0000950124-01-503263.txt : 20011009
0000950124-01-503263.hdr.sgml : 20011009
ACCESSION NUMBER: 0000950124-01-503263
CONFORMED SUBMISSION TYPE: 8-A12G/A
PUBLIC DOCUMENT COUNT: 2
FILED AS OF DATE: 20010921
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: TECUMSEH PRODUCTS CO
CENTRAL INDEX KEY: 0000096831
STANDARD INDUSTRIAL CLASSIFICATION: AIR COND & WARM AIR HEATING EQUIP & COMM & INDL REFRIG EQUIP [3585]
IRS NUMBER: 381093240
STATE OF INCORPORATION: MI
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-A12G/A
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-00452
FILM NUMBER: 1742137
BUSINESS ADDRESS:
STREET 1: 100 E PATTERSON ST
CITY: TECUMSEH
STATE: MI
ZIP: 49286
BUSINESS PHONE: 5174238411
MAIL ADDRESS:
STREET 1: 100 EAST PATTERSON STREET
CITY: TECUMSEH
STATE: MI
ZIP: 49286
8-A12G/A
1
k65108e8-a12ga.txt
CLASS A STOCK PURCHASE RIGHTS
1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM 8-A/A
(Amendment No. 4)
For Registration of Certain Classes of Securities
Pursuant to Section 12(b) or 12(g) of the
Securities Exchange Act of 1934
TECUMSEH PRODUCTS COMPANY
(Exact name of registrant as specified in its charter)
Michigan 38-1093240
(State of Incorporation or Organization) (I.R.S. Employer Identification Number)
100 East Patterson Street, Tecumseh, Michigan 49286
(Address of Principal Executive Offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Class A Stock Purchase Rights
(Title of Class)
2
Items 1 and 2 of the Form 8-A Registration Statement concerning the
Class A Stock Purchase Rights of the registrant, as previously amended, are
hereby further amended to read in their entirety as follows:
Item 1. Description of Registrant's Securities to Be Registered.
a. Background.
The Board of Directors of Tecumseh Products Company (the "Company")
first adopted a Rights Agreement on January 23, 1991 (the "Rights Agreement").
Pursuant to the Rights Agreement, the Company distributed one stock purchase
right for each share of the Company's common stock outstanding at that time.
Also pursuant to the Rights Agreement, one stock purchase right was distributed
for each share of the Company's common stock issued thereafter.
On April 22, 1992, the Company reclassified its capital stock (the
"Reclassification") by dividing it into two classes: Class A Common Stock, $1.00
par value per share ("Class A Stock"), and Class B Common Stock, $1.00 par value
per share ("Class B Stock", and together with the Class A Stock, the "Common
Stock"). The Company converted each share of common stock outstanding at the
time into one share of Class B Stock. On the same day, the Company's Board of
Directors declared a dividend distribution of one share of Class A Stock for
each outstanding share of Class B Stock (the "1992 Stock Dividend"). The 1992
Stock Dividend was payable May 29, 1992 to holders of record of Class B Stock as
of the close of business on May 8, 1992. Collectively, the Reclassification and
the 1992 Stock Dividend are referred to herein as the "Recapitalization." On May
26, 1993, the Board of Directors declared a dividend distribution of one share
of Class A Stock for each share of Common Stock (the "1993 Stock Dividend"). The
1993 Stock Dividend was payable June 30, 1993 to shareholders of record as of
the close of business on June 8, 1993.
At the time the 1992 Stock Dividend was declared, the Board of
Directors amended the Rights Agreement in order to clarify the effect of the
Recapitalization on the stock purchase rights that had been distributed under
that Agreement. Pursuant to the amendment, each previously distributed stock
purchase right was converted, as of the effective date of the Reclassification,
into a Class B Right. The amendment also provided for the distribution of one
Class B Right for each share of Class B Stock issued thereafter until the
Distribution Date (described below). At the same time, the Board of Directors
adopted a new plan for the distribution of a Class A Right for each share of
Class A Stock issued after the effectiveness of the Recapitalization (including
Class A Stock issued in the 1992 and 1993 Stock Dividends) until the
Distribution Date.
The agreements setting forth these rights plans were amended on August
30, 1992, May 26, 1993, August 25, 1999, and August 22, 2001.
b. Summary of Rights.
The Class A Rights are issued pursuant to a Class A Rights Agreement
dated as of April 22, 1992, as amended, between the Company and State Street
Bank and Trust Company, N.A., as successor Class A Rights Agent. This summary
does not purport to be complete and is qualified in its entirety by reference to
all the provisions of the Class A Rights Agreement, including its
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definition of certain terms. The Class A Rights Agreement is incorporated in
this summary by reference. Copies of the Class A Rights Agreement and all
amendments to that Agreement have been filed with the Securities and Exchange
Commission and are available free of charge from the Company.
Each Class A Right entitles the registered holder, subject to the terms
of the Class A Rights Agreement, to purchase from the Company one share of Class
A Stock at a purchase price of $180.00 per share, subject to adjustment (the
"Purchase Price"). The Purchase Price is payable in cash or by certified or bank
check or money order payable to the order of the Company.
The Class A Rights currently are attached to all certificates
representing shares of outstanding Class A Stock. Class A Rights will also be
attached to all certificates representing shares of Class A Stock issued in the
future until the Distribution Date. Initially, no separate Class A Rights
Certificates will be distributed. Until the Distribution Date, the Class A
Rights will be evidenced by the certificates representing Class A Stock and will
be transferred with and only with those certificates. The Class A Rights are not
exercisable until the Distribution Date and will expire at the close of business
on August 25, 2009, unless earlier redeemed by the Company as described below.
The Class A Rights will separate from the Class A Stock on the
Distribution Date. The Distribution Date will occur upon the earlier of (i) ten
business days following a public announcement (the "Stock Acquisition Date")
that a person or group of persons (an "Acquiring Person") has acquired 10% (or,
if such person or group is a "Grandfathered Person," the "Grandfathered
Percentage") or more of the then outstanding shares of Class B Stock other than
as a result of repurchases of Class B Stock by the Company or certain
inadvertent actions by institutional or certain other shareholders, or (ii) ten
business days (or a later date determined by the Board of Directors) following
the commencement, without Board approval, of a tender or exchange offer that
would result in a person or group owning 10% or more of the then outstanding
shares of Class B Stock. Any person or group that owned 5% or more of the Class
B Stock outstanding on April 22, 1992 (a "Grandfathered Person") will not be an
Acquiring Person unless the percentage of outstanding shares of Class B Stock
owned by that Grandfathered Person subsequently exceeds twice the percentage
owned on April 22, 1992, plus an additional 1% (the "Grandfathered Percentage").
An announcement by the Company will only give rise to the Stock Acquisition Date
if the Company expressly states in the announcement that it will do so.
After the Distribution Date, Class A Rights Certificates will be mailed
to holders of record of Class A Stock on the Distribution Date. From that point
on, the separate Class A Rights Certificates alone will represent the Class A
Rights.
If (i) the Company survives a merger with an Acquiring Person and
shares of Class A Stock remain outstanding, or (ii) any Acquiring Person becomes
the owner of 15% (or, if such person is a Grandfathered Person, the greater of
15% or the Grandfathered Percentage) or more of the outstanding shares of Class
B Stock (other than pursuant to a transaction described in the next paragraph),
or (iii) an Acquiring Person engages in one or more "self-dealing" transactions
as set forth in the Class A Rights Agreement, or (iv) the Company is a party to
any transaction which results in an Acquiring Person's ownership interest being
increased by more than 1%
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(other than a transaction described in the next paragraph), then, in each such
case, each Class A Right will thereafter represent the right to receive, upon
exercise, shares of Class A Stock (or, in certain circumstances, shares of Class
A Stock and cash, property, or other securities of the Company) having a value
(based on the current market price) equal to two times the Purchase Price of the
Class A Right. However, all Class A Rights that are owned by any Acquiring
Person will be null and void.
If, at any time following the Stock Acquisition Date, (i) the Company
merges into any other person, (ii) any person merges into the Company and in
connection with the merger all or part of the Class A Stock is converted or
exchanged for cash or property, or securities of any other person, or (iii) 50%
or more of the Company's assets or earning power is sold or transferred, each
holder of a Class A Right (except Class A Rights which previously have been
voided as described above) will have the right to receive, upon exercise, common
stock of the Acquiring Person having a value (based on the current market price)
equal to two times the Purchase Price of the Class A Right.
For purposes of the calculations described above, the current market
price of the Class A Stock will be considered to be the average of the daily
closing prices of the Class A Stock and the Class B Stock over a period of ten
consecutive trading days.
The Purchase Price payable, and the number of shares of Class A Stock
issuable, upon exercise of the Class A Rights are subject to adjustment from
time to time to prevent dilution. Those circumstances are set forth in detail in
the Class A Rights Agreement. With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments amount to at least
1% of the Purchase Price. The Company is not required to issue fractional
shares. Instead, it may make a cash adjustment based on the market price of the
Class A Stock prior to the date of exercise.
For ten business days following the Stock Acquisition Date, the
Company's Board of Directors may redeem all the Class A Rights at a price of
one-fourth of one cent ($.0025) per Class A Right, subject to adjustment (the
"Redemption Price"). The Redemption Price is payable, at the election of the
Board, in cash or shares of Class A Stock. Immediately upon action of the Board
of Directors ordering the redemption of the Class A Rights, the Class A Rights
will terminate and the holders of Class A Rights will only have a right to
receive the Redemption Price.
Until a Class A Right is exercised, the holder of the Right will have
no rights as a shareholder of the Company with respect to that Right (but the
holder will have rights as a shareholder with respect to the Class A Stock that
the Class A Right is attached to). The distribution of the Class A Rights was
not taxable to shareholders or to the Company. However, Class A shareholders
may, depending on the circumstances, recognize taxable income if the Class A
Rights become exercisable.
Any of the provisions of the Class A Rights Agreement may be amended at
any time prior to the Distribution Date. After the Distribution Date, the Class
A Rights Agreement may be amended to cure an ambiguity, defect, or
inconsistency, to make changes that do not adversely affect the interests of
holders of Class A Rights Certificates (excluding the interests of any
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Acquiring Person), or to shorten or lengthen any time period. However, no
amendment may be made to lengthen the time period governing redemption when the
Class A Rights are not redeemable or to lengthen any other time period unless it
is for the purpose of protecting, enhancing, or clarifying the rights of and/or
the benefits to the holders of Class A Rights.
c. Certain Anti-Takeover Effects.
The Class A Rights and the similar Class B Rights (collectively, the
"Rights") may have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors unless the offer is
conditioned on a substantial number of Rights being acquired. However, the
Rights should not interfere with any merger or other business combination
approved by the Board of Directors because the Rights may be redeemed by the
Company at $.0025 per Right at any time on or prior to the tenth business day
following the Stock Acquisition Date. Thus, the Rights are intended to encourage
persons who may seek to acquire control of the Company to initiate such an
acquisition through negotiations with the Board of Directors. However, the
effect of the Rights may be to discourage a third party from making a partial
tender offer or otherwise attempting to obtain a substantial equity position in
the equity securities of, or seeking to obtain control of, the Company. To the
extent any potential acquirors are deterred by the Rights, the Rights may have
the effect of preserving incumbent management in office.
Item 2. Exhibits.
The following exhibits are filed as part of this Form 8-A/A
Registration Statement:
4 Class A Rights Agreement, dated as of April 22, 1992,
between Tecumseh Products Company and NBD Bank, N.A.,
as Class A Rights Agent. (Filed with Form 8-A
Registration Statement, dated April 22, 1992,
concerning registrant's Class A Stock Purchase
Rights).
4.1 First Amendment to Class A Rights Agreement, dated
August 30, 1992, between Tecumseh Products Company
and NBD Bank, N.A., as Class A Rights Agent. (Filed
with Amendment No. 1 on Form 8, dated October 2,
1992, to the Form 8-A Registration Statement
concerning registrant's Class A Stock Purchase
Rights).
4.2 Second Amendment to Class A Rights Agreement, dated
as of May 26, 1993, between Tecumseh Products Company
and NBD Bank, N.A., as Class A Rights Agent. (Filed
with Amendment No. 2 on Form 8-A/A, dated June 22,
1993, to the Form 8-A Registration Statement
concerning registrant's Class A Stock Purchase
Rights).
4.3 Third Amendment to Class A Rights Agreement, dated as
of August 25, 1999, between Tecumseh Products Company
and State Street Bank and Trust Company, N.A., as
successor Class A Rights
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Agent. (Filed with Amendment No. 3 on Form 8-A/A,
dated August 26, 1999, to the Form 8-A Registration
Statement concerning registrant's Class A Stock
Purchase Rights).
4.4 Fourth Amendment to Class A Rights Agreement, dated
as of August 22, 2001, between Tecumseh Products
Company and State Street Bank and Trust Company,
N.A., as successor Class A Rights Agent.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this Form 8-A/A (Amendment No. 4) to
the Form 8-A Registration Statement concerning registrant's Class A Stock
Purchase Rights to be signed on its behalf by the undersigned, thereunto duly
authorized.
TECUMSEH PRODUCTS COMPANY
Date: September 19, 2001 By: /s/ John H. Foss
--------------------------------
John H. Foss
Its Vice President, Treasurer
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit
No. Description
4 Class A Rights Agreement, dated as of April 22, 1992,
between Tecumseh Products Company and NBD Bank, N.A.,
as Class A Rights Agent. (Filed with Form 8-A
Registration Statement, dated April 22, 1992,
concerning registrant's Class A Stock Purchase Rights).
4.1 First Amendment to Class A Rights Agreement, dated
August 30, 1992, between Tecumseh Products Company and
NBD Bank, N.A., as Class A Rights Agent. (Filed with
Amendment No. 1 on Form 8, dated October 2, 1992, to
the Form 8-A Registration Statement concerning
registrant's Class A Stock Purchase Rights).
4.2 Second Amendment to Class A Rights Agreement, dated as
of May 26, 1993, between Tecumseh Products Company and
NBD Bank, N.A., as Class A Rights Agent. (Filed with
Amendment No. 2 on Form 8-A/A, dated June 22, 1993, to
the Form 8-A Registration Statement concerning
registrant's Class A Stock Purchase Rights).
4.3 Third Amendment to Class A Rights Agreement, dated as
of August 25, 1999, between Tecumseh Products Company
and State Street Bank and Trust Company, N.A., as
successor Class A Rights Agent. (Filed with Amendment
No. 3 on Form 8-A/A, dated August 26, 1999, to the Form
8-A Registration Statement concerning registrant's
Class A Stock Purchase Rights).
4.4 Fourth Amendment to Class A Rights Agreement, dated as
of August 22, 2001, between Tecumseh Products Company
and State Street Bank and Trust Company, N.A., as
successor Class A Rights Agent.
EX-4.4
3
k65108ex4-4.txt
FOURTH AMENDMENT TO CLASS A RIGHTS AGREEMENT
1
EXHIBIT 4.4
FOURTH AMENDMENT TO
CLASS A RIGHTS AGREEMENT
THIS FOURTH AMENDMENT to the Class A Rights Agreement dated April 22,
1992, as amended (as so amended, the "Existing Class A Agreement"), is dated as
of August 22, 2001 and is between TECUMSEH PRODUCTS COMPANY, a Michigan
corporation (the "Company"), and STATE STREET BANK AND TRUST COMPANY, N.A., as
Class A Rights Agent (the "Agent").
WHEREAS, Section 26 of the Existing Class A Agreement entitles the
Company at any time prior to the Distribution Date (as therein defined) to amend
any provisions of the Existing Class A Agreement and requires the Agent, if
directed by the Company, to execute any such amendment upon the delivery of a
certificate from an appropriate officer of the Company which states that it is
in compliance with Section 26 (a "compliance certificate"); and
WHEREAS, the Board of Directors of the Company has authorized and
approved the amendments to the Existing Class A Agreement hereafter set forth in
this Fourth Amendment and has directed the execution hereof, and a compliance
certificate concerning this Fourth Amendment has been delivered to the Agent;
NOW, THEREFORE, in consideration of the foregoing and pursuant to Section
26 of the Existing Class A Agreement, the parties hereby agree as follows:
1. Amendment of Definition of "Acquiring Person." The definition of
"Acquiring Person" in Section 1 of the Existing Class A Agreement is hereby
amended to read in its entirety as follows:
"Acquiring Person" shall mean any Person who or which shall be the
Beneficial Owner of 10% or more of the shares of Class B Stock then
outstanding, but shall not include:
(i) the Company;
(ii) any Subsidiary of the Company;
(iii) any employee benefit plan of the Company or of any
Subsidiary of the Company or any trustee or fiduciary with respect
to any such plan acting in such capacity;
(iv) any Grandfathered Person, unless such Grandfathered
Person after April 22, 1992 becomes the Beneficial Owner of more
than the Grandfathered Percentage of the Class B Stock then
outstanding;
2
(v) any Person who or which becomes the Beneficial Owner of
10% (or, if applicable, the Grandfathered Percentage) or more of
the shares of Class B Stock then outstanding as a result of a
reduction in the number of shares of Class B Stock outstanding due
to the repurchase of shares of Class B Stock by the Company unless
and until such Person, after becoming aware that such Person has
become the Beneficial Owner of 10% (or, if applicable, the
Grandfathered Percentage) or more of the then outstanding shares
of Class B Stock, acquires beneficial ownership of additional
shares of Class B Stock representing 1% or more of the shares of
Class B Stock then outstanding; or
(vi) any such Person who or which has reported or is permitted
to report such ownership (but less than 20%) on Schedule 13G under
the Exchange Act (or any comparable or successor report), or on
Schedule 13D under the Exchange Act (or any comparable or
successor report) which Schedule 13D does not state any intention
to or reserve the right to control or influence the management or
policies of the Company or engage in any of the actions specified
in Item 4 of such Schedule (other than the disposition of the
Class B Stock). Within ten Business Days after being requested by
the Company, such Person shall certify to the Company that such
Person acquired beneficial ownership of shares of Class B Stock
representing 10% or more of the outstanding Class B Stock
inadvertently or without knowledge of the terms of the Class A
Rights. If such Person, having been requested to so certify as
aforesaid, fails to do so within ten Business Days, then such
Person shall become an Acquiring Person immediately after such ten
Business Day period. If such Person, after so certifying, acquires
beneficial ownership of additional shares of Class B Stock while
the Beneficial Owner of 10% or more of the shares of Class B Stock
then outstanding, then such Person shall become an Acquiring
Person immediately following the date on which the Company's Board
of Directors shall adopt a resolution to that effect.
2. Amendment of Section 11(a)(ii)(B). Section 11(a)(2)(B) of the Existing
Class A Agreement is hereby amended to read in its entirety as follows:
(B) any Acquiring Person shall become the Beneficial Owner of 15%
(or, if such Person is a Grandfathered Person, the greater of the
Grandfathered Percentage or 15%) or more of the shares of Class B Stock
then outstanding, other than pursuant to any transaction set forth in
Section 13(a) hereof; or
3. Amendment of Section 11(d). The first sentence of Section 11(d) of the
Existing Class A Agreement is hereby amended to read as follows:
(d) For the purpose of any computation hereunder, the "current market
price" per share of Class A Stock on any date shall be deemed to be the
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arithmetic mean of the average of the daily closing prices per share of
the Class A Stock and the average of the daily closing prices per share
of the Class B Stock for the ten consecutive Trading Days (as such term
is hereinafter defined) immediately prior to such date; provided,
however, if prior to the expiration of such requisite ten Trading Day
period the issuer announces either (A) a dividend or distribution on such
shares payable in such shares or securities convertible into such shares
(other than the Class A Rights or rights issued under the Company's
Amended and Restated Class B Rights Agreement dated as of April 22, 1992,
as amended from time to time), or (B) any subdivision, combination or
reclassification of such shares, then, following the ex-dividend date for
such dividend or the record date for such subdivision, as the case may
be, the "current market price" shall be properly adjusted to take into
account such event.
4. Amendment of Summary of Rights. Exhibit B to the Existing Class A
Agreement (Summary of Rights to Purchase Class A Stock) is hereby amended to
read in its entirety as set forth in Annex A to this Fourth Amendment.
5. Affirmation. Except as specifically amended herein, the Existing Class
A Agreement shall remain in full force and effect as existing prior to the date
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment
to be duly executed, all as of the date first above written.
TECUMSEH PRODUCTS COMPANY STATE STREET BANK AND TRUST COMPANY, N.A.
By: /s/ John H. Foss By: /s/ Tyler Haynes
--------------------------- -------------------------------
John H. Foss Tyler Haynes
Its: Vice President, Treasurer and Its: Managing Director
Chief Financial Officer
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ANNEX A
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE CLASS A STOCK
Pursuant to a Class A Rights Agreement entered into in 1992, Tecumseh
Products Company (the "Company") distributed one Class A Right for each share of
Class A Stock issued by the Company. Each Class A Right entitles the registered
holder, subject to the terms of the Class A Rights Agreement, to purchase from
the Company one share of Class A Stock at a specified purchase price.
The Class A Rights are issued pursuant to a Class A Rights Agreement
dated as of April 22, 1992, as amended, between the Company and State Street
Bank and Trust Company, N.A., as successor Class A Rights Agent. This summary
does not purport to be complete and is qualified in its entirety by reference to
all the provisions of the Class A Rights Agreement, including its definition of
certain terms. The Class A Rights Agreement is incorporated in this summary by
reference. Copies of the Class A Rights Agreement and all amendments to that
Agreement have been filed with the Securities and Exchange Commission and are
available free of charge from the Company.
Each Class A Right entitles the registered holder, subject to the terms
of the Class A Rights Agreement, to purchase from the Company one share of Class
A Stock at a purchase price of $180.00 per share, subject to adjustment (the
"Purchase Price"). The Purchase Price is payable in cash or by certified or bank
check or money order payable to the order of the Company.
The Class A Rights currently are attached to all certificates
representing shares of outstanding Class A Stock. Class A Rights will also be
attached to all certificates representing shares of Class A Stock issued in the
future until the Distribution Date. Initially, no separate Class A Rights
Certificates will be distributed. Until the Distribution Date, the Class A
Rights will be evidenced by the certificates representing Class A Stock and will
be transferred with and only with those certificates. The Class A Rights are not
exercisable until the Distribution Date and will expire at the close of business
on August 25, 2009, unless earlier redeemed by the Company as described below.
The Class A Rights will separate from the Class A Stock on the
Distribution Date. The Distribution Date will occur upon the earlier of (i) ten
business days following a public announcement (the "Stock Acquisition Date")
that a person or group of persons (an "Acquiring Person") has acquired 10% (or,
if such person or group is a "Grandfathered Person," the "Grandfathered
Percentage") or more of the then outstanding shares of Class B Stock other than
as a result of repurchases of Class B Stock by the Company or certain
inadvertent actions by institutional or certain other shareholders, or (ii) ten
business days (or a later date determined by the Board of Directors) following
the commencement, without Board approval, of a tender or exchange offer that
would result in a person or group owning 10% or more of the then
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outstanding shares of Class B Stock. Any person or group that owned 5% or more
of the Class B Stock outstanding on April 22, 1992 (a "Grandfathered Person")
will not be an Acquiring Person unless the percentage of outstanding shares of
Class B Stock owned by that Grandfathered Person subsequently exceeds twice the
percentage owned on April 22, 1992, plus an additional 1% (the "Grandfathered
Percentage"). An announcement by the Company will only give rise to the Stock
Acquisition Date if the Company expressly states in the announcement that it
will do so.
After the Distribution Date, Class A Rights Certificates will be mailed
to holders of record of Class A Stock on the Distribution Date. From that point
on, the separate Class A Rights Certificates alone will represent the Class A
Rights.
If (i) the Company survives a merger with an Acquiring Person and shares
of Class A Stock remain outstanding, or (ii) any Acquiring Person becomes the
owner of 15% (or, if such person is a Grandfathered Person, the greater of 15%
or the Grandfathered Percentage) or more of the outstanding shares of Class B
Stock (other than pursuant to a transaction described in the next paragraph), or
(iii) an Acquiring Person engages in one or more "self-dealing" transactions as
set forth in the Class A Rights Agreement, or (iv) the Company is a party to any
transaction which results in an Acquiring Person's ownership interest being
increased by more than 1% (other than a transaction described in the next
paragraph), then, in each such case, each Class A Right will thereafter
represent the right to receive, upon exercise, shares of Class A Stock (or, in
certain circumstances, shares of Class A Stock and cash, property, or other
securities of the Company) having a value (based on the current market price)
equal to two times the Purchase Price of the Class A Right. However, all Class A
Rights that are owned by any Acquiring Person will be null and void.
If, at any time following the Stock Acquisition Date, (i) the Company
merges into any other person, (ii) any person merges into the Company and in
connection with the merger all or part of the Class A Stock is converted or
exchanged for cash or property, or securities of any other person, or (iii) 50%
or more of the Company's assets or earning power is sold or transferred, each
holder of a Class A Right (except Class A Rights which previously have been
voided as described above) will have the right to receive, upon exercise, common
stock of the Acquiring Person having a value (based on the current market price)
equal to two times the Purchase Price of the Class A Right.
For purposes of the calculations described above, the current market
price of the Class A Stock will be considered to be the average of the daily
closing prices of the Class A Stock and the Class B Stock over a period of ten
consecutive trading days.
The Purchase Price payable, and the number of shares of Class A Stock
issuable, upon exercise of the Class A Rights are subject to adjustment from
time to time to prevent dilution. Those circumstances are set forth in detail in
the Class A Rights Agreement. With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments amount to at least
1% of the Purchase Price. The Company is not required to issue fractional
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shares. Instead, it may make a cash adjustment based on the market price of the
Class A Stock prior to the date of exercise.
For ten business days following the Stock Acquisition Date, the Company's
Board of Directors may redeem all the Class A Rights at a price of one-fourth of
one cent ($.0025) per Class A Right, subject to adjustment (the "Redemption
Price"). The Redemption Price is payable, at the election of the Board, in cash
or shares of Class A Stock. Immediately upon action of the Board of Directors
ordering the redemption of the Class A Rights, the Class A Rights will terminate
and the holders of Class A Rights will only have a right to receive the
Redemption Price.
Until a Class A Right is exercised, the holder of the Right will have no
rights as a shareholder of the Company with respect to that Right (but the
holder will have rights as a shareholder with respect to the Class A Stock that
the Class A Right is attached to). The distribution of the Class A Rights was
not taxable to shareholders or to the Company. However, Class A shareholders
may, depending on the circumstances, recognize taxable income if the Class A
Rights become exercisable.
Any of the provisions of the Class A Rights Agreement may be amended at
any time prior to the Distribution Date. After the Distribution Date, the Class
A Rights Agreement may be amended to cure an ambiguity, defect, or
inconsistency, to make changes that do not adversely affect the interests of
holders of Class A Rights Certificates (excluding the interests of any Acquiring
Person), or to shorten or lengthen any time period. However, no amendment may be
made to lengthen the time period governing redemption when the Class A Rights
are not redeemable or to lengthen any other time period unless it is for the
purpose of protecting, enhancing, or clarifying the rights of and/or the
benefits to the holders of Class A Rights.
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