
owner of securities held of record by the trustee of any employee benefit plan
of the Company or any Subsidiary of the Company for the benefit of any employee
of the Company or any Subsidiary of the Company, other than the officer or
director, by reason of any influence that such officer or director may have over
the voting of the securities held in the plan.
(d) "Business Day" shall mean any day other than a Saturday, Sunday or a day on
which national banking institutions in the Commonwealth of Virginia or the State
of New York are authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M., Richmond,
Virginia time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Richmond, Virginia time, on the next
succeeding Business Day.
(f) "Common Stock" shall mean the common stock, no par value, of the Company,
except that "Common Stock" when used with reference to any Person other than the
Company, if such Person is a corporation, shall mean the capital stock of such
Person with the greatest voting power, or the equity securities or other equity
interest in such Person having power to control or direct the management of such
Person, or any shares of capital stock or other equity interests into which the
foregoing shall be reclassified or changed.
(g) "Continuing Director" shall mean any member of the Board of Directors of the
Company, while a member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, and (i) who is a member
of the Board on the date of this Agreement or (ii) whose subsequent nomination
for election or election to the Board was recommended or approved by a majority
of the Continuing Directors serving at the time of such nomination or election.
(h) "Distribution Date" shall mean the earlier of (i) the Close of Business on
the tenth business day after the Stock Acquisition Date (as hereinafter defined)
or (ii) the Close of Business on the tenth business day after the date that a
tender or exchange offer by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act if, upon consummation thereof, such Person
would be an Acquiring Person (irrespective of whether any shares were actually
purchased pursuant to any such offer).
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(i) "Equivalent Shares" shall mean shares of Preferred Stock (as hereinafter
defined) and any other class or series of capital stock of the Company that is
entitled to participate in dividends and other distributions, including
distributions upon the liquidation, dissolution or winding up of the Company, on
a proportional basis with the Common Stock. In calculating the number of any
class or series of Equivalent Shares for purposes of Section 11 hereof, the
number of shares, or fractions of a share, of such class or series of capital
stock that is entitled to the same dividend or distribution as a whole share of
Common Stock shall be deemed to be one share.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
and in effect on the date of this Agreement, unless a different date is
otherwise specifically provided herein.
(k) "Exchange Date" shall mean the date on which the Board of Directors
authorizes the exchange of Rights for shares of Common Stock pursuant to Section
24 hereof.
(l) "Expiration Date" shall mean the earliest of (i) the Close of Business on
the Final Expiration Date, or (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof, or (iii) the Exchange Date.
(m) "Final Expiration Date" shall mean June 30, 2009.
(n) "Person" shall mean any individual, firm, corporation, partnership or other
entity and any particular Person shall include any "group" acting as described
in Section 13(d)(3) of the Exchange Act.
(o) "Preferred Stock" shall mean shares of Series A Participating Cumulative
Preferred Stock, without par value, of the Company.
(p) "Purchase Price" shall have the meaning set forth in Section 4(a) hereof, as
adjusted in accordance with this Agreement and as in effect from time to time.
(q) "Record Date" shall mean the Close of Business on June 18, 1999.
(r) "Rights" shall mean the rights to purchase Preferred Stock (or other
securities) as provided in this Agreement and "Rights Certificate" shall have
the meaning set forth in Section 3(a) hereof.
(s) "Section 11(a)(ii) Event" shall mean any occurrence of the event described
in Section 11(a)(ii) hereof.
(t) "Section 13 Event" shall mean any event described in clause (w), (x), (y) or
(z) of Section 13(a) hereof.
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(u) "Stock Acquisition Date" shall mean the first date of public announcement
(which, for purposes of this definition, shall include, without limitation, a
report filed pursuant to Section 13(d) of the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
(v) "Subsidiary" shall mean, with reference to any Person, any corporation or
other entity of which an amount of voting securities sufficient to elect a
majority of the directors or Persons having similar authority of such
corporation or other entity is beneficially owned, directly or indirectly, by
such Person, or otherwise controlled by such Person.
(w) "Triggering Event" shall mean any occurrence of the Section 11(a)(ii) Event
or any Section 13 Event.
(x) "Unit" shall mean one one-hundredth of a share of Preferred Stock.
Section 2. Appointment of Rights Agent
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be holders of Common Stock) in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Rights and Rights Certificates
(a) Until the Distribution Date, (x) the Rights shall be evidenced (subject to
the provisions of paragraphs (b) and (c) of this Section 3) by the certificates
for the Common Stock registered in the names of the holders of the Common Stock
(which certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights shall be
transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company). Subject to the provisions of
Section 7(e) hereof, as soon as practicable after the Company has notified the
Rights Agent of the occurrence of a Distribution Date, the Rights Agent shall
send by first-class, insured, postage prepaid mail, to each such record holder
of shares of the Common Stock as of the Close of Business on the Distribution
Date, at the address of such holder shown on the records of the Company, one or
more rights certificates, in substantially the form of Exhibit A hereto (the
"Rights Certificates"), evidencing one Right for each share of Common Stock so
held, subject to adjustment as provided herein. In the event that an adjustment
in the number of Rights per share of Common Stock has been made pursuant to
Section 11(n) hereof, at the time of distribution of the Rights Certificates,
the Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights shall be
evidenced solely by such Rights Certificates.
(b) A Summary of Rights, in substantially the form attached hereto as Exhibit B
(the "Summary of Rights"), shall be sent by the Company by first-class, postage
prepaid mail, to each record holder of the Common Stock on the Record Date, at
15
the address of each such holder shown on the records of the Company. Until the
Distribution Date, the Rights shall be evidenced by such certificates evidencing
the Common Stock, and the registered holders of the Common Stock shall also be
the registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date, the transfer of any certificates
evidencing shares of Common Stock in respect of which Rights have been issued
shall also constitute, subject to the provisions of Section 7(e) hereof, the
transfer of the Rights associated with such shares of Common Stock.
(c) Unless the Board of Directors by resolution adopted at or before the time of
the issuance (including pursuant to the exercise of rights under the Company's
stock option, stock purchase or other benefit plans) of any shares of Common
Stock specifies to the contrary, Rights shall be issued in respect of all shares
of Common Stock that are issued after the Record Date but prior to the earlier
of the Distribution Date or the Expiration Date. Certificates representing
shares of Common Stock outstanding prior to the Record Date that are issued upon
transfer or exchange of such Common Stock, shall also be deemed to be
certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Tredegar
Corporation, a Virginia corporation (the "Company") and American
Stock Transfer & Trust Company, a New York corporation (the "Rights
Agent") dated as of June 30, 1999, as may be amended from time to
time (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at
the principal offices of the Company. Under certain circumstances,
as set forth in the Rights Agreement, such Rights will be evidenced
by separate certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this certificate
a copy of the Rights Agreement, as in effect on the date of mailing,
without charge promptly after receipt of a written request therefor.
Under certain circumstances set forth in the Rights Agreement,
Rights that are owned or that were previously owned by a Person who
is, was or becomes an Acquiring Person or any Affiliate or Associate
of an Acquiring Person may become null and void.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute, subject to the provisions of
Section 7(e) hereof, the transfer of the Rights associated with the Common Stock
represented by such certificates.
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In the event that the Company purchases or acquires any shares of Common
Stock after the Record Date but prior to the Distribution Date, any Rights
associated with such shares of Common Stock shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated with
the shares of Common Stock that are no longer outstanding.
Section 4. Form of Rights Certificates
(a) The Rights Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse thereof) shall each be substantially in
the form set forth in Exhibit A hereto and may have such marks of identification
or designation and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 11 and Section 22 hereof,
the Rights Certificates, whenever distributed, shall be dated as of the
Distribution Date, and on their face shall entitle the holders thereof to
purchase such number of Units of Preferred Stock as shall be set forth therein
at the price set forth therein (such exercise price per unit, being hereinafter
referred to as the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof shall
be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof
that represents Rights beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
that the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose to avoid or effects
the avoidance of Section 7(e) hereof, and any Rights Certificate issued pursuant
to Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a person who was or became an Acquiring Person
or an Affiliate or an Associate of an Acquiring Person. Accordingly,
this Rights Certificate and the Rights represented hereby may become
void in the circumstances specified in Section 7(e) of the Rights
Agreement.
The Company shall notify the Rights Agent, and, if such notification is given
orally, the Company shall confirm promptly the same in writing, at such time as
the Company has notice that any Person constitutes an Acquiring Person or an
17
Affiliate or Associate of an Acquiring Person, and until such notice is received
by the Rights Agent the Rights Agent may conclusively presume for all purposes
that the foregoing legend need be imprinted only on Right Certificates
beneficially owned by Persons that the Company has previously identified to the
Rights Agent as constituting an Acquiring Person or an Affiliate or Associate of
an Acquiring Person and transferees of any such Persons.
Section 5. Countersignature and Registration
(a) The Rights Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President or any Vice President, either manually or
by facsimile signature, and shall have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Rights
Certificates shall be countersigned manually or by facsimile by the Rights Agent
and shall not be valid for any purpose unless so countersigned. The Rights
Certificates shall be countersigned by an authorized signatory of the Rights
Agent but it shall not be necessary for the same signatory to countersign all of
the Rights Certificates issued hereunder. In case any officer of the Company who
shall have signed any of the Rights Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its principal office or offices designated as the appropriate place for
surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates
(a) Subject to the provisions of Section 4(b), Section 7(e) and Section 14
hereof, at any time after the Close of Business on the Distribution Date, and at
or prior to the Close of Business on the Expiration Date, any Rights Certificate
or Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Certificates (other than Rights Certificates that have
become void pursuant to Section 7(e) hereof or that have been exchanged pursuant
to Section 24 hereof) entitling the registered holder to purchase a like number
of Units of Preferred Stock (or, following a Triggering Event, Common Stock,
other securities, cash or other assets, as the case may be) as the Rights
18
Certificate or Certificates surrendered then entitle such holder (or former
holder in the case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Certificates
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be transferred, split up,
combined or exchanged at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment from the holder of the Rights of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates.
(b) Subject to Section 7(e) hereof, upon receipt by the Company and the Rights
Agent of evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights;
Restriction on Transfer of Rights
(a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(ii), Section 11(a)(iii),
Section 13, Section 23(a), and Section 24 hereof) in whole or in part at any
time after the Distribution Date upon surrender of the Rights Certificate, with
the form of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the principal office or offices of the
Rights Agent designated for such purpose, together, except as otherwise provided
in Section 11(a)(ii) hereof, with payment of the aggregate Purchase Price with
respect to the total number of Units of Preferred Stock (or Common Stock or
other securities or property, as the case may be) as to which surrendered Rights
are then exercisable, at or prior to the Expiration Date.
(b) The Purchase Price for each Unit of Preferred Stock pursuant to the exercise
of a Right shall initially be $150 and shall be subject to adjustment from time
to time as provided in Section 11 hereof and shall be payable in accordance with
paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable Rights, with
the form of election to purchase and the certificate duly executed, accompanied
by payment, with respect to each Right so exercised, of the Purchase Price per
Unit of Preferred Stock (or Common Stock, other securities or property, as the
19
case may be) to be purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to Section 20(k)
hereof, thereupon promptly, (i) (A) requisition from any transfer agent of the
Units of Preferred Stock (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the total number of Units of Preferred
Stock to be purchased and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests, or (B) if the Company shall have elected
to deposit the total number of Units of Preferred Stock issuable upon exercise
of the Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of Units of Preferred Stock
as are to be purchased (in which case certificates for the Units of Preferred
Stock represented by such receipts shall be deposited by the transfer agent with
the depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) requisition from the Company the amount of cash, if any,
to be paid in lieu of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts, cause the same
to be delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights Certificate. The payment of
the Purchase Price (as such amount may be reduced (including to zero) pursuant
to Section 11(a)(iii) hereof) may be made in cash or by certified bank check or
bank draft payable to the order of the Company. In the event that the Company is
obligated to issue other securities of the Company, pay cash and/or distribute
other property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or other property
are available for distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall exercise less
than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and after
the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned
by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose to avoid or effects the avoidance of this Section 7(e), shall
become null and void without any further action and no holder of such Rights
shall have any rights whatsoever with respect to such Rights, whether under any
20
provision of this Agreement or otherwise. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 7(e) and Section 4(b)
hereof are complied with, but shall have no liability to any holder of Rights
Certificates or any other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates or
Associates, or any transferee thereof, hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates
All Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Stock
(a) The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock (or,
following the occurrence of a Triggering Event, out of its authorized and
unissued Preferred Stock or other securities, as the case may be), the number of
shares of Preferred Stock (or such other securities) that, except as provided in
Section 11(a)(iii) hereof, will be sufficient from time to time to permit the
exercise in full of all outstanding Rights and all Rights that are at the time
issuable, in accordance with the provisions of this Agreement.
(b) So long as the shares of Preferred Stock (and, following the occurrence of a
Triggering Event, any other securities) issuable and deliverable upon the
exercise of the Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to be listed on
such exchange upon official notice of issuance.
(c) The Company shall use its reasonable best efforts (i) to file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)(ii)
and (iii) hereof, or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement under the Act on an
21
appropriate form, with respect to the securities purchasable upon exercise of
the Rights, (ii) to cause such registration statement to become effective as
soon as practicable after such filing, and (iii) to 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 take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the various states
in connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety days after the date set forth
in clause (i) of the first sentence of this Section 9(c), the exercisability of
the Rights in order to prepare and file such registration statement and permit
it to become effective. Upon any such suspension, the Company shall issue a
public announcement stating, and notify the Rights Agent, that the
exercisability of the Rights has been temporarily suspended. The Company shall
also issue a public announcement at such time as the suspension is no longer in
effect. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all such action as may be
necessary to ensure that all shares of Preferred Stock (or other securities, as
the case may be) delivered upon exercise of the Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of the Purchase
Price), be duly authorized, validly issued, fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges that may be
payable in respect of the issuance or delivery of the Rights Certificates and of
any certificates for shares of Preferred Stock (or other securities, as the case
may be) upon the exercise of Rights. The Company shall not, however, be required
to pay any transfer tax that may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the issuance or
delivery of a number of shares of Preferred Stock (or other securities, as the
case may be) in respect of a name other than that of, the registered holder of
the Rights Certificates evidencing Rights surrendered for exercise or to issue
or deliver any certificates for a number of shares of Preferred Stock (or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
Section 10. Preferred Stock Record Date
Each person in whose name any certificate for a number of Units of
Preferred Stock (or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such Units of Preferred Stock (or other securities, as the case may
be) represented thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Stock (or other securities, as the case may be) transfer
books of the Company are closed, such Person shall be deemed to have become the
record holder of such shares (fractional or otherwise) on, and such certificate
22
shall be dated, the next succeeding Business Day on which such transfer books
are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate as such shall not be entitled to any rights of a shareholder
of the Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number
of Rights
The Purchase Price, and the number and kind of shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares, or (D) issue any
shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of Preferred Stock or the number and kind of shares of other capital stock, as
the case may be, issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the aggregate number
of shares of Preferred Stock or the number and kind of shares of other capital
stock, as the case may be, that, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock transfer books of the
Company were open, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs that would require an adjustment under both
this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for
in this Section 11(a)(i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 23 and Section 24 hereof, in the event any
Person becomes an Acquiring Person, then proper provision shall be made by the
Company so that each record holder of each Right (except as provided in Section
7(e) hereof) shall thereafter have the right to receive, upon exercise thereof
for the Purchase Price in accordance with terms of this Agreement, such number
of Units of Preferred Stock (or, in lieu of Preferred Stock, at the option of
the Company and to the extent available, such number of shares of Common Stock)
as shall equal the result obtained by multiplying the Purchase Price by a
fraction, the numerator of which is the number of Units of Preferred Stock for
which a Right is then exercisable and the denominator of which is 50% of the
current market price of a share of Common Stock (determined pursuant to Section
11(d) hereof) on the date of the first occurrence of a Section 11(a)(ii) Event
(such result being hereinafter referred to as the "Adjustment Shares").
23
(iii) To the extent that the number of shares of Preferred Stock
that are authorized by the Company's articles of incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights is not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section 11(a), and
subject to such limitations as are necessary to prevent a default under any
agreement for money borrowed as presently constituted to which the Company is a
party and subject to any limitations contained in Section 13.1-653 of the
Virginia Stock Corporation Act, the Company shall: (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the exercise of a Right
(the "Current Value"), over (2) the Purchase Price (such excess being
hereinafter referred to as the "Spread"), and (B) with respect to each Right,
make adequate provision to substitute for such unavailable Adjustment Shares,
upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) other equity securities of the Company, (4) debt securities
of the Company, (5) other assets, or (6) any combination of the foregoing,
having, together with the Adjustment Shares issued upon exercise of such Right,
an aggregate value equal to the Current Value, where such aggregate value has
been determined by the Board of Directors of the Company based upon the advice
of a nationally recognized investment banking firm selected by the Board of
Directors of the Company; provided, however, if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above within 30 days
following the first occurrence of a Section 11(a)(ii) Event, then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, shares of preferred stock of
the Company or Common Stock (to the extent such securities are available) and
then, if necessary, cash, which securities and/or assets in the aggregate are
equal in value to the Spread. If the Board of Directors of the Company shall
determine in good faith that it is likely that sufficient additional shares of
preferred stock of the Company or Common Stock could be authorized for issuance
upon exercise in full of the Rights, the 30 day period set forth above may be
extended to the extent necessary, but not more than 90 days following the first
occurrence of a Section 11(a)(ii) Event, in order that the Company may seek
shareholder approval for the authorization of such additional shares (such
period, as it may be extended, the "Substitution Period"). To the extent that
the Company determines that some action need be taken pursuant to the first
and/or second sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights, and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii), the
value of the Common Stock shall be the current market price (as determined
pursuant to Section 11(d) hereof) per share of the Common Stock on the date of
the first occurrence of a Section 11(a)(ii) Event.
(b) If at any time after the date of this Agreement the Company shall fix a
record date for the issuance of rights, options or warrants to all holders of
Common Stock or of any class or series of Equivalent Shares entitling such
24
holders (for a period expiring within 45 calendar days after such record date)
to subscribe for or to purchase Common Stock or Equivalent Shares (or securities
convertible into Common Stock or Equivalent Shares) at a price per share (or
having a conversion price per share, if a security convertible into Common Stock
or Equivalent Shares) less than the current market price of such Common Stock or
Equivalent Shares on such record date, then, in each such case, each Right
outstanding immediately prior to such record date shall thereafter evidence the
right to purchase, for the Purchase Price, that number of Units of Preferred
Stock or Equivalent Shares obtained by multiplying the number of Units of
Preferred Stock issuable upon exercise of a Right immediately prior to such
record date by a fraction, the numerator of which shall be the total number of
shares of Common Stock and Equivalent Shares (if any) outstanding on such record
date plus the number of additional shares of Common Stock and Equivalent Shares
(if any) to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible) and the
denominator of which shall be the total number of shares of Common Stock and
Equivalent Shares (if any) outstanding on such record date plus the number of
shares of Common Stock or Equivalent Shares, as the case may be, that the
aggregate offering price of the total number of shares of Common Stock or
Equivalent Shares, as the case may be, 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. In case such subscription price may be
paid in a consideration, part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent. Common Stock and Equivalent Shares
owned by or held for the account of the Company or any Subsidiary 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, each Right
shall be adjusted to evidence the right to receive that number of Units of
Preferred Stock that such Right would have entitled the holder to receive, for
the Purchase Price, if such record date had not been fixed.
(c) If at any time after the date of this Agreement the Company shall fix a
record date for the making of a distribution to all holders of Common Stock or
of any class or series of Equivalent Shares (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of cash (other than a regular quarterly
cash dividend of the Company in compliance with Section 13.1-653 of the Virginia
Stock Corporation Act), evidences of indebtedness, assets, securities (other
than Common Stock or any Equivalent Shares) or subscription rights, options or
warrants (excluding those referred to in Section 11(b) hereof), then, in each
such case, each Right outstanding immediately prior to such record date shall
thereafter evidence the right to purchase, for the Purchase Price, that number
of Units of Preferred Stock obtained by multiplying the number of Units of
Preferred Stock issuable upon exercise of a Right immediately prior to such
record date by a fraction, the numerator of which shall be the current market
price of a share of Common Stock or an Equivalent Share on the record date and
the denominator of which shall be the current market price of a share of Common
25
Stock or an Equivalent Share on such record date less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the cash, evidences of indebtedness, assets or securities so to
be distributed or of such subscription rights, options or warrants applicable to
a share of Common Stock or an Equivalent Share, as the case may be. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, each Right shall be adjusted
to evidence the right to receive that number of Units of Preferred Stock that
such Right would have entitled the holder to receive, for the Purchase Price, if
such record date had not been fixed.
(d) (iv) For the purpose of any computation hereunder, other than computations
made pursuant to Section 11(a)(iii) hereof, the "current market price" per share
of Common Stock on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the 30 consecutive Trading
Days (as such term is hereinafter defined) immediately prior to such date, and
for purposes of computations made pursuant to Section 11(a)(iii) hereof, the
"current market price" per share of Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of such Common Stock for
the ten consecutive Trading Days immediately following such date; provided,
however, that in the event that the current market price per share of the Common
Stock is determined during a period following the announcement by the issuer of
such Common Stock of (A) a dividend or distribution on such Common Stock payable
in shares of such Common Stock or securities convertible into shares of such
Common Stock (other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of the
requisite 30 Trading Day or ten Trading Day period, as set forth above, 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 properly adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices quoted on the Nasdaq
Stock Market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System ("Nasdaq") or such other quotation system then
in use, or, if on any such date the shares of Common Stock are not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Common Stock selected by
the Board of Directors of the Company. If on any such date no market maker is
making a market in the Common Stock, the fair value of such shares on such date
as determined in good faith by the Board of Directors of the Company shall be
used. The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading is open for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on any national securities exchange,
a Business Day. If the Common Stock is not publicly held or not so listed or
traded, "current market price" per share shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
26
(v) For the purpose of any computation hereunder, the "current
market price" per share of Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in Section 11(d)(i) hereof (other
than the last sentence thereof). If the current market price per share of
Preferred Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 100 (as
such number may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock and Preferred
Stock occurring after the date of this Agreement) multiplied by the current
market price per share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, "current market price"
per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. For all purposes of this Agreement, the
"current market price" of one one-hundredth of a share of Preferred Stock shall
be equal to the "current market price" of one share of Preferred Stock divided
by 100.
(e) Anything herein to the contrary notwithstanding, no adjustment in the number
of Units of Preferred Stock for which a Right is exercisable or in the Purchase
Price shall be required unless such adjustment would require an increase or
decrease of at least one percent in such number of shares or in the Purchase
Price; provided, however, that any adjustments that by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a Unit of
Preferred Stock, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the transaction that
mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) or 13(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock other than Preferred Stock, thereafter the
number of such other shares so receivable upon exercise of any Right and if
required, the Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Section 11(a), (b),
(c), (e), (g), (h), (i), (k) and (l) hereof, and the provisions of Sections 7,
9, 10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any adjustment
made to the number or kind of shares purchasable upon exercise of the Rights or
to the Purchase Price hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the adjusted number of Units of Preferred Stock or
other securities purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided below in
this Section 11(h), upon each adjustment of the Purchase Price as a result of
the calculations made in Section 11(b) and (c), each Right outstanding
27
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of Units of
Preferred Stock obtained by (i) multiplying (x) the number of Units of Preferred
Stock covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price. On or after the date of any adjustment of the
Purchase Price, in lieu of any adjustment in the number of Units of Preferred
Stock or any other capital stock purchasable upon the exercise of a Right, the
Company may elect to adjust the number of Rights. Each of the Rights outstanding
after the adjustment in the number of Rights shall be exercisable for the number
of Units of Preferred Stock for which a Right was exercisable immediately prior
to such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
one-ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten days later than the date of
the public announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(h), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates on the
record date specified in the public announcement.
(i) Irrespective of any adjustment or change in the Purchase Price or the number
of Units of Preferred Stock or the number and kind of other securities issuable
upon the exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per Unit, the
number of Units and the other terms that were expressed in the initial Rights
Certificates issued hereunder.
(j) In any case in which this Section 11 shall require that an adjustment be
made effective as of a record date for a specified event, the Company may elect
to defer until the occurrence of such event the issuance to the holder of any
Right exercised after such record date of the number of Units of Preferred Stock
and other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of Units of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise before
giving effect to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares (fractional or otherwise)
or securities upon the occurrence of the event requiring such adjustment.
28
(k) Anything in this Section 11 to the contrary notwithstanding, the Company
shall be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as and to the extent
that in its good faith judgment the Board of Directors of the Company shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred
Stock at less than the current market price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities that by their terms are convertible into
or exchangeable for shares of Preferred Stock, (iv) stock dividend or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such shareholders.
(l) The Company covenants and agrees that it shall not, at any time after the
Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(m)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction that complies with Section 11(m) hereof), (iii)
effect a statutory share exchange with any Person (other than a Subsidiary of
the Company in a transaction that complies with Section 11(m) hereof), or (iv)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(m) hereof), if at the time of or immediately after such
consolidation, merger, statutory share exchange or sale there are any rights,
warrants or other instruments or securities outstanding or agreements in effect
that would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights.
(m) The Company covenants and agrees that, after the Distribution Date, it will
not, except as permitted by Section 23 or Section 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
(n) Anything in this Agreement to the contrary notwithstanding, in the event
that the Company shall at any time after the Record Date and prior to the
Distribution Date (i) declare a dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event shall equal
the result obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event.
29
Section 12. Certificates of Adjusted Purchase Price or Number of Shares
Whenever an adjustment is made as provided in Section 11 or Section 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock or the Common Stock, a copy of such certificate, and (c) mail a
brief summary thereof to each holder of a Rights Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 25 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power
(a) In the event that, following the Stock Acquisition Date, directly or
indirectly, (w) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(m) hereof), and the Company shall not be the continuing
or surviving corporation of such consolidation or merger, (x) any Person (other
than a Subsidiary of the Company in a transaction that complies with Section
11(m) hereof) shall consolidate with, or merge with or into, the Company, and
the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash or any other
property, (y) the Company shall be a party to a statutory share exchange with
any other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(m) hereof) after which the Company is a Subsidiary of
any other Person, or (z) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one transaction
or a series of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which complies
with Section 11(m) hereof), then, and in each such case, proper provision shall
be made so that: (i) each record holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradable shares of Common Stock of the Principal Party
(as hereinafter defined), not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of shares of
Common Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying the number of
such shares for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and (2) dividing that product
(which, following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for each Right for all purposes of this Agreement) by
30
50% of the current market price (determined pursuant to Section 11(d)(i) hereof)
per share of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event; and (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11 hereof shall
apply only to such Principal Party following the first occurrence of a Section
13 Event; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may be
necessary to ensure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Section 11(a)(ii) hereof shall be of no effect following the first occurrence
of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (w), (x) or (y) of the
first sentence of Section 13(a) hereof, the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted in
such merger, consolidation or statutory share exchange, and if no securities are
so issued, the Person that is the other party to such merger, consolidation or
statutory share exchange; and
(ii) in the case of any transaction described in clause (z) of the first
sentence of Section 13(a) hereof, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions; provided, however, that in any such case, (1) if
the Common Stock of such Person is not at such time and has not been
continuously over the preceding twelve-month period registered under Section 12
of the Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered,
"Principal Party" shall refer to such other Person; and (2) in case such Person
is a Subsidiary, directly or indirectly, of more than one Person, the Common
Stocks of two or more of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the issuer of the Common
Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger, statutory
share exchange, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock that have not been
issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable after
the date of any consolidation, merger, statutory share exchange or sale of
assets mentioned in paragraph (a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement under the Act on an appropriate
form with respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, and will use its best efforts to cause such
31
registration statement to (A) become effective as soon as practicable after such
filing and (B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date and similarly comply with
applicable state securities laws; and
(ii) deliver to record holders of the Rights historical financial statements for
the Principal Party and each of its Affiliates that comply in all respects with
the requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or statutory share exchanges or sales or other transfers. In the
event that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights that have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a)
hereof.
Section 14. Fractional Rights and Fractional Shares
(a) The Company shall not be required to issue fractions of Rights, except prior
to the Distribution Date as provided in Section 11(n) hereof, or to distribute
Rights Certificates that evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Rights Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise
issuable. The closing price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price, or, if not so quoted, the average of the high bid and low asked
prices on the Nasdaq Stock Market, as reported by Nasdaq or such other quotation
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares of Preferred
Stock (other than fractions that are integral multiples of one one-hundredth of
a share of Preferred Stock) upon exercise of the Rights or to distribute
certificates that evidence fractional shares of Preferred Stock (other than in
such integral multiples). In lieu of fractional shares of Preferred Stock that
are not in such integral multiples, the Company may pay to the registered
holders of Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
32
value of one one-hundredth of a share of Preferred Stock. For purposes of this
Section 14(b), the current market value of one one-hundredth of a share of
Preferred Stock shall be one one-hundredth of the current market price of a
share of Preferred Stock (as determined pursuant to Section 11(d) hereof) for
the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly waives his
right to receive any fractional Right or any fractional shares upon exercise of
a Right, except as permitted by this Section 14.
Section 15. Rights of Action
All rights of action in respect of this Agreement are vested in the
respective registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock in respect of
which Rights have been issued); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of such Common Stock), without
the consent of the Rights Agent or of the holder of any other Rights Certificate
(or, prior to the Distribution Date, of such Common Stock), may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders
Every holder of a Right by accepting the same consents and agrees with the
Company and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable only
on the registry books of the Rights Agent if surrendered at the principal office
or offices of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights
Agent may deem and treat the person in whose name a Rights Certificate (or,
prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights Certificate
or the associated Common Stock certificate made by anyone other than the Company
or the Rights Agent) for all purposes whatsoever, and neither the Company,
subject to the last sentence of Section 7(e) hereof, nor the Rights Agent shall
be required to be affected by any notice to the contrary; and
33
(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use its best efforts to have any
such order, decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Shareholder
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of Units of Preferred
Stock or any other securities of the Company that may at any time be issuable on
the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.
Section 18. Concerning the Rights Agent
(a) The Company agrees to pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and disbursements and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises.
(b) The Rights Agent shall be protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, instruction, 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, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
34
Section 19. Merger or Consolidation or Change of Name of Rights Agent
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate
trust business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto;
provided, however, that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of a
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may be legal counsel
for the Company), and the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the Rights
Agent shall deem it necessary or desirable that any fact or matter (including,
without limitation, the identity of any Acquiring Person and the determination
of "current market price") be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by the Chairman
of the Board, any Vice-Chairman, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
35
the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own negligence, bad
faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of the
validity of any provision of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment provided for in this Agreement or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Rights Certificates
after actual notice of any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any shares of Preferred Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Preferred
Stock will, when so issued, be duly authorized, validly issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from the Chairman, the
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer. At any time the Rights
Agent may apply to the Company for written instructions with respect to any
matter arising in connection with the Rights Agent's duties and obligations
arising under this Agreement. Such application by the Rights Agent for written
instructions from the Company may at the option of the Rights Agent, set forth
in writing any action proposed to be taken or omitted by the Rights Agent with
respect to its duties or obligations under this Agreement and the date on and/or
after which such action shall be taken and the Rights Agent shall not be liable
for any action taken or omitted in accordance with a proposal included in any
such application on or after the date specified therein (which date shall be not
less than one Business Day after the Company receives such application, without
the Company's consent) unless, prior to taking or initiating any such action,
the Rights Agent has received written instructions in response to such
application specifying the action to be taken or omitted.
36
(h) The Rights Agent and any shareholder, director, officer or employee of the
Rights Agent may buy, sell or deal in any of the Rights or other securities of
the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company.
(i) The Rights Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or by or through its
attorneys or agents, and the Rights Agent shall not be answerable or accountable
for any act, default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, default, neglect or
misconduct; provided, however, reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of its rights if there shall
be reasonable grounds for believing that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights Agent
for exercise or transfer, the certificate attached to the form of assignment or
form of election to purchase, as the case may be, has either not been completed
or indicates an affirmative response to clause 1 and/or 2 thereof, the Rights
Agent shall not take any further action with respect to such requested exercise
of transfer without first consulting with the Company.
Section 21. Change of Rights Agent
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days' notice in writing
mailed to the Company, and to each transfer agent of the Preferred Stock or
Common Stock, by registered or certified 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 Preferred Stock or Common Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then any registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
37
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of the State of New York or the
Commonwealth of Virginia (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
State of New York or the Commonwealth of Virginia), in good standing, having a
principal office in the State of New York or the Commonwealth of Virginia, that
is authorized under such laws to exercise corporate trust powers and is subject
to supervision or examination by federal or state authority and that has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $100,000,000. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the registered holders
of the Rights Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates
Notwithstanding any of the provisions of this Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, the Company may, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Rights Certificates representing the appropriate
number of Rights in connection with the issuance or sale of shares of Common
Stock following the Distribution Date.
Section 23. Redemption and Termination
(a) (i) The Company may, at its option, at any time prior to the earlier of (A)
the Close of Business on the tenth day following the Stock Acquisition Date, or
(B) the Final Expiration Date, redeem all but not less than all the then
outstanding Rights (which shall not include any rights that have become void
pursuant to Section 7(e) hereof) at a redemption price of $.01 per Right, as it
may be appropriately adjusted by the Board of Directors of the Company to
reflect any stock split or combination, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price") and the Company may, at its option, pay
the Redemption Price either in shares of Common Stock (based on the current
market price (as determined pursuant to Section 11(d) hereof) per share of the
Common Stock at the time of redemption) or cash; provided, however, that if the
Board of Directors of the Company authorizes redemption of the Rights in either
of the circumstances set forth in clauses (x) and (y) below, then there must be
Continuing Directors in office and such authorization shall require the
concurrence of a majority of such Continuing Directors: (x) such authorization
occurs on or after the date a Person becomes an Acquiring Person, or (y) such
authorization occurs on or after the date of a change (resulting from a proxy
38
solicitation) in a majority of the directors in office at the commencement of
such solicitation if any Person who is a participant in such solicitation has
stated (or, if upon the commencement of such solicitation, a majority of the
Board of Directors of the Company has determined in good faith) that such Person
(or any of its Affiliates or Associates) intends to take, or may consider
taking, any action that would result in such Person becoming an Acquiring Person
or that would cause the occurrence of a Triggering Event.
(ii) In addition, if there are Continuing Directors then in office,
the Board of Directors may redeem all but not less than all of the then
outstanding Rights at the Redemption Price with the concurrence of a majority of
such Continuing Directors, following the occurrence of a Stock Acquisition Date
and following the expiration of the right of redemption under clause (i) above,
if either (A) (1) a Person who is an Acquiring Person shall have transferred or
otherwise disposed of a number of shares of Common Stock in one transaction or a
series of transactions not directly or indirectly involving the Company or any
of its Subsidiaries, such that such Person is thereafter a Beneficial Owner of
less than 10% of the outstanding shares of Common Stock and (2) there are no
other Persons, immediately following the occurrence of the event described in
clause (1), who are Acquiring Persons, or (B) in connection with the type of
transaction specified in Section 13(a) hereof in which all holders of Common
Stock are treated alike and not involving an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or any other Person in which such Acquiring
Person, Affiliate or Associate has any interest, or any other Person acting
directly or indirectly on behalf of or in association with any such Acquiring
Person, Affiliate or Associate. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable after the first
occurrence of a Triggering Event until such time as the Company's right of
redemption under clause (i) above is not exercisable.
(b) Immediately upon the action of the Board of Directors of the Company
authorizing the redemption of the Rights pursuant to subsection (a) of this
Section 23 and without any further action and without any notice, the right to
exercise the Rights shall terminate and the only right thereafter of a holder of
such Rights shall be to receive the Redemption Price for each Right so held.
Promptly after the action of the Board of Directors authorizing the redemption
of the Rights, the Company shall give notice of such redemption to the Rights
Agent and to the holders of such Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent for the Common Stock. Any notice that is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption shall state the method by which the
payment of the Redemption Price will be effected.
Section 24. Exchange
(a) The Company may, at its option, by resolution of its Board of Directors, at
any time (including a time after any Person becomes an Acquiring Person),
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to Section 7(e) hereof) for
shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or
39
similar transaction occurring with respect to the Common Stock after the date
hereof (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"); provided, however, under the circumstances described in the proviso to
Section 23(a)(i) hereof, an Exchange shall be effective only if there are
Continuing Directors and shall require the concurrence of a majority of such
Continuing Directors.
(b) Immediately upon the action of the Board of Directors of the Company
authorizing the exchange of the Rights pursuant to subsection (a) of this
Section 24 and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of a holder of
such Rights shall be to receive that number of shares of Common Stock equal to
the number of Rights held by such holder multiplied by the Exchange Ratio.
Promptly after the action of the Board of Directors authorizing the exchange of
the Rights, the Company shall give notice of such exchange to the Rights Agent
and to the holders of such Rights by mailing such notice to all such holders at
each holder's last address as it appears upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the transfer
agent for the Common Stock. Any notice that is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the
shares of Common Stock for Rights will be effected.
(c) In the event that there shall not be sufficient shares of Common Stock
authorized but unissued to permit the exchange in full of such Rights in
accordance with this Section 24, the Company shall take all such action as may
be necessary to authorize additional shares of Common Stock for issuance upon
exchange of the Rights. In the event the Company shall, after good faith effort,
be unable to take all such action as may be necessary to authorize such
additional shares of Common Stock, the Company shall substitute, for each share
of Common Stock that would otherwise be issuable upon exchange of a Right, a
number of shares of other equity securities of the Company or fraction thereof
such that the current per share market price of one share of such other equity
securities multiplied by such number or fraction is equal to the current per
share market price of one share of Common Stock as of the date of issuance of
such shares of such other equity securities or fraction thereof.
(d) The Company shall not be required to issue fractions of shares of Common
Stock or to distribute certificates that evidence fractional shares of Common
Stock. In lieu of such fractional shares of Common Stock, there shall be paid to
the registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this subsection (d), the current market value
of a whole share of Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to Section 11(d) hereof) for the Trading Day
immediately prior to the Exchange Date.
Section 25. Notice of Certain Events
(a) In case the Company shall propose, at any time after the Distribution Date,
(i) to pay any dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the holders of Preferred
Stock (other than a regular quarterly cash dividend of the Company in compliance
40
with Section 13.1-653 of the Virginia Stock Corporation Act), or (ii) to offer
to the holders of Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification involving
only the subdivision of outstanding shares of Preferred Stock), or (iv) to
effect any consolidation or merger into or with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(m)
hereof), or to effect a statutory share exchange with any Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(m)
hereof), or to effect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in one transaction or a
series of related transactions, of more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than a Subsidiary of the Company in one or more transactions each
of which complies with Section 11(m) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, statutory share exchange, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by the holders
of the shares of Preferred Stock, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i) or (ii)
above at least 20 days prior to the record date for determining holders of the
shares of Preferred Stock for purposes of such action, and in the case of any
such other action, at least 20 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
shares of Preferred Stock whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any such case, (i)
the Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate, to the extent feasible and in accordance with Section 26
hereof, a notice of the occurrence of such event, which shall specify the event
and the consequences of the event to holders of Rights under Section 11(a)(ii)
hereof, and (ii) all references in the preceding paragraph to Preferred Stock
shall be deemed thereafter to refer, if appropriate, not only to Preferred Stock
but also to Common Stock or other securities.
Section 26. Notices
Notices or demands authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Rights Certificate to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
Tredegar Corporation
1100 Boulders Parkway
Richmond, Virginia 23225
Attention: Corporate Secretary
41
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
Rights Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, New York 11219
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments
Prior to the Distribution Date and subject to the penultimate sentence of
this Section 27, the Company may, and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common Stock.
From and after the Distribution Date and subject to the penultimate sentence of
this Section 27, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein that may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen any time period
hereunder (which lengthening or shortening, under the circumstances described in
the proviso to Section 23(a)(i) hereof, shall be effective only if there are
Continuing Directors and shall require the concurrence of a majority of such
Continuing Directors), or (iv) to change or supplement the provisions hereunder
in any manner that the Company may deem necessary or desirable and that shall
not adversely affect the interests of the holders of Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, that this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period relating to when
the Rights may be redeemed at such time as the Rights are not then redeemable,
or (B) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits, to the
holders of Rights. Upon the delivery of a certificate from an appropriate
officer of the Company that states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment. No supplement or amendment shall be made that
changes the Redemption Price, the Final Expiration Date, the Purchase Price or
the number of shares of Common Stock for which a Right is exercisable; provided,
however, that at any time prior to the Distribution Date, the Board of Directors
of the Company may amend this Agreement to increase the Purchase Price or extend
the Final Expiration Date. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Common Stock.
42
Section 28. Successors
All the covenants and provisions of this Agreement by or for the benefit
of the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act. The Board of Directors of the Company
(and, where specifically provided for herein, the Continuing Directors) shall
have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board, or the Company
(or, where specifically provided for herein, the Continuing Directors), or as
may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including a determination
to redeem or not redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done or
made by the Board (or, where specifically provided for herein, by the Continuing
Directors) in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject the Board or the Continuing Directors to any liability to the
holders of the Rights.
Section 30. Benefits of this Agreement
Nothing in this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent, the registered holders from time to time of
the Rights Certificates (and, prior to the Distribution Date, registered holders
of the Common Stock) any legal or equitable right, remedy or claim under this
Agreement; and this Agreement shall be for the sole and exclusive benefit of the
Company and the Persons specified above.
Section 31. Severability
If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the Company
43
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the Close of Business on the tenth day following the date
of such determination by the Board of Directors.
Section 32. Governing Law
This Agreement, each Right and each Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of the Commonwealth of
Virginia and for all purposes shall be governed by and construed in accordance
with the laws of such Commonwealth applicable to contracts made and to be
performed entirely within such Commonwealth.
Section 33. Counterparts
This Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.
Section 34. Descriptive Headings
Descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
44
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
TREDEGAR CORPORATION
By: /s/ Norman A. Scher
______________________________
Name: Norman A. Scher
Title: Executive VP & CEO
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ Herbert J. Lemmer
________________________________
Name: Herbert J. Lemmer
Title: Vice President
45
EXHIBIT A
[Form of Rights Certificate]
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER JUNE 30, 1999, OR EARLIER IF REDEEMED OR EXCHANGED BY THE
COMPANY. THE COMPANY, AT ITS OPTION, MAY REDEEM THE RIGHTS EVIDENCED BY THIS
CERTIFICATE AT A REDEMPTION PRICE OF $.01 PER RIGHT OR EXCHANGE THE RIGHTS FOR
SHARES OF COMMON STOCK ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH
TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON.
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.](1)
Rights Certificate
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 June 30, 1999 (the "Rights
Agreement"), between Tredegar Corporation, a Virginia corporation (the
"Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY, a New York corporation
(the "Rights Agent"), to purchase from the Company at any time prior to 5:00
P.M. (Richmond, Virginia time) on June 30, 2009, at the office or offices of the
Rights Agent designated for such purpose, or its successors as Rights Agent, one
one-hundredth of a fully paid, non-assessable share (a "Unit") of Series A
Participating Cumulative Preferred Stock (the "Preferred Stock") or other
securities of the Company, at a purchase price of $____ per Unit (the "Purchase
Price"), upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase and related Certificate duly executed. (All
- --------
1 The bracketed language shall be inserted only if applicable.
46
capitalized terms not defined herein shall have the meaning set forth in the
Rights Agreement.) The Purchase Price may be paid in cash or by certified bank
check or bank draft payable to the order of the Company. The number of Rights
evidenced by this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of ______ __, ___,
based on the Preferred Stock as constituted at such date. As provided in the
Rights Agreement, the Purchase Price and the number and kind of shares of
Preferred Stock or other securities that may be purchased upon the exercise of
the Rights evidenced by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events, including Triggering Events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Under certain circumstances specified in Section 7(e) of the Rights Agreement,
Rights that are or were owned by an Acquiring Person or an Affiliate or
Associate of an Acquiring Person may become null and void and no longer
exercisable by any Person (including any subsequent transferee). Copies of the
Rights Agreement are on file at the above-mentioned office of the Rights Agent
and are also available upon written request to the Rights Agent or the Secretary
of the Corporation.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office or offices of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Units of Preferred Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered then
entitle such holder to purchase. If this Rights Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Company, at its
option, may redeem the Rights evidenced by this Certificate at a redemption
price of $.01 per Right or exchange the Rights for shares of Common Stock.
No fractional shares of Preferred Stock will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions that are integral
multiples of one one-hundredth of a share of Preferred Stock), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of Preferred Stock
or of any other securities of the Company that 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
47
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 the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signatures of the proper officers of the Company and
its corporate seal.
Dated as of ___________ __, ______
[SEAL]
ATTEST: TREDEGAR CORPORATION
By: ________________________________
Name:
Title:
Secretary
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: ________________________________
Name:
Title:
[Form of Reverse Side of Rights Certificate]
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Rights Certificate.)
FOR VALUE RECEIVED ________________________ hereby sells, assigns and
transfers unto
- --------------------------------------------------------------------------------
(Please print name and address of transferee)
- --------------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint
_________________________Attorney, to transfer the within Rights Certificate on
the books of the within-named Company, with full power of substitution.
Dated: _________________, ____
________________________________
Signature
Signature Guaranteed:
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Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: _____________________, ____ Signature ____________________________
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by the
Rights Certificate.)
To: TREDEGAR CORPORATION:
The undersigned hereby irrevocably elects to exercise ____________ Rights
represented by this Rights Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person that may be issuable upon the exercise of the
Rights) and requests that certificates for such shares (or other securities) be
issued in the name of and delivered to:
Please insert social security or other identifying number
- -----------------------------------------------------------------------
(Please print name and address)
- -----------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
- -----------------------------------------------------------------------
(Please print name and address)
- -----------------------------------------------------------------------
Date: _______________, ____
__________________________
Signature
Signature Guaranteed:
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Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
Dated: _____________________, ____ 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 Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On May 20, 1999, the Board of Directors of Tredegar Corporation, a
corporation organized under the laws of Virginia (the "Company"), approved a
Rights Agreement, dated as of and to be effective as of June 30, 1999 (the
"Rights Agreement"), between the Company and American Stock Transfer & Trust
Company, as Rights Agent, having the principal terms summarized below. In
accordance with the Rights Agreement, the Board also declared a dividend
distribution of one right ("Right") for each outstanding share of common stock
of the Company (the "Common Stock") to shareholders of record at the close of
business on June 18, 1999 (the "Record Date").
Each Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of the Company's Series A Participating Cumulative
Preferred Stock ("Preferred Stock"). Each one one-hundredth of a share (a
"Unit") of Preferred Stock is structured to be the equivalent of one share of
Common Stock of the Company ("Common Stock"). Shareholders will receive one
Right per share of Common Stock held of record at the close of business on the
Record Date. The exercise price of the Right will be $150 subject to adjustment
(the "Purchase Price").
Rights will also attach to shares of Common Stock issued after the Record
Date but prior to the Distribution Date (as defined below) unless the Board of
Directors determines otherwise at the time of issuance. The description and
terms of the Rights are set forth in the Rights Agreement.
The Rights will be appurtenant to the shares of Common Stock and will be
evidenced by Common Stock certificates, and no separate certificates evidencing
the Rights (the "Rights Certificates") will be distributed initially. The Rights
will separate from the Common Stock and a distribution of the Rights
Certificates will occur (the "Distribution Date") upon the earlier of (i) 10
business days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 10% or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date"), or (ii) 10
business days following the commencement of a tender offer or exchange offer
that would result in a person or group beneficially becoming an Acquiring
Person. Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with such Common
Stock certificates, (ii) any Common Stock certificates issued after June 30,
1999, will contain a legend incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on June 30, 2009, unless earlier redeemed or exchanged
by the Company as described below. As soon as practicable after the Distribution
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Date, Rights Certificates will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date, and thereafter such
separate Rights Certificates alone will represent the Rights.
While each Right will initially provide for the acquisition of one Unit of
Preferred Stock at the Purchase Price, the Agreement provides that if any person
becomes an Acquiring Person, proper provision shall be made so that each holder
of a Right (except as set forth below) will thereafter have the right to
receive, upon exercise and payment of the Purchase Price, Preferred Stock or, at
the option of the Company, Common Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal to twice the
amount of the Purchase Price.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger, statutory share exchange, or other business
combination in which the Company is not the surviving corporation, or (ii) 50%
or more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except as set forth below) shall thereafter have the right to
receive, upon exercise and payment of the Purchase Price, common stock of the
acquiring company having a value equal to twice the Purchase Price. The events
set forth in this paragraph and in the immediately preceding paragraph are
referred to as the "Triggering Events."
Upon the occurrence of a Triggering Event that entitles Rights holders to
purchase securities or assets of the Company, Rights that are or were owned by
the Acquiring Person, or any affiliate or associate of such Acquiring Person, on
or after such Acquiring Person's Stock Acquisition Date shall be null and void
and shall not thereafter be exercised by any person (including subsequent
transferees). Upon the occurrence of a Triggering Event that entitles Rights
holders to purchase common stock of a third party, or upon the authorization of
an Exchange (as defined below), Rights that are or were owned by any Acquiring
Person or any affiliate or associate of any Acquiring Person on or after such
Acquiring Person's Stock Acquisition Date shall be null and void and shall not
thereafter be exercised by any person (including subsequent transferees).
The Purchase Price payable, and the number of shares of Preferred Stock,
Common Stock or other securities or property issuable upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution.
At any time (including a time after any person becomes an Acquiring
Person), the Company may exchange all or part of the Rights (except as set forth
below) for shares of Common Stock (an "Exchange") at an exchange ratio of one
share per Right, as appropriately adjusted to reflect any stock split or similar
transaction.
At any time until ten days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"). Under certain circumstances set forth in the
Rights Agreement, the decision to make an Exchange or to redeem the Rights shall
require the concurrence of a majority of the Continuing Directors (as defined
below). Additionally, the Company may thereafter but prior to the occurrence of
a Triggering Event redeem the Rights in whole, but not in part, at the
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Redemption Price provided that such redemption is incidental to a merger or
other business combination transaction involving the Company that is approved by
a majority of the Continuing Directors, does not involve an Acquiring Person,
and in which all holders of Common Stock are treated alike. After the redemption
period has expired, the Company's right of redemption may be reinstated if an
Acquiring Person reduces his beneficial ownership to less than 10% of the
outstanding shares of Common Stock in a transaction or series of transactions
not involving the Company. Immediately upon the action of the Board ordering
redemption of the Rights, with, where required, the concurrence of the
Continuing Directors, the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
The term "Continuing Directors" means any member of the Board who was a
member of the Board immediately before the adoption of the Rights Agreement, and
any person who is subsequently elected to the Board if such person is
recommended or approved by a majority of the Continuing Directors, but does not
include an Acquiring Person, or an affiliate or associate of an Acquiring
Person, or any representative of the foregoing entities.
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. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Preferred Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
Other than certain provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by the
Board prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board (in certain
circumstances, only with the concurrence of the Continuing Directors) in order
to cure any ambiguity, to make certain other changes that do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the Rights
Agreement; provided, however, no amendment to adjust the time period governing
redemption may be made at such time as the Rights are not redeemable.
55