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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 10 - Q
(X) Quarterly Report Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 1997
( ) Transition Report Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
For the Transition Period From ___________ to _____________
Commission file number 1-5057
BOISE CASCADE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 82-0100960
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1111 West Jefferson Street
P.O. Box 50
Boise, Idaho 83728-0001
(Address of principal executive offices) (Zip Code)
(208) 384-6161
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Shares Outstanding
Class as of October 31, 1997
Common stock, $2.50 par value 56,224,392
PART I - FINANCIAL INFORMATION
STATEMENTS OF LOSS
BOISE CASCADE CORPORATION AND SUBSIDIARIES
(unaudited)
Item 1. Financial Statements
Three Months Ended September 30
1997 1996
(expressed in thousands,
except per share data)
Revenues
Sales $1,442,340 $1,356,370
Other income (expense), net (370) 1,530
__________ __________
1,441,970 1,357,900
__________ __________
Costs and expenses
Materials, labor, and other
operating expenses 1,160,960 1,119,670
Depreciation and cost of company
timber harvested 60,030 61,100
Selling and administrative expenses 186,590 143,730
__________ __________
1,407,580 1,324,500
__________ __________
Equity in net income (loss) of
affiliates (1,780) 850
__________ __________
Income from operations 32,610 34,250
__________ __________
Interest expense (38,810) (34,270)
Interest income 1,530 380
Foreign exchange loss (70) (170)
Gain on subsidiary's issuance of stock - 430
__________ __________
(37,350) (33,630)
__________ __________
Income (loss) before income taxes and
minority interest (4,740) 620
Income tax provision (benefit) (890) 70
__________ __________
Income (loss) before minority interest (3,850) 550
Minority interest, net of income tax (2,350) (2,200)
__________ __________
Net loss $ (6,200) $ (1,650)
Net loss per common share
Primary $ (.23) $ (.24)
Fully diluted $ (.23) $ (.24)
Dividends declared per common share $ .15 $ .15
The accompanying notes are an integral part of these Financial Statements.
SEGMENT INFORMATION
BOISE CASCADE CORPORATION AND SUBSIDIARIES
(unaudited)
Three Months Ended
September 30
1997 1996
(expressed in thousands)
Segment sales
Paper and paper products $ 406,062 $ 500,046
Office products 679,877 506,694
Building products 454,140 426,177
Intersegment eliminations and other (97,739) (76,547)
__________ __________
$1,442,340 $1,356,370
Segment operating income
Paper and paper products $ 4,860 $ 10,076
Office products 29,731 21,991
Building products 13,772 12,866
Equity in net income (loss) of
affiliates (1,780) 850
Corporate and other (13,973) (11,533)
__________ __________
Income from operations $ 32,610 $ 34,250
The accompanying notes are an integral part of these Financial Statements.
STATEMENTS OF INCOME (LOSS)
BOISE CASCADE CORPORATION AND SUBSIDIARIES
(unaudited)
Nine Months Ended
September 30
1997 1996
(expressed in thousands,
except per share data)
Revenues
Sales $4,048,960 $3,845,480
Other income (expense), net (830) 7,170
__________ __________
4,048,130 3,852,650
__________ __________
Costs and expenses
Materials, labor, and other
operating expenses 3,309,480 3,145,020
Depreciation and cost of company
timber harvested 172,050 174,160
Selling and administrative expenses 518,190 419,060
__________ __________
3,999,720 3,738,240
__________ __________
Equity in net income (loss) of
affiliates (3,360) 2,800
__________ __________
Income from operations 45,050 117,210
__________ __________
Interest expense (98,190) (97,720)
Interest income 5,360 1,130
Foreign exchange loss (120) (830)
Gain on subsidiary's issuance of stock - 2,450
__________ __________
(92,950) (94,970)
__________ __________
Income (loss) before income taxes and
minority interest (47,900) 22,240
Income tax provision (benefit) (17,720) 7,720
__________ __________
Income (loss) before minority interest (30,180) 14,520
Minority interest, net of income tax (7,460) (7,610)
__________ __________
Net income (loss) $ (37,640) $ 6,910
Net loss per common share
Primary $(1.25) $ (.47)
Fully diluted $(1.25) $ (.47)
Dividends declared per common share $ .45 $ .45
The accompanying notes are an integral part of these Financial Statements.
SEGMENT INFORMATION
BOISE CASCADE CORPORATION AND SUBSIDIARIES
(unaudited)
Nine Months Ended
September 30
1997 1996
(expressed in thousands)
Segment sales
Paper and paper products $1,162,116 $1,462,231
Office products 1,878,218 1,428,884
Building products 1,262,832 1,185,106
Intersegment eliminations and other (254,206) (230,741)
__________ __________
$4,048,960 $3,845,480
Segment operating income (loss)
Paper and paper products $ (36,611) $ 48,294
Office products 83,101 74,547
Building products 41,755 20,132
Equity in net income (loss)
of affiliates (3,360) 2,800
Corporate and other (39,835) (28,563)
__________ __________
Income from operations $ 45,050 $ 117,210
The accompanying notes are an integral part of these Financial Statements.
BOISE CASCADE CORPORATION AND SUBSIDIARIES
BALANCE SHEETS
(unaudited)
ASSETS
September 30 December 31
1997 1996 1996
(expressed in thousands)
Current
Cash and cash items $ 59,918 $ 55,945 $ 40,066
Short-term investments at
cost, which approximates
market 7,132 2,233 220,785
__________ __________ __________
67,050 58,178 260,851
Receivables, less allowances
of $9,245,000, $5,173,000,
and $4,911,000 592,472 522,887 476,339
Inventories 565,092 581,088 540,433
Deferred income tax benefits 60,998 58,705 53,728
Other 38,155 131,393 24,053
__________ __________ __________
1,323,767 1,352,251 1,355,404
__________ __________ __________
Property
Property and equipment
Land and land improvements 54,782 41,260 40,393
Buildings and improvements 508,291 484,701 452,578
Machinery and equipment 4,040,206 4,683,226 3,859,124
__________ __________ __________
4,603,279 5,209,187 4,352,095
Accumulated depreciation (1,974,291)(2,273,006) (1,798,349)
__________ __________ __________
2,628,988 2,936,181 2,553,746
Timber, timberlands, and
timber deposits 276,663 371,901 293,028
__________ __________ __________
2,905,651 3,308,082 2,846,774
__________ __________ __________
Goodwill, net of amortization 440,444 221,887 262,533
Investments in equity affiliates 31,226 38,607 19,430
Other assets 229,394 223,160 226,568
__________ __________ __________
Total assets $4,930,482 $5,143,987 $4,710,709
The accompanying notes are an integral part of these Financial Statements.
BOISE CASCADE CORPORATION AND SUBSIDIARIES
BALANCE SHEETS
(unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
September 30 December 31
1997 1996 1996
(expressed in thousands)
Current
Notes payable $ 1,200 $ 94,300 $ 36,700
Current portion of long-term
debt 116,867 107,427 157,304
Income taxes payable 564 - 3,307
Accounts payable 474,234 424,871 427,224
Accrued liabilities
Compensation and benefits 132,407 144,072 119,282
Interest payable 31,389 25,781 31,585
Other 173,561 147,688 157,156
__________ __________ __________
930,222 944,139 932,558
__________ __________ __________
Debt
Long-term debt, less current
portion 1,639,718 1,734,923 1,330,011
Guarantee of ESOP debt 191,868 210,453 196,116
__________ __________ __________
1,831,586 1,945,376 1,526,127
__________ __________ __________
Other
Deferred income taxes 228,279 270,558 249,676
Other long-term liabilities 231,721 238,530 240,323
__________ __________ __________
460,000 509,088 489,999
__________ __________ __________
Minority interest 102,159 76,481 81,534
__________ __________ __________
Shareholders' equity
Preferred stock -- no par
value; 10,000,000
shares authorized;
Series D ESOP: $.01
stated value; 5,607,467;
5,976,459; and 5,904,788
shares outstanding 252,336 268,941 265,715
Deferred ESOP benefit (191,868) (210,453) (196,116)
Series F: $.01 stated value;
115,000 shares outstanding 111,043 111,043 111,043
Series G: $.01 stated value;
862,500 shares outstanding - 176,404 176,404
Common stock -- $2.50 par
value; 200,000,000 shares
authorized; 55,947,919;
48,468,998; and 48,476,366
shares outstanding 139,870 121,172 121,191
Additional paid-in capital 407,447 230,655 230,728
Retained earnings 887,687 971,141 971,526
__________ __________ __________
Total shareholders' equity 1,606,515 1,668,903 1,680,491
__________ __________ __________
Total liabilities and
shareholders' equity $4,930,482 $5,143,987 $4,710,709
The accompanying notes are an integral part of these Financial Statements.
BOISE CASCADE CORPORATION AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended
September 30
1997 1996
(expressed in thousands)
Cash provided by (used for) operations
Net income (loss) $ (37,640) $ 6,910
Items in income (loss) not using
(providing) cash
Equity in net (income) loss of
affiliates 3,360 (2,800)
Depreciation and cost of company timber
harvested 172,050 174,160
Deferred income tax provision (benefit) (21,438) 6,073
Minority interest, net of income tax 7,460 7,610
Amortization and other 14,967 17,202
Gain on subsidiary's issuance of stock - (2,450)
Receivables (34,301) (20,383)
Inventories (93) 19,807
Accounts payable and accrued liabilities 24,068 (20,403)
Current and deferred income taxes (10,309) (57,382)
Other (2,184) 6,381
________ ________
Cash provided by operations 115,940 134,725
________ ________
Cash provided by (used for) investment
Expenditures for property and equipment (208,841) (481,746)
Expenditures for timber and timberlands (4,900) (4,471)
Investments in equity affiliates, net (16,747) (9,386)
Purchase of facilities (236,820) (153,392)
Other (16,340) 22,136
________ ________
Cash used for investment (483,648) (626,859)
________ ________
Cash provided by (used for) financing
Cash dividends paid
Common stock (21,781) (21,638)
Preferred stock (27,817) (28,378)
________ ________
(49,598) (50,016)
Notes payable (35,500) 77,300
Additions to long-term debt 331,000 496,498
Payments of long-term debt (71,828) (39,761)
Other (167) 14,822
________ ________
Cash provided by financing 173,907 498,843
________ ________
Increase (decrease) in cash and short-term
investments (193,801) 6,709
Balance at beginning of the year 260,851 51,469
________ ________
Balance at September 30 $ 67,050 $ 58,178
The accompanying notes are an integral part of these Financial Statements.
Notes to Quarterly Financial Statements
(1) BASIS OF PRESENTATION. The quarterly financial statements
have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations. These
statements should be read together with the statements and
the accompanying notes included in the Company's 1996 Annual
Report.
The quarterly financial statements have not been audited by
independent public accountants, but in the opinion of
management, all adjustments necessary to present fairly the
results for the periods have been included. The net income
(loss) for the three and nine months ended September 30,
1997 and 1996, necessarily involved estimates and accruals.
Except as may be disclosed within these "Notes to Quarterly
Financial Statements," the adjustments made were of a
normal, recurring nature. Quarterly results are not
necessarily indicative of results that may be expected for
the year.
(2) NET LOSS PER COMMON SHARE. Net loss per common share was
determined by dividing net loss, as adjusted, by applicable
shares outstanding. For the three and nine months ended
September 30, 1997 and 1996, the computation of fully
diluted net loss per share was antidilutive; therefore,
amounts reported for primary and fully diluted loss were the
same. Due to the impact on average shares outstanding of
the conversion of Series G preferred stock to common stock
in July 1997, year-to-date primary and fully diluted loss
per share for the nine months ended September 30, 1997, is
two cents less than the amount that would be arrived at by
adding together the three independently calculated quarters.
Three Months Ended Nine Months Ended
September 30 September 30
1997 1996 1997 1996
(expressed in thousands)
Net income (loss)
as reported $ (6,200) $ (1,650)$(37,640)$ 6,910
Preferred dividends (6,249) (9,839) (25,546) (29,479)
________ ________ ________ ________
Primary and fully
diluted loss $(12,449) $(11,489)$(63,186)$(22,569)
Average number of
common shares
outstanding 54,814 48,469 50,658 48,211
Average number of common
shares if all convertible
securities were dilutive
Primary shares 55,280 55,722 55,918 55,595
Fully diluted shares 60,733 60,591 60,556 60,526
Primary and fully diluted loss includes the aggregate amount
of dividends on the Company's preferred stock, if dilutive.
The dividend attributable to the Company's Series D
convertible preferred stock held by the Company's ESOP
(employee stock ownership plan) is net of a tax benefit.
For the three months ended September 30, 1996, and the nine
months ended September 30, 1997 and 1996, primary average
shares included common shares outstanding and, if dilutive,
common stock equivalents attributable to stock options and
Series G conversion preferred stock. For the three months
ended September 30, 1996, and the nine months ended
September 30, 1997 and 1996, common stock equivalents
attributable to stock options and the Series G conversion
preferred stock were antidilutive. Accordingly, 7,253,000
common stock equivalent shares for the three months ended
September 30, 1996, and 5,260,000 and 7,384,000 common stock
equivalent shares for the nine months ended September 30,
1997 and 1996, were excluded from the average number of
primary common shares. For the three months ended
September 30, 1997, common stock equivalents attributable to
stock options were antidilutive. Accordingly, 466,000
common stock equivalent shares were excluded from the
average number of primary common shares.
In addition to common and common equivalent shares, fully
diluted average shares include common shares that would be
issuable upon conversion of the Company's other convertible
securities, if dilutive. For the three and nine months
ended September 30, 1997 and 1996, all adjustments to arrive
at the average number of fully diluted common shares were
antidilutive. Accordingly, 5,919,000 and 9,898,000 common
equivalent and other convertible shares were excluded from
the average number of fully diluted common shares for the
three and nine months ended September 30, 1997. For the
three and nine months ended September 30, 1996, 12,122,000
and 12,315,000 common equivalent shares and other
convertible shares were excluded from the average number of
fully diluted common shares.
In February 1997, the Financial Accounting Standards Board
issued Statement 128, Earnings Per Share, which will be
implemented in the fourth quarter of 1997. The statement
will have no impact on previously reported fully diluted
earnings loss per share which will be renamed diluted
earnings (loss) per share. Primary earnings (loss) per
share will be replaced with basic earnings (loss) per share
which will not be significantly different than the
previously reported primary earnings (loss) per share.
(3) INVENTORIES. Inventories include the following:
September 30 December 31
1997 1996 1996
(expressed in thousands)
Finished goods and work
in process $425,284 $400,178 $390,694
Logs 74,956 110,393 98,883
Other raw materials and
supplies 146,830 165,622 131,631
LIFO reserve (81,978) (95,105) (80,775)
________ ________ ________
$565,092 $581,088 $540,433
(4) INCOME TAXES. The estimated annual tax benefit rate for the
first nine months of 1997 was 37%, compared with 39% used
for the first six months of 1997. The estimated annual tax
provision rate for the first nine months of 1996 was 39%,
excluding the effect of not providing taxes related to "Gain
on subsidiary's issuance of stock." The actual annual 1996
tax provision rate was 46%, excluding the effect of not
providing taxes related to "Gain on subsidiary's issuance of
stock." The changes in the rate were due primarily to the
sensitivity of the rate to lower income levels and the mix
of income sources.
(5) DEBT. On March 11, 1997, the Company signed a new
revolving credit agreement with a group of banks. The new
agreement allows the Company to borrow as much as
$600 million at variable interest rates based on customary
indices and expires in June 2002. The revolving credit
agreement contains financial covenants relating to minimum
net worth, minimum interest coverage ratios, and ceiling
ratios of debt to capitalization. The new agreement
replaces the Company's previous $600 million revolving
credit agreement that would have expired in June 2000. At
September 30, 1997, there were no borrowings under this
agreement. The Company's majority-owned subsidiary, Boise
Cascade Office Products Corporation ("BCOP"), signed a new
revolving credit agreement with a group of banks on June 26,
1997. The new agreement allows BCOP to borrow as much as
$450 million at variable interest rates based on customary
indices and expires in June 2001. The BCOP revolving credit
facility contains customary restrictive financial and other
covenants, including a negative pledge and covenants
specifying a minimum fixed charge coverage ratio and a
maximum leverage ratio. BCOP may, subject to the covenants
contained in the credit agreement and to market conditions,
raise additional funds through the agreement and through
other external debt or equity financings in the future. The
new agreement replaces BCOP's previous $350 million
revolving credit agreement. Borrowings under BCOP's
agreement were $360 million at September 30, 1997. Also at
September 30, 1997, BCOP had $1.2 million of short-term
borrowings outstanding. The maximum amount of short-term
borrowings outstanding during the three and nine months
ended September 30, 1997, was $77.4 million. The average
amount of short-term borrowings outstanding during the three
and nine months ended September 30, 1997, were $43.4 million
and $39.8 million. The average interest rate for these
borrowings was 5.8% for both periods.
(6) BOISE CASCADE OFFICE PRODUCTS CORPORATION. During the first
nine months of 1997, BCOP, the Company's majority-owned
subsidiary, completed seven acquisitions, and during the
first nine months of 1996, BCOP completed nine acquisitions,
all of which were accounted for under the purchase method of
accounting. Accordingly, the purchase prices were allocated
to the assets acquired and liabilities assumed based upon
their estimated fair values. The initial purchase price
allocations may be adjusted within one year of the date of
purchase for changes in estimates of the fair values of
assets and liabilities. Such adjustments are not expected
to be significant to results of operations or the financial
position of the Company. The excess of the purchase price
over the estimated fair value of the net assets acquired was
recorded as goodwill and is being amortized over 40 years.
The results of operations of the acquired businesses are
included in BCOP's operations subsequent to the dates of
acquisition.
On January 31, 1997, BCOP acquired the stock of the contract
stationer business of The Office Stop, based in Butte,
Montana. On February 28, 1997, BCOP acquired the assets of
the contract stationer business of Florida Ribbon and
Carbon, based in Jacksonville, Florida. On April 17, 1997,
BCOP acquired the assets of the contract stationer business
of Winterbulk Business Supplies, Ltd., based in Bolton,
England. On April 30, 1997, BCOP acquired the assets of the
computer consumables business of TDI, based in Raleigh-
Durham, North Carolina. On May 30, 1997, BCOP acquired the
assets of the computer consumables business of Carlyle
Computer Products, Ltd., based in Winnipeg, Manitoba,
Canada. On May 31, 1997, BCOP acquired the assets of the
promotional products business of OstermanAPI, Inc., based in
Maumee, Ohio. In conjunction with the acquisition of
Osterman, BCOP formed a majority-owned subsidiary, Boise
Marketing Services, Inc. ("BMSI"), of which BCOP owns 88%.
BCOP's previously acquired promotional products company,
OWNCO, also became part of BMSI. In January 1997, BCOP also
completed a joint venture with Otto Versand, of which BCOP
owns 50%, to direct market office products in Europe,
initially in Germany. These transactions, including the
joint venture with Otto and the formation of the majority-
owned promotional products subsidiary, were completed for
cash of $99.7 million, $2.9 million of BCOP common stock,
and the recording of $14.2 million of acquisition
liabilities.
On July 7, 1997, BCOP acquired 100% of the shares of Jean-
Paul Guisset S.A. ("JPG"), a French corporation. JPG is a
direct marketer of office products in France. The
negotiated purchase price was FF850.0 million
(US$144.0 million) plus a price supplement payable in the
year 2000, if certain earnings and sales growth targets are
reached. No liability has been recorded for the price
supplement as the amount of payment, if any, is not assured
beyond a reasonable doubt. Approximately FF128.5 million
(US$20.5 million) was repatriated to BCOP from JPG during
the third quarter of 1997. In addition to the cash paid,
BCOP recorded $5.8 million of acquisition liabilities and
assumed $10.1 million of long-term debt. The acquisition
was funded by cash flow from operations and borrowings under
BCOP's revolving credit agreement.
On February 5, 1996, BCOP completed the acquisition of 100%
of the shares of Grand & Toy Limited ("Grand & Toy") from
Cara Operations Limited (Toronto). On January 31,
February 9, March 29, April 26, May 31, July 1, and July 31,
1996, BCOP acquired businesses in New Mexico, Maine,
Vermont, Wisconsin, Washington, Michigan, Australia, and
Oklahoma City. These businesses were acquired for cash of
$145.1 million, $1.7 million of BCOP's common stock, and the
recording of $20.6 million of acquisition liabilities.
Unaudited pro forma results of operations for the Company
reflecting the acquisitions would have been as follows. If
the 1997 acquisitions had occurred on January 1, 1997, sales
for the first nine months of 1997 would have increased by
$100 million, net loss would have increased $0.9 million, and
primary and fully diluted loss per share would have
increased $.02. If the 1997 and 1996 acquisitions had
occurred on January 1, 1996, sales for the first nine months
of 1996 would have increased by $300 million, net loss would
have increased $0.7 million and primary and fully diluted
loss per share would have increased $.01. This unaudited
pro forma financial information does not necessarily
represent the actual results of operations that would have
occurred if the acquisitions had taken place on the dates
assumed.
On September 25, 1997, BCOP issued 2,250,000 shares of
unregistered common stock, all of which was purchased by the
Company. The transaction was completed at a price of
$21.5495 per share, for a total of $48,486,375. The
proceeds from the transaction were used to reduce BCOP's
outstanding short-term borrowings. At September 30, 1997,
the Company owned 53,398,724 shares, or 81.4%, of BCOP's
outstanding common stock.
(7) SHAREHOLDERS' EQUITY. The Company has a shareholder rights
plan which was adopted in December 1988, amended in
September 1990, and renewed in September 1997. The Renewed
Rights Agreement becomes operative upon the expiration of
the existing Rights Agreement. Details are set forth in the
Renewed Rights Agreement filed as an exhibit to this Form
10-Q.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Three Months Ended September 30, 1997, Compared With Three Months
Ended September 30, 1996
Boise Cascade Corporation's net loss for the third quarter of
1997 was $6.2 million, compared with a net loss of $1.7 million
for the third quarter of 1996. Primary loss and fully diluted
loss per common share for the third quarter of 1997 were
23 cents. For the same quarter in 1996, primary loss and fully
diluted loss per common share were 24 cents. Sales for the third
quarters of 1997 and 1996 were $1.4 billion.
The Company's paper and paper products segment reported operating
income of $4.9 million in the third quarter of 1997, compared
with operating income of $10.1 million in the third quarter of
1996. Sales fell 19% to $406.1 million in the third quarter of
1997 from $500.0 million in the third quarter of 1996. The
decline in results was partially caused by lower average prices
for nearly all of the Company's paper grades. Uncoated free
sheet prices declined 4%, containerboard prices declined 5%,
newsprint prices declined 2%, and pulp prices increased 2%.
Additionally, sales volumes for the third quarter of 1997
declined to 627,000 tons, compared with 729,000 tons in the third
quarter of 1996. This decrease is primarily the result of the
sale of the Company's coated paper publication business on
November 1, 1996. This business contributed 131,000 tons of
sales volume, $103 million of sales, and $7.5 million of
operating income in the third quarter of 1996. The decrease in
volume from the sale of the coated publication business was
partially offset by approximately 59,000 sales tons from the
Company's new 330,000-ton-per-year uncoated free sheet machine in
Jackson, Alabama, which started up in late April 1997.
Paper segment manufacturing costs per ton in the third quarter of
1997 were 5% lower than in the comparison quarter. This excludes
manufacturing costs associated with the sold coated paper
publication business. The decrease from quarter to quarter was
due primarily to lower fixed costs.
Operating income in the office products segment in the third
quarter of 1997 was $29.7 million, compared to $22.0 million in
the third quarter 1996. Net sales in the third quarter of 1997
increased 34% to $679.9 million, compared with $506.7 million in
the third quarter of 1996. The growth in sales resulted
primarily from acquisitions, new account development, and product
line extensions. Third quarter 1997 sales growth was constrained
due to the United Parcel Service ("UPS") strike, particularly in
BCOP's domestic direct marketing channel. Same-location sales
increased 15% in the third quarter of 1997, compared with sales
in the third quarter of 1996. Gross margins were 25.1% in the
third quarter of 1997, compared to 25.2% in the year-ago third
quarter. The decrease in the third quarter of 1997 was primarily
because of competitive pressures on gross profit.
Building products operating income increased to $13.8 million in
the third quarter of 1997, compared to $12.9 million in the third
quarter of 1996. Results for the quarter just ended were
stronger than those of a year ago, largely because of improved
prices for lumber. Relative to the year-ago quarter, average
prices for lumber increased 6%. Sales for the building products
segment were $454.1 million in the third quarter of 1997, up 7%
compared with the $426.2 million reported in the third quarter of
1996. Unit sales volumes for products in this segment were
generally improved, relative to those of a year ago. Plywood
unit sales volume increased 4%, lumber was up 5%, particleboard
was flat, laminated veneer lumber was up 33%, and I-joists were
flat. In the engineered wood products business, total net sales
dollars increased 10%, compared with last year. For the third
quarter of 1997 and 1996, building materials distribution sales
were $209 million.
In the third quarter of 1997, the Company's 47% joint venture in
Barwick, Ontario, Canada, sold 63,000,000 square feet of oriented
strand board. The Company operates the facility and markets the
product. The Company accounts for this investment on the equity
method.
Interest expense was $38.8 million in the third quarter of 1997,
compared with $34.3 million in the same period last year.
Capitalized interest in the third quarter of 1997 was
$212,000, compared to $4.9 million in the third quarter of 1996.
With the start-up of the expansion of the Jackson pulp and paper
mill in April 1997, the amount of interest capitalized has
decreased significantly. The Company's debt is predominately
fixed rate. Consequently, we experience only modest changes in
interest expense when market interest rates change.
Nine Months Ended September 30, 1997, Compared With Nine Months
Ended September 30, 1996
The Company had a net loss of $37.6 million for the first nine
months of 1997, compared with net income of $6.9 million for the
first nine months of 1996. Primary loss and fully diluted loss
per common share for the first nine months of 1997 were $1.25,
compared to 47 cents for the first nine months of the prior year.
Sales for the first nine months of 1997 were $4.0 billion,
compared with sales of $3.8 billion for the same period in 1996.
The Company's paper and paper products segment had an operating
loss of $36.6 million for the first nine months of 1997, compared
with income of $48.3 million in the same period of the prior
year. Sales decreased 21% to $1.2 billion for the nine months
ended September 30, 1997, compared with sales of $1.5 billion in
the same period of last year. The decline was primarily caused
by lower paper prices. Average prices for all of the Company's
paper grades declined during the first nine months of 1997,
compared with a year ago. Uncoated free sheet prices declined
12%, containerboard prices declined 19%, newsprint prices
declined 21%, and pulp prices declined 1%. Sales volumes for the
first nine months of 1997 were 1,882,000 tons. This compares to
1,987,000 tons in 1996. This decrease is primarily the result of
the sale of the Company's coated paper publication business on
November 1, 1996. This business contributed 321,000 tons of
sales volume, $279 million of sales, and $30.7 million of
operating income in the first nine months of 1996. The decrease
in volume from the sale of the coated publication business was
partially offset by approximately 104,000 sales tons from the
Company's new 330,000-ton-per-year uncoated free sheet machine in
Jackson, Alabama, which started up in late April 1997.
Additionally, in 1996, the Company took approximately 104,000
tons of market-related downtime.
Paper segment manufacturing costs per ton for the first nine
months of 1997 were 5% lower than in the comparison period. This
excludes manufacturing costs associated with the sold coated
paper publication business in 1996. The decrease is primarily
due to lower fiber costs and lower fixed costs.
Office products segment income for the first nine months of 1997
was $83.1 million, compared with $74.5 million in 1996. Segment
sales were up 31% in 1997 to $1.9 billion, compared to
$1.4 billion in 1996. Same-location sales increased 14% year to
year. Gross margins were 25.0% and 26.2% for the first nine
months of 1997 and 1996. Sales growth in technology-related
products and competitive pressures on gross profits contributed
to the lower gross profit level in the first nine months of 1997.
Operating income for the Company's building products segment was
$41.8 million in 1997, compared to $20.1 million in 1996. The
increase was largely because of rising plywood and lumber prices.
Plywood prices were up 4% from the prior year, while lumber
prices were up 17%. Segment sales increased 7% to $1.3 billion
in the first nine months of 1997, compared to $1.2 billion in the
first nine months of 1996. Compared to the prior year, plywood
sales volumes were down 3%, lumber sales volumes were down 4%,
particleboard volumes were flat, laminated veneer lumber sales
volumes were up 24%, and I-joists sales volumes were up 5%. In
the engineered wood products business, total net sales dollars
increased 13%, compared with the prior year. Building materials
distribution sales were up 7%. The increase in sales resulted
primarily from the addition of three new distribution centers in
1996 and one distribution center that started up in 1997.
In the second quarter of 1997, the Company's 47% owned joint
venture in Barwick, Ontario, Canada, started up a new oriented
strand board facility. The facility had sold 76,000,000 square
feet of oriented strand board by the end of the third quarter.
The Company operates the facility and markets the product. The
Company accounts for this investment on the equity method.
Interest expense was $98.2 million for the first nine months of
1997, compared with $97.7 million in the same period last year.
Capitalized interest was $10.4 million in 1997, compared with
$12.1 million in 1996. With the start-up of the expansion of the
Jackson pulp and paper mill in April 1997, the amount of interest
capitalized will decrease significantly.
Total long- and short-term debt outstanding was $1.9 billion at
September 30, 1997, compared with $1.7 billion at December 31,
1996.
Financial Condition
At September 30, 1997, the Company had working capital of
$393.5 million. Working capital was $408.1 million at
September 30, 1996, and $422.8 million at December 31, 1996.
Cash provided by operations was $115.9 million for the first nine
months of 1997, compared with $134.7 million for the same period
in 1996.
On March 11, 1997, the Company signed a new revolving credit
agreement with a group of banks. The new agreement allows the
Company to borrow as much as $600 million at variable interest
rates based on customary indices and expires in June 2002. The
Company's revolving credit agreement contains financial covenants
relating to minimum net worth, minimum interest coverage ratios,
and ceiling ratios of debt to capitalization. The payment of
dividends by the Company is dependent upon the existence of and
the amount of net worth in excess of the defined minimum under
this agreement. The new agreement replaces the Company's
previous $600 million revolving credit agreement that would have
expired in June 2000. At September 30, 1997, there were no
borrowings under the new agreement.
On June 26, 1997, BCOP signed a new revolving credit agreement
with a group of banks. The new agreement allows BCOP to borrow
as much as $450 million at variable interest rates based on
customary indices and expires in June 2001. As of September 30,
1997, borrowings under the agreement totaled $360 million. The
BCOP revolving credit facility contains customary restrictive
financial and other covenants, including a negative pledge and
covenants specifying a minimum fixed charge coverage ratio and a
maximum leverage ratio. BCOP may, subject to the covenants
contained in the credit agreement and to market conditions, raise
additional funds through the agreement and through other external
debt or equity financings in the future. This agreement replaced
BCOP's $350 million revolving credit agreement. Also at
September 30, 1997, BCOP had $1.2 million of short-term
borrowings outstanding. The maximum amount of short-term
borrowings outstanding during the three and nine months ended
September 30, 1997, was $77.4 million. The average amount of
short-term borrowings outstanding during the three and nine
months ended September 30, 1997, were $43.4 million and $39.8
million. The average interest rate for these borrowings was 5.8%
for both periods.
At September 30, 1997, the Company and BCOP met all of the
financial covenants related to their debt.
Capital expenditures for the first nine months of 1997 and 1996
were $490.3 million and $662.6 million. Capital expenditures for
the year ended December 31, 1996, were $832.2 million. The
decrease in capital expenditures is primarily due to nearing
completion of the Jackson pulp and paper mill expansion offset, in
part, by higher acquisition spending by BCOP.
An expanded discussion and analysis of financial condition is
presented on pages 18 and 19 of the Company's 1996 Annual Report
under the captions "Financial Condition" and "Capital
Investment."
Market Conditions
The Company's paper business should continue to improve in the
fourth quarter. Paper markets have strengthened over the last
several months, and operating rates for the Company's key grades
are high. In addition, the start-up of the Company's Jackson
paper machine, which is well underway, should reinforce a
positive swing in paper segment performance as the facility
continues to exit from the market pulp business and produces more
uncoated free sheet paper.
BCOP should likewise record stronger fourth-quarter results as
sales continue to grow and margins for copy paper and other
products improve. The building products business, however, faces
a potentially more difficult operating environment as building
products markets encounter downward seasonal pressure.
Year 2000 Computer Issue
Many computer systems in use today were designed and developed
using two digits, rather than four, to specify the year. As a
result, such systems will recognize the year 2000 as "00." This
could cause many computer applications to fail completely or to
create erroneous results unless corrective measures are taken.
The Company utilizes software and related computer technologies
that will be affected by this issue. The Company is currently
implementing, or has plans to implement, several computer system
replacements or upgrades before the year 2000. These new
computer systems will be year 2000 compliant. The Company is
studying what actions will be necessary to make its remaining
computer systems compliant. The expense associated with these
actions has not been determined.
New Accounting Standard
In February 1997, the Financial Accounting Standards Board issued
Statement 128, Earnings Per Share, which will be implemented in
the fourth quarter of 1997. The statement will have no impact on
previously reported fully diluted earnings (loss) per share which
will be renamed diluted earnings (loss) per share. Primary
earnings (loss) per share will be replaced with basic earnings
(loss) per share which will not be significantly different than
the previously reported primary earnings (loss) per share.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to the Company's annual report on Form 10-K for
the year ended December 31, 1996, and to the Company's quarterly
report on Form 10-Q for the quarter ended June 30, 1997, for
information concerning legal proceedings.
As reported in the Company's 1996 Form 10-K, on March 12, 1996, a
lawsuit purporting to be a nationwide class action was filed
against the Company in the Fourth Judicial District Court, Ada
County, Idaho. This lawsuit alleged, among other allegations,
that hardboard siding manufactured by the Company, which was used
as exterior cladding for buildings, was inherently defective. In
September 1997, the Company settled this action for $31,000,
resolving the claims of the four individual plaintiffs. The
entire action was dismissed by the District Court, and no class
was ever certified.
The Company is involved in other litigation and administrative
proceedings arising in the normal course of its business. In the
opinion of management, the Company's recovery, if any, or the
Company's liability, if any, under any pending litigation or
administrative proceeding, including that described in the
preceding paragraphs, would not materially affect its financial
condition or operations.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
The payment of dividends by the Company is dependent upon the
existence of and the amount of net worth in excess of the defined
minimum under the Company's revolving credit agreement. At
September 30, 1997, there were no borrowings under the agreement.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
On September 25, 1997, the Company renewed its shareholder rights
plan by entering into a Renewed Rights Agreement with First
Chicago Trust Company of New York. The Renewed Rights Agreement
will take effect and the Company will distribute new Rights upon
expiration of the existing rights plan.
The Renewed Rights Agreement contains terms substantially similar
to the terms of the existing rights plan. For example, each full
Right, if it becomes exercisable, will entitle the holder to
purchase one share of Common Stock at a purchase price of $175
per share, subject to adjustment. In addition, upon the
occurrence of certain events, and upon payment of the then-
current purchase price, the Rights may "flip in" and entitle
holders to buy Common Stock or "flip over" and entitle holders to
buy Common Stock in an acquiring entity in such amount that the
market value is equal to twice the purchase price.
A copy of the entire Renewed Rights Agreement has been attached
as Exhibit 4.2 and is incorporated by reference. The foregoing
summary and description of the Renewed Rights Agreement does not
purport to be complete and is qualified in its entirety by
reference to the Exhibits.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Required exhibits are listed in the Index to Exhibits
and are incorporated by reference.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter
ended September 30, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
BOISE CASCADE CORPORATION
As Duly Authorized Officer and
Chief Accounting Officer: /s/Tom E. Carlile
Tom E. Carlile
Vice President and
Controller
Date: November 12, 1997
BOISE CASCADE CORPORATION
INDEX TO EXHIBITS
Filed With the Quarterly Report on Form 10-Q
for the Quarter Ended September 30, 1997
Number Description Page Number
4.1(1) Form of First Amendment to 1997 Revolving
Credit Agreement dated as of
September 25, 1997
4.2(2) Renewed Rights Agreement dated as of
September 25, 1997
11 Computation of Per Share Earnings
12 Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
(1) The 1997 Revolving Credit Agreement was filed as Exhibit 4.2
in the Company's 1996 Annual Report on Form 10-K and is
incorporated by reference.
(2) The Renewed Rights Agreement becomes operative upon the
expiration of the existing Rights Agreement.
EXHIBIT 4.1
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "Amendment"),
dated as of September 25, 1997, is entered into by and among
BOISE CASCADE CORPORATION (the "Company"), BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, as administrative agent
for itself and the Banks (the "Agent"), THE CHASE MANHATTAN BANK,
as Syndication Agent, NATIONAL WESTMINSTER BANK PLC as
Documentation Agent, and the several financial institutions party
to the Credit Agreement (collectively, the "Banks").
RECITALS
A. The Company, Banks, and Agent are parties to a 1997
Revolving Credit Agreement dated as of March 11, 1997 (the
"Credit Agreement") pursuant to which the Banks have extended
certain credit facilities to the Company.
B. The Company has requested that the Banks agree to certain
amendments of the Credit Agreement.
C. The Banks are willing to amend the Credit Agreement, subject
to the terms and conditions of this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
(1) Defined Terms. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings, if any,
assigned to them in the Credit Agreement.
(2) Amendments to Credit Agreement. Section 5.07 of the
Credit Agreement shall be amended to read as follows:
"SECTION 5.07. Use of Proceeds. The Company shall
not, and shall not suffer or permit any Subsidiary to, use
any portion of the Loan proceeds, directly or indirectly,
(i) for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying Margin Stock or repaying
or otherwise refinancing indebtedness of the Company or
others incurred to purchase or carry Margin Stock, or (ii)
to extend credit for the purpose of purchasing or carrying
any Margin Stock, in either case in violation of Regulation
G, T, U, or X of the Federal Reserve Board."
(3) Representations and Warranties. The Company hereby
represents and warrants to the Agent and the Banks as follows:
(a) No Event of Default as defined in the Credit
Agreement has occurred and is continuing.
(b) The execution, delivery and performance by the
Company of this Amendment have been duly authorized by all
necessary corporate and other action and do not and will not
require any registration with, consent or approval of, notice to
or action by, any Person (including any Governmental Authority)
in order to be effective and enforceable. The Credit Agreement
as amended by this Amendment constitutes the legal, valid and
binding obligations of the Company, enforceable against it in
accordance with its respective terms, without defense,
counterclaim or offset.
(c) All representations and warranties of the Company
contained in the Credit Agreement are true and correct.
(d) The Company is entering into this Amendment on the
basis of its own investigation and for its own reasons, without
reliance upon the Agent and the Banks or any other Person.
(4) Effective Date. This Amendment will become effective
as of September 25, 1997 (the "Effective Date"), provided that
each of the following conditions precedent is satisfied:
(a) The Agent has received from the Company and each
of the Majority Banks a duly executed original (or, if elected by
the Agent, an executed facsimile copy) of this Amendment.
(b) The Agent has received from the Company a copy of
a resolution passed by the board of directors of such
corporation, certified by the Secretary or an Assistant Secretary
of such corporation as being in full force and effect on the date
hereof, authorizing the execution, delivery and performance of
this Amendment.
(5) Reservation of Rights. The Company acknowledges and
agrees that the execution and delivery by the Agent and the Banks
of this Amendment shall not be deemed to create a course of
dealing or otherwise obligate the Agent or the Banks to forbear
or execute similar amendments under the same or similar
circumstances in the future.
(6) Miscellaneous.
(a) Except as herein expressly amended, all terms,
covenants and provisions of the Credit Agreement are and shall
remain in full force and effect and all references therein to
such Credit Agreement shall henceforth refer to the Credit
Agreement as amended by this Amendment. This Amendment shall be
deemed incorporated into, and a part of, the Credit Agreement.
(b) This Amendment shall be binding upon and inure to
the benefit of the parties hereto and thereto and their
respective successors and assigns. No third party beneficiaries
are intended in connection with this Amendment.
(c) This Amendment shall be governed by and construed
in accordance with the law of the State of New York.
(d) This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all
such counterparts together shall constitute but one and the same
instrument. Each of the parties hereto understands and agrees
that this document (and any other document required herein) may
be delivered by any party thereto either in the form of an
executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy
original, and that receipt by the Agent of a facsimile
transmitted document purportedly bearing the signature of a Bank
or the Company shall bind such Bank or the Company, respectively,
with the same force and effect as the delivery of a hard copy
original. Any failure by the Agent to receive the hard copy
executed original of such document shall not diminish the binding
effect of receipt of the facsimile transmitted executed original
of such document of the party whose hard copy page was not
received by the Agent.
(e) This Amendment, together with the Credit
Agreement, contains the entire and exclusive agreement of the
parties hereto with reference to the matters discussed herein and
therein. This Amendment supersedes all prior drafts and
communications with respect thereto. This Amendment may not be
amended except in accordance with the provisions of Section 9.07
of the Credit Agreement.
(f) If any term or provision of this Amendment shall
be deemed prohibited by or invalid under any applicable law, such
provision shall be invalidated without affecting the remaining
provisions of this Amendment or the Credit Agreement,
respectively.
(g) The Company covenants to pay to or reimburse the
Agent and the Banks, upon demand, for all costs and expenses
(including allocated costs of in-house counsel) incurred in
connection with the development, preparation, negotiation,
execution and delivery of this Amendment, including without
limitation appraisal, audit, search and filing fees incurred in
connection therewith.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the date first above written
BOISE CASCADE CORPORATION
By:
Title:
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS
ASSOCIATION, as Agent, as a
Bank, and as a Swingline Bank
By:
Title:
Managing Director
THE CHASE MANHATTAN BANK, as
Syndication Agent, as a Bank,
and as a Swingline Bank
By:
Title:
NATIONAL WESTMINSTER BANK
PLC, as Documentation Agent,
and as a Bank
By:
Title:
WACHOVIA BANK OF GEORGIA,
N.A.
By:
Title:
ABN AMRO BANK N.V., SEATTLE
BRANCH
By:
Title:
By:
Title:
BANK OF MONTREAL
By:
Title:
CIBC INC.
By:
Title:
WELLS FARGO BANK N.A.
By:
Title:
CREDIT SUISSE FIRST BOSTON
By:
Title:
FIRST BANK NATIONAL
ASSOCIATION
By:
Title:
FIRST SECURITY BANK, N.A.
By:
Title:
AUSTRALIA AND NEW ZEALAND
BANKING GROUP LTD.
By:
Title:
CREDIT LYONNAIS NEW YORK
BRANCH
By:
Title:
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, LOS ANGELES AGENCY
By:
Title:
THE BANK OF NEW YORK
By:
Title:
MELLON BANK, N.A.
By:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:
Title:
NATIONSBANK OF NORTH
CAROLINA, N.A.
By:
Title:
THE NORTHERN TRUST COMPANY
By:
Title:
ROYAL BANK OF CANADA
By:
Title:
SOCIETE GENERALE
By:
Title:
U.S. BANK OF IDAHO
By:
Title:
THE SANWA BANK LIMITED, LOS
ANGELES BRANCH
By:
Title:
By:
Title:
TORONTO DOMINION (TEXAS),
INC.
By:
Title:
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By:
Title:
By:
Title:
EXHIBIT 4.2
BOISE CASCADE CORPORATION
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
Rights Agent
Renewed Rights Agreement
Dated as of September 25, 1997
RENEWED RIGHTS AGREEMENT
RENEWED RIGHTS AGREEMENT dated as of September 25, 1997
(the "Agreement") between BOISE CASCADE CORPORATION, a Delaware
corporation (the "Company"), and First Chicago Trust Company of
New York, a New York corporation, as rights agent.
W I T N E S S E T H
WHEREAS, on December 13, 1988, the Board of Directors
of the Company authorized and declared a dividend distribution of
one 1988 Right (as hereinafter defined) for each share of common
stock, par value $2.50 per share, of the Company outstanding at
the close of business on December 23, 1988 (the "1988 Record
Date"), and authorized the issuance of one 1988 Right for each
share of common stock, par value $2.50 per share, of the Company
issued between the 1988 Record Date (whether originally issued or
delivered from the Company's treasury) and the Distribution Date
(as defined in the Rights Agreement, dated as of December 23,
1988 (the "1988 Agreement"), between the Company and the Rights
Agent), each 1988 Right initially representing the right to pur-
chase one share of Common Stock of the Company, upon the terms
and subject to the conditions set forth in the 1988 Agreement
(the "1988 Rights");
WHEREAS, on September 25, 1990, the Board of Directors,
in accordance with Section 26 of the 1988 Agreement, determined
it desirable and in the best interests of the Company and its
stockholders for the Company to supplement and amend certain
provisions of the 1988 Agreement and to implement such
supplements and amendments by executing an amendment and
restatement of the 1988 Rights Agreement (the 1988 Agreement, as
so amended and restated as of September 25, 1990, being referred
to herein as the "1990 Agreement");
WHEREAS, on September 25, 1997, the Board of Directors
determined it desirable and in the best interests of the Company
and its stockholders for the Company to renew the 1990 Agreement
and to implement such renewal by executing this Agreement; and
WHEREAS, on September 25, 1997 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company
authorized and declared a dividend distribution of one Right for
each share of Common Stock of the Company outstanding upon the
"Expiration Date" under the 1990 Agreement (the "Record Date"),
and authorized the issuance of one Right (as such number may
hereafter be adjusted pursuant to the provisions of Section 11(i)
or 11(p) hereof) for each share of Common Stock of the Company
issued between the Record Date (whether originally issued or
delivered from the Company's treasury) and the Distribution Date
(as defined herein), and under certain circumstances thereafter,
each Right initially representing the right to purchase one share
of Common Stock of the Company, upon the terms and subject to the
conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby agree
as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who
or which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 15% or more of the
Voting Stock (as hereinafter defined) then outstanding, but shall
not include an Exempt Person (as hereinafter defined).
(b) "Act" shall mean the Securities Act of 1933,
as amended.
(c) "Adjustment Shares" shall have the meaning
set forth in Section 11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act (as defined
herein).
(e) "Agreement" means this Renewed Rights Agree-
ment as originally executed or as it may from time to time be
supplemented, amended, renewed or extended pursuant to the
applicable provisions hereof.
(f) A Person shall be deemed the "Beneficial
Owner" of and shall be deemed to "beneficially own" any
securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not
in writing) or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase or exchange or (B) securities issuable
upon exercise of Rights at any time prior to the occurrence
of a Triggering Event (as hereinafter defined) or (C)
securities issuable upon exercise of Rights from and after
the occurrence of a Triggering Event which are Original
Rights (as hereinafter defined) or securities issued
pursuant to Section 11(i) or Section 11(p) hereof in
connection with an adjustment made with respect to any
Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the General Rules
and Regulations under the Exchange Act), including pursuant
to any agreement, arrangement or understanding, whether or
not in writing; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of or to "beneficially own"
any security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding:
(A) arises solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the
Exchange Act, (B) is not also then reportable by such Person
on Schedule 13D under the Exchange Act (or any comparable or
successor report) and (C) does not constitute a trust,
proxy, power of attorney or other device with the purpose or
effect of allowing two or more persons, acting in concert,
to avoid being deemed "beneficial owners" of such security
or otherwise avoid the status of "Acquiring Person" under
the terms of this Agreement or as part of a plan or scheme
to evade the reporting requirements under Schedule 13D or
Sections 13(d) or 13(g) of the Exchange Act; or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (f)) or disposing of any
voting securities of the Company; provided, however, that
nothing in this paragraph (f) shall cause a Person engaged
in business as an underwriter of securities to be deemed the
"Beneficial Owner" of or to be deemed to "beneficially own"
any securities acquired through such Person's participation
in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(g) "Board" means the Board of Directors of the
Company.
(h) "Business Day" shall mean any day other than
a Saturday, Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive
order to close.
(i) "Close of Business" on any given date shall
mean 5:00 P.M., New York City time, on such date; provided,
however, that if such date is not a Business Day, it shall mean
5:00 P.M., New York City time, on the next succeeding Business
Day.
(j) "Common Stock" when used in reference to the
Company shall mean the common stock, par value $2.50 per share,
of the Company or any other shares of capital stock of the
Company into which such stock shall be reclassified or changed.
"Common Stock" when used with reference to any Person which shall
be organized in corporate form, other than the Company, shall
mean (i) the capital stock or other equity interest with the
greatest voting power, (ii) the equity securities or other equity
interest having power to control or direct the management of such
Person or (iii) if such Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-
mentioned Person and which has issued any such outstanding
capital stock, equity securities or equity interest. "Common
Stock" when used with reference to any Person which shall not be
organized in corporate form shall mean units of beneficial
interest which (x) shall represent the right to participate
generally in the profits and losses of such Person (including,
without limitation, any flow-through tax benefits resulting from
an ownership interest in such Person) and (y) are entitled to
exercise the greatest voting power of such Person or, in the case
of a limited partnership, have the power to rename the general
partner or partners.
(k) "Common Stock Equivalents" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(l) "Company" shall mean Boise Cascade
Corporation until a successor corporation or entity shall have
become such, or until a Principal Party shall assume, and
thereafter be liable for, all obligations and duties of the
Company hereunder pursuant to the applicable provisions of this
Agreement, and thereafter "Company" shall mean such successor or
Principal Party.
(m) "Current Market Price" shall have the meaning
set forth in Section 11(d) hereof.
(n) "Current Value" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(o) "Distribution Date" shall have the meaning
set forth in Section 3(a) hereof.
(p) "Equivalent Common Stock" shall have the
meaning set forth in Section 11(b) hereof.
(q) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(r) "Exempt Person" shall mean (i) the Company,
(ii) any Subsidiary of the Company, (iii) any employee benefit or
employee stock plan of the Company or of any Subsidiary of the
Company, (iv) any Person or entity organized, appointed,
established or holding Voting Stock of the Company by, for or
pursuant to the terms of any such employee benefit or employee
stock plan, (v) any Person who, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the
Voting Stock then outstanding solely as a result of a reduction
in the number of shares of Voting Stock outstanding due to the
repurchase of shares of Voting Stock by the Company, unless and
until such time as such Person shall purchase or otherwise become
(as a result of actions taken by such Person or its Affiliates or
Associates) the Beneficial Owner of additional shares of Voting
Stock constituting 1% or more of the then outstanding Voting
Stock of the Company, or (vi) any such Person who has reported or
is required to report ownership of 15% or more of the Voting
Stock of the Company (but less than 20%) on Schedule 13G under
the Securities and Exchange Act of 1934, as amended and in effect
on the date of the Agreement (the "Exchange Act"), (or any
comparable or successor report) or on Schedule 13D under the
Exchange Act (or any comparable or successor report) which
Schedule 13D does not state any intention to or reserve the right
to control or influence the management or policies of the Company
or engage in any of the actions specified in Item 4 of such
schedule (other than the disposition of the Voting Stock) and,
within 10 Business Days of being requested by the Company to
advise it regarding the same, certifies to the Company that such
Person acquired shares of Voting Stock in excess of 14.9%
inadvertently or without knowledge of the terms of the Rights and
who, together with all Affiliates and Associates, thereafter does
not acquire additional shares of Voting Stock while the
Beneficial Owner of 15% or more of the shares of Voting Stock
then outstanding; provided, however, that if the Person requested
to so certify fails to do so within 10 Business Days, then such
Person shall become an Acquiring Person immediately after such
10-Business-Day period.
(s) "Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(t) "Final Expiration Date" shall mean the Close
of Business on December 13, 2008.
(u) "Original Rights" shall mean Rights acquired
by such Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof.
(v) "Person" shall mean any individual, firm,
corporation, partnership, trust or other entity and includes,
without limitation, an unincorporated group of persons who, by
formal or informal agreement, whether or not in writing, have
embarked on a common purpose or act.
(w) "Principal Party" shall have the meaning set
forth in Section 13(b) hereof.
(aa) "Purchase Price" shall have the meaning set
forth in Section 4(a) hereof.
(bb) "Record Date" shall have the meaning set
forth in the fourth WHEREAS clause at the beginning of the
Agreement.
(cc) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(dd) "Rights" shall have the meaning set forth in
the fourth WHEREAS clause at the beginning of the Agreement.
(ee) "Rights Agent" shall mean First Chicago Trust
Company of New York until a successor Rights Agent shall have
become such pursuant to the applicable provisions hereof, and
thereafter "Rights Agent" shall mean such successor Rights Agent.
If at any time there is more than one Person appointed by the
Company as Rights Agent pursuant to the applicable provisions of
this Agreement, "Rights Agent" shall mean and include each such
Person.
(ff) "Rights Certificates" shall have the meaning
set forth in Section 3(a) hereof.
(gg) "Rights Dividend Declaration Date" shall mean
September 25, 1997.
(hh) "Section 11(a)(ii) Event" shall mean any
event described in Section 11(a)(ii) hereof.
(ii) "Section 11(a)(ii) Trigger Date" shall have
the meaning set forth in Section 11(a)(iii) hereof.
(jj) "Section 13 Event" shall mean any event
described in clauses (x), (y) or (z) of Section 13(a) hereof.
(kk) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ll) "Stock Acquisition Date" shall mean the first
date of public announcement by the Company that an Acquiring
Person has become such.
(mm) "Subsidiary" shall mean, with reference to
any Person, any corporation or other entity of which securities
or other ownership interest having ordinary voting power
sufficient, in the absence of contingencies, to elect a majority
of the board of directors or other persons performing similar
functions are at the time directly or indirectly beneficially
owned, or otherwise controlled, by such Person and any Affiliate
of such Person.
(nn) "Substitution Period" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(oo) "Trading Day" shall mean a day on which the
principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities
exchange, a Business Day.
(pp) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event.
(qq) "Voting Stock" shall mean all capital stock
of the Company authorized to be issued from time to time under
the Certificate of Incorporation of the Company which by its
terms may be voted on all matters submitted to stockholders of
the Company generally.
Section 2. Appointment of Rights Agent. The Company
has appointed the Rights Agent to act as agent for the Company
and the holders of the Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also be the holders
of the Common Stock of the Company) in accordance with the terms
and conditions hereof, and the Rights Agent has accepted such
appointment. The Company may from time to time act as Co-Rights
Agent or appoint such Co-Rights Agents as it may deem necessary
or desirable. Any actions which may be taken by and any
deliveries which are to be made to the Rights Agent pursuant to
the terms of this Agreement may be taken by and may be delivered
to any such Co-Rights Agent. To the extent that any Co-Rights
Agent takes any action pursuant to this Agreement, such Co-Rights
Agent shall be entitled to all of the rights and protections, and
subject to all of the applicable duties and obligations imposed
upon the Rights Agent pursuant to the terms of this Agreement.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the Close of
Business on the tenth Business Day (or such specified or
unspecified later date as may be determined by the Board before
the occurrence of a Distribution Date) after the Stock
Acquisition Date (or, if the tenth Business Day after the Stock
Acquisition Date occurs before the Record Date, the Close of
Business on the Record Date) or (ii) the Close of Business on the
tenth Business Day (or such specified or unspecified later date
as may be determined by the Board before the occurrence of a
Distribution Date) after the date that a tender or exchange offer
by any Person (other than an Exempt Person) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would be the Beneficial Owner
of 15% or more of the Voting Stock then outstanding (the earlier
of (i) and (ii) being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraphs (b) and (c) of this Section 3) by the
certificates for the Common Stock of the Company registered in
the names of the holders of the Common Stock of the Company
whether or not bearing the legend set forth in Section 3(c)
hereof (which certificates for Common Stock of the Company shall
be deemed also to be certificates for Rights) and not by separate
certificates and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common
Stock of the Company (including a transfer to the Company). As
soon as practicable after the Distribution Date, the Rights Agent
will send by first-class, insured postage prepaid mail, to each
record holder of the Common Stock of the Company as of the Close
of Business on the Distribution Date, at the address of such
holder shown on the records of the Company, one or more rights
certificates, in substantially the form of Exhibit A hereto (the
"Rights Certificates"), evidencing one Right for each share of
Common Stock of the Company so held, subject to adjustment as
provided herein. At the time of distribution of the Rights
Certificates, the Company may make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so
that Rights Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional
Rights. As of and after the Distribution Date, the Rights will
be evidenced solely by such Rights Certificates.
(b) The Company will make available, as promptly
as practicable following the Record Date, a copy of a Summary of
Rights, in substantially the form attached hereto as Exhibit B
(the "Summary of Rights") to any holder of Rights who may so
request from time to time prior to the Expiration Date. With
respect to certificates for the Common Stock of the Company
outstanding as of the Record Date, as set forth in paragraph (a)
above, until the earlier of the Distribution Date or the
Expiration Date, the Rights will be evidenced by such
certificates for the Common Stock of the Company whether or not
bearing the legend set forth in Section 3(c) hereof and the
registered holders of the Common Stock of the Company shall also
be the registered holders of the associated Rights. Until the
earlier of the Distribution Date or the Expiration Date, the
transfer of any certificates representing shares of Common Stock
of the Company in respect of which Rights have been issued shall
also constitute the transfer of the Rights associated with such
shares of Common Stock of the Company.
(c) Rights shall be issued in respect of all
shares of Common Stock of the Company which are issued (whether
originally issued or from the Company's treasury) after the
Record Date but prior to the earlier of the Distribution Date or
the Expiration Date, and to the extent provided in Section 22
hereof, in respect of shares of Common Stock of the Company
issued after the Distribution Date and prior to the Expiration
Date. Certificates representing such shares of Common Stock of
the Company shall also be deemed to be certificates for Rights
and shall, as promptly as possible following the Record Date,
bear the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in the
Renewed Rights Agreement between Boise Cascade
Corporation (the "Company") and First Chicago Trust
Company of New York (the "Rights Agent") dated as of
September 25, 1997, as the same may be amended,
restated, renewed or extended from time to time (the
"Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is
on file at the principal offices of the Company. Under
certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of
this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly
after receipt of a written request therefor. Under
certain circumstances set forth in the Rights
Agreement, Rights beneficially owned (as such term is
defined in the Rights Agreement) by any Person who is,
was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the
Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may
become null and void. The Rights shall not be
exercisable, and shall be void so long as held, by a
holder in any jurisdiction where the requisite
qualification to the issuance to such holder, or the
exercise by such holder, of the Rights in such
jurisdiction shall not have been obtained or be obtain-
able.
In addition to the provisions of Section 3(b) above, with respect
to such certificates containing the foregoing legend, and
certificates containing the legends specified in the 1988
Agreement and the 1990 Agreement and with respect to previously
issued certificates that contain no comparable legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date,
the Rights associated with the Common Stock of the Company
represented by such certificates shall be evidenced by such
certificates alone, registered holders of Common Stock of the
Company shall also be the registered holders of the associated
Rights, and the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the Common
Stock of the Company represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of
election to purchase, the forms of assignment and the
accompanying certificates to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit A
hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or
to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date and on their
face shall entitle the holders thereof to purchase such number of
shares of Common Stock as shall be set forth therein at the
exercise price set forth therein (such exercise price per share,
as adjusted from time to time hereunder, the "Purchase Price"),
but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be
subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to
Section 3(a) or Section 22 hereof that represents Rights
beneficially owned by: (i) an Acquiring Person or any Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any continuing agreement, arrangement
or understanding regarding the transferred Rights or (B) a
transfer which the Board has determined is part of a plan,
arrangement or understanding which has as a primary purpose or
effect avoidance of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof
upon transfer, exchange, replacement or adjustment of any other
Rights Certificate referred to in this sentence, shall contain
(to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are
or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person (as such terms are defined in
the Renewed Rights Agreement). Accordingly, this
Rights Certificate and the Rights represented hereby
may become null and void in the circumstances specified
in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its President
or any Vice President, either manually or by facsimile signature.
The Rights Certificates shall be countersigned by the Rights
Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have
signed any of the Rights Certificates shall cease to be such
officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Rights
Certificates, nevertheless, may be countersigned by the Rights
Agent, and issued and delivered by the Company with the same
force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company;
and any Rights Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to
sign such Rights Certificate, although at the date of the
execution of this Rights Agreement any such person was not such
an officer.
(b) Following the Distribution Date, the Rights
Agent will keep or cause to be kept, at its principal office or
offices designated as the appropriate place for surrender of
Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of
Rights evidenced on its face by each of the Rights Certificates,
the certificate number of each of the Rights Certificates and the
date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, at any time after the Close
of Business on the Distribution Date, and at or prior to the
Close of Business on the Expiration Date, any Rights Certificate
or Rights Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Rights Certificates,
entitling the registered holder to purchase a like number of
shares of Common Stock (or, following a Triggering Event, Common
Stock, other securities, cash or other assets, as the case may
be) as the Rights Certificate or Rights Certificates surrendered
then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or
Rights Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights Certificate
or Rights Certificates to be transferred, split up, combined or
exchanged at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with
respect to the transfer or exchange of any such surrendered
Rights Certificate or Rights Certificates until the registered
holder shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Rights
Certificate or Rights Certificates and shall have provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request. Thereupon, the Rights
Agent shall, subject to Section 4(b), Section 7(e) and Section 14
hereof, countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as
so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company or the Rights
Agent of evidence reasonably satisfactory to either of them of
the loss, theft, destruction or mutilation of a valid Rights
Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to either of them
and reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of
the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the
registered holder of any Rights Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability
set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution
Date upon surrender of the Rights Certificate, with the form of
election to purchase and the certificate on the reverse side
thereof duly executed, to the Rights Agent at the principal
office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price
with respect to the total number of shares of Common Stock (or
other securities, cash or other assets, as the case may be) as to
which such surrendered Rights are then exercisable, at or prior
to the earliest of (i) the Final Expiration Date, (ii) the time
at which the Rights are redeemed as provided in Section 23 hereof
and (iii) the time at which the Rights expire pursuant to Section
13(d) hereof (the earliest of (i), (ii) and (iii) being herein
referred to as the "Expiration Date").
(b) The Purchase Price for each share of Common
Stock pursuant to the exercise of a Right shall initially be
$175, and shall be subject to adjustment from time to time as
provided in Sections 11 and 13(a) hereof and shall be payable in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of election to
purchase and the certificate on the reverse side of the Rights
Certificate duly executed, accompanied by payment, with respect
to each Right so exercised, of the Purchase Price, as such amount
may be reduced pursuant to Section 11(a)(ii) hereof, per share of
Common Stock (or other shares, securities, cash or other assets,
as the case may be) to be purchased as set forth below and an
amount equal to any applicable transfer tax, the Rights Agent
shall, subject to Sections 7(f) and 20(k) hereof, thereupon
promptly (i)(A) requisition from any transfer agent of the shares
of Common Stock (or make available, if the Rights Agent is the
transfer agent for such shares) certificates for the total number
of shares of Common Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the
total number of shares of Common Stock issuable upon exercise of
the Rights hereunder with a depositary agent, requisition from
the depositary agent depositary receipts representing such number
of shares of Common Stock as are to be purchased (in which case
certificates for the shares of Common Stock represented by such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) shall be made in cash or by certified check,
cashiers check or bank draft payable to the order of the Company.
In the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay cash
and/or distribute other assets pursuant to Section 11(a) hereof,
the Company will make all arrangements necessary so that such
other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate. The
Company reserves the right to require prior to the occurrence of
a Triggering Event that, upon any exercise of Rights, a number of
Rights be exercised so that only whole shares of Common Stock
would be issued.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to
the contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring
Person which the Board in its sole discretion determines is or
was involved in or caused or facilitated, directly or indirectly,
such Section 11(a)(ii) Event, (ii) a transferee of any such
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after such Acquiring Person becomes such, or
(iii) a transferee of any such Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or
concurrently with such Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) from such Acquiring Person to holders
of equity interests in such Acquiring Person or to any Person
with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or
(B) a transfer which the Board has determined is part of a plan,
arrangement or understanding which has as a primary purpose or
effect the avoidance of this Section 7(e), shall become null and
void without any further action, and no holder of such Rights
shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The
Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but the Company and the Rights Agent shall have no
liability to any holder of Rights Certificates or other Person as
a result of the Company's failure to make any determinations with
respect to an Acquiring Person or any of its Affiliates,
Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder of any Rights Certificate upon the occurrence of any
purported assignment or exercise as set forth in this Section 7
unless such registered holder shall have (i) completed and signed
the certificate contained in the form of 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 additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled
by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to the
Company, or shall, at the written request of the Company, destroy
such cancelled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital
Stock.
(a) The Company covenants and agrees that
following the later of (i) the Distribution Date and (ii) the
termination of any period during which the exercisability of the
Rights are suspended, it will cause to be reserved and kept
available out of its authorized and unissued shares of Common
Stock or other securities (or out of its authorized and issued
shares held in its treasury), the number of shares of Common
Stock or other securities that, as provided in this Agreement
(including Section 11(a)(iii) hereof), will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) Following the later of (i) the Distribution
Date and (ii) the termination of any period during which the
exercisability of the Rights is suspended, and for so long as the
shares of Common Stock or other securities issuable and
deliverable upon the exercise of the Rights may be listed on any
national securities exchange, the Company shall use its
reasonable efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance
to be listed on such exchange upon official notice of issuance
upon such exercise.
(c) The Company shall use all reasonable efforts
to (i) file, as soon as practicable following the earliest date
after the first occurrence of a Triggering Event in which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with this Agreement, or
as soon as required by law following the Distribution Date, as
the case may be, a registration statement under the Act with
respect to the securities purchasable upon exercise of the Rights
on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the Expiration
Date. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities
or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may, acting by
resolution of the Board temporarily suspend, for a period of time
not to exceed ninety days after the date set forth in clause (i)
of the first sentence of this Section 9(c), the exercisability of
the Rights in order to prepare and file such registration
statement and permit it to become effective. In the event of any
such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been
temporarily suspended, and shall issue a public announcement at
such time as the suspension is no longer in effect. In addition,
if the Company shall determine that a registration statement is
required in other circumstances following the Distribution Date,
the Company may similarly temporarily suspend the exercisability
of the Rights until such time as a registration statement has
been declared effective. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in
any jurisdiction if the requisite qualification in such
jurisdiction shall not have been obtained, the exercise thereof
shall not otherwise be permitted under applicable law or a
registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all
shares of Common Stock (and, following the occurrence of a
Triggering Event other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and
nonassessable.
(e) The Company further covenants and agrees
that, except as set forth in Section 6(a) hereof, it will pay
when due and payable any and all federal and state transfer taxes
and charges which may be payable in respect of the issuance or
delivery of the Rights Certificates and of any certificates for a
number of shares of Common Stock (or other securities, as the
case may be) upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Rights Certificates to
a Person other than, or the issuance or delivery of a number of
shares of Common Stock (or other securities, as the case may be)
in respect of a name other than that of, the registered holder of
the Rights Certificates evidencing Rights surrendered for
exercise, nor shall the Company be required to issue or deliver
any certificates for a number of shares of Common Stock (or other
securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax
shall have been paid (any such tax being payable by the holder of
such Rights Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax
is due.
Section 10. Common Stock Record Date. Each person in
whose name any certificate for shares of Common Stock (or other
securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder
of record of such shares of Common Stock (or other securities, as
the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the
Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment
is a date upon which the Common Stock (or other securities, as
the case may be) transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such
shares (fractional or otherwise) on, and such certificate shall
be dated, the next succeeding Business Day on which the Common
Stock (or other securities, as the case may be) transfer books of
the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate, as such,
shall not be entitled to any rights of a stockholder of the
Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided
herein.
Section 11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights. The Purchase Price, the
number and kind of shares, or fractions thereof, purchasable upon
the exercise of 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 Common Stock payable in shares of Common Stock, (B) subdivide
or split the outstanding Common Stock, (C) combine or consolidate
the outstanding Common Stock into a smaller number of shares or
(D) issue any shares of its capital stock in a reclassification
of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is
the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, split,
combination, consolidation or reclassification, and the number
and kind of shares of Common Stock (or other capital stock, as
the case may be) issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase
Price then in effect, the aggregate number and kind of shares of
Common Stock or capital stock, as the case may be, which, if such
Right had been exercised immediately prior to such date and at a
time when the Common Stock (or other capital stock, as the case
may be) transfer books of the Company were open, the holder of
such Right would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, split,
combination, consolidation or reclassification. If an event
occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall
be made prior to, any adjustment required pursuant to, Section
11(a)(ii) hereof.
(ii) In the event (a "Section 11(a)(ii) Event")
that any Person (other than an Exempt Person), alone or
together with its Affiliates and Associates, shall, at any
time after the Rights Dividend Declaration Date, become an
Acquiring Person, unless the event causing such Person to
become an Acquiring Person is (A) a Section 13 Event or (B)
an acquisition of shares of Common Stock of the Company
pursuant to a tender offer or an exchange offer for all
outstanding shares of Common Stock of the Company determined
by at least a majority of the members of the Board, which
majority shall include a majority of the members of the
Board who are not officers of the Company and who are not
representatives, nominees, Affiliates or Associates of an
Acquiring Person, after receiving advice from one or more
investment banking firms, to be (1) at a price which is fair
to the Company's stockholders and not inadequate (taking
into account all factors which such members of the Board
deem relevant including, without limitation, prices which
could reasonably be achieved if the Company or its assets
were sold on an orderly basis designed to realize maximum
value) and (2) otherwise in the best interests of the
Company and its stockholders (a "Qualified Offer"), then,
promptly after the date of occurrence of a Section 11(a)(ii)
Event, proper provision shall be made so that each holder of
a Right (except as provided below and in Section 7(e)
hereof) shall thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of
shares of Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase
Price by the then number of shares of Common Stock for which
a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event (whether or not such
Right was then exercisable) and (y) dividing that product
(which, following such first occurrence, shall thereafter be
referred to as the "Purchase Price" for each Right and for
all purposes of this Agreement) by 50% of the Current Market
Price per share of Common Stock of the Company on the date
of such first occurrence (such number of shares, the
"Adjustment Shares").
(iii) In lieu of issuing only shares of Common
Stock of the Company in accordance with Section 11(a)(ii)
hereof, the Company, acting by resolution of the Board, may,
and in the event that the number of shares of Common Stock
of the Company which are authorized by the Company's
Certificate of Incorporation but not outstanding or reserved
for issuance for purposes other than upon exercise of the
Rights is not sufficient to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph
(ii) of this Section 11(a), the Company, acting by
resolution of the Board, shall (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") over (2) the
Purchase Price attributable to each Right (such excess, the
"Spread") and (B) with respect to each Right (subject to
Section 7(e) hereof), make adequate provision to substitute
for all or a portion of the Adjustment Shares, upon payment
of the applicable Purchase Price, (1) cash, (2) a reduction
in the Purchase Price, (3) equity securities of the Company
other than Common Stock of the Company (including, without
limitation, shares, or units of shares, of preferred stock
which the Board which, when added to any shares of Common
Stock issued upon such exercise, has deemed to have the same
value as shares of Common Stock of the Company (such shares
of preferred stock, "Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets or (6) any
combination of the foregoing which, when added to any shares
of Common Stock issued upon such exercise, has an aggregate
value equal to the Current Value, where such aggregate value
has been determined by the Board based upon the advice of a
nationally recognized investment banking firm selected by
the Board; provided, however, if the Company shall not have
made adequate provision to deliver value pursuant to clause
(B) above within thirty days following the later of (x) the
first occurrence of a Section 11(a)(ii) Event and (y) the
date on which the Company's right of redemption pursuant to
Section 23(a) hereof, as such date may be amended pursuant
to Section 26 hereof, expires (the later of (x) and (y)
being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock of the
Company (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal
to the Spread. If the Board shall determine in good faith
that it is likely that sufficient additional shares of
Common Stock of the Company could be authorized for issuance
upon exercise in full of the Rights, the thirty day period
set forth above may be extended to the extent necessary, but
not more than ninety days following the Section 11(a)(ii)
Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution
Period"). To the extent that the Company determines that
some action need be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii), the Company (x)
shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights and
(y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value
of the Common Stock of the Company shall be the Current
Market Price per share of the Common Stock of the Company on
the Section 11(a)(ii) Trigger Date and the value of any
Common Stock Equivalent shall be deemed to have the same
value as the Common Stock of the Company on such date.
(b) In case the Company shall fix a record date
for the issuance of rights, options or warrants to all holders of
Common Stock entitling them to subscribe for or purchase (for a
period expiring within forty-five calendar days after such record
date) Common Stock (or shares having the same rights, privileges
and preferences as the shares of Common Stock ("Equivalent Common
Stock")) or securities convertible into Common Stock or
Equivalent Common Stock at a price per share of Common Stock or
per share of Equivalent Common Stock (or having a conversion
price per share, if a security convertible into Common Stock or
Equivalent Common Stock) less than the Current Market Price per
share of Common Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be
the number of shares of Common Stock outstanding on such record
date, plus the number of shares of Common Stock and/or Equivalent
Common Stock which the aggregate subscription or purchase price
of the total number of shares of Common Stock and/or Equivalent
Common Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered)
would purchase at such Current Market Price, and the denominator
of which shall be the number of shares of Common Stock
outstanding on such record date, plus the number of additional
shares of Common Stock and/or Equivalent Common Stock to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by
delivery of consideration part or all of which may be in a form
other than cash, the value of such consideration shall be as
determined in good faith by the Board, whose determination shall
be described in a statement filed with the Rights Agent and shall
be conclusive for all purposes. Shares of Common Stock owned by
or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date
is fixed, and in the event that such rights, options or warrants
are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date
for a distribution to all holders of Common Stock (including any
such distribution made in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness, cash (other than a
regular periodic cash dividend out of the earnings or retained
earnings of the Company), assets (other than a dividend payable
in Common Stock, but including any dividend payable in stock
other than Common Stock) 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
immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price per share of
Common Stock on such record date, less the fair market value (as
determined in good faith by the Board, whose determination shall
be described in a statement filed with the Rights Agent and shall
be conclusive for all purposes) of the portion of the cash,
assets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to a share of
Common Stock and the denominator of which shall be such Current
Market Price per share of Common Stock. Such adjustments shall
be made successively whenever such a record date is fixed, and in
the event that such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which would have
been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii)
hereof, the Current Market Price per share of Common Stock on any
date shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the thirty consecutive
Trading Days immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the
Current Market Price per share of Common Stock on any date shall
be deemed to be the average of the daily closing prices per share
of such Common Stock for the ten consecutive Trading Days
immediately following such date; provided, however, that in the
event that the Current Market Price per share of the Common Stock
is determined during a period following the announcement by the
issuer of such Common Stock of (A) a dividend or distribution on
such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other
than the Rights) or (B) any subdivision, combination,
consolidation, reverse stock split or reclassification of such
Common Stock, and prior to the expiration of the requisite thirty
Trading Day or ten Trading Day period, as set forth above, after
the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination, consolidation,
reverse stock split or reclassification, then, and in each such
case, the Current Market Price shall be properly adjusted to take
into account ex-dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or
admitted to trading on the New York Stock Exchange, as reported
in the principal consolidated transaction reporting system or by
the Nasdaq National Market with respect to securities listed or
admitted to trading on another national securities exchange or
quoted by the Nasdaq National Market, respectively, or, if the
shares of Common Stock are not listed or admitted to trading on
any national securities exchange or quoted by the Nasdaq National
Market, the last quoted price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter
market, as reported by The Nasdaq Stock Market or such other
quotation system then in use, or, if on any such date the shares
of Common Stock are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock
selected by the Board. If on any such date the Common Stock is
not publicly held or not so listed, traded or quoted, and no
market maker is making a market in the Common Stock, Current
Market Price per share shall mean the fair value per share as
determined in good faith by the Board, whose determination shall
be described in a statement filed with the Rights Agent and shall
be conclusive for all purposes.
(e) Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least one percent in the Purchase Price; provided,
however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share of Common Stock
or other share, 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 mandates such
adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant
to Section 11(a)(ii) or Section 13(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive any
shares of capital stock other than Common Stock, thereafter the
number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof (or the number of Rights)
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 Common Stock contained in Sections 11(a),
(b), (c), (e), (g), (h), (i), (j), (k), (l) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to
the Common Stock shall apply on like terms to any such other
shares provided, however, that the Company shall not be liable
for its inability to reserve and keep available for issuance upon
exercise of the Rights pursuant to Section 11(a)(ii) a number of
shares of Common Stock of the Company greater than the number
then authorized by the Certificate of Incorporation of the
Company but not outstanding or reserved for any other purpose.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of shares of Common Stock purchasable from time
to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately prior
to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of
shares of Common Stock (calculated to the nearest ten-thousandth
of a share) obtained by (i) multiplying (x) the number of shares
covered by a Right immediately prior to this adjustment by (y)
the Purchase Price in effect immediately prior to such adjustment
of the Purchase Price and (ii) dividing the product so obtained
by the Purchase Price in effect immediately after such adjustment
of the Purchase Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights, in lieu of any adjustment in the number of shares of
Common Stock purchasable upon the exercise of a Right. Each of
the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of shares of Common
Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company
shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment
and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten days later
than the date of the public announcement. If Rights Certificates
have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of
Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights
to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders
prior to the date of adjustment and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all
the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of shares of Common Stock
issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were
expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated
value, if any, of the number of shares of Common Stock issuable
upon exercise of the Rights, the Company shall use reasonable
efforts to take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly
and legally issue, fully paid and nonassessable, such number of
shares of Common Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made
effective as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record
date the number of shares of Common Stock and other capital stock
or securities of the Company, if any, issuable upon such exercise
over and above the number of shares of Common Stock and other
capital stock or securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of
the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
adjustments in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that in its good faith judgment the Board shall determine
to be advisable in order that any (i) consolidation or
subdivision of the Common Stock, (ii) issuance wholly for cash of
any shares of Common Stock at less than the Current Market Price,
(iii) issuance wholly for cash of shares of Common Stock or
securities which by their terms are convertible into or
exchangeable for shares of Common Stock, (iv) stock dividends or
(v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its
Common Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it
shall not, at any time after the Distribution Date, (i)
consolidate with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof) or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction or a series
of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o)
hereof) if (x) at the time of or immediately after such
consolidation, merger, sale or transfer there are any rights,
warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger, sale or transfer, the stockholders of
the Person who constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of
its Affiliates and Associates.
(o) The Company covenants and agrees that, after
the Distribution Date, it will not, except as permitted by
Section 23 or Section 26 hereof, take (or permit any Subsidiary
to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) declare a dividend on the outstanding
shares of Common Stock of the Company payable in shares of Common
Stock of the Company, (ii) subdivide or split the outstanding
shares of Common Stock of the Company in a manner not covered in
clause (i) of this Section 11(p) or (iii) combine or consolidate
the outstanding shares of Common Stock of the Company into a
smaller number of shares, the number of Rights associated with
each share of Common Stock of the Company then outstanding, or
issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock of
the Company following any such event shall equal the result
obtained by multiplying the number of Rights associated with each
share of Common Stock of the Company immediately prior to such
event by a fraction the numerator of which shall be the total
number of shares of Common Stock of the Company outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of
Common Stock of the Company outstanding immediately following the
occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 or Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b)
promptly file with the Rights Agent, and with each transfer agent
for the Common Stock, a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Rights Certificate (or,
if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance
with Section 25 hereof. Notwithstanding the foregoing sentence,
the failure of the Company to prepare such certificate or
statement or make such filings or mailing shall not affect the
validity of, or the force or effect of, the requirement for such
adjustment. The Rights Agent shall be fully protected in relying
on any such certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.
(a) In the event (a "Section 13 Event") that, on
or after the Stock Acquisition Date, directly or indirectly, (x)
the Company shall consolidate or otherwise combine with, or merge
with or into, any other Person or Persons (other than a
Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation,
combination or merger, (y) any Person or Persons (other than a
Subsidiary of the Company in a transaction which complies with
Section ll(o) hereof) shall consolidate or combine with, or merge
with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation,
combination or merger and, in connection with such consolidation,
combination or merger, all or part of the outstanding shares of
Common Stock of the Company shall be changed into or exchanged
for stock or other securities of any other Person or Persons or
cash or any other property or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof);
provided, however, that this clause (z) of Section 13(a) shall
not apply to the pro rata distribution by the Company of assets
(including securities) of the Company or any of its Subsidiaries
to all holders of the Company's Common Stock; then, and in each
such case (except as may be contemplated by Section 13(d)
hereof), proper provision shall be made so that: (i) each holder
of a Right, except as provided in Section 7(e) hereof shall
thereafter have the right to receive, upon the exercise thereof
at the then current Purchase Price in accordance with the terms
of this Agreement, such number of validly authorized and issued,
fully paid, nonassessable and freely tradeable shares of Common
Stock of the Principal Party, not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of shares of Common Stock
for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii)
Event has occurred prior to the first occurrence of a Section 13
Event, multiplying the number of shares of Common Stock for which
a Right was exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and (2) dividing
that product (which, following the first occurrence of a Section
13 Event, shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by 50% of the
Current Market Price per share of the Common Stock of such
Principal Party on the date of consummation of such Section 13
Event; (ii) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) hereof shall
be of no effect following the first occurrence of any Section 13
Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a)
hereof, (A) the Person that is the issuer of any securities
into which shares of Common Stock of the Company are
converted, changed or exchanged in such merger,
consolidation or combination, or if there is more than one
such issuer, the issuer the Common Stock of which has the
greatest market value or (B) if no securities are so issued,
the Person that is the other party to such merger (and
survives the merger), consolidation or combination (or if
there is more than one such Person, the Person the Common
Stock of which has the greatest value), or if the other
party to the merger does not survive the merger, the Person
that does survive the merger (including the Company if it
survives); and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the
Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such
transaction or transactions or, if each Person that is a
party to such transaction or transactions receives the same
portion of the assets or earning power so transferred or if
the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such
Persons as is the issuer of Common Stock having the greatest
market value;
provided, however, that in any such case, (1) if the Common Stock
of such Person is not at such time and has not been continuously
over the preceding twelve-month period registered under Section
12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has
been so registered, "Principal Party" shall refer to such other
Person; (2) if the Common Stock of such Person is not and has not
been so registered and such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of two or
more of which are and have been so registered, "Principal Party"
shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value; and (3)
if the Common Stock of such Person is not and has not been so
registered and such Person is owned, directly or indirectly, by a
joint venture formed by two or more Persons that are not owned,
directly or indirectly, by the same Person, the rules set forth
in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such
party were a Subsidiary of both or all of such joint venturers
and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any Section
13 Event unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not
been issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental
agreement confirming that the requirements of Sections 13(a) and
(b) hereof shall promptly be performed in accordance with their
terms and that such Section 13 Event shall not result in a
default by the Principal Party under this Agreement as the same
shall have been assumed by the Principal Party pursuant to
Sections 13(a) and (b) hereof and further providing that, as soon
as practicable after the date of such Section 13 Event, the
Principal Party will:
(i) prepare and file a registration statement
under the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with
a prospectus at all times meeting the requirements of the
Act) until the Expiration Date and to similarly comply with
applicable state securities laws;
(ii) use its best efforts to list or obtain
quotation of (or continue the listing or quotation of) the
Rights and the securities purchasable upon exercise of the
Rights on a national securities exchange or automated
quotation service;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the
requirements for registration on Form 10 (or any successor
form) under the Exchange Act; and
(iv) use its best efforts to obtain waivers of
any rights of first refusal or preemptive rights in respect
of the shares of Common Stock of the Principal Party subject
to purchase upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to
successive mergers, consolidations, combinations or sales or
other transfers. In the event that a Section 13 Event shall
occur at any time after the occurrence of a Section 11(a)(ii)
Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section
13(a).
(d) Notwithstanding anything in this Agreement to
the contrary, Section 13 shall not be applicable to a transaction
described in subparagraph (x) or (y) of Section 13(a) if (i) such
transaction is consummated with a Person or Persons (or a wholly
owned Subsidiary of any such Person or Persons) who acquired
shares of Common Stock of the Company pursuant to a Qualified
Offer, (ii) the price per share of Common Stock of the Company
offered in such transaction is not less than the price per share
of Common Stock of the Company paid to all holders of shares of
Common Stock of the Company whose shares were purchased pursuant
to such tender offer or exchange offer and (iii) the form of
consideration being offered to the remaining holders of shares of
Common Stock of the Company pursuant to such transaction is the
same as the form of consideration paid pursuant to such tender
offer or exchange offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights
hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as
provided in Section 11(p) hereof, or to distribute Rights
Certificates which evidence fractional Rights. In lieu of any
such fractional Rights, there shall be paid to the registered
holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole
Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price of the Rights for any Trading Day shall be the last
sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system or the Nasdaq National
Market with respect to securities listed on another national
securities exchange or quoted by the Nasdaq National Market,
respectively, or if the Rights are not listed or admitted to
trading on any national securities exchange or quoted on the
Nasdaq National Market, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by The Nasdaq Stock Market
or such other quotation system then in use or, if on any such
date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected
by the Board. 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 shall be used.
(b) The Company shall not be required to issue
fractions of shares of Common Stock of the Company upon exercise
of the Rights or to distribute certificates which evidence
fractional shares of Common Stock of the Company. In lieu of
fractional shares of Common Stock of the Company, the Company may
pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one
share of Common Stock of the Company. For purposes of this
Section 14(b), the current market value of one share of Common
Stock shall be the closing price of one share of Common Stock or,
if unavailable, the appropriate alternative price (in each case
as determined pursuant to 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
that Right expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right, except
as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, except any rights of action vested in
the Rights Agent pursuant to Section 18 hereof, are vested in the
respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the
Common Stock of the Company); and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, of the
Common Stock of the Company), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior
to the Distribution Date, of the Common Stock of the Company),
may, in such holder's own behalf and for such holder's own
benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise the Rights evidenced
by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement
and shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to
this Agreement.
Section 16. Agreement of Rights Holders. Every holder
of a Right by accepting the same consents and agrees with the
Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights
will be transferable only in connection with the transfer of
Common Stock of the Company;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal office or offices of
the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f)
hereof, the Company and the Rights Agent may deem and treat the
person in whose name a Rights Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent, subject to the last sentence of Section 7(e)
hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to
the contrary, neither the Company nor the Rights Agent shall have
any liability to any holder of a Right or other Person as a
result of its inability to perform any of its obligations under
this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any
governmental authority prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company
must use reasonable efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the number of shares of Common Stock or any
other securities of the Company which may at any time be issuable
upon the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as
provided in Section 24 hereof), or to receive dividends or
subscription rights, or otherwise, until the Rights evidenced by
such Rights Certificate shall have been exercised in accordance
with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and disbursements
and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of
its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the
costs and expenses of defending against any claim of liability in
the premises.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration
of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document reasonably
believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person
or Persons.
Section 19. Merger or Consolidation or Change of Name
of Rights Agent.
(a) Any corporation into which the Rights Agent
or any successor Rights Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties
hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. If at the time such successor
Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and if at that
time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such
Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
(b) If at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates
shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and if at that time any of
the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in
its prior name or in its changed name; and in all such cases such
Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal
counsel (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete authorization
and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties
under this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation,
the identity of any Acquiring Person and the determination of the
Current Market Price) be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by the Chairman of the
Board, the President, or any Vice President of the Company and
delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder
only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or
by reason of any of the statements of fact or recitals contained
in this Agreement or in the Rights Certificates, nor shall it be
required to verify the same (except as to its countersignature on
such Rights Certificates), but all such statements and recitals
are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature
thereon); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for any
adjustment required under the provisions of Section 11 or Section
13 hereof or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to
the exercise of Rights evidenced by Rights Certificates after
actual notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Common Stock to
be issued pursuant to this Agreement or any Rights Certificate or
as to whether any shares of Common Stock will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance
of its duties hereunder from the Chairman of the Board, the
President, or any Vice President of the Company, and to apply to
such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder,
director, officer or employee of the Rights Agent may buy, sell
or deal in any of the Rights or other securities of the Company
or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for
the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct; provided, however,
reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require
the Rights Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its
duties hereunder or in the exercise of its rights if there shall
be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been
completed or indicates an affirmative response to clause 1 and/or
2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent
or any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon thirty days' notice in
writing mailed to the Company, and to each transfer agent of the
Common Stock, by registered or certified mail, and to the holders
of the Rights Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon thirty
days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of
the Common Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment
within a period of thirty days after giving notice of such
removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by
the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. If no successor Rights
Agent shall have been appointed within thirty days from
effectiveness of such removal or resignation, and no registered
holder of any Rights Certificates have applied pursuant to this
Agreement for the appointment of a new Rights Agent, the Company
shall be automatically designated as successor Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by
such a court, shall be (a) a corporation organized and doing
business under the laws of the United States or of any state of
the United States so long as such corporation, if other than the
Company, is authorized to do business as a banking institution in
such state, is in good standing, is authorized under such laws to
exercise corporate trust powers, is subject to supervision or
examination by federal or state authority and has at the time of
its appointment as Rights Agent a combined capital and surplus of
at least $100,000,000 or (b) an Affiliate of a corporation
described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and shall execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Stock, and shall mail
a notice thereof in writing to the registered holders of the
Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect
the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights Certificates to the contrary, the Company may, at its
option, issue new Rights Certificates evidencing Rights in such
form as may be approved by the Board to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock of the Company following the
Distribution Date and prior to the redemption or expiration of
the Rights, the Company (a) shall, with respect to shares of
Common Stock of the Company so issued or sold pursuant to the
exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of
securities hereafter issued by the Company and (b) may, in any
other case, if deemed necessary or appropriate by the Board,
issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided,
however, that (i) no such Rights Certificate shall be issued if,
and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom
such Rights Certificate would be issued and (ii) no such Rights
Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board may, at its option, at any time
prior to the earlier of (i) the Close of Business on the tenth
Business Day following the Stock Acquisition Date (or, if the
Stock Acquisition Date shall have occurred prior to the Record
Date, the Close of Business on the tenth Business Day following
the Record Date), as such period may be extended pursuant to
Section 26 hereof, or (ii) the Final Expiration Date, direct the
Company to, and if so directed, the Company shall, redeem all but
not less than all of the then outstanding Rights at a redemption
price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price").
Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash, shares of
Common Stock of the Company (based on the Current Market Price of
the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board.
(b) Immediately upon the action of the Board
ordering the redemption of the Rights, evidence of which shall
have been filed with the Rights Agent and without any further
action and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price for each Right so
held. Promptly after the action of the Board ordering the
redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at
each holder's last address as it appears upon the registry books
of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
(c) Notwithstanding the provisions of Section
23(a) hereof, in the event that a majority of the Board of
Directors of the Company is comprised of persons elected at a
meeting of stockholders who were not nominated by the Board of
Directors of the Company in office immediately prior to such
meeting, then for a period of one hundred and eighty (180) days
following the effectiveness of such election the Rights shall not
be redeemed if such redemption is reasonably likely to have the
purpose or effect of allowing any Person to become an Acquiring
Person or otherwise facilitating the occurrence of a Triggering
Event or a transaction with an Acquiring Person.
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 7(e) hereof)
for Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the
date hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the Board
of Directors of the Company shall not be empowered to effect such
exchange at any time after any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the
Company or any such Subsidiary, or any entity holding Voting
Stock for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Voting Stock then
outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to subsection (a) of this Section 24 and without any
further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of
Common Stock equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the Common Stock for
Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void pursuant to
the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In the event that there shall not be
sufficient shares of Common Stock issued but not outstanding or
authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company
shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of
the Rights.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any
time after the Distribution Date, (i) to pay any dividend payable
in stock of any class to the holders of Common Stock or to make
any other distribution to the holders of Common Stock (other than
a regular periodic cash dividend out of earnings or retained
earnings of the Company) or (ii) to offer to the holders of
Common Stock rights or warrants to subscribe for or to purchase
any additional shares of Common Stock or shares of stock of any
class or any other securities, rights or options, or (iii) to
effect any reclassification of its Common Stock (other than a
reclassification involving only the subdivision of outstanding
shares of Common Stock), or (iv) to effect any consolidation,
combination or merger into or with any other Person (other than a
Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related
transactions, of more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies
with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend
or distribution of rights or warrants, or the date on which such
reclassification, consolidation, combination, merger, sale,
transfer, liquidation, dissolution or winding up is to take place
and the date of participation therein by the holders of the
shares of Common Stock, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least twenty days prior to the record
date for determining holders of the shares of Common Stock for
purposes of such action, and in the case of any such other
action, at least twenty days prior to the date of the taking of
such proposed action or the date of participation therein by the
holders of the shares of Common Stock whichever shall be the
earlier.
(b) In case any Section 11(a)(ii) Event shall
occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event
to holders of Rights under Section 11(a)(ii) hereof and (ii) all
references in the preceding paragraph to Common Stock shall be
deemed thereafter to refer to Common Stock of the Company and/or,
if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the
holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Boise Cascade Corporation
P.O. Box 50
Boise, Idaho 83728-0001
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Rights Certificate to or on the Rights
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:
First Chicago Trust Company of New York
525 Washington Boulevard
Suite 4660
Jersey City, New Jersey 07310
Attention: Tenders and Exchanges
Administration
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate (or, if prior to the Distribution Date, to the
holder of certificates representing shares of Common Stock of the
Company) shall be sufficiently given or made if sent by first-
class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the
Company.
Section 27. Supplements and Amendments. Prior to the
Distribution Date and subject to the penultimate sentence of this
Section 27, the Company and the Rights Agent shall, if the Board
so directs, supplement or amend any provision of this Agreement
without the approval of any holders of certificates representing
shares of Common Stock of the Company. From and after the
Distribution Date and subject to the penultimate sentence of this
Section 27, the Company and the Rights Agent shall, if the Board
so directs, supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order (i) to
cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time
period hereunder or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of
the holders of Rights Certificates (other than an Acquiring
Person or any Affiliate or Associate of any Acquiring Person),
provided, this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time
as the Rights are not then redeemable or (B) any other time
period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to,
the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person). Upon the
delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the
Redemption Price, the Final Expiration Date, the Purchase Price
or the number of shares of Common Stock for which a Right is
exercisable; provided, however, that at any time prior to (x) the
existence of an Acquiring Person or (y) the date that a tender or
exchange offer by any Person (other than an Exempt Person) is
first published or sent or given within the meaning of Rule 14d-
2(a) of the General Rules and Regulations under the Exchange Act
if upon consummation thereof such Person would be an Acquiring
Person, the Board may amend this Agreement to increase the
Purchase Price or extend the Final Expiration Date. Prior to the
Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common
Stock of the Company.
Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board,
etc. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock of the Company outstanding at
any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock
of the Company of which any Person is the Beneficial Owner, shall
be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board shall have the exclusive power and
authority to administer this Agreement and to exercise all rights
and powers specifically granted to the Board, or to the Company,
or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to
(a) interpret the provisions of this Agreement, and (b) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to
redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board,
the Outside Directors or the Company in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent,
the holders of the Rights and all other parties, and (y) not
subject the Board to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in
this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock of the Company) any legal
or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock of the Company).
Section 31. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant
or restriction is held by such court or authority to be invalid,
void or unenforceable and the Board determines in its good faith
judgment that severing the invalid language from this Agreement
would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the Close of Business on
the tenth Business Day following the date of such determination
by the Board. Without limiting the foregoing, if any provision
of this Agreement requiring that a determination be made by the
Board or by the Outside Directors is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, such determination shall then be made by the Board
in accordance with applicable law and the Company's Certificate
of Incorporation and By-laws.
Section 32. Governing Law. This Agreement, each Right
and each Rights Certificate issued hereunder shall be deemed to
be a contract made under the laws of the State of Delaware, and
the laws of the State of Delaware shall govern the rights and
duties of the Rights Agent hereunder, and for all purposes this
Agreement shall be governed by and construed in accordance with
the laws of such State applicable to contracts made and to be
performed entirely within such State.
Section 33. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of September
25, 1997.
Attest: BOISE CASCADE CORPORATION
By /s/ Karen E. Gowland By /s/ J. W. Holleran
Name: Karen E. Gowland Name: J. W. Holleran
Title: Vice President, Title: Sr. Vice
Associate General Counsel, President and
and Corporate Secretary General Counsel
Attest: FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By /s/ George Dalton By /s/ James Kuzmich
Name: George Dalton Name: James Kuzmich
Title: Assistant Vice Title: Assistant Vice
President President
Exhibit A
[Form of Rights Certificate]
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER DECEMBER 13, 2008 OR EARLIER REDEMPTION BY
THE COMPANY OR EXPIRATION PURSUANT TO THE RENEWED RIGHTS AGREE-
MENT. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE
VOID SO LONG AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE
REQUISITE QUALIFICATION FOR THE ISSUANCE TO SUCH HOLDER, OR THE
EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH JURISDICTION SHALL
NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. UNDER CERTAIN CIRCUM-
STANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RENEWED RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE
RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENE-
FICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RENEWED RIGHTS AGREEMENT). ACCORDINGLY,
THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF SUCH AGREEMENT.]*
* The portion of the legend in brackets shall be inserted only
if applicable and shall replace the preceding sentence.
Rights Certificate
BOISE CASCADE 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 Renewed
Rights Agreement, dated as of September , 1997, as amended,
restated, renewed or extended from time to time (the "Rights
Agreement"), between Boise Cascade Corporation, a Delaware
corporation (the "Company"), and First Chicago Trust Company of
New York, a New York corporation (the "Rights Agent"), to pur-
chase from the Company at any time prior to 5:00 p.m. (New York
City time) on December 13, 2008 at the office or offices of the
Rights Agent, designated for such purpose, one fully paid,
nonassessable share of the Common Stock $2.50 par value, (the
"Common Stock") of the Company, at a purchase price of $175 per
share (the "Purchase Price"), upon presentation and surrender of
this Rights Certificate with the Election to Purchase and related
Certificate duly executed. The number of Rights evidenced by
this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and
Purchase Price as of September 25, 1997, based on the Common
Stock as constituted at such date. The Company reserves the
right to require prior to the occurrence of a Triggering Event
(as such term is defined in the Rights Agreement) that a number
of Rights be exercised so that only whole shares of Common Stock
will be issued.
As more fully set forth in the Rights Agreement, from
and after the first occurrence of a Section 11(a)(ii) Event (as
such term is defined in the Rights Agreement), if the Rights evi-
denced by this Rights Certificate are beneficially owned by (i)
an Acquiring Person or an Associate or Affiliate of an Acquiring
Person (as such terms are defined in the Rights Agreement), which
the Board (as defined in the Rights Agreement) in its sole
discretion determines is or was involved in or caused or
facilitated directly or indirectly, such Section 11(a)(ii) Event,
(ii) a transferee of any such Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after such
Acquiring Person becomes such or (iii) under certain circumstanc-
es specified in the Rights Agreement, a transferee of such Ac-
quiring Person (or of any such Associate or Affiliate), who be-
comes a transferee prior to or concurrently with such Acquiring
Person becoming such, such Rights shall become null and void and
no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price
and the number and kind of shares of Common Stock or other
securities which may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification
and adjustment upon the happening of certain events, including
Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.
Reference is also made to the Rights Agreement for definitions of
capitalized terms used and not defined herein. Copies of the
Rights Agreement are on file at the principal offices of the
Company and are available upon written request to the Rights
Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices
of the Rights Agent designated for such purpose, may be exchanged
for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase
a like aggregate number of shares of Common Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the
Company at its option at a redemption price of $.01 per Right at
any time prior to the earlier of (i) the Close of Business on the
tenth Business Day following the Stock Acquisition Date (or if
the Stock Acquisition Date shall have occurred prior to the
Record Date, the Close of Business on the tenth Business Day
following the Record Date), as such time period may be extended
pursuant to the Rights Agreement, and (ii) the Final Expiration
Date (as defined in the Rights Agreement).
If the Company so determines, no fractional shares of
Common Stock will be issued upon the exercise of any Right or
Rights evidenced hereby, but in lieu thereof a cash payment will
be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Common Stock or of any other
securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give 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 dividend or subscription rights, or otherwise, until the
Right or Rights evidenced by this Rights Certificate shall have
been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned
by the Rights Agent.
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal.
Dated as of ____________ __, 19__
ATTEST: BOISE CASCADE CORPORATION.
_______________________ By
Secretary Name:
Title:
Countersigned:
FIRST CHICAGO TRUST
COMPANY OF NEW YORK
By_____________________
Authorized Signature
[Form of Reverse Side of Rights Certificate]
ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _________________, Attorney, to transfer the within
Rights Certificate on the books of the within-named Company, with
full power of substitution.
Dated: , 19__
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any
such Acquiring Person (as such terms are defined pursuant to the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the
Rights evidenced by this Rights Certificate from any Person who
is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person.
Dated: ___________ ___, 19__ ______________________
Signature
Signature Guaranteed:
NOTICE
The signatures to the foregoing Assignment and
Certificate must correspond to the name as written upon the face
of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: BOISE CASCADE CORPORATION:
The undersigned hereby irrevocably elects to exercise
_____________ Rights represented by this Rights Certificate to
purchase the shares of Common Stock issuable upon the exercise of
the Rights (or such other securities of the Company or of any
other Person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name of
and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: ______________ ___, 19__
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [
] are [ ] are not being exercised by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined pursuant to
the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the
Rights evidenced by this Rights Certificate from any Person who
is, was or became an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person.
Dated: ____________ __, 19__
Signature
Signature Guaranteed:
NOTICE
The signatures to the foregoing Election to Purchase
and Certificate must correspond to the name as written upon the
face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On September 25, 1997, the Board of Directors of Boise
Cascade Corporation (the "Company") declared a dividend
distribution of one Right for each outstanding share of Company
Common Stock to stockholders of record upon the "Expiration Date"
under the Company's Rights Agreement dated December 13, 1988 and
Amended and Restated September 25, 1990 (the "Record Date"). The
Rights Agreement (hereinafter defined) also contemplates the
issuance of one Right for each share of Common Stock which is
issued between the Record Date and the Distribution Date. Each
Right entitles the registered holder to purchase from the Company
one share of Common Stock, par value $2.50 per share, of the
Company (the "Common Stock") at a Purchase Price of $175 per
share, subject to anti-dilutive adjustments. The description and
terms of the Rights are set forth in a Renewed Rights Agreement
dated as of September 25, 1997 (the "Rights Agreement") between
the Company and First Chicago Trust Company of New York, as
Rights Agent.
Initially, the Rights will be attached to all Common
Stock certificates representing shares then outstanding, and no
separate Rights Certificates will be distributed. Subject to
certain exceptions specified in the Rights Agreement, the Rights
will be represented by the Common Stock certificates and will not
be exercisable or transferable apart from the Common Stock until
the earlier to occur of (i) 10 business days (or such later date
as the Board shall determine) following a public announcement
that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired beneficial ownership of 15% or
more of the outstanding shares of capital stock of the Company
which may be voted on all matters submitted to stockholders of
the Company generally (the "Voting Stock", and such date being
referred to as the "Stock Acquisition Date"), other than as a
result of repurchases of stock by the Company or certain inadver-
tent actions by institutional or certain other stockholders or
(ii) 10 business days (or such later date as the Board shall
determine) following the commencement of a tender offer or
exchange offer that would result in a person or group becoming an
Acquiring Person (the earlier of such dates being called the
"Distribution Date"). Until the Distribution Date, (i) the
Rights will be evidenced by the Common Stock certificates and
will be transferred with and only with such Common Stock cer-
tificates, (ii) new Common Stock certificates issued after the
Record Date will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of
any certificates for Common Stock outstanding will also
constitute the transfer of the Rights associated with the Common
Stock represented by such certificate. Pursuant to the Rights
Agreement, the Company reserves the right to require prior to the
occurrence of a Triggering Event (as defined below) that, upon
any exercise of Rights, a number of Rights be exercised so that
only whole shares of Common Stock will be issued.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on December 13,
2008, unless such date is extended or the Rights are earlier
redeemed or exchanged by the Company as described below.
As soon as practicable after the Distribution Date,
Rights Certificates will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date
and, thereafter, the separate Rights Certificates alone will
represent the Rights. Except as otherwise determined by the
Board of Directors, only shares of Common Stock issued prior to
the Distribution Date will be issued with Rights.
In the event that a Person becomes an Acquiring Person,
except pursuant to an offer for all outstanding shares of Common
Stock determined by at least a majority of the independent direc-
tors to be at a price which is fair and not inadequate and to
otherwise be in the best interests of the Company and its stock-
holders, after receiving advice from one or more investment bank-
ing firms (a "Qualified Offer"), each holder of a Right will
thereafter have the right to receive, upon exercise, Common Stock
(or, in certain circumstances, cash, property or other securities
of the Company) having a value equal to two times the exercise
price of the Right. Notwithstanding any of the foregoing, fol-
lowing the occurrence of the event set forth in this paragraph,
all Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void. However, Rights are not
exercisable following the occurrence of the event set forth above
until such time as the Rights are no longer redeemable by the
Company as set forth below.
For example, at an exercise price of $175 per Right,
each Right not owned by an Acquiring Person (or by certain
related parties) following an event set forth in the preceding
paragraph would entitle its holder to purchase $350 worth of
Common Stock (or other consideration, as noted above) for $175.
Assuming that the Common Stock had a per share value of $50 at
such time, the holder of each valid Right would be entitled to
purchase 7 shares ($350 divided by $50) of Common Stock for $175.
If at any time following the Stock Acquisition Date,
(i) the Company engages in a merger or other business combination
transaction in which the Company is not the surviving corporation
(other than with an entity which acquired the shares pursuant to
a Qualified Offer), (ii) the Company engages in a merger or other
business combination transaction in which the Company is the
surviving corporation and the Common Stock of the Company is
changed or exchanged, or (iii) 50% or more of the Company's as-
sets, cash flow or earning power is sold or transferred, each
holder of a Right (except Rights which have previously been
voided as set forth above) shall thereafter have the right to
receive, upon exercise, common stock of the acquiring company
having a value equal to two times the exercise price of the
Right. The events set forth in this paragraph and in the second
preceding paragraph are referred to as the "Triggering Events."
At any time after a person becomes an Acquiring Person
and prior to the acquisition by such person or group of fifty
percent (50%) or more of the outstanding Voting Stock, the Board
may exchange the Rights (other than Rights owned by such person
or group which have become void), in whole or in part, at an
exchange ratio of one share of Common Stock per Right (subject to
adjustment).
At any time prior to the earlier of (i) the Close of
Business on the tenth business day following the Stock Ac-
quisition Date (or, if the Stock Acquisition Date shall have
occurred prior to the Record Date, the Close of Business on the
tenth Business Day following the Record Date), or (ii) Final
Expiration Date, the Board of Directors may, at its option,
redeem the Rights in whole, but not in part, at a price of $.01
per Right (payable in cash, Common Stock or other consideration
deemed appropriate by the Board of Directors). Immediately upon
the action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.01 redemption price.
The foregoing notwithstanding, in the event that a majority of
the Board of Directors of the Company is comprised of persons
elected at a meeting of stockholders who were not nominated by
the Board of Directors in office immediately prior to such
meeting, then the Rights shall not be redeemed if such redemption
is reasonably likely to have the purpose or effect of allowing
any person to become an Acquiring Person or otherwise facilitat-
ing the occurrence of Triggering Event or a transaction with an
Acquiring Person, for a period of one hundred eighty (180) days
following the effectiveness of such election.
Until a holder exercises a Right, the holder may not
vote or receive dividends and will have no other rights as a
stockholder of the Company. While the distribution of the Rights
will not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable
for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company or in the event of the
redemption of the Rights as set forth above.
Any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the
Distribution Date. After the Distribution Date, the provisions
of the Rights Agreement may be amended by the Board to cure any
ambiguity, to make changes which do not adversely affect the
interests of holders of Rights, or to shorten or lengthen any
time period under the Rights Agreement with a few exceptions.
The foregoing notwithstanding, no amendment may be made at such
time as the Rights are not redeemable.
A copy of the Rights Agreement will be filed with the
Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A. A copy of the Rights Agree-
ment is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
Exhibit 11
Boise Cascade Corporation
Computation of Per Share Earnings
Three Months Ended Nine Months Ended
September 30 September 30
1997 1996 1997 1996
(expressed in thousands,
except per share amounts)
Net income (loss) as
reported $ (6,200) $ (1,650) $(37,640) $ 6,910
Preferred dividends (6,249) (9,839) (25,546) (29,479)
________ ________ ________ _________
Primary loss (12,449) (11,489) (63,186) (22,569)
Assumed conversions:
Preferred dividends
eliminated 3,546 7,136 17,438 21,371
Supplemental ESOP
contribution (3,031) (3,188) (9,098) (9,531)
________ ________ ________ _________
Fully diluted loss $(11,934) $ (7,541) $(54,846) $ (10,729)
Average number of common
shares
Primary 54,814 48,469 50,658 48,211
Fully diluted 60,733 60,591 60,556 60,526
Net loss per common share
Primary $ (.23) $ (.24) $ (1.25) $ (.47)
Fully diluted(1) $ (.20) $ (.12) $ (.91) $ (.18)
(1) Because the computation of fully diluted loss per common
share was antidilutive, the fully diluted loss per common
share reported for the three and nine months ended
September 30, 1997 and 1996, was the same as primary loss
per common share.