SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Filed pursuant to Section 13, or 15(d) of
the Securities Exchange Act of 1934
Date of Report: June 13, 1995
KIMBERLY-CLARK CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State of other Jurisdiction of Incorporation)
1-225 39-0394230
(Commission File Number) (IRS Employer Identification No.)
P.O. Box 619100, Dallas, Texas 75261-9100
(Address of Principal Executive Offices) (Zip Code)
(214) 281-1200
(Registrant's Telephone Number)
The undersigned registrant hereby reports the event,
as set forth below, with respect to which information is not
otherwise called for by this form, that the registrant deems of
importance to security-holders.
Item 5. Other Events.
On June 8, 1995, the Board of Directors of Kimberly-
Clark Corporation (the "Company") approved an amendment and
restatement of the Rights Agreement, dated as of June 21, 1988,
between Kimberly-Clark Corporation and The First National Bank
of Boston (as so amended and restated, the "Amended and Re-
stated Rights Agreement"). The Rights Plan, as amended by the
Amended and Restated Rights Agreement (the "Amended Plan"),
eliminates (i) the stockholder referendum procedure that pro-
vided for the redemption of the Rights, prior to the acquisi-
tion by any person or group of 20% or more of the Company's
Common Stock, either by action of the Board of Directors or by
direct action of stockholders without the approval of the
Company's Board of Directors and, (ii) the qualified offer
provision that provided that the "flip-in" provision would not
apply in the event a person purchased at least 80% of the
Company's common stock pursuant to a cash tender offer for all
outstanding shares.
The Amended Plan extends the expiration date of the
Rights to June 8, 2005, ten years from the adoption of the
Amended and Restated Rights Agreement. In addition, the
Amended Plan increases the exercise price of each Right from
$100 per one two-hundredth of a share of the Company's Series A
Junior Participating Preferred Stock to $225 per one one-
hundredth of a share of the Company's Series A Junior Partici-
pating Preferred Stock, and provides that the Right associated
with each share of Common Stock, par value $1.25 per share, of
the Company shall be amended to represent a Right to purchase
one one-hundredth of a share of the Company's Series A Junior
Participating Preferred Stock.
The foregoing description of the Amended Plan is
qualified in its entirety by reference to the full text of the
Amended and Restated Rights Agreement, which is attached hereto
as Exhibit 1 and is incorporated herein by reference.
In addition, on June 8, 1995, the Board of Directors
amended and restated the By-Laws of the Company, principally
to: (i) authorize the Board to postpone previously scheduled
special meetings in accordance with applicable law, (ii) speci-
fically authorize the Chairman of a stockholder meeting to
adjourn the meeting from time to time whether or not a quorum
-2-
is present and (iii) establish procedures with respect to the
notice required for stockholders to conduct business at an
annual or special meeting.
The foregoing description of the By-Laws dated as of
June 8, 1995 is qualified in its entirety by reference to the
full text of such By-Laws, which are attached hereto as Exhibit
2 and are incorporated herein by reference.
-3-
Exhibits
1. Rights Agreement, dated as of June 21, 1988, as amended
and restated as of June 8, 1995, between Kimberly-Clark
Corporation and The First National Bank of Boston, as
Rights Agent.
2. By-Laws of Kimberly-Clark Corporation as amended as of
June 8, 1995.
-4-
SIGNATURES
Pursuant to the requirements of the Securities Ex-
change Act of 1934, the registrant has duly caused this amend-
ment to be signed on its behalf by the undersigned thereunto
duly authorized.
KIMBERLY-CLARK CORPORATION
By: /s/ Donald M. Crook
Name: Donald M. Crook
Title: Vice President and
Secretary
Dated: June 13, 1995
-5-
INDEX TO EXHIBITS
Exhibit Page
1. Rights Agreement, dated as of June 21, 6
1988, as amended and restated as of
June 8, 1995, between Kimberly-Clark
Corporation and The First National Bank
of Boston, as Rights Agent.
2. By-Laws of Kimberly-Clark Corporation as
amended as of June 8, 1995 84
-6-
EXHIBIT 1
KIMBERLY-CLARK CORPORATION
and
THE FIRST NATIONAL BANK OF BOSTON
Rights Agent
Amended and Restated
Rights Agreement
Dated as of June 8, 1995
TABLE OF CONTENTS
Page
Section 1. Certain Definitions........................ 2
Section 2. Appointment of Rights Agent................ 8
Section 3. Issue of Right Certificates................ 8
Section 4. Form of Right Certificates................. 12
Section 5. Countersignature and Registration.......... 12
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificates................ 14
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights................ 15
Section 8. Cancellation and Destruction of
Right Certificates....................... 18
Section 9. Availability of Preferred Shares........... 19
Section 10. Preferred Shares Record Date............... 20
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights............... 21
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares...................... 36
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power............... 37
Section 14. Fractional Rights and Fractional Shares.... 39
Section 15. Rights of Action........................... 42
Section 16. Agreement of Right Holders................. 42
Section 17. Right Certificate Holder Not Deemed a
Stockholder.............................. 43
Section 18. Concerning the Rights Agent................ 44
-i-
Page
Section 19. Merger or Consolidation or Change of
Name of Rights Agent..................... 45
Section 20. Duties of Rights Agent..................... 47
Section 21. Change of Rights Agent..................... 51
Section 22. Issuance of New Right Certificates......... 53
Section 23. Redemption................................. 54
Section 24. Exchange................................... 55
Section 25. Notice of Certain Events................... 58
Section 26. Notices.................................... 60
Section 27. Supplements and Amendments................. 61
Section 28. Successors................................. 62
Section 29. Benefits of this Agreement................. 62
Section 30. Severability............................... 62
Section 31. Governing Law.............................. 63
Section 32. Counterparts............................... 63
Section 33. Descriptive Headings....................... 63
Signatures.............................................. 63
Exhibit A - Form of Certificate of Designations of
Kimberly-Clark Corporation
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred
Shares
-ii-
RIGHTS AGREEMENT
Agreement, dated as of June 21, 1988, as amended and
restated as of June 8, 1995 between Kimberly-Clark Corporation,
a Delaware corporation (the "Company"), and The First National
Bank of Boston, a national banking association (the "Rights
Agent").
The Board of Directors of the Company has authorized
and declared a dividend of one preferred share purchase right
(a "Right") for each Common Share (as hereinafter defined) of
the Company outstanding as of the close of business on July 1,
1988 (the "Record Date"), each Right representing the right to
purchase one one-hundredth of a Preferred Share (as hereinafter
defined), upon the terms and subject to the conditions herein
set forth, and has further authorized and directed the issuance
of one Right with respect to each Common Share that shall be-
come outstanding between the Record Date and the earliest of
the Distribution Date, the Redemption Date and the Final Expi-
ration Date (as such terms are hereinafter defined).
The Board wishes to amend and restate the terms of
this Agreement and amend the terms of the Rights outstanding as
of June 8, 1995, so that, subject to the adjustment provisions
contained in this Agreement, the terms of each Right
outstanding prior to such amendment shall thereafter be amended
to represent a Right having the terms herein set forth, and
there shall be issued one Right with respect to each Common
Share outstanding as of June 8, 1995, and each Common Share
that shall become outstanding between June 8, 1995 and the
earliest of the Distribution Date, Redemption Date and the Fi-
nal Expiration Date (as such terms are hereinafter defined).
Accordingly, 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 indi-
cated:
(a) "Acquiring Person" shall mean any Person (as
such term is hereinafter defined) who or which, together
with all Affiliates and Associates (as such terms are
hereinafter defined) of such Person, shall be the Bene-
ficial Owner (as such term is hereinafter defined) of 20%
or more of the Common Shares of the Company then out-
standing, but shall not include the Company, any Subsid-
iary (as such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or any Subsidiary
of the Company, or any entity holding Common Shares for or
pursuant to the terms of any such plan. Notwithstanding
the foregoing, no Person shall become an "Acquiring Per-
son" as the result of an acquisition of Common Shares by
-2-
the Company which, by reducing the number of shares out-
standing, increases the proportionate number of shares
beneficially owned by such Person to 20% or more of the
Common Shares of the Company then outstanding; provided,
however, that if a Person shall become the Beneficial
Owner of 20% or more of the Common Shares of the Company
then outstanding by reason of share purchases by the Com-
pany and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional Common
Shares of the Company, then such Person shall be deemed to
be an "Acquiring Person". Notwithstanding the foregoing,
if the Board of Directors of the Company determines in
good faith that a Person who would otherwise be an "Ac-
quiring Person", as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inad-
vertently, and such Person divests as promptly as prac-
ticable a sufficient number of Common Shares so that such
Person would no longer be an "Acquiring Person," as de-
fined pursuant to the foregoing provisions of this para-
graph (a), then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the re-
spective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities
-3-
Exchange Act of 1934, as amended (the "Exchange Act"), as
in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner"
of and shall be deemed to "beneficially own" any securi-
ties:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly
or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or
only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than
customary agreements with and between underwriters
and selling group members with respect to a bona fide
public offering of securities), or upon the exercise
of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or other-
wise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially
own, securities tendered pursuant to a tender or ex-
change offer made by or on behalf of such Person or
any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or
-4-
exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Ben-
eficial Owner of, or to beneficially own, any secu-
rity if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revo-
cable proxy or consent given to such Person in re-
sponse to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable
rules and regulations promulgated under the Exchange
Act and (2) is not also then reportable 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 with which such Per-
son or any of such Person's Affiliates or Associates
has any agreement, arrangement or understanding
(other than customary agreements with and between
underwriters and selling group members with respect
to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the
extent contemplated by the proviso to Section
1(c)(ii)(B)) or disposing of any securities of the
Company.
-5-
Notwithstanding anything in this definition
of Beneficial Ownership to the contrary, the phrase
"then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the
Company, shall mean the number of such securities
then issued and outstanding together with the number
of such securities not then actually issued and out-
standing which such Person would be deemed to own
beneficially hereunder.
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions
in Massachusetts, or the location of the principal office
of the Rights Agent, are authorized or obligated by law or
executive order to close.
(e) "Close of business" on any given date shall mean
5:00 P.M., Boston, Massachusetts time, on such date; pro-
vided, however, that if such date is not a Business Day it
shall mean 5:00 P.M., Boston, Massachusetts time, on the
next succeeding Business Day.
(f) "Common Shares" when used with reference to the
Company shall mean the shares of common stock, par value
$1.25 per share, of the Company. "Common Shares" when
used with reference to any Person other than the Company
shall mean the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such
-6-
other Person is a Subsidiary of another Person, the Person
or Persons which ultimately control such first-mentioned
Person.
(g) "Distribution Date" shall have the meaning set
forth in Section 3 hereof.
(h) "Final Expiration Date" shall have the meaning
set forth in Section 7 hereof.
(i) "Person" shall mean any individual, firm, cor-
poration or other entity, and shall include any successor
(by merger or otherwise) of such entity.
(j) "Preferred Shares" shall mean shares of Series A
Junior Participating Preferred Stock, without par value,
of the Company having the rights and preferences set forth
in the Form of Certificate of Designations attached to
this Agreement as Exhibit A.
(k) "Redemption Date" shall have the meaning set
forth in Section 7 hereof.
(l) "Shares Acquisition Date" shall mean the first
date of public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such.
(m) "Subsidiary" of any Person shall mean any cor-
poration or other entity of which a majority of the voting
-7-
power of the voting equity securities or equity interest
is owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Com-
pany 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 Shares) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until
the earlier of (i) the tenth day after the Shares Acquisition
Date or (ii) the tenth business day (or such later date as may
be determined by action of the Board of Directors prior to such
time as any Person becomes an Acquiring Person) after the date
of the commencement 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 entity
holding Common Shares for or pursuant to the terms of any such
plan) of, or of the first public announcement of the intention
of 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 entity holding Common Shares
for or pursuant to the terms of any such plan) to commence, a
-8-
tender or exchange offer the consummation of which would result
in any Person becoming the Beneficial Owner of Common Shares
aggregating 20% or more of the then outstanding Common Shares
(including any such date which is after the date of this
Agreement and prior to the issuance of the Rights; the earlier
of such dates being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the pro-
visions of Section 3(b) hereof) by the certificates for Common
Shares registered in the names of the holders thereof (which
certificates shall also be deemed to be Right Certificates) and
not by separate Right Certificates, and (y) the right to re-
ceive Right Certificates will be transferable only in connec-
tion with the transfer of Common Shares. As soon as practi-
cable after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign, and the Company
will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, insured, postage-prepaid mail,
to each record holder of Common Shares as of the close of
business on the Distribution Date, at the address of such
holder shown on the records of the Company, a Right Certifi-
cate, in substantially the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right for each Common Share so
held. As of the Distribution Date, the Rights will be evi-
denced solely by such Right Certificates.
-9-
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights
to Purchase Preferred Shares, in substantially the form of Ex-
hibit C hereto (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Shares as
of the close of business on the Record Date, at the address of
such holder shown on the records of the Company. With respect
to certificates for Common Shares outstanding as of the Record
Date, until the Distribution Date, the Rights will be evidenced
by such certificates registered in the names of the holders
thereof together with a copy of the Summary of Rights attached
thereto. Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the surrender
for transfer of any certificate for Common Shares outstanding
on the Record Date, with or without a copy of the Summary of
Rights attached thereto, shall also constitute the transfer of
the Rights associated with the Common Shares represented
thereby.
(c) Certificates for Common Shares which become
outstanding (including, without limitation, reacquired Common
Shares referred to in the last sentence of this paragraph (c))
after the Record Date but prior to the earliest of the Distri-
bution Date, the Redemption Date or the Final Expiration Date
shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
-10-
This certificate also evidences and entitles the
holder hereof to certain rights as set forth in
a Rights Agreement between Kimberly-Clark Cor-
poration and The First National Bank of Boston,
dated as of June 21, 1988, as amended and
restated as of June 8, 1995 (the "Rights Agree-
ment"), the terms of which are hereby incorpo-
rated herein by reference and a copy of which is
on file at the principal executive offices of
Kimberly-Clark Corporation. Under certain cir-
cumstances, as set forth in the Rights Agree-
ment, such Rights will be evidenced by separate
certificates and will no longer be evidenced by
this certificate. Kimberly-Clark Corporation
will mail to the holder of this certificate a
copy of the Rights Agreement without charge af-
ter receipt of a written request therefor. As
described in the Rights Agreement, Rights issued
to any Person who becomes an Acquiring Person
(as defined in the Rights Agreement) shall be-
come null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with
the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender for
transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares rep-
resented thereby. In the event that the Company purchases or
acquires any Common Shares after the Record Date but prior to
the Distribution Date, any Rights associated with such Common
Shares shall be deemed cancelled and retired so that the Com-
pany shall not be entitled to exercise any Rights associated
with the Common Shares which are no longer outstanding.
-11-
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase Preferred
Shares and of assignment to be printed on the reverse thereof)
shall be substantially the same as Exhibit B hereto and may
have such marks of identification or designation and such leg-
ends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the pro-
visions of this Agreement, or as may be required to comply with
any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform
to usage. Subject to the provisions of Section 22 hereof, the
Right Certificates shall entitle the holders thereof to pur-
chase such number of one one-hundredths of a Preferred Share as
shall be set forth therein at the price per one one-hundredth
of a Preferred Share set forth therein (the "Purchase Price"),
but the number of such one one-hundredths of a Preferred Share
and the Purchase Price shall be subject to adjustment as pro-
vided herein.
Section 5. Countersignature and Registration. The
Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its Chief Executive Officer, its
President, any of its Vice Presidents, or its Treasurer, either
manually or by facsimile signature, shall have affixed thereto
-12-
the Company's seal or a facsimile thereof, and shall be at-
tested by the Secretary or an Assistant Secretary of the Com-
pany, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless counter-
signed. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right
Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same
force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Com-
pany by any person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Com-
pany to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not
such an officer.
Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its office designated for
such purpose, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names
and addresses of the respective holders of the Right Certifi-
cates, the number of Rights evidenced on its face by each of
-13-
the Right Certificates and the date of each of the Right Cer-
tificates.
Section 6. Transfer, Split Up, Combination and Ex-
change of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates. Subject to the provisions of Sec-
tion 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on
the earlier of the Redemption Date or the Final Expiration
Date, any Right Certificate or Right Certificates (other than
Right Certificates representing Rights that have become void
pursuant to Section 11(a)(ii) hereof or that have been ex-
changed pursuant to Section 24 hereof) may be transferred,
split up, combined or exchanged for another Right Certificate
or Right Certificates, entitling the registered holder to pur-
chase a like number of one one-hundredths of a Preferred Share
as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered holder de-
siring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the
Right Certificate or Right Certificates to be transferred,
split up, combined or exchanged at the office of the Rights
Agent designated for such purpose. Thereupon the Rights Agent
shall countersign and deliver to the person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as
-14-
so requested. The Company may require payment of a sum suffi-
cient to cover any tax or governmental charge that may be im-
posed in connection with any transfer, split up, combination or
exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case
of loss, theft or destruction, of indemnity or security rea-
sonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all rea-
sonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mu-
tilated, the Company will make and deliver a new Right Cer-
tificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Ex-
piration Date of Rights. (a) The registered holder of any
Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase on the
reverse side thereof duly executed, to the Rights Agent at the
principal office of the Rights Agent, together with payment of
-15-
the Purchase Price for each one one-hundredth of a Preferred
Share as to which the Rights are exercised, at or prior to the
earliest of (i) the close of business on June 8, 2005 (the
"Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption
Date"), or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of
a Preferred Share pursuant to the exercise of a Right shall be
$225 as of June 8, 1995 and shall be subject to adjustment from
time to time as provided in Section 11 or 13 hereof and shall
be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and
certificate duly executed, accompanied by payment of the Pur-
chase Price for the shares to be purchased and an amount equal
to any applicable transfer tax required to be paid by the
holder of such Right Certificate in accordance with Section 9
hereof by certified check, cashier's check or money order pay-
able to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent
-16-
of the Preferred Shares certificates for the number of Pre-
ferred Shares to be purchased and the Company hereby ir-
revocably authorizes its transfer agent to comply with all such
requests, or (B) requisition from the depositary agent deposi-
tary receipts representing such number of one one-hundredths of
a Preferred Share as are to be purchased (in which case cer-
tificates for the Preferred Shares represented by such receipts
shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to
comply with such request, (ii) when appropriate, requisition
from the Company the amount of cash to be paid in lieu of is-
suance 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 Right Certificate, registered
in such name or names as may be designated by such holder and
(iv) when appropriate, after receipt, deliver such cash to or
upon the order of the registered holder of such Right Certifi-
cate.
(d) In case the registered holder of any Right Cer-
tificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate
-17-
or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported transfer or exer-
cise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate
following the form of assignment or election to purchase set
forth on the reverse side of the Rights Certificate surrendered
for such assignment or exercise, and (ii) provided such ad-
ditional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the pur-
pose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or to any of its agents,
be delivered to the Rights Agent for cancellation or in can-
celled form, or, if surrendered to the Rights Agent, shall be
cancelled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by any of the pro-
visions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the
-18-
Rights Agent shall so cancel and retire, any other Right Cer-
tificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right
Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Availability of Preferred Shares. The
Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Preferred
Shares or any Preferred Shares held in its treasury, the number
of Preferred Shares that will be sufficient to permit the ex-
ercise in full of all outstanding Rights in accordance with
Section 7. The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all Pre-
ferred Shares delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
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 issu-
ance or delivery of the Right Certificates or of any Preferred
Shares upon the exercise of Rights. The Company shall not,
-19-
however, be required to pay any transfer tax which may be pay-
able in respect of any transfer or delivery of Right Certifi-
cates to a person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Shares in
a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to
issue or to deliver any certificates or depositary receipts for
Preferred Shares upon the exercise of any Rights until any such
tax shall have been paid (any such tax being payable by the
holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's reasonable sat-
isfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each
person in whose name any certificate for Preferred Shares is
issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a
date upon which the Preferred Shares transfer books of the
Company are closed, such person shall be deemed to have become
the record holder of such shares on, and such certificate shall
-20-
be dated, the next succeeding Business Day on which the Pre-
ferred Shares transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled to any rights of a
holder of Preferred Shares for which the Rights shall be exer-
cisable, 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 of
Shares or Number of Rights. The Purchase Price, the number of
Preferred 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 Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Pre-
ferred Shares into a smaller number of Preferred Shares or (D)
issue any shares of its capital stock in a reclassification of
the Preferred Shares (including any such reclassification in
connection with a consolidation or merger in which the Company
-21-
is the continuing or surviving corporation), except as other-
wise provided in this Section 11(a), the Purchase Price in ef-
fect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclas-
sification, and the number and kind of shares of capital stock
issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised im-
mediately prior to such date and at a time when the Preferred
Shares transfer books of the Company were open, he would have
owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the ag-
gregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in
the event any Person becomes an Acquiring Person, each holder
of a Right shall thereafter have a right to receive, upon exer-
cise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-hundredths of a Pre-
ferred Share for which a Right is then exercisable, in accor-
dance with the terms of this Agreement and in lieu of Preferred
Shares, such number of Common Shares of the Company as shall
-22-
equal the result obtained by (x) multiplying the then current
Purchase Price by the number of one one-hundredths of a Pre-
ferred Share for which a Right is then exercisable and dividing
that product by (y) 50% of the then current per share market
price of the Company's Common Shares (determined pursuant to
Section 11(d) hereof) on the date of the occurrence of such
event. In the event that any Person shall become an Acquiring
Person and the Rights shall then be outstanding, the Company
shall not take any action which would eliminate or diminish the
benefits intended to be afforded by the Rights.
From and after the occurrence of such event, any
Rights that are or were acquired or beneficially owned by any
Acquiring Person (or any Associate or Affiliate of such Ac-
quiring Person) shall be void and any holder of such Rights
shall thereafter have no right to exercise such Rights under
any provision of this Agreement. No Right Certificate shall be
issued pursuant to Section 3 that represents Rights benefi-
cially owned by an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affili-
ate thereof; no Right Certificate shall be issued at any time
upon the transfer of any Rights to an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof or to any nominee of such Ac-
quiring Person, Associate or Affiliate; and any Right Certifi-
cate delivered to the Rights Agent for transfer to an Acquiring
-23-
Person whose Rights would be void pursuant to the preceding
sentence shall be cancelled.
(iii) In the event that there shall not be suf-
ficient Common Shares issued but not outstanding or authorized
but unissued to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Company
shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exercise of the
Rights. In the event the Company shall, after good faith ef-
fort, be unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be is-
suable upon exercise of a Right, a number of Preferred Shares
or fraction thereof such that the current per share market
price of one Preferred Share multiplied by such number or
fraction is equal to the current per share market price of one
Common Share as of the date of issuance of such Preferred
Shares or fraction thereof.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or
purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent
-24-
preferred shares")) or securities convertible into Preferred
Shares or equivalent preferred shares at a price per Preferred
Share or equivalent preferred share (or having a conversion
price per share, if a security convertible into Preferred
Shares or equivalent preferred shares) less than the then cur-
rent per share market price of the Preferred Shares (as defined
in Section 11(d)) on such record date, the Purchase Price to be
in effect after such record date shall be determined by multi-
plying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the
number of Preferred Shares outstanding on such record date plus
the number of Preferred Shares which the aggregate offering
price of the total number of Preferred Shares and/or equivalent
preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be of-
fered) would purchase at such current market price and the de-
nominator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares to be of-
fered for subscription or purchase (or into which the convert-
ible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the ag-
gregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case such subscription
-25-
price may be paid in a consideration part or all of which shall
be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a
statement filed with the Rights Agent. Preferred Shares owned
by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such ad-
justment shall be made successively whenever such a record date
is fixed; and in the event that such rights, options or war-
rants 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
the making of a distribution to all holders of the Preferred
Shares (including any such distribution made in connection with
a consolidation or merger in which the Company is the continu-
ing or surviving corporation) of evidences of indebtedness or
assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or 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 im-
mediately prior to such record date by a fraction, the numera-
tor of which shall be the then current per share market price
of the Preferred Shares on such record date, less the fair
-26-
market value (as determined in good faith by the Board of Di-
rectors of the Company, whose determination shall be described
in a statement filed with the Rights Agent) of the portion of
the assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to one Pre-
ferred Share and the denominator of which shall be such current
per share market price of the Preferred Shares; provided, how-
ever, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company to be issued upon
exercise of one Right. Such adjustments shall be made succes-
sively whenever such a record date is fixed; and in the event
that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be
in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation here-
under, the "current per share market price" of any security (a
"Security" for the purpose of this Section 11(d)(i)) on any
date shall be deemed to be the average of the daily closing
prices per share of such Security for the 30 consecutive Trad-
ing Days (as such term is hereinafter defined) immediately
prior to such date; provided, however, that in the event that
the current per share market price of the Security is deter-
mined during a period following the announcement by the issuer
-27-
of such Security of (A) a dividend or distribution on such Se-
curity payable in shares of such Security or securities con-
vertible into such shares, or (B) any subdivision, combination
or reclassification of such Security and prior to the expira-
tion of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivi-
sion, combination or reclassification, then, and in each such
case, the current per share market price shall be appropriately
adjusted to reflect the current market price per share equiva-
lent of such Security. 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 re-
spect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Security is not listed or ad-
mitted to trading on the New York Stock Exchange, as reported
in the principal consolidated transaction reporting system with
respect to securities listed on the principal national secu-
rities exchange on which the Security is listed or admitted to
trading or, if the Security is not listed or admitted to trad-
ing on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked
-28-
prices in the over-the-counter market, as reported by the Na-
tional Association of Securities Dealers, Inc. Automated Quo-
tations System ("NASDAQ") or such other system then in use, or,
if on any such date the Security is not quoted by any such or-
ganization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Security selected by the Board of Directors of the Company.
The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or,
if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation here-
under, the "current per share market price" of the Preferred
Shares shall be determined in accordance with the method set
forth in Section 11(d)(i). If the Preferred Shares are not
publicly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the current
per share market price of the Common Shares as determined pur-
suant to Section 11(d)(i) (appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occur-
ring after the date hereof), multiplied by one hundred. If
neither the Common Shares nor the Preferred Shares are publicly
held or so listed or traded, "current per share market price"
shall mean the fair value per share as determined in good faith
-29-
by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided, how-
ever, 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 calcula-
tions under this Section 11 shall be made to the nearest cent
or to the nearest one one-millionth of a Preferred Share or one
ten-thousandth of any other share or security as the case may
be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the date of
the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right thereafter exer-
cised shall become entitled to receive any shares of capital
stock of the Company other than Preferred Shares, thereafter
the number of such other shares so receivable upon exercise of
any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Shares contained in
-30-
Section 11(a) through (c), inclusive, and the provisions of
Sections 7, 9, 10 and 13 with respect to the Preferred Shares
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 here-
under shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-hundredths of a Preferred
Share 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 evi-
dence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a Preferred Share (calcu-
lated to the nearest one one-millionth of a Preferred Share)
obtained by (i) multiplying (x) the number of one one-
hundredths 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) divid-
ing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
-31-
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number of one
one-hundredths of a Preferred Share purchasable upon the exer-
cise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the num-
ber of Rights shall become that number of Rights (calculated to
the nearest one ten-thousandth) obtained by dividing the Pur-
chase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately af-
ter adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates
have been issued, shall be at least 10 days later than the date
of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant
to this Section 11(i), the Company shall, as promptly as prac-
ticable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing,
-32-
subject to Section 14 hereof, the additional Rights to which
such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for
the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, ex-
ecuted and countersigned in the manner provided for herein and
shall be registered in the names of the holders of record of
Right 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-hundredths of a Pre-
ferred Share issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may con-
tinue to express the Purchase Price and the number of one one-
hundredths of a Preferred Share which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-hundredth
of the then par value, if any, of the Preferred Shares issuable
-33-
upon exercise of the Rights, the Company shall take any corpo-
rate action which may, in the opinion of its counsel, be nec-
essary in order that the Company may validly and legally issue
fully paid and nonassessable Preferred Shares at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall re-
quire that an adjustment in the Purchase Price be made effec-
tive as of a record date for a specified event, the Company may
elect to defer until the occurrence of such event the issuing
to the holder of any Right exercised after such record date of
the Preferred Shares and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above
the Preferred Shares 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; pro-
vided, however, that the Company shall deliver to such holder a
due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares upon the oc-
currence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
-34-
reductions in the Purchase Price, in addition to those adjust-
ments expressly required by this Section 11, as and to the ex-
tent that it in its sole discretion shall determine to be ad-
visable in order that any consolidation or subdivision of the
Preferred Shares, issuance wholly for cash of any Preferred
Shares at less than the current market price, issuance wholly
for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or
issuance of rights, options or warrants referred to hereinabove
in Section 11(b), hereafter made by the Company to holders of
its Preferred Shares shall not be taxable to such stockholders.
(n) In the event that at any time after the date of
this Agreement and prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on the Common Shares
payable in Common Shares or (ii) effect a subdivision, combi-
nation or consolidation of the Common Shares (by reclassifica-
tion or otherwise than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then
in any such case (A) the number of one one-hundredths of a
Preferred Share purchasable after such event upon proper exer-
cise of each Right shall be determined by multiplying the num-
ber of one one-hundredths of a Preferred Share so purchasable
immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately
-35-
before such event and the denominator of which is the number of
Common Shares outstanding immediately after such event, and (B)
each Common Share outstanding immediately after such event
shall have issued with respect to it that number of Rights
which each Common Share outstanding immediately prior to such
event had issued with respect to it. The adjustments provided
for in this Section 11(n) shall be made successively whenever
such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares. Whenever an adjustment is made as pro-
vided in Section 11 or 13 hereof, the Company shall promptly
(a) prepare a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for
the Common Shares or the Preferred Shares a copy of such cer-
tificate and (c) mail a brief summary thereof to each holder of
a Right Certificate in accordance with Section 25 hereof. The
Rights Agent shall be fully protected in relying on such cer-
tificate and on any adjustment therein contained. The Rights
Agent shall not be deemed to have knowledge of any such ad-
justment unless and until it shall have received such certifi-
cate.
-36-
Section 13. Consolidation, Merger or Sale or Trans-
fer of Assets or Earning Power. In the event, directly or in-
directly, at any time after a Person has become an Acquiring
Person, (a) the Company shall consolidate with, or merge with
and into, any other Person, (b) any Person shall consolidate
with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of
such merger and, in connection with such merger, all or part of
the Common Shares shall be changed into or exchanged for stock
or other securities of any other Person (or the Company) or
cash or any other property, or (c) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall
sell or otherwise transfer), in one or more transactions, as-
sets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person other than the Company or one or
more of its wholly-owned Subsidiaries, then, and in each such
case, proper provision shall be made so that (i) each holder of
a Right (except as otherwise provided herein) shall thereafter
have the right to receive, upon the exercise thereof at a price
equal to the then current Purchase Price multiplied by the
number of one one-hundredths of a Preferred Share for which a
Right is then exercisable, in accordance with the terms of this
-37-
Agreement and in lieu of Preferred Shares, such number of Com-
mon Shares of such other Person (including the Company as suc-
cessor thereto or as the surviving corporation) as shall equal
the result obtained by (A) multiplying the then current Pur-
chase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable and dividing that
product by (B) 50% of the then current per share market price
of the Common Shares of such other Person (determined pursuant
to Section 11(d) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) the issuer of
such Common Shares shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursu-
ant to this Agreement; (iii) the term "Company" shall thereaf-
ter be deemed to refer to such issuer; and (iv) such issuer
shall take such steps (including, but not limited to, the res-
ervation of a sufficient number of its Common Shares in ac-
cordance with Section 9 hereof) in connection with such con-
summation as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to the Common Shares thereafter deliverable
upon the exercise of the Rights. The Company shall not con-
summate any such consolidation, merger, sale or transfer unless
prior thereto the Company and such issuer shall have executed
and delivered to the Rights Agent a supplemental agreement so
-38-
providing. The Company shall not enter into any transaction of
the kind referred to in this Section 13 if at the time of such
transaction there are any rights, warrants, instruments or se-
curities outstanding or any agreements or arrangements which,
as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be
afforded by the Rights. The provisions of this Section 13
shall similarly apply to successive mergers or consolidations
or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Right Certifi-
cates with regard to which such fractional Rights would other-
wise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole Right. For the purposes
of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price
for any day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
-39-
system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the Rights are not listed
or admitted to trading on the New York Stock Exchange, as re-
ported in the principal consolidated transaction reporting
system with respect to securities listed on the principal na-
tional securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admit-
ted 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 re-
ported 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 se-
lected by the Board of Directors of the Company. If on any
such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined
in good faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to issue
fractions of Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share)
upon exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions
-40-
which are integral multiples of one one-hundredth of a Pre-
ferred Share). Fractions of Preferred Shares in integral mul-
tiples of one one-hundredth of a Preferred Share may, at the
election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a
depositary selected by it; provided, that such agreement shall
provide that the holders of such depositary receipts shall have
all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Shares repre-
sented by such depositary receipts. In lieu of fractional
Preferred Shares that are not integral multiples of one one-
hundredth of a Preferred Share, the Company shall pay to the
registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one Pre-
ferred Share. For the purposes of this Section 14(b), the
current market value of a Preferred Share shall be the closing
price of a Preferred Share (as determined pursuant to the sec-
ond sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the
Right expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right (ex-
cept as provided above).
-41-
Section 15. Rights of Action. All rights of action
in respect of this Agreement, excepting the rights of action
given to the Rights Agent under Section 18 hereof, are vested
in the respective registered holders of the Right Certificates
(and, prior to the Distribution Date, the registered holders of
the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common
Shares), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Dis-
tribution Date, of the Common Shares), may, in his own behalf
and for his own benefit, enforce, and may institute and main-
tain any suit, action or proceeding against the Company to en-
force, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for
any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief
against actual or threatened violations of the obligations of
any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every
holder of a Right, by accepting the same, consents and agrees
-42-
with the Company and the Rights Agent and with every other
holder of a Right that:
(a) prior to the Distribution Date, the Rights will
be transferable only in connection with the transfer of the
Common Shares;
(b) after the Distribution Date, the Right Certifi-
cates are transferable only on the registry books of the Rights
Agent if surrendered at the principal office of the Rights
Agent, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and
treat the person in whose name the Right Certificate (or, prior
to the Distribution Date, the associated Common Shares cer-
tificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associ-
ated Common Shares certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed for
-43-
any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall any-
thing contained herein or in any Right Certificate be construed
to confer upon the holder of any Right Certificate, as such,
any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter sub-
mitted 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 Right Certificate shall have been exercised
in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Com-
pany agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the ad-
ministration 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 harm-
less against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent
-44-
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.
The Rights Agent shall be protected and shall incur
no liability for, or in respect of any action taken, suffered
or omitted by it in connection with, its administration of this
Agreement in reliance upon any Right Certificate or certificate
for the Preferred Shares or Common Shares or for other securi-
ties of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, di-
rection, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, ex-
ecuted and, where necessary, verified or acknowledged, by the
proper person or persons, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of
Name of Rights Agent. Any corporation into which the Rights
Agent or any successor Rights Agent may be merged or with which
it may be consolidated, or any corporation resulting from any
merger or consolidation to which the Rights Agent or any suc-
cessor Rights Agent shall be a party, or any corporation suc-
ceeding to the stock transfer or corporate trust powers of the
Rights Agent or any successor Rights Agent, shall be the suc-
cessor to the Rights Agent under this Agreement without the
-45-
execution or filing of any paper or any further act on the part
of any of the parties hereto; provided that such corporation
would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time
such successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and
in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may coun-
tersign such Right Certificates either in the name of the pre-
decessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have
the full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right Certificates
shall have been countersigned but not delivered, the Rights
Agent may adopt the countersignature under its prior name and
deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name;
and in all such cases such Right Certificates shall have the
-46-
full force provided in the Right Certificates and in this
Agreement.
Section 20. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and pro-
tection 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 de-
sirable that any fact or matter be proved or established by the
Company prior to taking or suffering any action hereunder, such
fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclu-
sively proved and established by a certificate signed by any
one of the Chairman of the Board, the Chief Executive Officer,
the President, any Vice President, the Treasurer or the Secre-
tary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for
-47-
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 to
the Company and any other Person only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
in this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any respon-
sibility 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 Right Certificate (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or in any
Right Certificate; nor shall it be responsible for any change
in the exercisability of the Rights (including the Rights be-
coming void pursuant to Section 11(a)(ii) hereof) or any ad-
justment in the terms of the Rights (including the manner,
method or amount thereof) provided for in Section 3, 11, 13, 23
or 24, or the ascertaining of the existence of facts that would
-48-
require any such change or adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates after
actual notice that such change or adjustment is required); nor
shall it by any act hereunder be deemed to make any represen-
tation or warranty as to the authorization or reservation of
any Preferred Shares to be issued pursuant to this Agreement or
any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will perform, exe-
cute, acknowledge and deliver or cause to be performed, exe-
cuted, 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 di-
rected to accept instructions with respect to the performance
of its duties hereunder from any one of the Chairman of the
Board, the Chief Executive Officer, the President, any Vice
President, the Secretary or the Treasurer of the Company, and
to apply to such officers for advice or instructions in con-
nection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance with
instructions of any such officer or for any delay in acting
-49-
while waiting for those instructions. Any application by the
Rights Agent for written instructions from the Company may, at
the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this
Rights Agreement and the date on and/or after which such action
shall be taken or such omission shall be effective. The Rights
Agent shall not be liable for any action taken by, or omission
of, the Rights Agent in accordance with a proposal included in
any such application on or after the date specified in such
application (which date shall not be less than five Business
Days after the date any such officer of the Company actually
receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to tak-
ing any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written in-
structions in response to such application specifying the ac-
tion to be taken or omitted.
(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 be-
come 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
-50-
shall preclude the Rights Agent from acting in any other ca-
pacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or ac-
countable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company re-
sulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and
continued employment thereof.
Section 21. Change of Rights Agent. The Rights
Agent or any successor Rights Agent may resign and be dis-
charged from its duties under this Agreement upon 30 days' no-
tice in writing mailed to the Company and to each transfer
agent of the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or
any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Shares or
Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the
-51-
Rights Agent shall resign or be removed or shall otherwise be-
come incapable of acting, the Company shall appoint a successor
to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who
shall, with such notice, submit his Right Certificate for in-
spection by the Company), then the registered holder of any
Right Certificate may apply to any court of competent juris-
diction for the appointment of a new Rights Agent. Any suc-
cessor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing busi-
ness under the laws of the United States or any state of the
United States or the District of Columbia, in good standing,
which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been origi-
nally named as Rights Agent without further act or deed; but
-52-
the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company
shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any ad-
justment or change in the Purchase Price and the number or kind
or class of shares or other securities or property purchasable
under the Right Certificates made in accordance with the pro-
visions of this Agreement.
-53-
Section 23. Redemption. (a) The Board of Directors
of the Company may, at its option, at any time prior to such
time as any Person becomes an Acquiring Person, redeem all but
not less than all the then outstanding Rights at a redemption
price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). The redemption of the
Rights by the Board of Directors may be made effective at such
time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Di-
rectors of the Company ordering the redemption of the Rights
pursuant to paragraph (b) of this Section 23 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.
The Company shall promptly give public notice of any such re-
demption; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of
such redemption. Within 10 days after such action of the Board
of Directors ordering the redemption of the Rights the Company
shall mail a notice of redemption to all the holders of the
then outstanding Rights at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the
-54-
Distribution Date, on the registry books of the transfer agent
for the Common Shares. Any notice which is mailed in the man-
ner 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. Neither the Company nor any of its Af-
filiates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24
hereof, and other than in connection with the purchase of Com-
mon Shares prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors
of the Company 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 11(a)(ii) hereof) for Common Shares at an exchange ra-
tio of one Common Share 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"). Notwith-
standing the foregoing, the Board of Directors 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
-55-
any entity holding Common Shares for or pursuant to the terms
of any such plan), together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of 50% or more of
the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Di-
rectors of the Company ordering the exchange of any Rights
pursuant to paragraph (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 Common
Shares 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 ex-
change will state the method by which the exchange of the Com-
mon Shares for Rights 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
-56-
pursuant to the provisions of Section 11(a)(ii) hereof) held by
each holder of Rights.
(c) In the event that there shall not be sufficient
Common Shares 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 Common
Shares for issuance upon exchange of the Rights. In the event
the Company shall, after good faith effort, be unable to take
all such action as may be necessary to authorize such ad-
ditional Common Shares, the Company shall substitute, for each
Common Share that would otherwise be issuable upon exchange of
a Right, a number of Preferred Shares or fraction thereof such
that the current per share market price of one Preferred Share
multiplied by such number or fraction is equal to the current
per share market price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue
fractions of Common Shares or to distribute certificates which
evidence fractional Common Shares. In lieu of such fractional
Common Shares, the Company shall pay to the registered holders
of the Right Certificates with regard to which such fractional
Common Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a
-57-
whole Common Share. For the purposes of this paragraph (d),
the current market value of a whole Common Share shall be the
closing price of a Common Share (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 (i) to pay any dividend payable in
stock of any class to the holders of its Preferred Shares or to
make any other distribution to the holders of its Preferred
Shares (other than a regular quarterly cash dividend), (ii) to
offer to the holders of its Preferred Shares rights or warrants
to subscribe for or to purchase any additional Preferred Shares
or shares of stock of any class or any other securities, rights
or options, (iii) to effect any reclassification of its Pre-
ferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect
any consolidation or merger into or with, or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one or more transac-
tions, of 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other
Person, (v) to effect the liquidation, dissolution or winding
up of the Company, or (vi) to declare or pay any dividend on
-58-
the Common Shares payable in Common Shares or to effect a sub-
division, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in
Common Shares), then, in each such case, the Company shall give
to each holder of a Right Certificate, in accordance with Sec-
tion 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock divi-
dend, or 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 Common Shares and/or Preferred Shares, if any such date is
to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of the Pre-
ferred Shares for purposes of such action, and in the case of
any such other action, at least 10 days prior to the date of
the taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii)
hereof shall occur, then the Company shall as soon as practi-
cable thereafter give to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of the occurrence
of such event, which notice shall describe such event and the
-59-
consequences of such event to holders of Rights under Section
11(a)(ii) hereof.
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 Right Certificate to or on the Company shall
be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Kimberly-Clark Corporation
P.O. Box 619100
DFW Airport Station
Dallas, Texas 75261-9100
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
The First National Bank of Boston
P.O. Box 1865
Boston, Massachusetts 02105
Attention: Shareholder Services Division
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Right Certificate shall be sufficiently given or made if sent
-60-
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. The Company
may from time to time supplement or amend this Agreement with-
out the approval of any holders of Right Certificates in order
to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with
any other provisions herein, or to make any other provisions
with respect to the Rights which the Company may deem necessary
or desirable, any such supplement or amendment to be evidenced
by a writing signed by the Company and the Rights Agent; pro-
vided, however, that from and after such time as any Person
becomes an Acquiring Person, this Agreement shall not be
amended in any manner which would adversely affect the inter-
ests of the holders of Rights. Without limiting the foregoing,
the Company may at any time prior to such time as any Person
becomes an Acquiring Person amend this Agreement to lower the
thresholds set forth in Sections 1(a) and 3(a) hereof from 20%
to not less than the greater of (i) the sum of .001% and the
largest percentage of the outstanding Common Shares then known
by the Company to be beneficially owned by any Person (other
than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company,
-61-
or any entity holding Common Shares for or pursuant to the
terms of any such plan) and (ii) 10%.
Section 28. Successors. All the covenants and pro-
visions 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. Benefits of this Agreement. Nothing in
this Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certifi-
cates (and, prior to the Distribution Date, the Common Shares).
Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void
or unenforceable, the remainder of the terms, provisions, cov-
enants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated.
-62-
Section 31. Governing Law. This Agreement and each
Right 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 to be made
and performed entirely within such State.
Section 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such coun-
terparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.
Section 33. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the mean-
ing or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and attested, all as of the
day and year first above written.
-63-
KIMBERLY-CLARK CORPORATION
Attest:
By /s/ Donald M. Crook By /s/ Wayne R. Sanders
Title: Vice President and Title: Chief Executive Officer
Secretary
THE FIRST NATIONAL BANK OF BOSTON
Attest:
By /s/ Joshua P. McGinn By /s/ Colleen H. Shey
Title: Account Manager Title: Administration Manager
-64-
EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
KIMBERLY-CLARK CORPORATION
(Pursuant to Section 151 of the
Delaware General Corporation Law)
Kimberly-Clark Corporation, a corporation organized and
existing under the General Corporation Law of the State of
Delaware (hereinafter called the "Corporation"), hereby certi-
fies that the following resolution was adopted by the Board of
Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on
June 8, 1995:
RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors of this Corporation
(hereinafter called the "Board of Directors" or the "Board") in
accordance with the provisions of the Certificate of Incorpo-
ration, the Board of Directors hereby creates a series of Pre-
ferred Stock, without par value (the "Preferred Stock"), of the
Corporation and hereby states the designation and number of
shares, and fixes the relative rights, preferences, and limi-
tations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall
be designated as "Series A Junior Participating Preferred Stock"
(the "Series A Preferred Stock") and the number of shares
constituting the Series A Preferred Stock shall be 2,000,000.
Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series A Preferred Stock to
a number less than the number of shares then outstanding plus
the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or
-65-
upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of
any series of Preferred Stock (or any similar stock) ranking
prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock,
par value $1.25 per share (the "Common Stock"), of the
Corporation, and of any other junior 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 first 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 Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1 or (b) subject to
the provision for adjustment hereinafter set forth, 100 times
the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a
dividend payable in shares of Common Stock or a subdivision of
the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately
preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such
case the amount to which holders of shares of Series A
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.
-66-
(B) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A)
of this Section 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 $1 per share on the
Series A 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 Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of
holders of shares of Series A Preferred 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 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 Preferred Stock entitled to
receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted to a
vote of the stockholders of the Corporation. In the event the
Corporation shall at any time declare or pay any dividend on
the Common Stock payable in
-67-
shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the number of
votes per share to which holders of shares of Series A
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, in any other
Certificate of Designations creating a series of Preferred
Stock or any similar stock, or by law, the holders of shares
of Series A Preferred Stock and the holders of shares of
Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class
on all matters submitted to a vote of stockholders of the
Corporation.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required (except
to the extent 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 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 Preferred Stock outstanding
shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior
(either as to dividends or upon liquidation, dis-
solution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
-68-
dissolution or winding up) with the Series A Pre-
ferred Stock, except dividends paid ratably on the
Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in propor-
tion 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 junior
(either as to dividends or upon liquidation, dis-
solution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any
such junior 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 Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock,
or any shares of stock ranking on a parity with the
Series A 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 Di-
rectors, after consideration of the respective annual
dividend rates and other relative rights and prefer-
ences of the respective series and classes, shall
determine in good faith will result in fair and eq-
uitable 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 un-
less 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
Preferred Stock purchased or otherwise acquired by the Cor-
poration in any manner whatsoever shall be retired and can-
celled 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 subject to the conditions and re-
strictions on issuance set forth herein, in the Certificate of
Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
-69-
Section 6. Liquidation, Dissolution or Winding Up. Upon
any liquidation, dissolution or winding up of the Corporation,
no distribution shall be made (1) to the holders of shares of
stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Pre-
ferred Stock unless, prior thereto, the holders of shares of
Series A Preferred Stock shall have received $100 per share,
plus an amount equal to accrued and unpaid dividends and dis-
tributions thereon, whether or not declared, to the date of
such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount
to be distributed per share to holders of shares of Common
Stock, or (2) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution
or winding up) with the Series A Preferred Stock, except dis-
tributions made ratably on the Series A Preferred Stock and all
such parity stock in proportion to the total amounts to which
the holders of all such shares are entitled upon such liquida-
tion, dissolution or winding up. In the event the Corporation
shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivi-
sion or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by pay-
ment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case
the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event
under the proviso in clause (1) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the nu-
merator of which is the number of shares of Common Stock out-
standing immediately after such event and the denominator of
which is the number of shares of Common Stock that were out-
standing immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combi-
nation 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 each
share of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share, sub-
ject to the provision for adjustment hereinafter set forth,
equal to 100 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 declare or pay any dividend on the Common Stock pay-
able in shares of Common Stock, or effect a subdivision or
-70-
combination or consolidation of the outstanding shares of Com-
mon Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, 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 Preferred Stock shall
be adjusted by multiplying such amount by a fraction, the nu-
merator of which is the number of shares of Common Stock out-
standing immediately after such event and the denominator of
which is the number of shares of Common Stock that were out-
standing immediately prior to such event.
Section 8. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution
of assets, junior to all series of any other class of the
Corporation's Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation of
the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special
rights of the Series A Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single class.
-71-
IN WITNESS WHEREOF, this Certificate of Designations
is executed on behalf of the Corporation by its Chairman of the
Board and attested by its Secretary this 21st day of June,
1988.
Chairman of the Board
Attest:
Secretary
-72-
Exhibit B
Form of Right Certificate
Certificate No. R- Rights
NOT EXERCISABLE AFTER JUNE 8, 2005 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUB-
JECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
KIMBERLY-CLARK CORPORATION
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 Agree-
ment, dated as of June 21, 1988, and as amended and restated as
of June 8, 1995 (the "Rights Agreement"), between Kimberly-
Clark Corporation, a Delaware corporation (the "Company"), and
The First National Bank of Boston (the "Rights Agent"), to
purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and
prior to 5:00 P.M., Boston, Massachusetts time, on June 8, 2005
at the principal office of the Rights Agent, or at the office
of its successor as Rights Agent, one one-hundredth of a fully
paid non-assessable share of Series A Junior Participating Pre-
ferred Stock, without par value (the "Preferred Shares"), of
the Company, at a purchase price of $225 per one one-hundredth
of a Preferred Share (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the Form of
Election to Purchase duly executed. The number of Rights
evidenced by this Right Certificate (and the number of one one-
hundredths of a Preferred Share which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of June 8,
1995, based on the Preferred Shares as constituted at such
date. As provided in the Rights Agreement, the Purchase Price
and the number of one one-hundredths of a Preferred Share which
may be purchased upon the exercise of the Rights evidenced by
this Right Certificate are subject to modification and adjust-
ment upon the happening of certain events.
This Right Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement, which
terms, provisions and conditions are hereby incorporated herein
-73-
by reference and made a part hereof and to which Rights Agree-
ment reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immuni-
ties hereunder of the Rights Agent, the Company and the holders
of the Right Certificates. Copies of the Rights Agreement are
on file at the principal executive offices of the Company and
the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the
Rights Agent, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certifi-
cate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exer-
cised in part, the holder shall be entitled to receive upon
surrender hereof another Right Certificate or Right Certifi-
cates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Certificate (i) may be redeemed by
the Company at a redemption price of $.01 per Right or (ii) may
be exchanged in whole or in part for Preferred Shares or shares
of the Company's Common Stock, par value $1.25 per share.
No fractional Preferred Shares will be issued upon
the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one one-
hundredth of a Preferred Share, which may, at the election of
the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the
holder of the Preferred Shares or of any other securities of
the Company which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter sub-
mitted 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 the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised
as provided in the Rights Agreement.
-74-
This Right Certificate shall not be valid or oblig-
atory for any purpose until it shall have been countersigned by
the Rights Agent.
WITNESS the facsimile signature of the proper offi-
cers of the Company and its corporate seal. Dated as of
, 19 .
ATTEST: KIMBERLY-CLARK CORPORATION
By
Countersigned:
THE FIRST NATIONAL BANK OF BOSTON
By
Authorized Signature
-75-
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and in-
terest therein, and does hereby irrevocably constitute and ap-
point Attorney, to transfer the within
Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: , 19
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank or trust
company, broker, dealer or other eligible institution
participating in a recognized signature guarantee medallion
program.
-------------------------------------------------------------
CERTIFICATE
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially owned
by an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
Signature
-------------------------------------------------------------
-76-
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the Right Certificate.)
To KIMBERLY-CLARK CORPORATION
The undersigned hereby irrevocably elects to exercise
Rights represented by this Right Certifi-
cate to purchase the Preferred Shares issuable upon the exer-
cise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the
balance remaining of such Rights shall be registered in the
name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: , 19
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank or trust
company, broker, dealer or other eligible institution
participating in a recognized signature guarantee medallion
program.
-77-
Form of Reverse Side of Right Certificate -- continued
---------------------------------------------------------------
CERTIFICATE
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially owned
by an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
Signature
---------------------------------------------------------------
NOTICE
The signature in the foregoing Form of Assignment and
Election must conform to the name as written upon the face of
this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
In the event the certification set forth above in the
Form of Assignment or the Form of Election to Purchase, as the
case may be, is not completed, the Company and the Rights Agent
will deem the beneficial owner of the Rights evidenced by this
Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
-78-
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On June 21, 1988, the Board of Directors of Kimberly-
Clark Corporation (the "Company") declared a dividend of one
preferred share purchase right (a "Right") for each outstanding
share of common stock, par value $1.25 per share (the "Common
Shares"), of the Company. The dividend is payable on July 1,
1988 (the "Record Date") to the stockholders of record on that
date. Each Right entitles the registered holder to purchase
from the Company one one-hundredth of a share of Series A
Junior Participating Preferred Stock, without par value (the
"Preferred Shares"), of the Company at a price of $200 per one
one-hundredth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and The First National Bank of Boston, as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a
public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") have acquired ben-
eficial ownership of 20% or more of the outstanding Common
Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such
time as any Person becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would
result in the beneficial ownership by a person or group of 20%
or more of such outstanding Common Shares (the earlier of such
dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share cer-
tificate with a copy of this Summary of Rights attached there-
to.
The Rights Agreement provides that, until the Dis-
tribution Date, the Rights will be transferred with and only
with the Common Shares. Until the Distribution Date (or ear-
lier redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date, upon transfer or new
issuance of Common Shares will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Rights), the sur-
render for transfer of any certificates for Common Shares,
outstanding as of the Record Date, even without such notation
or a copy of this Summary of Rights being attached thereto,
will also constitute the transfer of the Rights associated with
the Common Shares represented by such certificate. As soon as
-79-
practicable following the Distribution Date, separate certifi-
cates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Shares as of the
close of business on the Distribution Date and such separate
Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on June 21, 1998 (the "Final Ex-
piration Date"), unless the Final Expiration Date is extended
or unless the Rights are earlier redeemed by the Company, in
each case, as described below.
The Purchase Price payable, and the number of Pre-
ferred Shares or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend
on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Pre-
ferred Shares of certain rights or warrants to subscribe for or
purchase Preferred Shares at a price, or securities convertible
into Preferred Shares with a conversion price, less than the
then current market price of the Preferred Shares or (iii) upon
the distribution to holders of the Preferred Shares of evi-
dences of indebtedness or assets (excluding regular periodic
cash dividends paid out of earnings or retained earnings or
dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of
one one-hundredths of a Preferred Share issuable upon exercise
of each Right are also subject to adjustment in the event of a
stock split of the Common Shares or a stock dividend on the
Common Shares payable in Common Shares or subdivisions, con-
solidations or combinations of the Common Shares occurring, in
any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the
Rights will not be redeemable. Each Preferred Share will be
entitled to a minimum preferential quarterly dividend payment
of $1 per share but will be entitled to an aggregate dividend
of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will
be entitled to a minimum preferential liquidation payment of
$100 per share but will be entitled to an aggregate payment of
100 times the payment made per Common Share. Each Preferred
Share will have 100 votes, voting together with the Common
Shares. Finally, in the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 100 times the
amount received per Common Share. These rights are protected
by customary antidilution provisions.
-80-
Because of the nature of the Preferred Shares' div-
idend, liquidation and voting rights, the value of the one one-
hundredth interest in a Preferred Share purchasable upon exer-
cise of each Right should approximate the value of one Common
Share.
In the event that the Company is acquired in a merger
or other business combination transaction or 50% or more of its
consolidated assets or earning power are sold, proper provision
will be made so that each holder of a Right will thereafter
have the right to receive, upon the exercise thereof at the
then current exercise price of the Right, that number of shares
of common stock of the acquiring company which at the time of
such transaction will have a market value of two times the
exercise price of the Right. In the event that (i) any person
becomes an Acquiring Person (unless such person first acquires
20% or more of the outstanding Common Shares by a purchase
pursuant to a tender offer for all of the Common Shares for
cash, which purchase increases such person's beneficial owner-
ship to 80% or more of the outstanding Common Shares) or (ii)
during such time as there is an Acquiring Person, there shall
be a reclassification of securities or a recapitalization or
reorganization of the Company or other transaction or series of
transactions involving the Company which has the effect of
increasing by more than 1% the proportionate share of the out-
standing shares of any class of equity securities of the Com-
pany or any of its subsidiaries beneficially owned by the
Acquiring Person, proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will thereafter be void), will there-
after have the right to receive upon exercise that number of
Common Shares having a market value of two times the exercise
price of the Right.
At any time after the acquisition by a person or
group of affiliated or associated persons of beneficial owner-
ship of 20% or more of the outstanding Common Shares and prior
to the acquisition by such person or group of 50% or more of
the outstanding Common Shares, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by
such person or group which have become void), in whole or in
part, at an exchange ratio of one Common Share, or one one-
hundredth of a Preferred Share (or of a share of a class or
series of the Company's preferred stock having equivalent
rights, preferences and privileges), per Right (subject to
adjustment).
With certain exceptions, no adjustment in the Pur-
chase Price will be required until cumulative adjustments re-
quire an adjustment of at least 1% in such Purchase Price. No
fractional Preferred Shares will be issued (other than frac-
tions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the election of the Company, be
-81-
evidenced by depositary receipts) and in lieu thereof, an ad-
justment in cash will be made based on the market price of the
Preferred Shares on the last trading day prior to the date of
exercise.
At any time prior to the acquisition by a person or
group of affiliated or associated persons of beneficial owner-
ship of 20% or more of the outstanding Common Shares, the Board
of Directors of the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (the "Redemption
Price"). The redemption of the rights may be made effective at
such time on such basis and with such conditions as the Board
of Directors in its sole discretion may establish. In addi-
tion, if a bidder who does not beneficially own more than 1% of
the Common Shares (and who has not within the past year owned
in excess of 1% of the Common Shares and, at a time he held
such greater than 1% stake, disclosed, or caused the disclosure
of, an intention which relates to or would result in the ac-
quisition or influence of control of the Company) proposes to
acquire all of the Common Shares (and all other shares of cap-
ital stock of the Company entitled to vote with the Common
Shares in the election of directors or on mergers, consolida-
tions, sales of all or substantially all of the Company's
assets, liquidations, dissolutions or windings-up) for cash at
a price which a nationally recognized investment banker
selected by such bidder states in writing is fair, and such
bidder has obtained written financing commitments (or otherwise
has financing) and complies with certain procedural require-
ments, then the Company, upon the request of the bidder, will
hold a special stockholders meeting to vote on a resolution
requesting the Board of Directors to accept the bidder's pro-
posal. If a majority of the outstanding shares entitled to
vote on the proposal vote in favor of such resolution, then for
a period of 60 days after such meeting the Rights will be
automatically redeemed at the Redemption Price immediately
prior to the consummation of any tender offer for all of such
shares at a price per share in cash equal to or greater than
the price offered by such bidder; provided, however, that no
redemption will be permitted or required after the acquisition
by any person or group of affiliated or associated persons of
beneficial ownership of 20% or more of the outstanding Common
Shares. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption
Price.
The terms of the Rights may be amended by the Board
of Directors of the Company without the consent of the holders
of the Rights, including an amendment to lower the threshold
for exercisability of the Rights from 20% to not less than the
greater of (i) any percentage greater than the largest per-
centage of the outstanding Common Shares then known to the
Company to be beneficially owned by any person or group of
affiliated or associated persons and (ii) 10%, except that from
-82-
and after such time as any person becomes an Acquiring Person
no such amendment may adversely affect the interests of the
holders of the Rights.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company, in-
cluding, without limitation, the right to vote or to receive
dividends.
A copy of the Rights Agreement has been filed with
the Securities and Exchange Commission as an Exhibit to a Reg-
istration Statement on Form 8-A dated June , 1988. A copy of
the Rights Agreement is available free of charge from the Com-
pany. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to
the Rights Agreement, which is hereby incorporated herein by
reference.
-83-
BY-LAWS
OF
KIMBERLY-CLARK CORPORATION
AS AMENDED
JUNE 8, 1995
WITH EXCERPTS FROM THE EMERGENCY PROVISIONS OF
THE DELAWARE GENERAL CORPORATION LAW APPENDED
TABLE OF CONTENTS*
PAGE
Capital Stock
1. Certificates............................................................. 1
2. Record Ownership......................................................... 1
3. Transfer................................................................. 1
4. Lost Certificates........................................................ 1
5. Transfer Agent; Registrar................................................ 1
6. Record Date; Closing Transfer Books...................................... 2
Meetings of Stockholders
7. Annual................................................................... 2
8. Special.................................................................. 2
9. Notice................................................................... 2
10. Quorum................................................................... 2
11. Conduct of Meetings...................................................... 3
12. Voting................................................................... 4
13. Inspectors of Election................................................... 4
14. List of Stockholders..................................................... 4
Board of Directors
15. Resignation.............................................................. 5
16. Annual Meeting........................................................... 5
17. Regular Meetings......................................................... 5
18. Special Meetings......................................................... 5
19. Telephonic Meetings...................................................... 5
20. Quorum................................................................... 5
21. Action Without Meeting................................................... 6
22. Organization............................................................. 6
23. Compensation............................................................. 6
Committees of the Board
24. Standing and Other Committees............................................ 6
25. Procedure................................................................ 6
26. Audit Committee.......................................................... 6
27. Compensation Committee................................................... 7
28. Executive Committee...................................................... 7
29. Nominating Committee..................................................... 7
30. Alternates; Vacancies in Committees...................................... 7
Officers
31. Designation; Election; Qualification; Term............................... 8
32. Duties................................................................... 8
33. Resignation; Removal; Vacancies.......................................... 8
34. Chief Executive Officer.................................................. 8
35. Chairman of the Board, Vice Chairman of the Board and President.......... 9
36. Vice Presidents.......................................................... 9
37. Chief Financial Officer.................................................. 9
38. Controller............................................................... 9
39. Secretary................................................................ 10
40. Treasurer................................................................ 10
TABLE OF CONTENTS* -- (CONTINUED)
PAGE
Miscellaneous
41. Offices.................................................................. 11
42. Seal..................................................................... 11
43. Fiscal Year.............................................................. 11
44. Annual Report............................................................ 11
45. Indemnification of Directors and Officers................................ 11
46. Reliance on Records...................................................... 12
47. Inspection of Books...................................................... 12
48. Transactions with the Corporation........................................ 13
49. Ratification............................................................. 13
50. Voting of Stocks......................................................... 13
51. Notice................................................................... 13
52. Waiver of Notice......................................................... 14
53. Dispensing with Notice................................................... 14
54. Amendments............................................................... 14
Emergency Provisions from para.110 Delaware General Corporation Law............. 14
- ---------------
* This Table of Contents has not been adopted by the Board of Directors as part
of the By-Laws of the Corporation, but is provided solely for the convenience
of the reader.
BY-LAWS
OF
KIMBERLY-CLARK CORPORATION
As Amended Through June 8, 1995
Note: For convenience, the masculine has been used in these By-Laws with the
intention that it include the feminine as well.
CAPITAL STOCK
1. CERTIFICATES
Every stockholder shall be entitled to have a certificate in such form as
the Board shall from time to time approve, signed by the Chairman of the Board,
a Vice Chairman of the Board, the President or a Vice President and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
certifying the number of shares owned by him. Any of or all the signatures on
the certificate and the corporate seal may be facsimiles. In case any officer,
transfer agent, or registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer, transfer
agent or registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer, transfer agent, or
registrar at the date of issue. While the corporation is authorized to issue
more than one class of stock or more than one series of any class, there shall
be set forth on the face or back of each certificate issued a statement that the
corporation will furnish without charge to each stockholder who so requests the
powers, designations, preferences and relative, participating, optional or other
special rights of each class of stock or series thereof of the corporation and
the qualifications, limitations or restrictions of such preferences and/or
rights.
2. RECORD OWNERSHIP
The name and address of the holder of each certificate, the number of
shares represented thereby, and the date of issuance thereof shall be recorded
in the corporation's books and records. The corporation shall be entitled to
treat the holder of record of any share of stock as the holder in fact thereof,
and accordingly shall not be bound to recognize any equitable or other claim to
or interest in any share on the part of any other person, whether or not it
shall have express or other notice thereof, except as required by law.
3. TRANSFER
Transfer of stock shall be made on the books of the corporation only by
direction of the person named in the certificate or his attorney, lawfully
constituted in writing, and only upon the surrender for cancellation of the
certificate therefor and a written assignment of the shares evidenced thereby.
4. LOST CERTIFICATES
Any person claiming a stock certificate in lieu of one lost or destroyed
shall give the corporation an affidavit as to his ownership of the certificate
and of the facts which go to prove its loss or destruction. He shall also, if
required by the Board, give the corporation a bond or other indemnification, in
such form as may be approved by the Board, sufficient to indemnify the
corporation against any claim that may be made against it on account of the
alleged loss of the certificate or the issuance of a new certificate.
5. TRANSFER AGENT; REGISTRAR
The corporation shall maintain one or more transfer offices or agencies,
each in charge of a transfer agent designated by the Board, where the shares of
stock of the corporation shall be transferable. The corporation shall also
maintain one or more registry offices, each in charge of a registrar designated
by the Board, where such shares of stock shall be registered. The same entity
may be both transfer agent and registrar.
1
6. RECORD DATE; CLOSING TRANSFER BOOKS
So that the corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders, or any adjournment thereof, or
entitled to express consent to corporate action in writing without a meeting as
provided in Article VI of the Certificate of Incorporation, or entitled to
receive payment of any dividend or other distribution or allotment of rights, or
entitled to exercise any rights in respect of any change, conversion or exchange
of capital stock, or for the purpose of any other lawful action, the Board may
fix a record date which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board and which record date
shall not be more than sixty days nor less than ten days before the date of such
meeting, nor more than ten days from the date upon which the resolution fixing
the record date is adopted by the Board in the case of a determination of the
stockholders entitled to express consent to corporate action without a meeting,
nor more than sixty days before any other action, and only such stockholders as
shall be stockholders of record on the date so fixed shall be entitled to such
notice of and to vote at such meeting, or to give such consent, or to receive
such dividend or other distribution or allotment of rights, or to exercise such
rights, or to take such other lawful action, as the case may be, notwithstanding
any transfer of any stock on the books of the corporation after any such record
date fixed as aforesaid. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any adjournment
of the meeting; provided, however, that the Board may fix a new record date for
the adjourned meeting.
MEETINGS OF STOCKHOLDERS
7. ANNUAL
The annual meeting of stockholders for the election of directors and the
transaction of such other business as may properly be brought before the meeting
shall be held on the third Thursday in April in each year, or on such other day,
which shall not be a legal holiday, as shall be determined by the Board. The
annual meeting shall be held at such place and hour, within or without the State
of Delaware, as shall be determined by the Board. The day, place and hour of
each annual meeting shall be specified in the notice of the annual meeting. The
meeting may be adjourned by the chairman of the meeting from time to time and
place to place. At any adjourned meeting the corporation may transact any
business which might have been transacted at the original meeting. In accordance
with the provisions of applicable law, the Board acting by resolution may
postpone and reschedule any previously scheduled annual meeting of stockholders.
8. SPECIAL
Special meetings shall be held at such place, within or without the State
of Delaware, as may from time to time be fixed consistent with the provisions of
Article VI of the Certificate of Incorporation. In the event no such place has
been fixed, special meetings shall be held at the offices of the corporation
located in Dallas County, Texas. The meeting may be adjourned by the chairman of
the meeting from time to time and place to place. At any adjourned meeting the
corporation may transact any business which might have been transacted at the
original meeting. In accordance with the provisions of applicable law, the Board
acting by resolution may postpone and reschedule any previously scheduled
special meeting of stockholders.
9. NOTICE
Written notice of every meeting of stockholders, stating the place, day,
hour and purposes thereof, shall, except when otherwise required by law, be
mailed at least ten, but not more than sixty days before such meeting to each
stockholder of record entitled to vote thereat.
10. QUORUM
The holders of a majority of the voting power of the issued and outstanding
shares of capital stock of the corporation entitled to vote, present in person
or represented by proxy, shall constitute a quorum at any meeting, except as
otherwise required by law. In the event of lack of a quorum, the chairman of the
meeting or a majority of the voting power of the shares of capital stock present
in person or represented by proxy may adjourn the meeting from time to time
without notice other than announcement at the meeting, until a quorum shall be
obtained. At
2
any such adjourned meeting at which there is a quorum, any business may be
transacted which might have been transacted at the meeting originally called.
The stockholders present at a duly called meeting at which a quorum is present
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
11. CONDUCT OF MEETINGS
(a) The Chief Executive Officer, or in his absence such other officer as
may be designated by the Board, shall be the chairman at stockholders' meetings.
The Secretary of the corporation shall be the secretary at stockholders'
meetings but in his absence the chairman of the meeting may appoint a secretary
for the meeting. The opening and closing of the polls for matters upon which the
stockholders will vote at a meeting shall be announced at the meeting by the
chairman of the meeting. The Board may, to the extent not prohibited by law,
adopt by resolution such rules and regulations for the conduct of the meeting of
stockholders as it shall deem appropriate. Except to the extent inconsistent
with such rules and regulations as adopted by the Board, the chairman of any
meeting of stockholders shall have the right and authority to prescribe such
rules, regulations or procedures and to do all acts as, in the judgment of the
chairman, are appropriate for the proper conduct of the meeting. Such rules,
regulations or procedures, whether adopted by the Board or prescribed by the
chairman of the meeting, may to the extent not prohibited by law include,
without limitation, the following: (i) the establishment of an agenda or order
of business for the meeting; (ii) rules and procedures for maintaining order at
the meeting and the safety of those present; (iii) limitations on attendance at
or participation in the meeting to stockholders of record of the corporation,
their duly authorized and constituted proxies (which shall be reasonable in
number) or such other persons as the chairman of the meeting shall determine;
(iv) restrictions on entry to the meeting after the time fixed for the
commencement thereof; and (v) limitations on the time allotted to questions or
comments by participants.
(b) At a meeting of the stockholders, only such business shall be conducted
as shall have been properly brought before the meeting in accordance with these
By-Laws. To be properly brought before a meeting, business must (a) be specified
in the notice of the meeting (or any supplement thereto) given by or at the
direction of the Board, (b) otherwise properly be brought before the meeting by
or at the direction of the Board, or (c) otherwise (i) properly be requested to
be brought before the meeting by a stockholder of record entitled to vote in the
election of directors generally, and (ii) constitute a proper subject to be
brought before such meeting. For business to be properly requested to be brought
before an annual meeting of stockholders by a stockholder of record, any
stockholder who intends to bring any matter (other than in connection with the
election of directors) before an annual meeting of stockholders and is entitled
to vote on such matter must deliver written notice of such stockholder's intent
to bring the matter before the annual meeting of stockholders, either by
personal delivery or by United States mail, postage prepaid, to the Secretary of
the corporation. Such notice must be received by the Secretary not less than 75
days nor more than 100 days prior to the first anniversary of the preceding
year's annual meeting; provided, however, that in the event that the date of the
annual meeting is advanced by more than 30 days or delayed by more than 60 days
from such anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the close of business on the 100th day prior to such
annual meeting and not later than the close of business on the later of the 75th
day prior to such annual meeting or the 10th day following the day on which
public announcement of the date of such meeting is first made. In no event shall
the public announcement of an adjournment of an annual meeting commence a new
time period for the giving of a stockholder notice as described above. For
purposes of this By-Law 11, "public announcement" shall mean the date disclosure
of the date of the meeting of stockholders is first made in a press release
reported by the Dow Jones News Service, Associated Press or comparable national
news service, or in a document publicly filed by the corporation with the
Securities and Exchange Commission pursuant to Sections 13, 14, or 15(d) of the
Securities Exchange Act of 1934, as amended. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the corporation's notice of meeting.
A stockholder's notice to the Secretary required by this By-Law 11 shall
set forth as to each matter the stockholder proposes to bring before the meeting
of stockholders: (i) a brief description of the business to be brought before
the meeting and the reasons for conducting such business at the meeting; (ii)
the name and address of the stockholder intending to propose such business;
(iii) the number of shares of stock of the corporation beneficially held, either
personally or in concert with others, by the stockholder, and a representation
that the stockholder is a holder of stock of the corporation entitled to vote at
such meeting and intends to appear in person or
3
by proxy at the meeting to present such proposal; and (iv) any material interest
of the stockholder in such business. No business shall be conducted at a meeting
of stockholders except in accordance with the procedures set forth in this
By-Law 11. The chairman of the meeting shall, if the facts warrant, determine
and declare to the meeting that the business was not properly brought before the
meeting in accordance with the provisions hereof and, if he should so determine,
he shall so declare to the meeting that any such business not properly brought
before the meeting shall not be transacted.
12. VOTING
Except as otherwise provided in the Certificate of Incorporation, at each
meeting of the stockholders, each holder of shares entitled to vote at such
meeting shall, as to all matters in respect of which such shares have voting
rights, be entitled to one vote in person or by written proxy for each share
held of record by him. No vote upon any matter, except the election of directors
or the amendment of the Certificate of Incorporation, is required to be by
ballot unless demanded by the holders of at least 10% of the voting power of the
shares of capital stock represented and entitled to vote at the meeting. All
motions to introduce a matter for a vote by the stockholders at a meeting
thereof, except for nominations for election as directors recommended by the
Nominating Committee and approved by the Board, shall be seconded prior to a
vote thereon by the stockholders.
A stockholder may authorize another person or persons to act for him as
proxy by transmitting or authorizing the transmission of a telegram, cablegram,
or other means of electronic transmission to the person who will be the holder
of the proxy or to a proxy solicitation firm, proxy support service organization
or like agent duly authorized by the person who will be the holder of the proxy
to receive such transmission, provided that any such telegram, cablegram or
other means of electronic transmission must either set forth or be submitted
with information from which it can be determined that the telegram, cablegram or
other electronic transmission was authorized by the stockholder.
The date and time of the opening and closing of the polls for each matter
upon which the stockholders will vote at a meeting shall be announced at the
meeting. No ballot, proxies or votes, nor any revocations thereof or changes
thereto, shall be accepted by the inspectors after the closing of the polls. All
elections and questions shall be decided by plurality vote, except as otherwise
required by the laws of Delaware or the Certificate of Incorporation.
13. INSPECTORS OF ELECTION
The Chief Executive Officer shall, in advance of any meeting of
stockholders, appoint one or more inspectors to act at the meeting and make a
written report thereof. He may designate one or more persons as alternate
inspectors to replace any inspector who fails to act. If no inspector or
alternate is able to act at a meeting of stockholders, the chairman of the
meeting shall appoint one or more inspectors to act at the meeting. Each
inspector, before entering upon the discharge of his duties, shall take and sign
an oath faithfully to execute the duties of inspector with strict impartiality
and according to the best of his ability.
The inspectors shall (i) ascertain the number of shares outstanding and the
voting power of each, (ii) determine the number of shares represented at a
meeting and the validity of proxies and ballots, (iii) count all votes and
ballots, (iv) determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the inspectors, and
(v) certify their determination of the number of shares represented at the
meeting, and their count of all votes and ballots. The inspectors may appoint or
retain other persons or entities to assist the inspectors in the performance of
the duties of the inspectors. The inspectors shall determine the validity of and
count the proxies and ballots in accordance with applicable law.
14. LIST OF STOCKHOLDERS
A complete list of the stockholders entitled to vote at stockholders'
meetings (arranged in alphabetical order and showing the address of each
stockholder and the number of shares registered in the name of each stockholder)
shall be prepared by the Secretary and filed at least ten days prior to each
meeting, either at a place specified in the notice of such meeting within the
city or town where such meeting is to be held, or if no such place is specified,
at the place where such meeting is to be held. Such list shall be open to the
examination of any stockholder for any purpose germane to the meeting, and shall
be produced and kept at the time and place of such meeting during the whole time
thereof, and subject to the inspection of any stockholder who may be present.
The original or duplicate stock ledger shall be the only evidence as to who are
stockholders entitled to inspect such list.
4
BOARD OF DIRECTORS
15. RESIGNATION
A director may resign at any time by giving written notice to the
corporation, addressed to the Chief Executive Officer or the Secretary. Such
resignation shall take effect at the date of receipt of such notice or at any
later time specified therein. Acceptance of a resignation shall not be necessary
to make it effective unless otherwise stated in the notice.
16. ANNUAL MEETING
A meeting of the Board, to be known as the annual Board meeting, shall be
held without call or notice immediately after and at the same general place as
the annual meeting of the stockholders. The annual Board meeting shall be held
for the purpose of organizing the Board, electing officers, and transacting any
other business that may properly come before the meeting.
17. REGULAR MEETINGS
Regular meetings of the Board may be held without call or notice at such
place and at such time as shall be fixed by the Board.
18. SPECIAL MEETINGS
Special meetings of the Board may be called by the Chief Executive Officer,
and shall be called by the Secretary upon the request in writing of not less
than two of the directors then in office. Special meetings of the Board may be
held at such place and at such time as shall be designated in the call thereof.
Notice of special meetings of the Board shall either be mailed by the Chief
Executive Officer or the Secretary to each director at least three days before
the meeting, or served upon, or sent by electronic means by the Chief Executive
Officer or the Secretary to, each director at least one day before the meeting,
but during an emergency as defined in By-Law 20, notice may be given only to
such of the directors as it may be feasible to reach at the time and by such
means as may be feasible at the time, including publications or private or
public electronic means. Unless required by law, the notice need not state the
purposes of the meeting.
19. TELEPHONIC MEETINGS
Members of the Board or any committee designated by the Board may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such participation shall
constitute presence in person at such meeting.
20. QUORUM
Except during the existence of an emergency and except as otherwise
provided in these By-Laws or in the Certificate of Incorporation, one-third of
the total number of directors, as fixed pursuant to Section (2) of Article VIII
of the Certificate of Incorporation, shall constitute a quorum for the
transaction of business. During the existence of an emergency, three directors
shall constitute a quorum for the transaction of business. To the extent
required to constitute a quorum at any meeting of the Board during an emergency,
the officers of the corporation who are present shall be deemed, in order of
rank and within the same rank in order of seniority, directors for such meeting.
Subject to the provisions of the Certificate of Incorporation, the action of the
majority of directors present at a meeting at which a quorum is present shall be
the act of the Board. In the event of lack of a quorum, a majority of the
directors present may adjourn the meeting from time to time without notice other
than announcement at the meeting until a quorum shall be obtained. At any such
adjourned meeting at which there is a quorum, any business may be transacted
which might have been transacted at the meeting originally called.
An "emergency" for the purpose of these By-Laws shall be any emergency
resulting from an attack on the United States or on a locality in which the
corporation conducts its business or customarily holds meetings of its Board or
its stockholders, or during any nuclear or atomic disaster, or during the
existence of any catastrophe, or
5
other similar emergency condition, as a result of which a quorum of the Board or
a standing committee thereof cannot readily be convened for action.
21. ACTION WITHOUT MEETING
Any action required or permitted to be taken at any meeting of the Board
may be taken without a meeting if all members of the Board consent thereto in
writing and such written consent is filed with the minutes of the proceedings of
the Board.
22. ORGANIZATION
The Chairman of the Board, or in his absence the Chief Executive Officer,
or in his absence a director chosen by the directors present, shall act as
chairman at meetings of the Board. The Secretary of the corporation shall act as
secretary at meetings of the Board but in his absence the chairman of the
meeting may appoint a secretary for the meeting.
23. COMPENSATION
The compensation of directors for services as directors and as members of
committees of the Board shall be as fixed by the Board from time to time. The
compensation, if any, of the directors need not be uniform as between directors
and the compensation, if any, of the members of the committees of the Board need
not be uniform either as between members of a committee or as between
committees. The Board shall provide for reimbursing the directors for expenses
incurred in attending meetings of the Board or committees thereof.
Any director may also serve the corporation in any other capacity and
receive compensation, including fees and expenses, for such service.
COMMITTEES OF THE BOARD
24. STANDING AND OTHER COMMITTEES
The directors shall from time to time designate, by resolution passed by a
majority of the entire Board of Directors (as defined in Section (2) of Article
VIII of the Certificate of Incorporation), an Audit Committee, a Compensation
Committee, an Executive Committee and a Nominating Committee, each of which
shall have and may exercise the powers of the Board in the direction of the
business and affairs of the corporation in respect to the matters and to the
extent hereinafter set forth, subject to the power of the Board to assign from
time to time to any such committees or to any other committees such powers in
respect to specific matters as the Board may deem desirable. These four
committees shall be the standing committees of the corporation. The Board may,
by resolution passed by a majority of the entire Board of Directors, designate
such other committees as it from time to time may deem appropriate; no such
committee shall consist of fewer than two directors, and the powers of each such
committee shall be limited to those specified in the resolution designating the
committee.
25. PROCEDURE
Each committee shall fix its own rules of procedure and shall meet where
and as provided by such rules, but the presence of a majority shall be necessary
to constitute a quorum, unless otherwise provided by these By-Laws. Each
committee shall keep minutes of its meetings. Any action required or permitted
to be taken at any meeting of any committee may be taken without a meeting if
all the members consent thereto in writing and such written consent is filed
with the minutes of the proceedings of such committee. All action by each
committee shall be reported to the Board.
26. AUDIT COMMITTEE
The Audit Committee shall consist of three or more members. The Board shall
select the members of the Audit Committee from among the directors who are not
officers or employees of the corporation and shall designate the Chairman of the
Committee. The Audit Committee shall, with respect to the corporation and the
other entities as to which the corporation has power to select and engage
auditors, select and engage independent public
6
accountants to audit books, records and accounts, determine the scope of audits
to be made by the auditors and establish policy in connection with internal
audit programs and the scope thereof, and shall perform such other duties as the
Board may from time to time prescribe.
27. COMPENSATION COMMITTEE
The Compensation Committee shall consist of three or more members. The
Board shall select the members of the Compensation Committee from among the
directors who are not, and have not been for at least one year prior to
selection, officers or employees of the corporation and shall designate the
Chairman of the Committee. The Compensation Committee shall constitute the Stock
Option Committee provided for under any stock option plan of the corporation. It
shall from time to time fix the compensation of employees who are directors of
the corporation and, in consultation with the Chief Executive Officer, the
compensation of officers of the corporation who are elected by the Board. It
shall review and make recommendations to the Board from time to time with
respect to the compensation of directors pursuant to By-Law 23.
28. EXECUTIVE COMMITTEE
The Executive Committee shall consist of three or more members including,
by virtue of his office, the Chief Executive Officer. The Board shall select the
other members of the Committee from among the directors and shall designate the
Chairman thereof.
The Executive Committee, when the Board is not in session, shall have and
may exercise all of the powers of the Board to direct the business and the
affairs of the corporation, including but not limited to the power to declare
dividends and to authorize the issuance of stock, except the powers hereinafter
in these By-Laws assigned to any other standing committee and except to the
extent, if any, that the authority of the Committee may be limited in any
respect by law, by the Certificate of Incorporation or by these By-Laws.
29. NOMINATING COMMITTEE
The Nominating Committee shall consist of three or more members. The Board
shall select the members of the Nominating Committee from among the directors
who (except in the case of the Chairman of the Board) are not officers or
employees of the corporation. The Nominating Committee shall have the power to:
propose and consider suggestions as to candidates for membership on the Board;
periodically recommend to the Board candidates for vacancies on the Board due to
resignations or retirements or due to such standards for composition of Board
membership as may from time to time legally prevail; review and recommend to the
Board such modifications to the prevailing Board of Directors retirement policy
as may be deemed appropriate in light of contemporary standards; and propose to
the Board on or before March 1 of each year a slate of directors for submission
to the stockholders at the annual meeting.
30. ALTERNATES; VACANCIES IN COMMITTEES
The Board may designate one or more directors as alternate members of any
committee. Alternate members shall serve, in the order in which the Board shall
determine, when one or more members of the committee shall be absent or
disqualified. Alternate members may attend committee meetings as observers,
without the right to vote when all members are present; when fewer than all are
present, only an alternate member serving in the place of an absent or
disqualified member shall have the right to vote. If no alternate is available,
the committee member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board to act at the meeting in place
of any absent or disqualified member. All members of all committees (including
Chairmen) shall serve at the pleasure of the Board.
7
OFFICERS
31. DESIGNATION; ELECTION; QUALIFICATION; TERM
Each year at the annual Board meeting the directors shall elect a Chairman
of the Board, a Chief Executive Officer, a Secretary and a Treasurer. From time
to time the Board may also elect or appoint a Vice Chairman of the Board or Vice
Chairmen of the Board, a President, such Executive, Senior or other Vice
Presidents as it may deem appropriate, a Chief Financial Officer, and such other
officers, including a Controller, Assistant Vice Presidents, Assistant
Secretaries, Assistant Treasurers and Assistant Controllers, as it may deem
appropriate. The Chief Executive Officer may appoint any officers of the
corporation not required to be elected by the Board, as he may deem appropriate.
The Chairman of the Board, the Chief Executive Officer, and any Vice Chairman of
the Board must be directors; no other officer need be a director. Any number of
offices may be held by the same person. The term of each officer, whenever
elected or appointed, shall be until the election or appointment (as the case
may be) and qualification of his successor or until his earlier resignation or
removal.
32. DUTIES
The officers shall have such powers and perform such duties as are
prescribed in these By-Laws, or, in the case of an officer whose powers and
duties are not so prescribed, as may be assigned by the Board or delegated by or
through the Chief Executive Officer.
33. RESIGNATION; REMOVAL; VACANCIES
Any officer may resign at any time by giving notice to the corporation
addressed to the Chief Executive Officer or the Secretary. Such resignation
shall take effect at the date of the receipt of such notice or at any later time
specified therein. Acceptance of a resignation shall not be necessary to make it
effective unless otherwise stated in the notice. Any officer may be removed by
the Board at any time with or without cause. Any appointed officer may be
removed by the Chief Executive Officer at any time with or without cause. A
vacancy in any office may be filled by the Board, and a vacancy in any appointed
office may be filled by the Chief Executive Officer, for the unexpired portion
of the term.
34. CHIEF EXECUTIVE OFFICER
The Chief Executive Officer of the corporation shall be elected by the
Board. Subject to the Board, he shall be in general and active charge, control
and supervision over the management and direction of the business, property and
affairs of the corporation. He shall keep the Board fully informed, and shall
freely consult it, concerning the business of the corporation in his charge.
He shall, subject to these By-Laws, have authority to:
(i) appoint or approve the appointment of employees to various posts
and positions in the corporation bearing titles designated or approved by
him and to prescribe their authority and duties, which may include the
authority to appoint subordinates to various other posts and positions; and
(ii) remove or approve the removal of employees so appointed; and
(iii) sign, execute and acknowledge, on behalf of the corporation, all
deeds, mortgages, bonds, notes, debentures, stock certificates, contracts,
including contracts of guaranty and suretyship, leases, reports and other
documents and instruments, except where the signing or execution thereof by
some other officer or employee of the corporation shall be expressly
authorized and directed by law, or by the Board, or by these By-Laws.
Unless otherwise provided by law, or by these By-Laws, or by the Board, he
may authorize in a writing filed with the Secretary, any officer, employee,
or agent of the corporation to sign, execute and acknowledge, on behalf of
the corporation and in his place and stead, any or all such documents and
instruments.
He shall have such other authority and perform such other duties as are
incident to the office of Chief Executive Officer and as may be prescribed from
time to time by the Board and these By-Laws.
8
In the absence or disability of the Chief Executive Officer, or in case of
an unfilled vacancy in that office, until such time as the Board shall elect his
successor, his duties shall be performed and his powers shall be exercised by
other elected officers of the corporation who are also directors (unless none
are directors) in the order in which such officers were listed in their
respective elections.
35. CHAIRMAN OF THE BOARD, VICE CHAIRMAN OF THE BOARD AND PRESIDENT
The Chairman of the Board, any Vice Chairman of the Board and the
President, each acting alone, shall have authority to sign, execute and
acknowledge on behalf of the corporation, all deeds, mortgages, bonds, notes,
debentures, stock certificates, contracts, including contracts of guaranty and
suretyship, leases, reports and other documents and instruments, except where
the signing or execution thereof by some other officer or employee shall be
expressly authorized and directed by law, or by the Board, or by the Chief
Executive Officer or by these By-Laws. Each shall have such additional powers
and perform such additional duties as may be assigned to him by the Board or as
may be delegated to him by the Chief Executive Officer.
36. VICE PRESIDENTS
Each Vice President shall have such powers and perform such duties as may
be assigned to him by the Board or as may be delegated to him by the Chief
Executive Officer.
Each Executive Vice President shall have authority to sign, execute and
acknowledge on behalf of the corporation, all deeds, mortgages, bonds, notes,
debentures, contracts, including contracts of guaranty and suretyship, leases,
reports and other documents and instruments, except where the signing or
execution thereof by some other officer or employee shall be expressly
authorized and directed by law, or by the Board, or by the Chief Executive
Officer, or by these By-Laws.
37. CHIEF FINANCIAL OFFICER
The Chief Financial Officer shall:
(i) be the principal financial officer of the corporation and have
responsibility for all financial affairs of the corporation; and
(ii) protect the cash, securities, receivables and other financial
resources of the corporation, have responsibility for investment, receipt,
custody and disbursement of such resources, and establish policies for
granting credit to customers; and
(iii) maintain the creditworthiness of the corporation; and
(iv) negotiate and procure capital required by the corporation,
including long-term debt and equity, maintain adequate sources for the
corporation's short-term financing requirements and maintain banking
relationships; and
(v) administer the accounting policies of the corporation and the
internal controls with respect to its financial affairs; and
(vi) supervise the corporation's books of account, and have access to
all records, including the Secretary's records; and
(vii) in general, have such other powers and perform such other duties
as may be assigned from time to time by the Board or by or through the
Chief Executive Officer.
38. CONTROLLER
The Controller shall:
(i) be the principal accounting officer of the corporation; and
9
(ii) have custody and charge of the corporation's books of account,
and have access to all records, including the Secretary's and the
Treasurer's records, for purpose of obtaining information necessary to
verify or complete the records of the Controller's office; and
(iii) implement the policies for granting credit to customers; and
(iv) implement the internal controls with respect to the financial
affairs of the corporation; and
(v) have the responsibility for processing vouchers for payment by the
Treasurer; and
(vi) in general, have such other powers and perform such other duties
as may be assigned from time to time by the Board or by or through the
Chief Executive Officer.
39. SECRETARY
The Secretary shall:
(i) attend and keep the minutes of all meetings of the stockholders,
the Board, and of such committees as the Board may direct; and
(ii) have custody of the corporate seal and all corporate records
(including transfer books and stock ledgers), contracts, papers,
instruments, documents and books of the corporation except those required
to be kept by other officers under these By-Laws; and
(iii) sign on behalf of the corporation such documents and instruments
as require his signature when approved in accordance with these By-Laws,
and to such documents he shall affix the corporate seal when necessary and
may do so when he deems it desirable; and
(iv) see that notices are given and records and reports are properly
kept and filed by the corporation as required by these By-Laws or as
required by law; and
(v) in general, have such other powers and perform such other duties
as are incident to the office of Secretary and as may be assigned to him
from time to time by the Board or by or through the Chief Executive
Officer.
40. TREASURER
The Treasurer shall:
(i) receive and sign receipts for all moneys paid to the corporation
and shall deposit the same in the name and to the credit of the corporation
in authorized banks or depositories; and
(ii) when necessary or desirable, endorse for collection on behalf of
the corporation all checks, drafts, notes and other obligations payable to
it; and
(iii) disburse the funds of the corporation only upon vouchers duly
processed and under such rules and regulations as the Board may from time
to time adopt; and
(iv) keep full and accurate accounts of the transactions of his office
in books belonging to the corporation; and
(v) render as the Board may direct an account of the transactions of
his office; and
(vi) in general, have such other powers and perform such other duties
as are incident to the office of Treasurer and as may be assigned to him
from time to time by the Board or by or through the Chief Executive
Officer.
10
MISCELLANEOUS
41. OFFICES
The registered office of the corporation in the State of Delaware shall be
located at 1209 Orange Street, Wilmington, Delaware 19801 and the name of the
registered agent in charge thereof shall be The Corporation Trust Company. The
corporation may have such other offices as the Board may from time to time
determine. The books of the corporation may be kept outside the State of
Delaware.
42. SEAL
The corporation's seal shall be circular in form with "KIMBERLY-CLARK
CORPORATION -- DELAWARE" around the periphery and "1928 -- CORPORATE SEAL"
within.
43. FISCAL YEAR
The fiscal year of the corporation shall begin on January 1 of each year.
44. ANNUAL REPORT
At least fifteen days in advance of the annual meeting of stockholders, but
not later than three months after the close of the fiscal year, the Board shall
publish and submit to the stockholders a consolidated balance sheet of the
corporation and its consolidated subsidiaries as of the end of the previous
fiscal year and the related consolidated income and cash flow statements of the
corporation and its consolidated subsidiaries for the previous fiscal year.
45. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The corporation shall:
(i) indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation) by reason of the fact
that he is or was a director or officer of the corporation, or is or was
serving at the request of the corporation as a director or officer of
another corporation, or in the case of an officer or director of the
corporation is or was serving as an employee or agent of a partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful; and
(ii) indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, or in the case of an officer or
director of the corporation is or was serving as an employee or agent of a
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
11
The corporation shall be required to indemnify an indemnitee in connection
with a proceeding (or part thereof) initiated by such indemnitee against the
corporation or any of its directors, officers or employees only if the
initiation of such proceeding (or part thereof) by the indemnitee was authorized
by the Board. Notwithstanding the foregoing, the corporation shall be required
to indemnify an indemnitee in connection with a proceeding seeking to enforce
rights to indemnification without the authorization of the Board to the extent
that such proceeding is successful on the merits. To the extent that a director
or officer of the corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections (i) and
(ii), or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
Any indemnification under subsections (i) and (ii) (unless ordered by a
court) shall be made by the corporation only as authorized in the specific case
upon a determination that indemnification of the director or officer is proper
in the circumstances because he has met the applicable standard of conduct set
forth in subsections (i) and (ii). Such determination shall be made (1) by a
majority vote of the directors who were not parties to such action, suit or
proceedings, even though less than a quorum; or (2) if there are no such
directors, or if such directors so direct, by independent legal counsel in a
written opinion; or (3) by the stockholders.
Expenses (including attorneys' fees) incurred in defending any civil,
criminal, administrative or investigative action, suit or proceeding may be paid
by the corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation as authorized in this By-Law.
The indemnification and advancement of expenses provided by, or granted
pursuant to, the other paragraphs of this By-Law shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
The corporation's obligation, if any, to indemnify any person who was or is
serving at its request as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, enterprise or nonprofit entity
shall be reduced by any amount such person may collect as indemnification from
such other corporation, partnership, joint venture, trust, enterprise or
nonprofit entity.
The Board may authorize and direct that insurance be purchased and
maintained on behalf of any person who is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, or in the case of an officer or
director of the corporation is or was serving as an employee or agent of a
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this By-Law.
46. RELIANCE ON RECORDS
Each director, each member of any committee designated by the Board, and
each officer, shall, in the performance of his duties, be fully protected in
relying in good faith upon the records of the corporation and upon such
information, opinion, reports or statements presented to the corporation by any
of the corporation's officers or employees, or committees of the Board, or by
any other person as to matters the director, member or officer reasonably
believes are within such other person's professional or expert competence and
who has been selected with reasonable care by or on behalf of the corporation.
47. INSPECTION OF BOOKS
The directors shall determine from time to time whether, and, to what
extent and at what times and places and under what conditions and regulations
the accounts and other books and records of the corporation (except such as may
by statute be specifically open to inspection) or any of them, shall be open to
the inspection of the stockholders, and the stockholders' rights in this respect
are and shall be restricted and limited accordingly.
12
48. TRANSACTIONS WITH THE CORPORATION
No contract or transaction between the corporation and one or more of its
directors or officers, or between the corporation and any other corporation,
partnership, association, or other organization in which one or more of its
directors or officers are directors or officers, or have a financial interest,
shall be void or voidable solely for this reason, or solely because the director
or officer is present at or participates in the meeting of the Board or
committee thereof which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose, if:
(i) the material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the Board or the
committee, and the Board or committee in good faith authorizes the contract
or transaction by the affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum;
or
(ii) the material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
(iii) the contract or transaction is fair as to the corporation as of
the time it is authorized, approved or ratified, by the Board, a committee
thereof, or the stockholders.
Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the Board or of a committee which authorizes the
contract or transaction.
No other contract or transaction in which a director or officer has an
interest and which may, under law, be authorized, approved or ratified by the
Board, a committee thereof, or the stockholders shall be void or voidable if
authorized, approved or ratified by the body which under law may authorize,
approve or ratify such contract or transaction.
49. RATIFICATION
Any transaction questioned in any stockholders' derivative suit on the
ground of lack of authority, defective or irregular execution, adverse interest
of director, officer or stockholder, nondisclosure, miscomputation, or the
application of improper principles or practices of accounting may be ratified
before or after judgment, by the Board or by the stockholders in case less than
a quorum of directors is qualified; and, if so ratified, shall have the same
force and effect as if the questioned transaction had been originally duly
authorized, and said ratification shall be binding upon the corporation and its
stockholders and shall constitute a bar to any claim or execution of any
judgment in respect to such questioned transaction.
50. VOTING OF STOCKS
Unless otherwise ordered by the Board, any one of the Chief Executive
Officer, the Chairman of the Board, the President, any Vice Chairman of the
Board, any Executive Vice President or any Senior Vice President shall have full
power and authority, on behalf of the corporation, to consent to or approve of
any action by, and to attend, act and vote at any meeting of stockholders of,
any company in which the corporation may hold shares of stock, and in giving
such consent or approval or at any such meeting shall possess and may exercise
any and all rights and powers incident to the ownership of such shares and which
as the holder thereof, the corporation might possess and exercise if personally
present, and may exercise such power and authority through the execution of
proxies or may delegate such power and authority to any other officer, agent or
employee of the corporation.
51. NOTICE
Any notice which the corporation is required to give under these By-Laws
may be given personally or it may be given in writing by depositing the notice
in the post office or letter box in a postpaid envelope directed to such address
as appears on the books of the corporation. Such notice shall be deemed to be
given at the time of mailing.
13
52. WAIVER OF NOTICE
Whenever any notice is required to be given, a waiver thereof in writing
signed by the person or persons entitled to the notice, whether before or after
the time stated therein, shall be deemed equivalent thereto.
53. DISPENSING WITH NOTICE
No notice need be given to any person with whom communication is made
unlawful by any law of the United States or any rule, regulation, proclamation
or executive order issued under any such law.
54. AMENDMENTS
Subject to the provisions of the Certificate of Incorporation, these
By-Laws may be altered, amended or repealed by the stockholders or by the Board.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The following emergency provisions are excerpted
from para. 110 Delaware General Corporation Law
The board of directors, either before or during any such emergency, may provide,
and from time to time modify, lines of succession in the event that during such
emergency any or all officers or agents of the corporation shall for any reason
be rendered incapable of discharging their duties.
The board of directors, either before or during any such emergency, may,
effective in the emergency, change the head office or designate several
alternative head offices or regional offices, or authorize the officers so to
do.
No officer, director or employee acting in accordance with any emergency by-laws
shall be liable except for willful misconduct.
To the extent not inconsistent with any emergency by-laws so adopted, the
by-laws of the corporation shall remain in effect during any emergency and upon
its termination the emergency by-laws shall cease to be operative.
Unless otherwise provided in emergency by-laws, notice of any meeting of the
board of directors during such an emergency may be given only to such of the
directors as it may be feasible to reach at the time and by such means as may be
feasible at the time, including publication or radio.
To the extent required to constitute a quorum at any meeting of the board of
directors during such an emergency, the officers of the corporation who are
present shall, unless otherwise provided in emergency by-laws, be deemed, in
order of rank and within the same rank in order of seniority, directors for such
meeting.
14
