Exhibit 4.1
STOCKHOLDER RIGHTS AGREEMENT
between
CORE MOLDING TECHNOLOGIES, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
Dated as of July 18, 2007
TABLE OF CONTENTS
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Section 1.
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Certain Definitions
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1
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Section 2.
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Appointment of Rights Agent
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6
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Section 3.
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Issuance of Rights Certificates
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7
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Section 4.
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Form of Rights Certificates
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9
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Section 5.
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Countersignature and Registration
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10
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Section 6.
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Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates
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11
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Section 7.
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Exercise of Rights; Purchase Price; Expiration Date of Rights
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12
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Section 8.
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Cancellation and Destruction of Rights Certificates
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14
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Section 9.
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Reservation and Availability of Capital Stock
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14
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Section 10.
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Preferred Stock Record Date
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15
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Section 11.
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Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights
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16
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Section 12.
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Certificate of Adjusted Purchase Price or Number of Shares
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24
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Section 13.
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Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or Earning Power
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24
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Section 14.
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Fractional Rights and Fractional Shares
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27
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Section 15.
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Rights of Action
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28
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Section 16.
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Agreement of Rights Holders
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29
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Section 17.
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Rights Certificate Holder Not Deemed a Stockholder
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29
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Section 18.
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Concerning the Rights Agent
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30
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Section 19.
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Merger or Consolidation or Change of Name of Rights Agent
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30
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Section 20.
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Duties of Rights Agent
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31
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Section 21.
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Change of Rights Agent
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33
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Section 22.
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Issuance of New Rights Certificates
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34
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Section 23.
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Redemption and Termination
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34
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Section 24.
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Exchange
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35
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Section 25.
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Notice of Certain Events
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36
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Section 26.
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Notices
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37
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Section 27.
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Supplements and Amendments
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38
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Section 28.
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Successors
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38
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Section 29.
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Determinations and Actions by the Board of Directors, etc.
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38
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Section 30.
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Benefits of this Agreement
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39
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Section 31.
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Severability
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39
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Section 32.
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Governing Law
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39
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Section 33.
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Counterparts
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39
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Section 34.
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Descriptive Headings
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40
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EXHIBITS
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Exhibit A
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Form of Certificate of Designation, Preferences and Rights of
Series A Junior Participating Preferred Stock
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Exhibit B
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Form of Rights Certificate
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Exhibit C
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Form of Summary of Rights
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STOCKHOLDER RIGHTS AGREEMENT
This Stockholder Rights Agreement (this “
Agreement
”) is dated as of July 18, 2007, between
Core Molding Technologies, Inc., a Delaware corporation (the “
Company
”), and American Stock
Transfer & Trust Company, a New York corporation (the “
Rights Agent
”).
Background
WHEREAS, on July 16, 2007 (the “
Rights Dividend Declaration Date
”), the Board of
Directors of the Company (the “
Board
”) authorized and declared a dividend distribution of
one Right (as hereinafter defined) for each share of Common Stock, par value $0.01 per share, of
the Company (the “
Common Stock
”) outstanding at the close of business on July 18, 2007 (the
“
Record Date
”), and has authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of Section 11(p) hereof) for each share of
Common Stock issued between the Record Date (whether originally issued or delivered from the
Company’s treasury) and the Distribution Date (as hereinafter defined), each Right initially
representing the right to purchase one one-thousandth of a share of Series A Junior Participating
Preferred Stock of the Company (the “
Preferred Stock
”) having the rights, powers and
preferences set forth in the form of Certificate of Designation, Preferences and Rights attached
hereto as Exhibit A, upon the terms and subject to the conditions hereinafter set forth (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 (x) any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of fifteen
percent (15%) or more of the shares of Common 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 Person or entity organized, appointed
or established by the Company for or pursuant to the terms of any such plan, (iv) any Person
who becomes the Beneficial Owner of fifteen percent (15%) or more of the shares of Common
Stock then outstanding as a result of a reduction in the number of shares of Common Stock
outstanding due to the repurchase of shares of Common Stock by the Company unless and until
such Person, after becoming aware that such Person has become the Beneficial Owner of
fifteen percent (15%) or more of the then outstanding shares of Common Stock, acquires
beneficial ownership of additional shares of Common Stock representing one percent (1.0%) or
more of the shares of Common Stock then outstanding or (v) any such Person who has reported
or is required to report such ownership 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
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Common Stock), who inadvertently becomes the Beneficial Owner of fifteen percent (15%)
or more of the shares of Common Stock then outstanding (but less than twenty percent (20%))
and, within 10 Business Days of being requested by the Company to advise it regarding the
same, certifies to the Company that such Person acquired shares of Common Stock in excess of
fourteen and 9/10 percent (14.9%) inadvertently or without knowledge of the terms of the
Rights and who or which, together with all Affiliates and Associates, thereafter does not
acquire additional shares of Common Stock while the Beneficial Owner of fifteen percent
(15%) or more of the shares of Common Stock then outstanding;
provided
,
however
,
that if the Person requested to so certify fails to do so within 10
Business Days or breaches or violates such certification, then such Person shall become an
Acquiring Person immediately after such 10 Business Day period or such breach or violation,
(vi) any Person who is, as of the date of this Agreement, the Beneficial Owner of fifteen
percent (15%) or more of the shares of Common Stock then outstanding, so long as such Person
thereafter does not, while the Beneficial Owner of fifteen percent (15%) or more of the
shares of Common Stock then outstanding, acquire additional shares of Common Stock
representing one percent (1.0%) or more of the shares of Common Stock then outstanding,
unless any such acquisition of additional shares is pursuant to (A) a stock dividend or
distribution by the Company or (B) a Qualified Offer (as defined in Section 11(a)(ii));
provided
,
however
,
that such Person shall cease to be excluded from the
definition of Acquiring Person pursuant to this clause (vi) at such time, if any, as such
Person ceases to be the Beneficial Owner of fifteen percent (15%) or more of the shares of
Common Stock then outstanding, or (y) any Person who or which has entered into any agreement
or arrangement with the Company or any Subsidiary of the Company providing for an
Acquisition Transaction (as defined in Section 1(b) hereof).
(b) “
Acquisition Transaction
” shall mean (x) a merger, consolidation or similar
transaction involving the Company or any of its Subsidiaries as a result of which
stockholders of the Company will no longer own a majority of the outstanding shares of
Common Stock of the Company or, if appropriate, the entity into which the Company may be
merged, consolidated or otherwise combined (based solely on the shares of Common Stock
received or retained by such stockholders, in their capacity as stockholders of the Company,
pursuant to such transaction), (y) a purchase or other acquisition of all or a substantial
portion of the assets of the Company and its Subsidiaries, or (z) a purchase or other
acquisition of securities representing fifteen percent (15%) or more of the shares of Common
Stock then outstanding.
(c) “
Act
” shall mean the Securities Act of 1933, as amended.
(d) “
Adjustment Shares
” shall have the meaning set forth in Section 11(a)(ii)
hereof.
(e) “
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.
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(f) “
Agreement
” shall mean this Agreement as it may from time to time be
supplemented, amended, renewed, restated or extended pursuant to the applicable provisions
hereof.
(g) A Person shall be deemed the “
Beneficial Owner
” of, and shall be deemed to
“
beneficially own,
” any securities:
(i) which such Person or any of such Person’s Affiliates or Associates,
directly or indirectly, owns or has the right to acquire (whether such right is
exercisable immediately or only after the passage of time or upon the satisfaction
of one or more conditions (whether or not within the control of such Person),
compliance with regulatory requirements or otherwise) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, other rights, warrants or options, or otherwise;
provided
,
however
,
that a Person shall not be deemed 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, (B) securities
issuable upon exercise of Rights at any time prior to the occurrence of a Triggering
Event (as hereinafter defined), or (C) securities issuable upon exercise of Rights
from and after the occurrence of a Triggering Event which Rights were acquired by
such Person or any of such Person’s Affiliates or Associates prior to the
Distribution Date (as hereinafter defined) or pursuant to Section 3(a) or Section 22
hereof (the “
Original Rights
”) or pursuant to Section 11(i) hereof in
connection with an adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person’s Affiliates or Associates,
directly or indirectly, has the right to vote or dispose of or has “beneficial
ownership” of (as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), 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 (ii) as a result of an
agreement, arrangement or understanding (whether or not in writing) to vote such
security if such agreement, arrangement or understanding: (A) arises solely from a
revocable proxy given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions of the General Rules
and Regulations under the Exchange Act, and (B) is not reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any other Person
(or any Affiliate or Associate thereof) with which such Person (or any of such
Person’s Affiliates or Associates) has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the proviso to
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subparagraph (ii) of this paragraph (g)) or disposing of any voting securities
of the Company;
provided
,
however
, that nothing in this paragraph
(g) shall cause a Person engaged in business as an underwriter of securities to be
the “Beneficial Owner” of, or to “beneficially own,” any securities acquired through
such Person’s participation in good faith in a firm commitment underwriting until
the expiration of forty days after the date of such acquisition, and then only if
such securities continue to be owned by such Person at such expiration of forty
days.
(h) “
Board
” shall have the meaning set forth in the preamble to this Agreement.
(i) “
Business Day
” shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated by law or
executive order to close.
(j) “
Close of Business
” on any given date shall mean 5:00 P.M., Columbus, Ohio
time, on such date;
provided
,
however
, that if such date is not a Business
Day, it shall mean 5:00 P.M., Columbus, Ohio time, on the next succeeding Business Day.
(k) “
Common Stock
” shall mean the Common Stock, par value $0.01 per share, of the
Company or any other shares of capital stock of the Company into which such stock shall be
reclassified or changed, except that “Common Stock” when used with reference to any Person
other than the Company shall mean the capital stock of such Person with the greatest voting
power, or the equity securities or other equity interest having power to control or direct the
management, of such Person.
(l) “
Common Stock Equivalents
” shall have the meaning set forth in Section
11(a)(iii) hereof.
(m) “
Company
” shall have the meaning set forth in the preamble to this Agreement
until a successor corporation or entity shall have become such or until a Principal Party (as
hereinafter defined) shall assume, and thereafter be liable for, all obligations and duties of
the Company hereunder pursuant to the applicable provisions of this Agreement, and thereafter,
“Company” shall mean such successor or Principal Party, respectively.
(n) “
Current Market Price
” shall have the meaning set forth in Section 11(d)(i)
hereof.
(o) “
Current Value
” shall have the meaning set forth in Section 11(a)(iii)
hereof.
(p) “
Distribution Date
” shall have the meaning set forth in Section 3(a) hereof.
(q) “
Equivalent Preferred Stock
” shall have the meaning set forth in Section
11(b) hereof.
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(r) “
Exchange Act
” shall mean the Securities Exchange Act of 1934, as amended.
(s) “
Exchange Ratio
” shall have the meaning set forth in Section 24 hereof.
(t) “
Expiration Date
” shall have the meaning set forth in Section 7(a) hereof.
(u) “
Final Expiration Date
” shall mean 5:00 P.M., Columbus, Ohio time on July 18,
2017, unless the Rights are previously redeemed, exchanged or terminated.
(v) “
Person
” shall mean any individual, firm, corporation, partnership, limited
liability company, trust, association, syndicate or other entity and includes, without
limitation, an unincorporated group of persons who, by formal or informal agreement or
arrangement (whether or not in writing), have embarked on a common purpose or act.
(w) “
Preferred Stock
” shall mean shares of Series A Junior Participating
Preferred Stock, par value $0.01, of the Company, and, to the extent that there are not a
sufficient number of shares of Series A Junior Participating Preferred Stock authorized to
permit the full exercise of the Rights, any other series of preferred stock of the Company
designated for such purpose containing terms substantially similar to the terms of the Series
A Junior Participating Preferred Stock.
(x) “
Principal Party
” shall have the meaning set forth in Section 13(b) hereof.
(y) “
Purchase Price
” shall have the meaning set forth in Section 4(a) hereof.
(z) “
Qualified Offer
” shall have the meaning set forth in Section 11(a)(ii)
hereof.
(aa) “
Record Date
” shall have the meaning set forth in the preamble of this
Agreement.
(bb) “
Redemption Price
” shall have the meaning set forth in Section 23(a) hereof.
(cc) “
Rights
” shall have the meaning set forth in the preamble of this Agreement.
(dd) “
Rights Agent
” shall have the meaning set forth in the preamble of this
Agreement.
(ee) “
Rights Certificate
” shall have the meaning set forth in Section 3(a)
hereof.
(ff) “
Rights Dividend Declaration Date
” shall have the meaning set forth in the
preamble of this Agreement.
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(gg) “
Section
11(a)(ii)
Event
” shall mean any event described in Section
11(a)(ii) hereof.
(hh) “
Section
11(a)(ii)
Trigger Date
” shall have the meaning set forth in Section
11(a)(iii) hereof.
(ii) “
Section 13 Event
” shall mean any event described in clauses (x), (y) or (z)
of Section 13(a) hereof.
(jj) “
Spread
” shall have the meaning set forth in Section 11(a)(iii) hereof.
(kk) “
Stock Acquisition Date
” shall mean the earlier of (i) the first date of
public announcement (which, for purposes of this definition, shall include, without
limitation, a report filed or amended pursuant to Section 13(d) under the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such pursuant to clause (x)
of the definition of Acquiring Person other than pursuant to a Qualified Offer, and (ii) the
date that an Acquiring Person has become such pursuant to clause (y) of the definition of
Acquiring Person.
(ll) “
Subsidiary
” shall mean, with reference to any Person, any corporation or
other entity of which an amount of securities or other ownership interest having ordinary
voting power sufficient to elect at least a majority of the directors or other Persons having
similar functions of such corporation or other entity are at the time, directly or indirectly,
beneficially owned, or otherwise controlled by such Person.
(mm) “
Substitution Period
” shall have the meaning set forth in Section 11(a)(iii)
hereof.
(nn) “
Summary of Rights
” shall have the meaning set forth in Section 3(b) hereof.
(oo) “
Trading Day
” shall have the meaning set forth in Section 11(d)(i) hereof.
(pp) “
Triggering Event
” shall mean any Section 11(a)(ii) Event or any Section 13
Event.
Section 2.
Appointment of Rights Agent
. The Company hereby appoints the Rights Agent
to act as rights 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 the holders of the 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.
- 6 -
Section 3.
Issuance of Rights Certificates
.
(a) Until the earlier of (i) the Close of Business on the tenth Business Day (or such
specified or unspecified later date as may be determined by the Board before the occurrence
of the Distribution Date) after the Stock Acquisition Date (or, if the tenth Business Day
(or such later date) after the Stock Acquisition Date occurs before the Record Date, the
Close of Business on the Record Date), or (ii) the Close of Business on the tenth Business
Day (or such specified or unspecified later date as may be determined by the Board before
the occurrence of the Distribution Date) 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
become an Acquiring Person (the earlier of (i) and (ii) being herein referred to as the
“
Distribution Date
”), (x) the Rights will be evidenced (subject to the provisions of
paragraph (b) or (c) of this Section 3) by the balances indicated in the book-entry account
system of the transfer agent for the Common Stock registered in the names of the holders of
the Common Stock (which shares of Common Stock shall also be deemed to represent
certificates for Rights) or, in the case of certificated shares, the certificates for the
Common Stock registered in the names of the holders of the Common Stock (which certificates
for Common Stock shall also be deemed to be certificates for Rights), and not by separate
certificates, and (y) the Rights will be transferable only in connection with the transfer
of the underlying shares of Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will send by first-class, insured,
postage-prepaid mail, to each record holder of 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 B 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(p) 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 will be
evidenced solely by such Rights Certificates. The Company shall promptly notify the Rights
Agent in writing upon the occurrence of the Distribution Date. Until such notice is received
by the Rights Agent, the Rights Agent may presume conclusively for all purposes that the
Distribution Date has not occurred.
(b) The Company will make available, as promptly as practicable following the Record
Date, a copy of a Summary of Rights, in substantially the form attached hereto as Exhibit C
(the “
Summary of Rights
”) to any holder of Rights who may so
request from time to time prior to the Expiration Date. With respect to the Common
Stock outstanding as of the Record Date, or issued subsequent to the Record Date, unless
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and
until the Distribution Date shall occur, the Rights will be evidenced by the balances
indicated in the book-entry account system of the transfer agent for the Common Stock or, in
the case of certificated shares, such certificates for 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
shares of Common Stock in respect of which Rights have been issued shall also constitute the
transfer of the Rights associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common Stock which are issued
(whether originally issued or from the Company’s treasury) after the Record Date but prior
to the earlier of the Distribution Date or the Expiration Date and shall bear the following
legends:
(i) Confirmation and account statements sent to holders of shares of Common
Stock in book-entry form (which shares of Common Stock shall also be deemed to
represent certificates for Rights) shall bear the following legend:
The shares of Common Stock, par value $0.01 per share, of Core
Molding Technologies, Inc. (the “
Company
”) entitles the
holder hereof to certain Rights as set forth in the Stockholder
Rights Agreement between the Company and the Rights Agent thereunder
(the “
Rights Agent
”) dated as of July 18, 2007, as it may be
amended, restated, renewed or extended from time to time (the
“
Rights Agreement
”), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at
the principal offices of the Rights Agent. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be
evidenced by the shares to which this statement relates. The Rights
Agent will mail to the holder of shares to which this statement
relates 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 beneficially owned (as such term is defined in the
Rights Agreement) by any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become null
and void.
With respect to shares of Common Stock in book-entry form for which there has been
sent a confirmation or account statement 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 shares of Common Stock shall be
evidenced by such shares of Common Stock alone and registered holders
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of Common
Stock shall also be the registered holders of the associated Rights, and the
transfer of any of such shares of Common Stock shall also constitute the transfer of
the Rights associated with such shares of Common Stock.
(ii) In the case of certificated shares, certificates representing shares of
Common Stock (which certificates shall also be deemed to be certificates for Rights)
shall bear the following legend if such certificates are issued after the Record
Date but prior to the earlier of the Distribution Date or the Expiration Date:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Stockholder Rights Agreement
between Core Molding Technologies, Inc. (the “
Company
”) and
the Rights Agent thereunder (the “
Rights Agent
”) dated as of
July 18, 2007, as it may be amended, restated, renewed or extended
from time to time (the “
Rights Agreement
”), the terms of
which are hereby incorporated herein by reference and a copy of
which is on file at the principal offices of the Rights Agent. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer
be evidenced by this certificate. The Rights Agent 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 beneficially owned (as
such term is defined in the Rights Agreement) by any Person who is,
was or becomes an Acquiring Person or any Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent
holder, 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 the transfer of the Rights associated with the
Common Stock represented by such certificates.
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 B hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation made
- 9 -
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
Record Date and on their face shall entitle the holders thereof to purchase such number of
one one-thousandths of a share of Preferred Stock as shall be set forth therein at the price
set forth therein (such exercise price per one one-thousandth of a share, 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), Section 11(i) 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 (whether or not in writing) regarding the transferred Rights or
(B) a transfer which the Board, in its sole discretion, has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the avoidance of
Section 7(e) hereof, and any 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
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the Rights represented
hereby may become null and void in the circumstances specified in Section
7(e) of the Rights Agreement.
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 and Chief Executive Officer, or any Vice President of the
Company, 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 by the Rights Agent, either manually or by
facsimile signature and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of the 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
- 10 -
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 Rights Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep, or cause to be kept,
at its principal office or offices designated as the appropriate place for surrender of
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 (other than
Rights Certificates representing Rights that may have been exchanged pursuant to Section 24
hereof) may be transferred, split up, combined or exchanged for another Rights Certificate
or Certificates, entitling the registered holder to purchase a like number of one
one-thousandths of a share of Preferred Stock (or, following a Triggering Event, Common
Stock, other securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitles 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, subject to Section 4(b),
Section 7(e), Section 14 hereof and Section 24 hereof, 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 a Rights Certificate of a sum
sufficient to cover any tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Rights Certificates.
-11-
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a 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
.
(a) Subject to Section 7(e) hereof, at any time after the Distribution Date 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)(iii) and Section 23(a) hereof) in
whole or in part 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
with payment of the aggregate Purchase Price with respect to the total number of one
one-thousandths of a share of Preferred Stock (or other securities, cash or other assets, as
the case may be) as to which such surrendered Rights are then exercisable, at or prior to
the earlier of (i) the Final Expiration Date or (ii) the time at which the Rights are
redeemed or exchanged as provided in Section 23 and Section 24 hereof (the earlier of (i)
and (ii) being herein referred to as the “
Expiration Date
”).
(b) The Purchase Price for each one one-thousandth of a share of Preferred Stock
pursuant to the exercise of a Right initially shall be $35.00, shall be subject to
adjustment from time to time as provided in Sections 11 and 13(a) 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 one one-thousandth of a share
of Preferred Stock (or other shares, securities, cash or other assets, as the 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 Sections 7(f) and 20(k) hereof, thereupon promptly (i) (A)
requisition from any transfer agent of the shares of Preferred Stock (or make available, if
the Rights Agent is the transfer agent for such shares) certificates for the total number of
one one-thousandths of a share 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 shares 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 one one-thousandths of a
share of Preferred Stock as are to be purchased (in which case certificates for the shares
of Preferred Stock represented by such receipts
-12-
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 pursuant to Section 11(a)(iii) hereof) shall
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 (including
Common Stock) 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. The Company reserves the right to require prior to the occurrence
of a Triggering Event that, upon any exercise of Rights, a number of Rights be exercised so
that only whole shares of Preferred Stock would be issued.
(d) In case the registered holder of any Rights Certificate shall exercise less than
all the Rights evidenced thereby, a new Rights Certificate evidencing 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 (whether or not in writing) 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 or
effect 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 provision of this Agreement or otherwise. The Company shall use
all reasonable efforts to insure 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 any of its Affiliates, Associates or transferees hereunder.
-13-
(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 of
such Beneficial Owner 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 cancelled form, or, if surrendered to the Rights Agent, shall be cancelled 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 cancelled Rights Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9.
Reservation and Availability of Capital 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 (and, following the
occurrence of a Triggering Event, out of its authorized and unissued shares of Common Stock
and/or other securities or out of its authorized and issued shares held in its treasury),
the number of shares of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) that, as provided in this Agreement including
Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or 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 upon such exercise.
(c) The Company shall use its best efforts to (i) 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)(iii) hereof, a registration statement under the
Act, with respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement to remain
effective
-14-
(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 date of the expiration of the Rights. 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 (90) 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 that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension has been rescinded. In
addition, if the Company shall determine that a registration statement is required following
the Distribution Date, the Company may temporarily suspend the exercisability of the Rights
until such time as a registration statement has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not have been
obtained, the exercise thereof shall not be permitted under applicable law, or a
registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such action as may be
necessary to ensure that all one one-thousandths of a share of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other securities)
delivered upon exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due and payable any
and all federal and state transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Rights Certificates and of any certificates for a number of one
one-thousandths of a share of Preferred Stock (or Common Stock and/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 which 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 one
one-thousandths of a share of Preferred Stock (or Common Stock and/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, nor shall the Company be required
to issue or deliver any certificates (or make any entries in the book-entry account system
of the transfer agent) for a number of one one-thousandths of a share of Preferred Stock (or
Common Stock and/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 Certificates 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 or
entry in the book-entry account system of the transfer agent for a number of one one-
-15-
thousandths of
a share of Preferred Stock (or Common Stock and/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 fractional shares of Preferred Stock (or Common Stock and/or other securities, as the case may
be) represented thereby on, and such certificate or entry in the book-entry account system 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 Common Stock and/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 or entry in the book-entry account system shall be dated,
the next succeeding Business Day on which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Rights Certificate shall not be entitled to any
rights of a stockholder 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, 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 or split the outstanding shares of Preferred Stock,
(C) combine or consolidate the outstanding shares of Preferred Stock into a smaller
number of shares, through a reverse stock split or otherwise, or (D) issue any shares
of its capital stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the Company is
the continuing or surviving corporation), except as otherwise provided in this
Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of
the record date for such dividend or of the effective date of such subdivision,
split, combination, consolidation or reclassification, and the number and kind of
shares of Preferred Stock or 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 and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been exercised immediately prior
to such date and at a time when the Preferred Stock transfer books of the Company
were open, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, split, combination, consolidation or
reclassification. If an event occurs which 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,
-16-
and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event any Person shall, at any time after the Rights Dividend
Declaration Date, become an Acquiring Person, unless the event causing such Person
to become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or
is an acquisition of shares of Common Stock pursuant to a tender offer or an
exchange offer for all outstanding shares of Common Stock at a price and on terms
determined by at least a majority of the members of the Board of Directors who are
not officers of the Company and who are not representatives, nominees, Affiliates or
Associates of an Acquiring Person, after receiving advice from one or more
investment banking firms, to be (a) at a price which is fair to stockholders from a
financial point of view and (b) otherwise in the best interests of the stockholders
(a “
Qualified Offer
”), then, promptly following the later of the occurrence
of such event and the Record Date, proper provision shall be made so that each
holder of a Right (except as provided below and in Section 7(e) hereof) shall
thereafter have the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, in lieu of a number
of one one-thousandths of a share of Preferred Stock, such number of shares of
Common Stock of the Company as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the then number of one one-thousandths of a share
of Preferred Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which,
following such first occurrence, shall thereafter be referred to as the
“
Purchase Price
” for each Right and for all purposes of this Agreement) by
fifty percent (50%) of the Current Market Price (determined pursuant to Section
11(d) hereof) per share of Common Stock on the date of such first occurrence (such
number of shares, the “
Adjustment Shares
”).
(iii) In the event that the number of treasury shares and shares of Common
Stock which are authorized by the Company’s Certificate of Incorporation, as
amended, but not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights, is not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the
Company shall (A) determine the value of the Adjustment Shares issuable upon the
exercise of a Right (the “
Current Value
”), and (B) with respect to each
Right (subject to Section 7(e) hereof), make adequate provision to substitute for
the Adjustment Shares, upon the exercise of a Right and payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or
other equity securities of the Company (including, without limitation, shares, or
units of shares, of preferred stock, such as the Preferred Stock, which the Board
has deemed to have essentially the same value or economic rights as shares of Common
Stock (such shares of preferred stock being referred to as “
Common Stock
Equivalents
”)), (4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to the Current Value
(less the amount of any reduction in the Purchase
-17-
Price), where such aggregate value
has been determined by the Board based upon the advice of a nationally recognized
investment banking firm selected by the Board;
provided
,
however
,
that if the Company shall not have made adequate provision to deliver value pursuant
to clause (B) above within thirty (30) days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company’s
right of redemption pursuant to Section 23(a) expires (the later of (x) and (y)
being referred to herein as the “
Section
11(a)(ii)
Trigger Date
”), then the
Company shall be obligated to deliver, upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, shares of Common Stock (to the
extent available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. For purposes of the preceding sentence, the
term “
Spread
” shall mean the excess of (i) the Current Value over (ii) the
Purchase Price. If the Board determines in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized for issuance upon
exercise in full of the Rights, the thirty (30) day period set forth above may be
extended to the extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such thirty (30) day
period, as it may be extended, is herein called the “
Substitution Period
”).
To the extent that the Company determines that action should be taken pursuant to
the first and/or third sentences of this Section 11(a)(iii), the Company (1) shall
provide, subject to Section 7(e) hereof, that such action shall apply uniformly to
all outstanding Rights, and (2) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek such stockholder approval
for such 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 each
Adjustment Share shall be the Current Market Price per share of the Common Stock on
the Section 11(a)(ii) Trigger Date and the per share or per unit value of any Common
Stock Equivalent shall be deemed to equal the Current Market Price per share of the
Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within forty-five (45) calendar days after such record date) Preferred
Stock (or shares having the same rights, privileges and preferences as the shares of
Preferred Stock (“
Equivalent Preferred Stock
”)) or securities convertible into
Preferred Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or per
share of Equivalent Preferred Stock (or having a conversion price per share, if a security
convertible into Preferred Stock or Equivalent Preferred Stock) less than the Current Market
Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such
record date, the Purchase Price to be in effect after such record date shall
-18-
be determined
by multiplying the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred Stock and/or Equivalent
Preferred Stock so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such Current Market Price, and
the denominator of which shall be the number of shares of Preferred Stock outstanding on
such record date, plus the number of additional shares of Preferred Stock and/or Equivalent
Preferred Stock to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such subscription price may
be paid by delivery of consideration, part or all of which may be in a form other than cash,
the value of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights.
Shares of Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to all holders of
Preferred Stock (including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation), cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including any dividend payable in
stock other than Preferred Stock) or evidences of indebtedness, or of subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of which shall be
the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock 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, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants applicable to a
share of Preferred Stock, and the denominator of which shall be such Current Market Price
(as determined pursuant to Section 11(d) hereof) per share of Preferred Stock. Such
adjustments shall be made successively whenever such a record date is fixed, and in the
event that such distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date had not been fixed.
(d) (i) 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 thirty
-19-
(30) consecutive Trading Days 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 (10) 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, consolidation, reverse stock split or reclassification of such Common
Stock, and the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination, consolidation, reverse stock split or
reclassification shall not have occurred prior to the commencement of the requisite
thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, 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 American Stock Exchange or, if the
shares of Common Stock are not listed or admitted to trading on the American 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 in the over-the-counter market, as reported by the NASDAQ Stock
Market (“
NASDAQ
”) or such other 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. 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 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, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the Current Market Price per
share of Preferred Stock shall be determined in the same manner as set forth above
for the Common Stock in clause (i) of this Section 11(d) (other than
-20-
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 1,000 (as such number may be appropriately adjusted for
such events as stock splits, stock dividends and recapitalizations with respect to
the Common 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, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase
Price shall be required unless such adjustment would require an increase or decrease of at
least one percent (1%) in the Purchase Price;
provided
,
however
, that any
adjustments which by reason of this Section 11(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of a
share of Common Stock or other share or one-millionth of a share 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 (3) years
from the date of the transaction which mandates such adjustment, or (ii) the Expiration
Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii) or Section 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 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 Sections
11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), 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 Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase
Price, the number of one one-thousandths of a share of Preferred Stock 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 in Section 11(i),
upon each adjustment of the Purchase Price as a result of the calculations made in Sections
11(b) and (c), each Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
-21-
Purchase Price, that number
of one one-thousandths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one one-thousandths of a share
covered by a Right immediately prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment of the Purchase Price
to adjust the number of Rights, in lieu of any adjustment in the number of one
one-thousandths of a share of Preferred Stock purchasable upon the exercise of a Right. Each
of the Rights outstanding after the adjustment in the number of Rights shall be exercisable
for the number of one one-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights (calculated to the
nearest one-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 (10) 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(i), 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.
(j) Irrespective of any adjustment or change in the Purchase Price or the number of one
one-thousandths of a share of Preferred Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express the Purchase
Price per one one-thousandth of a share and the number of one one-thousandth of a share
which were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the Purchase Price
below the then stated value, if any, of the number of one one-thousandths of a share of
Preferred Stock issuable upon exercise of the Rights, the Company shall
-22-
take any corporate
action which may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable such number of one one-thousandths of
a share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment in the
Purchase Price be made effective as of a record date for a specified event, the Company may
elect to defer until the occurrence of such event the issuance to the holder of any Right
exercised after such record date the number of one one-thousandths of a share of Preferred
Stock and other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one one-thousandths of a share of Preferred Stock and
other capital stock or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment;
provided
,
however
, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder’s right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be
entitled to make such reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that in their 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 which by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock dividends 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 stockholders.
(n) 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 which complies with Section 11(o) hereof), (ii) merge with or into
any other Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), or (iii) other than pursuant to a pro rata dividend and/or
distribution to all of the then current holders of Common Stock, sell or transfer (or permit
any Subsidiary to sell or transfer), in one transaction, or a series of related
transactions, assets, cash flow or earning power aggregating more than fifty percent (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(o) hereof), if (x) at the time of
or immediately after such consolidation, merger or sale there are any rights, warrants or
other instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or immediately after such consolidation, merger
or sale, the stockholders of the Person who constitutes, or would constitute, the
-23-
“
Principal Party
” for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates and
Associates.
(o) 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.
(p) Anything in this Agreement to the contrary notwithstanding, in the event that the
Company shall at any time after the Rights Dividend Declaration 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 shares of Common Stock, or (iii)
combine the outstanding shares of 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 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.
Section 12.
Certificate of Adjusted Purchase Price or Number of Shares
. Whenever an
adjustment is made as provided in Section 11 and Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief statement of the facts accounting
for such adjustment, (b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate and (c) if a Distribution Date has
occurred, mail a brief summary thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a share of Common Stock) in accordance with Section 26 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, Cash Flow or Earning
Power
.
(a) In the event that, following the Stock Acquisition Date, directly or indirectly,
(x) the Company shall consolidate with, or merge with and into, any other Person (other than
a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), and
the Company shall not be the continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) 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
-24-
shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) the Company shall,
other than pursuant to pro rata dividend and/or distribution to all of the then current
holders of Common Stock, 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, cash flow or earning power aggregating more than fifty percent (50%) of the assets,
cash flow 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(o) hereof), then, and in each such case
(except as may be contemplated by Section 13(d) hereof), proper provision shall be made so
that: (i) each 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, non-assessable and freely tradeable shares of Common Stock of the
Principal Party (as such term is 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 one
one-thousandths of a share of Preferred 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
one one-thousandths of a share 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 of a Section 11(a)(ii) Event), 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 and for all purposes of this Agreement) by fifty
percent (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; (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 assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to its shares of Common Stock thereafter deliverable upon the exercise of the
Rights; 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 (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
-25-
such merger or
consolidation, and if no securities are so issued, the Person that is the other
party to such merger or consolidation; 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, cash flow 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 (12) 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 Stock 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, sale or transfer
unless the Principal Party shall have a sufficient number of authorized shares of its Common
Stock which have not been issued or reserved for issuance to permit the exercise in full of
the Rights in accordance with this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent confirming that the
requirements of Section 13(a) and Section 13(b) hereof shall promptly be performed in
accordance with their terms and further providing that, as soon as practicable after the date
of any consolidation, merger 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, 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 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;
(ii) take all such other action as may be necessary to enable the Principal
Party to issue the securities purchasable upon exercise of the Rights, including but
not limited to the registration or qualification of such securities under all
requisite securities laws of jurisdictions of the various states and the listing of
such securities on such exchanges and trading markets as may be necessary or
appropriate; and
(iii) will deliver to holders of the Rights historical financial statements for
the Principal Party and each of its Affiliates which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the Exchange
Act.
-26-
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations 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 which have not
theretofore been exercised shall thereafter become exercisable in the manner described in
Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary, Section 13 shall not be
applicable to a transaction described in subparagraphs (x) and (y) of Section 13(a) if (i)
such transaction is consummated with a Person or Persons (or a wholly owned subsidiary of
any such Person or Persons) who acquired shares of Common Stock pursuant to a tender offer
or exchange offer for all outstanding shares of Common Stock which is a Qualified Offer as
such term is defined in Section 11(a)(ii) hereof (or a wholly owned subsidiary of any such
Person or Persons), (ii) the price per share of Common Stock offered in such transaction is
not less than the price per share of Common Stock paid to all holders of shares of Common
Stock whose shares were purchased pursuant to such tender offer or exchange offer and (iii)
the form of consideration being offered to the remaining holders of shares of Common Stock
pursuant to such transaction is the same as the form of consideration paid pursuant to such
tender offer or exchange offer. Upon consummation of any such transaction contemplated by
this Section 13(d), all Rights hereunder shall expire.
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(p) hereof, or to distribute
Rights Certificates which evidence fractional Rights. In lieu of such fractional
Rights, the Company shall pay 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 Trading 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 American Stock Exchange or, if the Rights are not listed or admitted
to trading on the American Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to trading,
or if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by NASDAQ or such
other system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights, selected by the Board. If
on any such date no such market maker is making
-27-
a market in the Rights, the fair
value of the Rights on such date as determined in good faith by the Board shall be
used.
(b) The Company shall not be required to issue fractions of shares of Preferred
Stock (other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock) upon exercise of the Rights or to distribute certificates
which evidence fractional shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock). In lieu of
fractional shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share of Preferred Stock, 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 value of
one one-thousandth of a share of Preferred Stock. For purposes of this Section
14(b), the current market value of one one-thousandth of a share of Preferred Stock
shall be one one-thousandth of the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall not be
required to issue fractions of shares of Common Stock upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Common Stock. In lieu
of fractional shares of Common Stock, 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 value of one (1)
share of Common Stock. For purposes of this Section 14(c), the current market value
of one share of Common Stock shall be the closing price per share of Common Stock
(as determined pursuant to Section 11(d)(i) hereof) on the Trading Day immediately
prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly waives such
holder’s right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15.
Rights of Action
. All rights of action in respect of this Agreement,
excepting the rights of action given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Rights Certificates (and, prior to the Distribution Date, the
registered holders of the Common Stock); and any registered holder of any Rights Certificate (or,
prior to the Distribution Date, of the 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 the Common
Stock), may, in the holder’s own behalf and for the holder’s own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise
act in respect of, the holder’s right to exercise the Rights evidenced by such Rights Certificate
in the manner provided in such Rights Certificate and in this Agreement. Without
-28-
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 shares 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 balance indicated in the book-entry account system of the
transfer agent for the Common Stock or, in the case of certificated shares, 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
Certificates or the associated balance indicated in the book-entry account system of the
transfer agent for the Common Stock or, in the case of certificated shares, the associated
Common Stock certificate, made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the Company nor
the Rights Agent shall have any liability to any holder of a Right or other Person as a
result of its inability to perform any of its obligations under this Agreement by reason of
any preliminary or permanent injunction or other order, decree or ruling issued by a court
of competent jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or enacted by
any governmental authority, prohibiting or otherwise restraining performance of such
obligation;
provided
,
however
, the Company must use its best efforts to
have any such order, decree or ruling lifted or otherwise overturned as soon as possible.
Section 17.
Rights Certificate Holder Not Deemed a Stockholder
. No holder, as such, of
any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of the number of one one-thousandths of a share of Preferred Stock or any
-29-
other securities of the Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights Certificate be construed
to confer upon the holder of any Rights Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as provided in 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 gross negligence, bad
faith or willful misconduct (each as determined by a court of competent jurisdiction) 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 the balance indicated in the book-entry
account system of the transfer agent for the Common Stock or, in the case of certificated
shares, certificate for Common Stock, or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or acknowledged, by the
proper Person or Persons.
Section 19.
Merger or Consolidation or Change of Name of Rights Agent
.
(a) Any Person into which the Rights Agent or any successor Rights Agent may be merged
or with which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or
any Person succeeding to the corporate trust, stock transfer or other stockholder services
business of the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; but only if such Person 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
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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, the President and Chief Executive Officer, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross negligence, bad
faith or willful misconduct (each as determined by a court of competent jurisdiction),
provided
,
however
, that the Rights Agent shall under no circumstances be
liable for indirect, consequential, special or punitive damages hereunder. Anything herein
to the contrary notwithstanding, any liability of the Rights Agent under this Agreement will
be limited in the aggregate to an amount equal to three times the amount of fees paid by the
Company to the Rights Agent.
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(d) The Rights Agent shall not be liable for or by reason of any of the statements of
fact or recitals contained in this Agreement or in the 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 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 required under the provisions of
Section 11, Section 13 or Section 24 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by 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 Common Stock or Preferred Stock to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any shares of Common Stock or Preferred Stock will, when
so issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from the Chairman of the Board, the
President and Chief Executive Officer, 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.
(h) The Rights Agent and any stockholder, director, officer or employee of the Rights
Agent may buy, sell or deal in any of the Rights or other securities of the Company or
become pecuniarily interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any other Person.
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(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 (other than internal costs incurred by the Rights Agent in providing services to
the Company in the ordinary course of its business as Rights Agent) 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 or transfer without first consulting with the
Company.
Section 21.
Change of Rights Agent
. The Rights Agent or any successor Rights Agent may
resign and be discharged from its duties under this Agreement upon thirty (30) days’ notice in
writing mailed to the Company, and to each transfer agent of the Common Stock and Preferred Stock,
by registered or certified mail, and, if such resignation occurs after the Distribution Date, to
the registered holders of the Rights Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon thirty (30) days’ notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified mail, and, if such removal occurs
after the Distribution Date, 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 thirty (30) days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or incapacitated Rights
Agent or by the holder of a 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 by the Company or by such a court, shall be (a) a legal
business entity organized and doing business under the laws of the United States or any State
thereof, in good standing, having an office in the State of Ohio, which is authorized under such
laws to exercise corporate trust, stock transfer or stockholder services powers and which has at
the time of its appointment as Rights Agent a combined capital and surplus of at least $50,000,000
or (b) an affiliate of a legal business entity described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent
-33-
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 the Preferred Stock, and, if such appointment occurs
after the Distribution Date, 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 the Board 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, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to shares of Common Stock so issued or sold pursuant to
the exercise of stock options or under any employee plan or arrangement, granted or awarded as of
the Distribution Date, or upon the exercise, conversion or exchange of securities hereinafter
issued by the Company, and (b) may, in any other case, if deemed necessary or appropriate by the
Board, issue Rights Certificates representing the appropriate number of Rights in connection with
such issuance or sale;
provided
,
however
, that (i) no such Rights Certificate shall
be issued if, and to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the Company or the Person
to whom such Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
Section 23.
Redemption and Termination
.
(a) The Board may, at its option, at any time prior to the earlier of (i) the Close of
Business on the tenth Business Day (or such specified or unspecified later date as may be
determined by the Board before the Rights cease to be redeemable) following the Stock
Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior to the Record
Date, the Close of Business on the tenth Business Day following the Record Date), or (ii)
the Final Expiration Date, (x) redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.001 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter referred to as the “
Redemption
Price
”) or (y) amend this Agreement to change the Final Expiration Date to another date,
including without limitation an earlier date. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable after the first occurrence of
a Section 11(a)(ii) Event until such time as the Company’s right of redemption hereunder has
expired. The Company may, at its option, pay the Redemption
-34-
Price in cash, shares of Common
Stock (based on the Current Market Price, as defined in Section 11(d)(i) hereof, of the
Common Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors.
(b) Immediately upon the action of the Board ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent and without any further action
and without any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for each Right
so held. Promptly after the action of the Board ordering the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to 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 which is
mailed in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
Section 24.
Exchange
.
(a) The Board may, at its option, at any 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 the provisions of Section 7(e) hereof) for
Common Stock at an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as the “
Exchange
Ratio
”). Notwithstanding the foregoing, the Board shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Stock for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of fifty percent
(50%) or more of the Common Stock of the Company then outstanding.
(b) Immediately upon the action of the Board ordering the exchange of any Rights
pursuant to subsection (a) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange;
provided
,
however
,
that the failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the Common Stock for Rights
-35-
will be effected and,
in the event of any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its option, may
substitute Preferred Stock (or Equivalent Preferred Stock, as such term is defined in
paragraph (b) of Section 11 hereof) for Common Stock exchangeable for Rights, at the initial
rate of one one-thousandth of a share of Preferred Stock (or Equivalent Preferred Stock) for
each share of Common Stock, as appropriately adjusted to reflect stock splits, stock
dividends and other similar transactions after the date hereof.
(d) In the event that there shall not be sufficient shares of Common Stock issued but
not outstanding or authorized but unissued to permit any exchange of Rights as contemplated
in accordance with this Section 24, the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock for issuance upon exchange of the
Rights.
(e) The Company shall not be required to issue fractions of shares of Common Stock or,
in the case of certificated shares, to distribute certificates which 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 Rights 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 (e), 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 the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
Section 25.
Notice of Certain Events
.
(a) In case the Company shall propose, at any time after the Distribution Date, (i) to
pay any dividend payable in stock of any class to the holders of Preferred Stock or to make
any other distribution to the holders of Preferred Stock (other than a regular quarterly
cash dividend out of earnings or retained earnings of the Company), or (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or to purchase any additional
shares of Preferred Stock or shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of Preferred Stock),
or (iv) to effect any consolidation or merger into or with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), or,
other than pursuant to a pro rata dividend and/or distribution to all of the then current
holders of Common Stock, 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 fifty percent (50%) of the assets, cash flow or earning
power of the Company and its Subsidiaries (taken as a whole)
-36-
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(o) 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, 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 twenty (20)
days prior to the record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least twenty (20) days
prior to the date of the taking of such proposed action or the date of participation therein
by the holders of the shares of Preferred Stock, whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii) hereof 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
to Common Stock and/or, if appropriate, 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 by the Rights Agent with the Company) as follows:
Core Molding Technologies, Inc.
800 Manor Park Drive
Columbus, Ohio 43228
Attention: Secretary
With a copy to:
Squire, Sanders & Dempsey L.L.P.
1300 Huntington Center
41 South High Street
Columbus, Ohio 43215
Attention: Patrick J. Dugan, Esq.
Subject to the provisions of Section 21, any notice or demand authorized by this Agreement to be
given or made by the Company or by the holder of any Rights Certificate to or on the Rights
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Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing by the Rights Agent with the Company) as follows:
American Stock Transfer & Trust Company
59 Maiden Lane
Plaza Level
New York, NY 10038
Attention: Corporate Actions
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 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, the Company
and the Rights Agent shall, if the Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of shares of Common Stock. From and after the
Distribution Date, 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 which may be
defective or inconsistent with any other provisions herein, (iii) to shorten or lengthen any time
period hereunder or (iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which 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). Upon the delivery of a certificate from an appropriate officer of the Company
which states that the proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment. Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock. Notwithstanding anything herein to the contrary, this Agreement may not be
amended (other than pursuant to clauses (i) or (ii) of the preceding sentence) at a time when the
Rights are not redeemable. Notwithstanding anything herein to the contrary, the Rights Agent may,
but shall not be obligated to, enter into any supplement or amendment that affects the Rights
Agent’s own rights, duties, obligations or immunities under this Agreement.
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 or any other
class of capital 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 shall have
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the exclusive power and
authority to administer this Agreement and to exercise all rights and powers specifically granted
to the Board or to the Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret the provisions of
this Agreement, and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not redeem the Rights or
to amend the Agreement). All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board 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 any of the directors on the Board 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 and the registered holders 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; but this Agreement shall be for
the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock).
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 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 Business Day following the date of such
determination by the Board. Without limiting the foregoing, if any provision requiring a specific
group of directors of the Company to act is held to by any court of competent jurisdiction or other
authority to be invalid, void or unenforceable, such determination shall then be made by the Board
of Directors of the Company in accordance with applicable law and the Company’s Certificate of
Incorporation, as amended and By-laws.
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 State of Delaware and
for all purposes shall be governed by and construed in accordance with the laws of such State
applicable to contracts made and to be performed entirely within such State.
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.
-39-
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.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as
of the day and year first above written.
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CORE MOLDING TECHNOLOGIES, INC.
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By:
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/s/ Herman F. Dick, Jr.
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Name:
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Herman F. Dick, Jr.
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Title:
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Vice President, Secretary, Treasurer and Chief
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Financial Officer
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American Stock Transfer & Trust Company,
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as Rights Agent
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By:
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/s/ Paula Caroppoli
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Name:
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Paula Caroppoli
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Title:
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Vice
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[SIGNATURE PAGE TO RIGHTS AGREEMENT]
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
Core Molding Technologies, Inc.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
I, the undersigned officer of Core Molding Technologies, Inc., a Delaware corporation (the
“
Corporation
”), pursuant to the provisions of Sections 103 and 151 of the General
Corporation Law of the State of Delaware, do hereby state and certify that pursuant to the
authority vested in the Board of Directors of the Corporation by the Certificate of Incorporation
of the Corporation, the Board of Directors on July 16, 2007, duly adopted the following resolution
creating a series of 1,000,000 shares of Preferred Stock designated as Series A Junior
Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation
in accordance with the provisions of its Certificate of Incorporation, as amended, a series of
Preferred Stock of the Corporation be and it hereby is created, and that the designation and amount
thereof and the voting powers, preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications, limitations or restrictions thereof
are as follows:
Section 1.
Designation and Amount
. The shares of such series shall be designated as
“
Series A Junior Participating Preferred Stock
” and the number of shares constituting such
series shall be 1,000,000.
Section 2.
Dividends and Distributions
.
(A) Subject to the prior and superior rights of the holders of any shares of any series
of Preferred Stock ranking prior and superior to the shares of Series A Junior Participating
Preferred Stock with respect to dividends, the holders of shares of Series A Junior
Participating Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the 15
th
day of March, June, September and December in each
year (each such date being referred to herein as a “
Quarterly Dividend Payment
Date
”), commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Junior Participating Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $0.10 or (b)
subject to the provision for adjustment hereinafter set forth, 1,000 times the aggregate per
share amount of all cash dividends, and 1,000 times the aggregate per share amount (payable
in kind) of all non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of
A-1
Common Stock (by
reclassification or otherwise), declared on the Common Stock, par value $0.01 per share, of
the Corporation (the “
Common Stock
”), since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since
the first issuance of any share or fraction of a share of Series A Junior Participating
Preferred Stock. In the event the Corporation shall at any time after July 18, 2007 (the
“
Rights Dividend Declaration Date
”) (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock, through a reverse stock split of otherwise, into a smaller number
of shares, then in each such case the amount to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event under clause (b)
of the preceding sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series A Junior
Participating Preferred Stock as provided in Paragraph (A) above immediately after it declares a
dividend or distribution on the Common Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $.10 per share on the Series A Junior Participating
Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior
Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Junior Participating Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either
of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of
Series A Junior Participating Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix
a record date for the determination of holders of shares of Series A Junior Participating Preferred
Stock entitled to receive payment of a dividend or distribution declared thereon, which record date
shall be no more than thirty (30) days prior to the date fixed for the payment thereof.
Section 3.
Voting Rights
. The holders of shares of Series A Junior Participating
Preferred Stock shall have the following voting rights:
A-2
(A) Subject to the provision for adjustment hereinafter set forth, each share of Series A
Junior Participating Preferred Stock shall entitle the holder thereof to one thousand (1,000) votes
on all matters submitted to a vote of the stockholders of the Corporation. In the event the
Corporation shall at any time after the Rights Dividend Declaration Date (i) declare any dividend
on 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, through a reverse stock
split of otherwise, then in each such case the number of votes per share to which holders of shares
of Series A Junior Participating Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of shares of Series A Junior
Participating Preferred Stock and the holders of shares of Common Stock shall vote together as one
class on all matters submitted to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior Participating Preferred Stock shall be
in arrears in an amount equal to six (6) quarterly dividends thereon, the occurrence of such
contingency shall mark the beginning of a period (herein called a “
default period
”) which
shall extend until such time when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all shares of Series A Junior
Participating Preferred Stock then outstanding shall have been declared and paid or set apart for
payment. During each default period, all holders of Preferred Stock (including holders of the
Series A Junior Participating Preferred Stock) with dividends in arrears in an amount equal to six
(6) quarterly dividends thereon, voting as a class, irrespective of series, shall have the right to
elect two (2) directors.
(ii) During any default period, such voting right of the holders of Series A Junior
Participating Preferred Stock may be exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting of stockholders, and thereafter
at annual meetings of stockholders, provided that such voting right shall not be exercised unless
the holders of ten percent (10%) in number of shares of Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not
affect the exercise by the holders of Preferred Stock of such voting right. At any meeting at
which the holders of Preferred Stock shall exercise such voting right initially during an existing
default period, they shall have the right, voting as a class, to elect directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2) directors or, if such
right is exercised at an annual meeting, to elect two (2) directors. If the number which may be so
elected at any special meeting does not amount to the required number, the holders of the
Preferred Stock shall have the right to make such increase in the number of directors as shall be
necessary to permit the election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect directors in any default period and
during the continuance of such period, the number of directors shall not be increased or decreased
except by vote of the holders of Preferred Stock as herein provided or
A-3
pursuant to the rights of
any equity securities ranking senior to or
pari
passu
with the Series A Junior
Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an existing default period, have
previously exercised their right to elect directors, the Board of Directors may order, or any
stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total
number of shares of Preferred Stock outstanding, irrespective of series, may request, the calling
of a special meeting of the holders of Preferred Stock, which meeting shall thereupon be called by
the President, a Vice-President or the Secretary of the Corporation. Notice of such meeting and of
any annual meeting at which holders of Preferred Stock are entitled to vote pursuant to this
Paragraph (C)(iii) shall be given to each holder of record of Preferred Stock by mailing a copy of
such notice to him at his last address as the same appears on the books of the Corporation. Such
meeting shall be called for a time not earlier than 20 days and not later than 60 days after such
order or request or in default of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any stockholder or stockholders owning in
the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock
outstanding. Notwithstanding the provisions of this Paragraph (C)(iii), no such special meeting
shall be called during the period within 60 days immediately preceding the date fixed for the next
annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and other classes of stock of the
Corporation if applicable, shall continue to be entitled to elect the whole number of directors
until the holders of Preferred Stock shall have exercised their right to elect two (2) directors
voting as a class, after the exercise of which right (x) the directors so elected by the holders
of Preferred Stock shall continue in office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y) any vacancy in the Board of
Directors may (except as provided in Paragraph (C)(ii) of this Section 3) be filled by vote of a
majority of the remaining directors theretofore elected by the holders of the class of stock which
elected the director whose office shall have become vacant. References in this Paragraph (C) to
directors elected by the holders of a particular class of stock shall include directors elected by
such directors to fill vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the right of the holders of
Preferred Stock as a class to elect directors shall cease, (y) the term of any directors elected
by the holders of Preferred Stock as a class shall terminate, and (z) the number of directors
shall be such number as may be provided for in the certificate of incorporation or by-laws
irrespective of any increase made pursuant to the provisions of Paragraph (C)(ii) of this Section
3 (such number being subject, however, to change thereafter in any manner provided by law or in
the certificate of incorporation or by-laws). Any vacancies in the Board of Directors effected by
the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the
remaining directors.
(D) Except as set forth herein, holders of Series A Junior Participating Preferred Stock shall
have no special voting rights and their consent shall not be required (except to the extent
A-4
they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4.
Certain Restrictions
.
(A) Whenever quarterly dividends or other dividends or distributions payable on the Series A
Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A
Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation
shall not
(i) declare or pay dividends on, make any other distributions on, or redeem or purchase or
otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with
the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A
Junior Participating Preferred Stock and all such parity stock on which dividends are payable or
in arrears in proportion to the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking
on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of
any stock of the Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Junior Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of Series A Junior
Participating Preferred Stock, or any shares of stock ranking on a parity with the Series A Junior
Participating Preferred Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation
could, under Paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section 5.
Reacquired Shares
. Any shares of Series A Junior Participating Preferred
Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired
A-5
and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued as part of a new
series of Preferred Stock to be created by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth herein.
Section 6.
Liquidation, Dissolution or Winding Up
.
(A) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior
Participating Preferred Stock shall have received an amount equal to $1,000 per share of Series A
Junior Participating Preferred Stock, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment (the “
Series A
Liquidation Preference
”). Following the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall
have received an amount per share (the “
Common Adjustment
”) equal to the quotient obtained
by dividing (i) the Series A Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set
forth in subparagraph (C) below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii), the
“
Adjustment Number
”). Following the payment of the full amount of the Series A Liquidation
Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior
Participating Preferred Stock and Common Stock, respectively, holders of Series A Junior
Participating Preferred Stock and holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number
to 1 with respect to such Preferred Stock and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets available to permit payment in
full of the Series A Liquidation Preference and the liquidation preferences of all other series of
preferred stock, if any, which rank on a parity with the Series A Junior Participating Preferred
Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares
in proportion to their respective liquidation preferences. In the event, however, that there are
not sufficient assets available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights Dividend Declaration Date
(i) declare any dividend on 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, through a reverse stock split of otherwise, then in each such case the Adjustment Number in
effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of
A-6
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7.
Consolidation, Merger, etc
. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other property, then in
any such case the shares of Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 1,000 times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at any time after the
Rights Dividend Declaration Date (i) declare any dividend on 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, through a reverse stock split of otherwise, then in each
such case the amount set forth in the preceding sentence with respect to the exchange or change of
shares of Series A Junior Participating Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 8.
No Redemption
. The shares of Series A Junior Participating Preferred Stock
shall not be redeemable.
Section 9.
Ranking
. The Series A Junior Participating Preferred Stock shall rank
junior to all other series of the Corporation’s Preferred Stock as to the payment of dividends and
the distribution of assets, unless the terms of any such series shall provide otherwise.
Section 10.
Amendment
. At any time when any shares of Series A Junior Participating
Preferred Stock are outstanding, the Certificate of Incorporation of the Corporation nor this
Certificate of Designation shall be amended in any manner which would materially alter or change
the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so
as to affect them adversely without the affirmative vote of the holders of a majority or more of
the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a
class.
Section 11.
Fractional Shares
. Series A Junior Participating Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion to such holder’s
fractional shares, to exercise voting rights, receive dividends, participate in distributions and
to have the benefit of all other rights of holders of Series A Junior Participating Preferred
Stock.
A-7
IN WITNESS WHEREOF, I have executed and subscribed this Certificate and do affirm the
foregoing as true under the penalties of perjury this 18th day of July, 2007.
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Name: Herman F. Dick, Jr.
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Title: Vice President, Secretary, Treasurer and
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Chief Financial Officer
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A-8
Exhibit B
Form of Rights Certificate
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Certificate No. R-
Rights
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NOT EXERCISABLE AFTER 5:00 P.M., COLUMBUS, OHIO TIME ON JULY 18, 2017, UNLESS THE RIGHTS ARE
PREVIOUSLY REDEEMED, EXCHANGED OR TERMINATED. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION
OF THE COMPANY, AT $.001 PER RIGHT 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 ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]
1
Rights Certificate
Core Molding Technologies, Inc.
This certifies that
, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of July
18, 2007 (the “
Rights Agreement
”), between Core Molding Technologies, Inc., a Delaware
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., Columbus, Ohio time on July 18, 2017, unless the Rights are previously redeemed, exchanged or
terminated, at the office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-thousandth of a fully paid, non-assessable share of Series A
Junior Participating Preferred Stock (the “
Preferred Stock
”) of the Company, at a purchase
price of $35.00 per one one-thousandth (0.001) of a share (the “
Purchase Price
”), upon
presentation and surrender of this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. 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 July 18, 2007,
based on the Preferred Stock as constituted at such date. The Company reserves the right to require
prior to the
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The portion of the legend in brackets shall be inserted only if applicable and shall replace the preceding sentence.
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B-1
occurrence of a Triggering Event (as such term is defined in the Rights Agreement)
that a number of Rights be exercised so that only whole shares of Preferred Stock will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights
Agreement), if the Rights evidenced by this Rights Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights Agreement, a transferee of
a person who, after such transfer, became an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, such Rights shall become null and void and no holder hereof shall have any right
with respect to such Rights from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number and kind of shares of
Preferred Stock or other securities, which 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. 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.
This Rights Certificate, with or without other Rights Certificates, upon surrender at the
office 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 one one-thousandths of a share of Preferred Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered shall have entitled 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 Rights evidenced by this Certificate
may be redeemed by the Company at its option at any time prior to the earlier of the Close of
Business on (A) the tenth Business Day following the Stock Acquisition Date (as such time period
may be extended pursuant to the Rights Agreement), and (B) the Final Expiration Date at a
redemption price of $0.001 per Right.
No fractional shares of Preferred Stock will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions which are integral multiples of one one-thousandth of
a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in the Rights
B-2
Agreement.
The Company, at its election, may require that a number of Rights be exercised so that only whole
shares of Preferred Stock would be issued.
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 which may at any time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of directors or upon
any matter submitted to stockholders at any meeting thereof, or to give consent to or withhold
consent from any corporate action, or, to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this 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 signature of the proper officers of the Company and its corporate seal.
Dated as of
,
.
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ATTEST:
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CORE MOLDING TECHNOLOGIES, INC.
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By:
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Name:
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Title:
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Countersigned:
American Stock Transfer & Trust Company,
as Rights Agent
B-3
[Form of Reverse Side of Rights Certificate]
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 Guaranteed:
B-4
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 Guaranteed:
B-5
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.
B-6
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: CORE MOLDING TECHNOLOGIES, INC.
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 which may be
issuable upon the exercise of the Rights) and requests that certificates for such shares 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)
Dated:
,__
Signature Guaranteed:
B-7
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 Guaranteed:
B-8
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.
B-9
Exhibit C
FORM OF
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On July 16, 2007, the Board of Directors (the “
Board
”) of Core Molding Technologies,
Inc. (the “
Company
”) authorized and declared a dividend distribution of one right (a
“
Right
”) for each outstanding share of Common Stock, par value $0.01 per share, of the
Company (the “
Common Stock
”) to stockholders of record at the close of business on July 18,
2007 (the “
Record Date
”). Each Right entitles the registered holder to purchase from the
Company a unit consisting of one one-thousandth of a share (a “
Unit
”) of Series A Junior
Participating Preferred Stock, par value $0.01 per share (the “
Preferred Stock
”) at a
purchase price of $35.00 per Unit, subject to adjustment (the “
Purchase Price
”). The
description and terms of the Rights are set forth in a Rights Agreement (the “
Rights
Agreement
”), dated as of July 18, 2007, between the Company and American Stock Transfer & Trust
Company, a New York corporation, as Rights Agent.
Initially, the Rights will be attached to the shares of Common Stock underlying the balances
indicated in the book-entry account system of the transfer agent for the Common Stock or, in the
case of certificated shares, all Common Stock certificates representing shares then outstanding,
and no separate rights certificates (“
Rights Certificates
”) will be distributed. Subject to
certain exceptions specified in the Rights Agreement, the Rights will separate from the Common
Stock and a distribution date (a “
Distribution Date
”) will occur upon the earlier of (i) 10
business days (or such later date as the Board shall determine) following a public announcement
that a person or group of affiliated or associated persons (an “
Acquiring Person
”) has
acquired beneficial ownership of fifteen percent (15%) or more of the outstanding shares of Common
Stock (the “
Stock Acquisition Date
”), other than as a result of repurchases of stock by the
Company, certain inadvertent actions by institutional or certain other stockholders or certain
other stockholders or the beneficial ownership by a person of fifteen percent (15%) or more of the
outstanding Common Stock as of July 18, 2007, or the date a Person has entered into an agreement or
arrangement with the Company or any Subsidiary of the Company providing for an Acquisition
Transaction or (ii) 10 business days (or such later date as the Board shall determine) following
the commencement of a tender offer or exchange offer that would result in a person or group
becoming an Acquiring Person. An Acquisition Transaction is defined in the Rights Agreement as (x)
a merger, consolidation or similar transaction involving the Company or any of its Subsidiaries as
a result of which stockholders of the Company will no longer own a majority of the outstanding
shares of Common Stock of the Company or a publicly traded entity which controls the Company or, if
appropriate, the entity into which the Company may be merged, consolidated or otherwise combined
(based solely on the shares of Common Stock received or retained by such stockholders, in their
capacity as stockholders of the Company, pursuant to such transaction), (y) a purchase or other
acquisition of all or a substantial portion of the assets of the Company and its Subsidiaries, or
(z) a purchase or other acquisition of securities representing fifteen percent (15%) or more of
the shares of Common Stock then outstanding. Until the Distribution Date, (i) the Rights will be
evidenced by the balances indicated in the book-entry account system of the transfer agent for the
Common Stock registered in the names of the
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holders of the Common Stock or, in the case of
certificated shares, the Common Stock certificates, and will be transferred with and only with such
shares or, in the case of certificated shares, Common Stock certificates, (ii) confirmation and
account statements sent to holders of shares of Common Stock in book-entry form or, in the case of
certificated shares, new Common Stock certificates issued after the Record Date, will contain a
notation incorporating the Rights Agreement by reference and (iii) the transfer of any shares of
Common Stock or, in the case of certificated shares, certificates for Common Stock, outstanding
will also constitute the transfer of the Rights associated with such shares of Common Stock or, in
the case of certificated shares, the Common Stock represented by such certificates. Pursuant to the
Rights Agreement, the Company reserves the right to require prior to the occurrence of a Triggering
Event (as defined below) that, upon any exercise of Rights, a number of Rights be exercised so that
only whole shares of Preferred Stock will be issued.
The Rights are not exercisable until the Distribution Date and will expire at 5:00 P.M.,
Columbus, Ohio time on July 18, 2017, unless such date is extended or the Rights are previously
redeemed, exchanged or terminated 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, the separate Rights Certificates alone will represent the Rights.
In the event that a person or group of affiliated or associated persons becomes an Acquiring
Person, except pursuant to an offer for all outstanding shares of Common Stock which a majority of
the directors (excluding directors who are officers or have an affiliation with the Acquiring
Person) determine to be fair from a financial point of view and to otherwise be in the best
interests of the stockholders, after receiving advice from one or more investment banking firms (a
“
Qualified Offer
”), each holder of a Right will thereafter have the right to receive, upon
exercise, Common Stock (or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the exercise price of the Right. Notwithstanding any of
the foregoing, following the occurrence of the event set forth in this paragraph, all Rights that
are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person will be null and void. However, Rights are not exercisable following the
occurrence of the event set forth above until such time as the Rights are no longer redeemable by
the Company as set forth below.
For example, at an exercise price of $35.00 per Right, each Right not owned by an Acquiring
Person (or by certain related parties) following the event set forth in the preceding paragraph
would entitle its holder to purchase $70.00 worth of Common Stock (or other consideration, as noted
above) for $35.00. Assuming that the Common Stock had a per share value of $7.00 at such time, the
holder of each valid Right would be entitled to purchase ten (10) shares of Common Stock for
$35.00.
In the event that, at any time following the Stock Acquisition Date, (i) the Company engages
in a merger or other business combination transaction in which the Company is not the surviving
corporation (other than with an entity which acquired the shares pursuant to a Qualified Offer),
(ii) the Company engages in a merger or other business combination
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transaction in which the Company
is the surviving corporation and the Common Stock of the Company is changed or exchanged, or (iii)
other than pursuant to a pro rata dividend and/or distribution to all of the then current holders
of Common Stock, fifty percent (50%) or more of the Company’s assets, cash flow or earning power is
sold or transferred, each holder of a Right (except Rights which have previously been voided as set
forth above) shall thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the exercise price of the Right. The events set
forth in this paragraph and in the second preceding paragraph are referred to as the
“
Triggering Events
.”
At any time after a person becomes an Acquiring Person and prior to the acquisition by such
person or group of fifty percent (50%) or more of the outstanding Common Stock, the Board may
exchange the Rights (other than Rights owned by such person or group which have become void), in
whole or in part, for Common Stock or Preferred Stock at an exchange ratio of one share of Common
Stock, or one one-thousandth of a share of Preferred Stock (or of a share of a class or series of
the Company’s preferred stock having equivalent rights, preferences and privileges), per Right
(subject to adjustment).
The Purchase Price payable, and the number of Units of Preferred Stock or other securities or
property issuable, upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) if holders of the Preferred Stock are granted
certain rights or warrants to subscribe for Preferred Stock or convertible securities at less than
the current market price of the Preferred Stock, or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular quarterly cash dividends)
or of subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments amount to at least one percent (1.0%) of the Purchase Price. No fractional Units will
be issued and, in lieu thereof, an adjustment in cash will be made based on the market price of the
Preferred Stock on the last trading date prior to the date of exercise.
At any time until ten business days following the Stock Acquisition Date, the Company may
redeem the Rights in whole, but not in part, at a price of $0.001 per Right (payable in cash,
Common Stock or other consideration deemed appropriate by the Board of Directors) or amend the
Rights Agreement to change the Final Expiration Date to another date, including without limitation
an earlier date. Immediately upon the action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and the only right of the holders of Rights will be to receive
the $0.001 redemption price.
Until a Right is exercised, the holder thereof, as such, will have no separate rights as a
stockholder of the Company, including, without limitation, the right to vote or to receive
dividends in respect of Rights. While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the acquiring company or in the event of the
redemption of the Rights as set forth above.
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Any of the provisions of the Rights Agreement may be amended by the Board of Directors of the
Company prior to the Distribution Date. After the Distribution Date, the provisions of the Rights
Agreement may be amended by the Board in order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights, or to shorten or lengthen any time period
under the Rights Agreement. The foregoing notwithstanding, no amendment may be made at such time as
the Rights are not redeemable.
A copy of the Rights Agreement has been or will be filed with the Securities and Exchange
Commission as an Exhibit to a Current Report on Form 8-K. A copy of the Rights Agreement is
available free of charge from the Rights Agent. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the Rights Agreement, which
is incorporated herein by reference.
C- 4