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EXHIBIT 1
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RIGHTS AGREEMENT
BETWEEN
XXXXXXXXXX TECHNOLOGY INCORPORATED
AND
XXXXX FARGO BANK MINNESOTA, N.A.,
AS RIGHTS AGENT
DATED AS OF JULY 19, 2000
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TABLE OF CONTENTS
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Section 1. Certain Definitions...................................................................................1
Section 2. Appointment of Rights Agent...........................................................................4
Section 3. Issue of Right Certificates...........................................................................5
Section 4. Form of Right Certificates............................................................................6
Section 5. Countersignature and Registration.....................................................................7
Section 6. Transfer, Split-Up, Combination and Exchange of Right Certificates; Lost, Stolen, Destroyed or
Mutilated Right Certificates......................................................................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.........................................8
Section 8. Cancellation and Destruction of Right Certificates...................................................10
Section 9. Reservation and Availability of Common Shares........................................................10
Section 10. Common Shares Record Date...........................................................................11
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights.........................12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares..........................................21
Section 13. Consolidation, Merger, Share Exchange or Sale or Transfer of Assets or Earning Power................21
Section 14. Fractional Rights and Fractional Shares.............................................................23
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Section 15. Rights of Action....................................................................................24
Section 16. Agreement of Right Holders..........................................................................25
Section 17. Right Certificate Holder Not Deemed a Shareholder...................................................26
Section 18. Concerning the Rights Agent.........................................................................26
Section 19. Merger or Consolidation or Change of Name of Rights Agent...........................................26
Section 20. Duties of Rights Agent..............................................................................27
Section 21. Change of Rights Agent..............................................................................29
Section 22. Issuance of New Right Certificates..................................................................30
Section 23. Redemption..........................................................................................30
Section 24. Exchange............................................................................................31
Section 25. Notice of Certain Events............................................................................32
Section 26. Notices.............................................................................................33
Section 27. Supplements and Amendments..........................................................................33
Section 28. Successors..........................................................................................34
Section 29. Benefits of this Agreement..........................................................................34
Section 30. Severability........................................................................................34
Section 31. Governing Law.......................................................................................34
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Section 32. Counterparts........................................................................................35
Section 33. Descriptive Headings................................................................................35
Exhibit A -- Form of Right Certificate
Exhibit B -- Summary of Rights
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RIGHTS AGREEMENT
This Agreement is dated as of July 19, 2000, between Xxxxxxxxxx
Technology Incorporated, a Minnesota corporation (the "Company"), and Xxxxx
Fargo Bank Minnesota, N.A., a national banking association (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one common share purchase right (each a "Right" and collectively the
"Rights") for each Common Share of the Company outstanding at the Close of
Business on August 10, 2000 (the "Record Date"), each Right initially
representing the right to purchase one-tenth of a Common Share, upon the terms
and subject to the conditions set forth herein, and has further authorized the
issuance of one Right (as such number may hereafter be adjusted pursuant to
Section 11) with respect to each Common Share that shall become outstanding (a)
at any time between the Record Date and the earliest of the Distribution Date,
the Redemption Date or the Final Expiration Date or (b) upon the exercise or
conversion, before the earlier of the Redemption Date or the Final Expiration
Date, of any option or other security exercisable for or convertible into Common
Shares, which option or other such security is outstanding on the Distribution
Date.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" means 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 Common Shares of the Company
then outstanding, but shall not include (1) the Company, (2) any wholly
owned Subsidiary of the Company, (3) any employee benefit plan of the
Company or of any Subsidiary of the Company, or (4) any entity holding
Common Shares for or pursuant to the terms of any such plan described
in clause (3) of this sentence (each Person described in clauses (1)
through (4) is called an "Exempt Person"). Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result
of an acquisition of Common Shares by the Company that, by reducing the
number of Common Shares outstanding, increases the proportionate number
of shares beneficially owned by such Person to 15% or more of the
Common Shares of the Company then outstanding; provided, however, that
if a Person, together with all Affiliates or Associates of such Person,
shall become the Beneficial Owner of 15% or more of the Common Shares
of the Company then outstanding by reason of share acquisitions by the
Company and if such Person or such Person's Affiliates or Associates,
after such share acquisitions by the Company, shall become the
Beneficial Owner of any additional Common Shares of the Company (other
than pursuant to a stock dividend, stock split, recapitalization or
similar transaction that does not affect the percentage of outstanding
Common Shares beneficially owned by such Person and its Affiliates and
Associates), and, immediately after becoming the Beneficial Owner of
such additional Common Shares, such Person, together with all
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Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the Common Shares of the Company then outstanding,
then such Person (unless such Person is an Exempt Person) shall be
deemed an "Acquiring Person." An entity other than the Company or any
wholly owned Subsidiary of the Company holding Common Shares for or
pursuant to the terms of an employee benefit plan of the Company or of
any Subsidiary of the Company and in addition being the Beneficial
Owner of Common Shares that are not held for or pursuant to the terms
of any such plan shall be deemed to constitute an Acquiring Person,
notwithstanding anything herein stated, if, but only if, it, together
with its Affiliates and Associates, shall be the Beneficial Owner of
15% or more, exclusive of those Common Shares held by it for or
pursuant to the terms of any such plan, of the Common Shares then
outstanding. Notwithstanding the foregoing, if the Board of Directors
of the Company determines in good faith that a Person who would
otherwise be deemed an "Acquiring Person," pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently
(including, without limitation, because (A) such Person was unaware
that it beneficially owned a percentage of the Common Shares that would
otherwise cause such Person to be an "Acquiring Person" or (B) such
Person was aware of the extent of its Beneficial Ownership but had no
actual knowledge of the consequences of such Beneficial Ownership under
this Agreement), and without any intention of changing or influencing
control of the Company, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person
would no longer be deemed an "Acquiring Person," pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not
be deemed to be an "Acquiring Person."
(b) "Adjusted Exercise Price" has the meaning set forth in
Section 11(a)(2).
(c) "Affiliate" and "Associate" have the respective meanings
ascribed to those terms in Rule 12b-2 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on
the date of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," or have beneficial ownership of,
any securities:
(1) that such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly,
including without limitation securities with respect to which
such Person or any of such Person's Affiliates or Associates
has "beneficial ownership" pursuant to Rule 13d-3 promulgated
under the Exchange Act;
(2) that such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, (A) the right to
acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement,
arrangement or understanding, whether or not in writing (other
than customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion
rights, exchange rights, other rights (other
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than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own or to have beneficial
ownership of, any securities pursuant to subparagraph (1), (2)
or (3) of this paragraph (d) solely because such securities
are 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) the right to vote or dispose of
(including without limitation 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 or have beneficial
ownership of, any security pursuant to subparagraph (1), (2)
or (3) of this paragraph (d) solely because of the right to
vote such security pursuant to an agreement, arrangement or
understanding if the agreement, arrangement or understanding
to vote such security (i) arises solely from a revocable proxy
or consent given to such Person or any of such Person's
Affiliates or Associates in response to a public proxy or
consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations under the Exchange Act
and (ii) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or
successor report) as being beneficially owned by such Person;
or
(3) that are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof)
with which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding,
whether or not in writing (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities), for the
purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the final proviso to
subparagraph (2) of this paragraph (d)), or disposing of, any
securities of the Company.
Notwithstanding anything in these definitions of Beneficial
Owner, beneficially own or beneficial ownership to the contrary, the
phrase "then outstanding," when used with reference to a Person's
beneficial ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding that
such Person would be deemed to beneficially own hereunder.
(e) "Business Day" means any day other than a Saturday, Sunday
or a day on which banking institutions in the State of New York or
Minnesota are authorized or obligated by law or executive order to
close.
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(f) "Close of Business" on any given date means 5:00 p.m.,
Minneapolis, Minnesota time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 p.m., Minneapolis,
Minnesota time, on the next Business Day.
(g) "Common Shares," when used with reference to the Company,
means shares of common stock, $.01 par value (as such par value may be
changed from time to time), of the Company. "Common Shares," when used
with reference to any Person other than the Company, means the class or
series of capital stock (or equity interest) with the greatest voting
power of such other Person or if such other Person is a Subsidiary of
another Person, the Person or Persons that ultimately control such
first mentioned Person.
(h) "Distribution Date" has the meaning set forth in
Section 3.
(i) "Final Expiration Date" has the meaning set forth in
Section 7.
(j) "Person" means any individual, firm, corporation, limited
liability company, partnership, trust or other entity, and shall
include any successor (by merger or otherwise) of such entity.
(k) "Purchase Price" initially for each one-tenth of a Common
Share is set forth in Section 7, has the meaning set forth in Section 4
and shall be subject to adjustment from time to time as provided in
Sections 11 and 13.
(l) "Redemption Date" has the meaning set forth in Section 7.
(m) "Section 11(a)(2) Event" means an event described in the
first sentence of Section 11(a)(2).
(n) "Section 13 Event" means any event described in clauses
(1), (2), (3) or (4) of Section 13(a).
(o) "Shares Acquisition Date" means the first date of public
announcement (which, for purposes of this definition, includes, without
limitation, a report filed pursuant to Section 13(d) of the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has
become such.
(p) "Subsidiary" of any Person means any corporation or other
entity of which a majority of the voting power of the voting equity
securities or other equity interests entitled to vote in the election
of directors (or Persons with comparable responsibilities if the entity
has no directors) is beneficially owned, directly or indirectly, by
such Person or otherwise controlled by such Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3, shall before the Distribution Date also be the
holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such
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appointment. The Company may from time to time appoint such Co-Rights Agents as
it may deem necessary or desirable.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (1) the Close of Business on the 15th
day after the Shares Acquisition Date or (2) the Close of Business on
the 15th day (or such later date as may be determined by action of the
Board of Directors of the Company before such time as any Person
becomes an Acquiring Person) after the date of the first public
announcement (as defined in Rule 14d-2 promulgated under the Exchange
Act) by any Person (other than an Exempt Person) relating to a tender
or exchange offer the consummation of which would result in any Person
(other than an Exempt Person) becoming the Beneficial Owner of 15% or
more of the then-outstanding Common Shares (including any such date
that is after the date of this Agreement and before the issuance of the
Rights; the earlier of such dates being referred to as the
"Distribution Date"), (A) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for
Common Shares registered in the names of the holders thereof (which
certificates shall also be deemed to be Right Certificates when the
context so requires) and not by separate Right Certificates, and (B)
the right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares. As soon as practicable
after the Distribution Date, the Company will prepare and execute, the
Rights Agent will countersign, and the Company will send or cause to be
sent (and the Rights Agent will, if requested, send) by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the
Close of Business on the Distribution Date, at the address of such
holder shown on the records of the Company, one or more Right
Certificates, in substantially the form of Exhibit A hereto (the "Right
Certificates"), evidencing one Right for each Common Share so held,
subject to adjustment pursuant to Section 11(i). If an adjustment in
the number of Rights per Common Share has been made pursuant to Section
11(i), at the time Right Certificates are distributed, the Company may,
to the extent provided in Section 14(a), make the necessary and
appropriate rounding adjustments (as set forth in Section 14(a)) so
that Right Certificates are distributed representing only whole numbers
of Rights and pay cash in lieu of fractional Rights pursuant to Section
14(a). As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights, in substantially
the form of Exhibit B hereto (the "Summary of Rights"), by first class,
postage-prepaid mail, to each record holder of Common Shares as of the
Close of Business on the Record Date, at the address of such holder
shown on the records of the Company. With respect to certificates for
Common Shares outstanding as of the Record Date, until the Distribution
Date (or the earlier Redemption Date or Final Expiration Date), the
Rights will be evidenced by such certificates registered in the names
of the holders thereof and the registered holders of the Common Shares
shall also be the registered holders of the associated Rights. Until
the Distribution Date (or the earlier Redemption Date or Final
Expiration Date), the surrender for transfer of any certificate for
Common Shares (including without limitation the
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surrender for transfer of any certificate for Common Shares outstanding
as of the Record Date), with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(c) Certificates for Common Shares that become outstanding
after the Record Date and (1) before the earliest of the Distribution
Date, the Redemption Date or the Final Expiration Date or (2) upon the
exercise or conversion, before the earlier of the Redemption Date or
the Final Expiration Date, of any option or other security exercisable
for or convertible into Common Shares, which option or other security
is outstanding on the Distribution Date, shall have impressed on,
printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between
Xxxxxxxxxx Technology Incorporated (the "Company") and Xxxxx
Fargo Bank Minnesota, N.A., dated as of July 19, 2000 (the
"Rights Agreement"), the terms of which (including
restrictions on the transfer of such Rights) are hereby
incorporated herein by reference and a copy of which is on
file at the principal executive 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 without charge after receipt of a written
request therefor from such holder. Under certain
circumstances, as set forth in the Rights Agreement, Rights
that are or were beneficially owned by an Acquiring Person or
any Associate or Affiliate thereof (as those terms are defined
in the Rights Agreement) may become void.
With respect to such certificates containing any such legend, until the
earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such
certificates alone, the registered holders of the Common Shares shall
also be the registered holders of the associated Rights and the
surrender for transfer of any such certificate shall also constitute
the transfer of the Rights associated with the Common Shares
represented thereby. If the Company purchases or acquires any Common
Shares after the Record Date but before the Distribution Date, any
Rights associated with such Common Shares shall be deemed canceled and
retired so that the Company shall not be entitled to exercise any
Rights associated with the Common Shares that are no longer
outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Common Shares and of assignment to be printed on
the reverse thereof) shall be in substantially the form of Exhibit A hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may
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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 or automated quotation system on which the Rights may from time
to time be listed, or to conform to usage or to reflect adjustments to the
Rights made pursuant to this Agreement. Subject to Sections 11, 13 and 22, the
initial Right Certificates, whenever distributed, shall entitle the holders
thereof to purchase such number of one-tenths of a Common Share as shall be set
forth therein at the price per one-tenth of a Common Share set forth therein
(the price per one-tenth of a Common Share being called the "Purchase Price"),
but the amount and type of securities purchasable upon the exercise of each
Right and the Purchase Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman, Chief Executive Officer, President, Chief
Financial Officer, any Vice President, or Secretary, either manually or
by facsimile signature. The Right Certificates shall be countersigned,
either manually or by facsimile signature, by the Rights Agent and
shall not be valid for any purpose unless so countersigned. If any
officer of the Company who shall have signed or whose facsimile
signature shall appear on any of the Right Certificates shall cease to
be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right
Certificates, nevertheless, may be countersigned by the Rights Agent,
and issued and delivered by the Company with the same force and effect
as though the Person who signed such Right Certificates had not ceased
to be such officer of the Company; and any Right Certificate may be
signed on behalf of the Company by any Person who, at the actual date
of the signing of such Right Certificate, shall be a proper officer of
the Company to sign such Right 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 the office or
offices designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date and certificate number of each of the
Right Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Lost, Stolen, Destroyed or Mutilated Right Certificates.
(a) Subject to Section 14, at any time after the Close of
Business on the Distribution Date, and at or before the Close of
Business on the earlier of the Redemption Date or the Final Expiration
Date, any Right Certificate or Right Certificates (other than Right
Certificates representing Rights that have become void pursuant to
Section 11(a)(2) or that have been exchanged pursuant to Section 24)
may be transferred, split up,
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combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number
of Common Shares as the Right Certificate or Right 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 Right Certificate or Rights
Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates
to be transferred, split up, combined or exchanged at the office or
offices of the Rights Agent designated for such purpose. Thereupon the
Rights Agent shall, subject to Section 14, countersign and deliver to
the Person entitled thereto a Right Certificate or Right Certificates,
as the case may be, as so requested. The Company may require payment by
the registered holder 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 Right Certificates.
Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered
Right Certificate until the registered holder shall have duly completed
and executed the form of assignment on the reverse side of such Right
Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of such
Right Certificate or Affiliates or Associates thereof as the Company
shall reasonably request.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory
to them, and, at the Company's request, 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 Right
Certificate if mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Right Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 11(a)(2) and Section 13, the registered
holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side
thereof duly completed and executed, to the Rights Agent at the office
or offices of the Rights Agent designated for such purpose, together
with payment of the Purchase Price for each one-tenth of a Common Share
as to which Rights are exercised, at or before the earliest of (1) the
Close of Business on August 10, 2010 (the "Final Expiration Date"), (2)
the time at which the Rights are redeemed as provided in Section 23
(the "Redemption Date"), or (3) the time at which such Rights are
exchanged as provided in Section 24.
(b) The Purchase Price for each one-tenth of a Common Share
pursuant to the exercise of a Right shall initially be $10.00, shall be
subject to adjustment from time to
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time as provided in Sections 11 and 13 and shall be payable in lawful
money of the United States of America in accordance with paragraph (c)
below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly
completed and executed, accompanied by payment of the Purchase Price
for each one-tenth of a Common Share to be purchased (or, after the
occurrence of a Section 11(a)(2) Event or Section 13 Event, the
Adjusted Exercise Price for each Right exercised) and an amount equal
to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 in cash, or by
certified check or bank cashiers' check or money order payable to the
order of the Company, the Rights Agent shall, subject to Section 20(k),
thereupon promptly (1) (A) requisition from any transfer agent of the
Common Shares (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the number of Common Shares 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 Common Shares issuable upon
exercise of the Rights under this Agreement with a depositary agent,
requisition from the depositary agent depositary receipts representing
such number of Common Shares as are to be purchased (in which case
certificates for the Common Shares represented by such receipts shall
be deposited by the transfer agent with the depositary agent) and the
Company hereby directs the depositary agent to comply with such
request, (2) when appropriate, requisition from the Company the amount
of cash to be paid in lieu of issuance of fractional interests in
shares in accordance with Section 14, (3) promptly after receipt of
such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by
such holder and (4) when appropriate, after receipt, promptly deliver
such cash for fractional interests to or upon the order of the
registered holder of such Right Certificate.
(d) If the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Right Certificate or to such holder's duly
authorized assigns, subject to Section 14.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated
to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (1) duly completed and
executed the form of election to purchase set forth on the reverse side
of the Right Certificate surrendered for such exercise and (2) provided
such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) of such Right Certificate or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if
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surrendered to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if surrendered to the Rights
Agent, shall be canceled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by 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 Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to the Company.
Section 9. Reservation and Availability of Common Shares.
(a) The Company will cause to be reserved and kept available
out of its authorized and unissued Common Shares at all times prior to
a Section 11(a)(2) Event, the number of Common Shares that will be
sufficient to permit the exercise in full of all outstanding Rights
after the Distribution Date but prior to a Section 11(a)(2) Event.
(b) At such time, if any, as, and so long as, the Common
Shares issuable upon the exercise of Rights may be listed on any
national securities exchange, the Company shall use its best efforts to
cause, from and after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) The Company will prepare and file, as soon as practicable
following the Shares Acquisition Date, a registration statement under
the Securities Act of 1933, as amended (the "Act"), with respect to the
Rights and the Company's securities purchasable upon exercise of the
Rights on an appropriate form, and use its best efforts to cause such
registration statement to (1) become effective as soon as practicable
after such filing, and (2) 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 or (B) the Final Expiration Date. The Company will also take
such action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in connection
with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed 90 days after the date the
registration statement is filed, the exercisability of the Rights in
order to permit the registration statement to become effective. Upon
any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. In addition, if the Company shall
determine that a registration statement is required following the
Distribution Date, the Company may temporarily suspend the
exercisability of the Rights until such time as a registration
statement has been declared effective. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in
any jurisdiction if the requisite qualification in such jurisdiction
shall not have been obtained or the exercise thereof is not permitted
under applicable law.
(d) The Company will take all such action as may be necessary
to ensure that all Common Shares delivered upon exercise of Rights
shall, at the time of delivery of the
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certificates for such Common Shares (subject to payment of the Purchase
Price for each one-tenth of a Common Share to be purchased or, after a
Section 11(a)(2) Event, the Adjusted Exercise Price, and any applicable
transfer taxes), be duly and validly authorized and issued and fully
paid and nonassessable shares.
(e) The Company will pay when due and payable any and all
federal and state transfer taxes and charges that may be payable in
respect of the issuance or delivery of the Right Certificates or of any
Common Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax that may be payable in
respect of any transfer or delivery of Right Certificates to a person
other than, or the issuance or delivery of certificates or depositary
receipts for the Common Shares in a name other than that of, the
registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or deliver any certificates or
depositary receipts for Common Shares upon the exercise of any Rights
until any such tax shall have been paid (any such tax being payable by
the holder of such Right Certificate at the time of surrender) or until
it has been established to the Company's satisfaction that no such tax
is due.
Section 10. Common Shares Record Date. Each person in whose name any
certificate for Common Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Common Shares
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price for each one-tenth of a Common Share to be purchased or,
after a Section 11(a)(2) Event or Section 13 Event, the Adjusted Exercise Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Common Shares
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next Business Day on which the Common Shares transfer books of the Company
are open. Before the exercise of the Rights evidenced thereby, the holder of a
Right Certificate as such shall not be entitled to any rights of a holder of
Common Shares for which the Rights shall be exercisable, including without
limitation the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (1) If the Company shall at any time after the date of
this Agreement (A) declare or pay a dividend on the Common Shares
payable in Common Shares, (B) subdivide the outstanding Common Shares
into a greater number of Common Shares, (C) combine the outstanding
Common Shares into a smaller number of Common Shares or (D) issue any
shares of its capital stock in a reclassification of the Common Shares
(including any such reclassification in connection with a
consolidation, merger or
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statutory share exchange in which the Company is the continuing,
surviving or acquiring corporation), except as provided in Section
11(m) with respect to an event described in clause (A), (B) or (C)
above that occurs before the Distribution Date or as otherwise provided
in this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind
of shares of capital stock issuable on such date pursuant to the
exercise of the Rights, 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, or, after a Section
11(a)(2) Event or Section 13 Event, the Adjusted Exercise Price then in
effect (and any applicable transfer taxes), the aggregate number and
kind of shares of capital stock that, if such Right had been exercised
immediately before such date and at a time when the Common Shares
transfer books of the Company were open, such holder would have owned
upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event
occurs that would require an adjustment under both Section 11(a)(1) and
Section 11(a)(2), the adjustment provided for in this Section 11(a)(1)
shall be in addition to, and shall be made before, any adjustment
required pursuant to Section 11(a)(2).
(2) Subject to Section 24, if any Person shall become an
Acquiring Person (other than pursuant to any Section 13 Event occurring
on or after the Distribution Date or within 15 days prior thereto),
proper provision shall be made so that each holder of a Right, subject
to Section 11(a)(3), shall thereafter have a right to receive, upon
exercise thereof by payment (in lieu of the payment required to be made
pursuant to Section 7 to exercise a Right) of an amount equal to the
product of (i) the number of one-tenths of a Common Share that would
otherwise be issuable upon exercise of a Right after the Distribution
Date if no Section 11(a)(2) Event or Section 13 Event had occurred and
(ii) ten times the then current Purchase Price for one-tenth of a
Common Share that would have been payable in accordance with the terms
of this Agreement if such Right had been exercised immediately prior to
the first occurrence of a Section 11(a)(2) Event or Section 13 Event,
such number of whole Common Shares of the Company (in lieu of the
number of one-tenths of a Common Share for which such Right would have
been exercisable after the Distribution Date and prior to the first
occurrence of a Section 11(a)(2) Event or Section 13 Event) as shall
equal the result obtained by (A) multiplying the then-current Purchase
Price for one-tenth of a Common Share immediately prior to the first
occurrence of a Section 11(a)(2) Event or Section 13 Event by ten times
the number of one-tenths of a Common Share for which a Right would have
been exercisable after the Distribution Date and immediately prior to
the first occurrence of a Section 11(a)(2) Event or Section 13 Event
and (B) dividing that product by 50% of the then-current per-share
market price of the Company's Common Shares (determined pursuant to
Section 11(d)) on the date of such occurrence. The exercise price of a
Right determined pursuant to the immediately preceding sentence at the
time of the exercise of the Right, after giving effect to any
adjustments in the Purchase Price pursuant to this Section 11 but
subject to Section 11(a)(3), is referred to in this Agreement as the
"Adjusted Exercise Price."
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From and after the first occurrence of a Section 11(a)(2)
Event or a Section 13 Event, any Rights that are beneficially owned by
any Acquiring Person (or any Associate or Affiliate thereof) or were
beneficially owned by any Acquiring Person (or any Associate or
Affiliate thereof) after the Acquiring Person became an Acquiring
Person shall become void without any further action and no holder of
such Rights shall thereafter have any rights to exercise such Rights or
any other rights whatsoever with respect to such Rights, whether under
this Agreement or otherwise. No Right Certificate shall be issued
pursuant to Section 3 that represents Rights that would be void
pursuant to the preceding sentence; no Right Certificate shall be
issued at any time upon the transfer of any Rights to an Acquiring
Person whose Rights would be void pursuant to the preceding sentence or
any Associate or Affiliate of such an Acquiring Person or to any
nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring
Person or any Associate or Affiliate of such Acquiring Person whose
Rights would be void pursuant to the preceding sentence shall be
canceled. The Company shall use all reasonable efforts to ensure that
the provisions of this Section 11(a)(2) are complied with, but shall
have no liability to any holder of a Right Certificate or other Person
as a result of its failure in good faith to make any determinations
with respect to an Acquiring Person or its Affiliates or Associates.
(3) If, on the date of the occurrence of a Section 11(a)(2)
Event (the "Adjustment Date"), the Company does not have sufficient
authorized, unissued and unreserved Common Shares available to permit
the exercise in full of all Rights that are exercisable on the
Adjustment Date for the number of Common Shares per Right provided for
in Section 11(a)(2), then the exercise price of a Right and the number
of Common Shares to be delivered by the Company upon exercise of a
Right shall be further adjusted as provided in this subparagraph (3).
(A) Definitions:
(i) The "Aggregate Market Value" is the product
of the number of Available Shares times the current
per-share market price of the Common Shares on the
Adjustment Date, determined as provided in Section
11(d).
(ii) The "Available Shares" are all unreserved
Common Shares (for which purpose, and for the
purposes of all other provisions of this Section
11(a)(3), Common Shares reserved for exercise of the
Rights shall be deemed to be unreserved) which are
authorized and unissued immediately before the
Adjustment Date.
(iii) The "Exercise Price" is the Adjusted
Exercise Price immediately after the Section 11(a)(2)
Event without regard to this Section 11(a)(3).
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(iv) The "Deficiency" is the amount
by which two times the Exercise Price
exceeds the quotient obtained by dividing
the Aggregate Market Value by the number of
Rights remaining outstanding immediately
before the Adjustment Date (the "Remaining
Rights") (which number shall not include the
Rights that are beneficially owned by any
Acquiring Person (or any Associate or
Affiliate thereof) or were beneficially
owned by any Acquiring Person (or any
Associate or Affiliate thereof) after the
Acquiring Person became an Acquiring Person
that shall have become void pursuant to
Section 11(a)(2)).
(B) If the Deficiency is less than or equal to
the Exercise Price, then
(i) the number of Common Shares to
be delivered by the Company upon exercise of
a Right shall be adjusted to equal the
number of Available Shares divided by the
number of Remaining Rights; and
(ii) the amount of cash required to
be delivered by the holder of a Right upon
the exercise thereof shall be adjusted (the
"New Exercise Price") to equal the Exercise
Price minus the Deficiency, notwithstanding
anything to the contrary provided in Section
11(a)(2); provided, however, that in no
event will the New Exercise Price be less
than the aggregate par value of the Common
Shares required to be delivered upon the
exercise of one Right pursuant to
subparagraph (B)(i) above.
(C) If the Deficiency is greater than the
Exercise Price, then
(i) the number of Common Shares to
be delivered by the Company upon exercise of
a Right shall be adjusted to equal the
quotient obtained by dividing the Exercise
Price by the per-share market price of the
Common Shares on the Adjustment Date;
(ii) the New Exercise Price shall
equal the aggregate par value of the Common
Shares required to be delivered upon the
exercise of one Right pursuant to
subparagraph (C)(i) above; and
(iii) In lieu of issuing Common
Shares (in whole or in part upon the
exercise of Rights) the Company may issue,
upon the exercise of Rights at the New
Exercise Price
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notwithstanding anything to the contrary
provided in Section 11(a)(2), other equity
securities of the Company to the extent they
shall be authorized (including, without
limitation, shares, or units or fractions of
shares, of preferred stock to the extent
they shall be authorized) that the Board of
Directors of the Company has determined to
have substantially the same value, voting
rights, dividend rights and other rights as
the Common Shares (such equity securities
are herein called "common share
equivalents"). To the extent that such
common share equivalents (or fractions
thereof) are substituted for Common Shares
upon exercise of the Rights following the
occurrence of a Section 11(a)(2) Event, they
shall be substituted on a pro-rata basis
with respect to all Rights (other than
Rights that are beneficially owned by any
Acquiring Person (or any Associate or
Affiliate thereof) or were beneficially
owned by any Acquiring Person (or any
Associate or Affiliate thereof) after the
Acquiring Person became an Acquiring Person
that shall have become void pursuant to
Section 11(a)(2)). Such common shares
equivalents shall not be included in
Available Shares, and all of the Available
Shares shall be reserved, as of the
Adjustment Date, for issuance, on a pro-rata
basis, upon exercise of the Rights and may
not be substituted for with common share
equivalents upon the exercise of any Right
except to the extent that the number of
Common Shares required to be delivered under
subparagraph (C)(i) upon the exercise of
such Right exceeds the quotient of the
number of Available Shares divided by the
number of Remaining Rights.
(D) If, at the time any adjustment is required
pursuant to this Section 11(a)(3), the Common Shares shall
have no par value, then for the purpose of this Section
11(a)(3), the par value of the Common Shares shall be deemed
to be $.01 per share.
(E) If there shall not be sufficient authorized but
unissued and unreserved Common Shares (or common share
equivalents the issuance of which is permitted under Section
11(a)(3)(C)(iii)), to permit the exercise in full of the
Rights in accordance with this subparagraph (3), the Company
shall use its best efforts to cause the authorization of
sufficient additional Common Shares or common share
equivalents to permit such exercise and, if the Board of
Directors of the Company shall determine in good faith that it
is likely that sufficient additional Common Shares or common
stock equivalents could be authorized to permit such exercise,
the Company may suspend the exercisability of the Rights for a
period not to
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exceed 90 days (and not beyond the Final Expiration Date) in
order to seek any authorization of additional Common Shares or
common share equivalents. 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. If, despite the best
efforts of the Company, there shall not be sufficient
authorized but unissued and unreserved Common Shares (or
common share equivalents) to permit the exercise in full of
the Rights in accordance with this subparagraph (3), the Board
of Directors of the Company in good faith shall establish such
a system as it shall determine will provide for treatment of
exercising Rights holders on as pro-rata a basis as
practicable based upon the number of Common Shares for which
Rights are exercised and the number of Available Shares.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Shares entitling
them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Shares or securities
convertible into Common Shares at a price per Common Share (or having a
conversion price per share, if a security convertible into Common
Shares) less than the current per-share market price of the Common
Shares (as determined pursuant to Section 11(d)) 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
before such record date by a fraction, the numerator of which shall be
the number of Common Shares outstanding on such record date, plus the
number of Common Shares that the aggregate offering price of the total
number of Common Shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase, at such current per-share market price, and the denominator
of which shall be the number of Common Shares outstanding on such
record date, plus the number of additional Common Shares 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 in a consideration part or all of which shall be in a
form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders
of the Rights. Common Shares 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 again be adjusted
to be the Purchase Price that would then be in effect if such record
date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of the Common Shares (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation or in a
statutory share exchange) of evidences of indebtedness or cash or
non-cash assets (other than a regular quarterly cash dividend or a
dividend payable in
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Common Shares) or subscription rights or warrants (excluding those
referred to in Section 11(b)), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price
in effect immediately before such record date by a fraction, the
numerator of which shall be the current per-share market price of the
Common Shares (as determined pursuant to Section 11(d)) on such record
date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights) of the
portion of the evidences of indebtedness or cash or non-cash assets so
to be distributed on, or of such subscription rights or warrants
applicable to, one Common Share, and the denominator of which shall be
such current per-share market price of the Common Shares. 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 again be adjusted to be the Purchase Price that
would then be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current
per-share market price" of any security (a "Security" for the purpose
of this Section 11(d)) on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the 30
consecutive Trading Days (as defined below) immediately before such
date; provided, however, that if the current per-share market price of
the Security is determined during a period following the announcement
by the issuer of such Security of (A) a dividend or distribution on
such Security payable in such Security or securities convertible into
such Security (other than the Rights) or (B) any subdivision,
combination or reclassification of such Security, and before the
expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the
current per-share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security.
The closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Security is not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not
listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported on the
Nasdaq National Market, the Nasdaq SmallCap Market or any similar
system then in use, or, if on any such date the Security is not quoted
or reported 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 Security selected by the Board of Directors of the
Company. If on any such day no market maker is making a market in the
Security, the fair value of such Security on such day as determined in
good faith by the Board of Directors of the Company (whose
determination shall be described in a
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statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights) shall be used in lieu of
the closing price for such day. The term "Trading Day" shall mean a day
on which the principal national securities exchange on which the
Security is listed or admitted to trading is open for the transaction
of business or, if the Security is not listed or admitted to trading on
any national securities exchange, a Business Day.
(e) Anything herein to the contrary notwithstanding, except as
provided in the third sentence of this Section 11(e), no adjustment in
the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price;
provided, however, that any adjustments that by reason of this Section
11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one-ten
thousandth of a Common Share or any other share or security, as the
case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11, but for the first sentence
of this Section 11(e), shall be made no later than the earlier of (1)
three years from the date of the transaction that requires such
adjustment or (2) the Final Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section
11(a) or Section 13(a), the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the
Company other than Common Shares, thereafter the number of such other
shares so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares
contained in Section 11(a) through (c) inclusive, and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Common Shares shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of Common
Shares (or other securities) purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price
as a result of the calculations made in Section 11(b) and (c), each
Right outstanding immediately before the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of Common Shares (calculated to the nearest
one ten-thousandth of a Common Share) obtained by (1) multiplying (A)
the number of Common Shares covered by a Right immediately before such
adjustment by (B) ten times the Purchase Price in effect immediately
before such adjustment of the Purchase Price and (2) dividing the
product so obtained by ten times the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
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(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of Common Shares
purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be
exercisable for the number of Common Shares for which a Right was
exercisable immediately before such adjustment. Each Right held of
record before such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one ten-thousandths)
obtained by dividing the Purchase Price in effect immediately before
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 Right Certificates have been issued on or after
the Distribution Date, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued on or
after the Distribution Date, 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 Right
Certificates on such record date Right Certificates evidencing, subject
to Section 14, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such
holders before the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein, may bear, at the
option of the Company, the adjusted Purchase Price or the Adjusted
Exercise Price, and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(j) Regardless of any adjustment or change in the Purchase
Price or the number of Common Shares issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one-tenth of a Common Share
and the number of one-tenths of a Common Share that were expressed in
the initial Right Certificates issued hereunder.
(k) 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 issuing to the holder of any Right
exercised after such record date of the Common Shares and other capital
stock or securities of the Company, if any, issuable upon such exercise
over and above the Common Shares and other capital stock or securities
of the Company, if any, issuable upon such exercise on the basis of the
Purchase Price in effect before such adjustment; provided, however,
that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such
adjustment.
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(l) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that the Board of
Directors of the Company in its sole discretion shall determine to be
advisable in order that any (1) consolidation or subdivision of the
Common Shares, (2) issuance wholly for cash of any of the Common Shares
at less than the current per-share market price, (3) issuance wholly
for cash of securities that by their terms are convertible into or
exchangeable for Common Shares, (4) dividends on Common Shares payable
in Common Shares or (5) issuance of rights, options or warrants
referred to in paragraph (b) of this Section 11, hereafter made by the
Company to holders of its Common Shares shall not be taxable to such
shareholders.
(m) Anything in this Agreement or the Rights to the contrary
notwithstanding, if at any time after the date of this Agreement and
before the Distribution Date, the Company shall (1) declare or pay any
dividend on the Common Shares payable in Common Shares or (2) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise) into a greater or lesser number of
Common Shares, then in any such case (A) the number of one-tenths of a
Common Share purchasable after such event upon proper exercise of each
Right shall be determined by multiplying the number of one-tenths of a
Common Share so purchasable immediately before such event by a
fraction, the numerator of which is the number of Common Shares
outstanding immediately before such event and the denominator of which
is the number of Common Shares outstanding immediately after such event
and (B) each Common Share outstanding immediately after such event
shall have issued with respect to it that number of Rights that each
Common Share outstanding immediately before such event had issued with
respect to it. The adjustments provided for in this Section 11(m) shall
be made successively whenever such a dividend is declared or paid or
such a subdivision, combination or consolidation is effected. If an
event occurs that would require an adjustment under Section 11(a)(2)
and this Section 11(m), the adjustments provided for in this Section
11(m) shall be in addition to, and prior to, any adjustment required
pursuant to Section 11(a)(2).
(n) If any adjustment in the Purchase Price pursuant to
paragraph (b) or (c) of this Section 11 would not be permitted by law
or under the Company's Articles of Incorporation, as amended, no such
issuance of securities or distribution of evidences of indebtedness or
other assets or subscription rights or warrants, as the case may be,
that would require such an adjustment but for the limitations
established by law or the Company's Articles of Incorporation, as
amended, shall be made by the Company.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13, 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 Shares a copy
of such certificate and (c) if such adjustment is made after the Distribution
Date, mail a brief summary thereof to each holder of record of a Right
Certificate in accordance with
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Section 25. The Rights Agent shall be fully protected in relying on such
certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger, Share Exchange or Sale or Transfer
of Assets or Earning Power.
(a) If, on or after the Distribution Date or within 15
days prior thereto, directly or indirectly,
(1) the Company shall consolidate with, or merge with
and into, any other Person, and the Company shall not be the
continuing or surviving corporation of such consolidation or
merger,
(2) any Person shall consolidate with the Company, or
merge with and into the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or
merger and, in connection with such consolidation or merger,
all or part of the outstanding Common Shares of the Company
shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or money or
any other property (except as a result of the exercise of
statutory dissenters' rights),
(3) the company shall effect a statutory share
exchange with outstanding Common Shares of the Company being
exchanged for stock or other securities of any other Person,
money or any other property, or
(4) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise
transfer), in one or a series of related transactions, assets
or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company
or one or more of its wholly owned Subsidiaries),
then, and in each such case, proper provision shall be made so that (A)
each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof by
payment of the amount equal to the Adjusted Exercise Price, such number
of validly authorized and issued, fully paid, nonassessable and freely
tradable Common Shares of the Principal Party (as defined below), not
subject to any liens, encumbrances, rights of first refusal or adverse
claims, as shall be equal to the result obtained by dividing the
Adjusted Exercise Price by 50% of the then-current per-share market
price of the Common Shares of such Principal Party (determined pursuant
to Section 11(d)) on the date of consummation of such Section 13 Event;
(B) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such merger, consolidation, statutory share
exchange, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (C) the term "Company" shall
thereafter be deemed to refer to such Principal Party; and (D) such
Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of its Common Shares
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to permit the exercise of all outstanding Rights) in connection with
the consummation of any such transaction as may be necessary to ensure
that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter
deliverable upon the exercise of the Rights.
(b) "Principal Party" means:
(1) in the case of any transaction described in
clauses (1), (2) or (3) of the first sentence of Section
13(a), the Person (including, without limitation, the Company
as successor thereto or as the surviving corporation) that is
the issuer of any securities into which Common Shares of the
Company are converted in such merger, consolidation or
exchange, or if no securities are so issued, the Person that
is the other party to such merger, consolidation or exchange;
or
(2) in the case of any transaction described in
clause (4) 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;
provided, however, that in any such case, (A) if the Common Shares of
such Person are not at such time and have not been continuously over
the preceding 12-month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person, the Common Shares of which are and have been so
registered, "Principal Party" shall refer to such other Person, and (B)
in case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Shares 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 Shares having the greatest
aggregate market value.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of
authorized, unissued and unreserved Common Shares to permit the
exercise in full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the
date of any Section 13 Event, the Principal Party will:
(1) 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 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 earlier
of (i) the date as of which the Rights are no longer
exercisable for such securities or (ii) the Final Expiration
Date;
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(2) 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; and
(3) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
(d) The Company shall not enter into any transaction of the
kind referred to in this Section 13 if at the time of such transaction
there are any rights, warrants, instruments or securities outstanding
or any agreements or arrangements that, as a result of the consummation
of such transaction, would eliminate or substantially diminish or
eliminate the benefits intended to be afforded by the Rights.
(e) The provisions of this Section 13 shall similarly apply to
successive mergers, consolidations, exchanges or sales or other
transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates that evidence fractional
Rights. In lieu of such fractional Rights, there may be paid to the
registered holders of the Right 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
the purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day
immediately before the date on which such fractional Rights would have
been otherwise issuable. The closing price for any day shall be the
last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed
or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights
are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported on the Nasdaq National Market or the Nasdaq SmallCap Market or
any similar system then in use or, if on any such date the Rights are
not so quoted or reported, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Company. If on any
such date no such market maker is making a market in the Rights, the
fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used in lieu of the
closing price for such day.
(b) The Company shall not be required to issue fractions of
Common Shares upon exercise of the Rights or to issue certificates
which evidence fractions of Common
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Shares. Fractions of Common Shares may, at the election of the Company,
be evidenced by depositary receipts pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided
that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which
they are entitled as beneficial owners of the Common Shares represented
by such depositary receipts. In lieu of fractional Common Shares, the
Company may pay to the registered holders of Right Certificates at the
time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one Common
Share. For purposes of this Section 14(b), the current market value of
a Common Share shall be the closing price of a Common Share (as
determined pursuant to the second sentence of Section 11(d)) for the
Trading Day immediately before the date of such exercise or if the
closing price is not determinable pursuant to the second sentence of
Section 11(d), the current market value of a Common Share shall be
determined pursuant to the third sentence of Section 11(d).
(c) The holder of a Right by the acceptance of the Rights
expressly waives such holder's right to receive any fractional Rights
or any fractional Common Shares upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, except the rights of action given to the Rights Agent under Section
18, are vested in the respective registered holders of the Right Certificates
(and, before the Distribution Date, the registered holders of the Common
Shares); and any registered holder of any Right Certificate (or, before the
Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, before the
Distribution Date, of the Common Shares), 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 Right
Certificate (or, before the Distribution Date, the associated Common Shares
certificate) in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, agrees with the Company and the Rights Agent and with every
other holder of a Right that:
(a) before the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights
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Agent if surrendered at the office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, before the Distribution
Date, the associated Common Shares certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificate or the associated Common Shares certificate made by anyone
other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;
(d) the Company may issue Rights on or after the Record Date
but before the Distribution Date, and in certain instances after the
Distribution Date, as provided in this Agreement; and
(e) notwithstanding anything in this Agreement or the Rights
to the contrary, the Company, the Rights Agent and the Board of
Directors shall not have any liability to any holder of a Right or
other Person as a result of the inability of the Company or the Rights
Agent 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.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Common Shares or any
other securities of the Company that may at any time be issuable on the exercise
of the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
(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 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
(including the costs and expenses of defending against any claim of
liability), incurred without negligence, bad faith or
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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.
(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 Right Certificate or certificate for Common Shares or
for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons,
or otherwise upon the advice of its counsel as set forth in Section 20.
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 Section 21. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent;
and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
(b) If at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates
(or, before the Distribution Date, the Common Shares certificates), by their
acceptance thereof, shall be bound:
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(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 per-share market
price") be proved or established by the Company before 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 any one of the Chairman, the Chief Executive Officer, the
President, the Chief Financial Officer, any Vice President, and the
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Right Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any 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 Right Certificate (except
its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for
any change in the exercisability of the Rights (including the Rights
becoming void pursuant to Section 11(a)(2)) or any adjustment in the
terms of the Rights (including the manner, method or amount thereof)
provided for in Sections 3, 11, 13, 23 or 24, or the ascertaining of
the existence of facts that would require any such change or adjustment
(except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice that such change or adjustment is
required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of
any Common Shares to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Common Shares will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company 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.
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(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman, the Chief Executive Officer,
the President, the Chief Financial Officer, any Vice President, and the
Secretary 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 or for delay in acting
while waiting for those instructions.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in
any transaction in which the Company or its Subsidiaries may be
interested, or contract with or lend money to the Company or its
Subsidiaries 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 its
Subsidiaries 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 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 or powers 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 Right Certificate surrendered to
the Rights Agent for exercise or transfer, the form of assignment or
form of election to purchase, as the case may be, has either not been
duly completed and executed or indicates an affirmative response to
enumerated clause 1 and/or 2 on the reverse side of the applicable
Right Certificate, 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 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares by registered or certified mail, and, if such notice is
mailed after the Distribution Date, to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares by registered or certified mail, and, if such notice is mailed
after the Distribution Date, to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise
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become incapable of acting, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment within a period of 30
days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit such holder's Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a corporation organized and doing business under the laws of the United States
or of the State of Minnesota or New York (or of any other state of the United
States so long as such corporation is authorized to do business as a banking
institution in the State of Minnesota or New York), in good standing, having an
office in the State of Minnesota or New York that is authorized under such laws
to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and that has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million 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 execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Shares, and, if such notice is filed after the Distribution Date,
mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price or the Adjusted Exercise Price and the number or kind or
class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option,
at any time before the earlier of (1) such time as a Person becomes an
Acquiring Person or (2) the Close of Business on the Final Expiration
Date, redeem all but not less than all of the then-outstanding Rights
at a redemption price of $.001 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date of this Agreement (such redemption price being
referred to as the "Redemption Price"). The Redemption Price shall be
payable in cash by the Company. The redemption of the Rights by the
Board of Directors of the Company may be made effective at such time,
on such basis and with such conditions as the Board of Directors of the
Company in its sole
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discretion may establish. Except for the obligation of the Company to
pay the Redemption Price, the Board of Directors and the Company shall
not have any liability to any Person as a result of the redemption of
Rights pursuant to the terms of this Section 23.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights pursuant to paragraph
(a) of this Section 23, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of
the Board of Directors of the Company 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 their last addresses as they appear upon
the registry books of the Rights Agent or, before the Distribution
Date, on the registry books of the transfer agent for the Common
Shares; provided, however, that the failure to give, or any defect in,
any such notice shall not affect the validity of such redemption. Any
notice that is mailed in the manner herein provided shall be deemed
given whether or not the holder receives the notice. Each such notice
of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner except as specifically set forth in
this Section 23 or in Section 24 or other than in connection with the
purchase of Common Shares before the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time after any person becomes an Acquiring Person, exchange all
or part of the then-outstanding and exercisable Rights (which shall not
include Rights that shall have become void pursuant to the provisions
of Section 11(a)(2)) for Common Shares with each Right to be exchanged
for such number of Common Shares as shall equal the result obtained by
dividing (1) the Exercise Price (as defined in Section 11(a)(3)) by (2)
the current per-share market price of the Common Shares (determined
pursuant to Section 11(d)) on the date the Rights first become
exercisable for Common Shares pursuant to Section 11(a)(2) (such number
of shares being referred to as the "Exchange Ratio"). The Exchange
Ratio shall be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction affecting the Common Shares that occurs
after the date the Rights first become exercisable for Common Shares
pursuant to Section 11(a)(2). Notwithstanding the foregoing, the Board
of Directors shall not be empowered to effect such exchange at any time
after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph
(a) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall
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terminate, and the only right thereafter of a holder of such Rights
shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders
of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method
by which the exchange of Common Shares for Rights will be effected and,
in the event of any partial exchange, the number of Rights which will
be exchanged. Any partial exchange shall be effected pro rata based on
the number of Rights (other than Rights which shall have become void
pursuant to the provisions of Section 11(a)(2)) held by each holder of
Rights.
(c) If there shall not be sufficient Common Shares authorized,
unreserved and unissued to permit an exchange of Rights as contemplated
in accordance with this Section 24, the Company, at its option, may
substitute common share equivalents, as defined in Section
11(a)(3)(C)(iii)), for Common Shares exchangeable for Rights, at the
initial rate of one common share equivalent for each Common Share, as
appropriately adjusted to reflect stock splits, stock dividends or
similar transactions affecting the Common Shares that occur after the
date of this Agreement.
(d) If there shall not be sufficient Common Shares or common
share equivalents, as defined in Section 11(a)(3)(C)(iii), authorized,
unreserved and unissued to permit the exchange of Rights as
contemplated in accordance with this Section 24, the Company, if its
Board of Directors, at its option, shall elect to exchange Rights
pursuant to this Section 24, shall take all such action as may be
necessary to authorize additional Common Shares or common share
equivalents for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates that evidence fractional
Common Shares. In lieu of such fractional Common Shares, the Company
may pay to the registered holders of the Right Certificates with regard
to which such fractional Common Shares would otherwise be issuable an
amount in cash equal to the same fraction of the current market value
of a whole Common Share. For the purposes of this paragraph (e), the
current market value of a whole Common Share shall be the closing price
of a Common Share (as determined pursuant to the second sentence of
Section 11(d)) for the Trading Day immediately before the date of
exchange pursuant to this Section 24. The Board of Directors and the
Company shall not have any liability to any Person as a result of the
exchange of Rights pursuant to the terms of this Section.
Section 25. Notice of Certain Events.
(a) If the Company shall propose, at any time after the
Distribution Date, (1) to pay any dividend payable in stock of any
class to the holders of its Common Shares or
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36
to make any other distribution to the holders of its Common Shares
(other than a regular quarterly cash dividend), (2) to offer to the
holders of its Common Shares rights or warrants to subscribe for or to
purchase any additional Common Shares or shares of stock of any class
or any other securities, rights or options, (3) to effect any
reclassification of its Common Shares (other than a reclassification
involving only the subdivision of outstanding Common Shares), (4) to
effect any consolidation or merger into or with any other Person, or to
effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or a series
of related transactions, of 50% or more 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 wholly
owned Subsidiaries), (5) to effect any statutory share exchange with
outstanding Common Shares of the Company being exchanged for stock or
other securities of any other corporation or money or other property,
(6) to effect the liquidation, dissolution or winding up of the
Company, or (7) to declare or pay any dividend on the Common Shares
payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise),
then, in each such case, the Company shall give to each holder of a
Right Certificate, to the extent feasible and in accordance with
Section 26, 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, merger, sale, transfer, exchange, liquidation,
dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares, if any such
date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (1) or (2) above at least 10 days before
the record date for determining holders of the Common Shares for
purposes of such action, and in the case of any such other action, at
least 10 days before the date of the taking of such proposed action or
the date of participation therein by the holders of the Common Shares,
whichever shall be the earlier.
(b) If any Section 11(a)(2) Event shall occur, then, in any
such case, the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate, in accordance with Section 26, 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)(2).
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage-prepaid, or delivered by hand or express courier service or faxed,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
Xxxxxxxxxx Technology Incorporated
00 Xxxx Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Secretary
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37
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 Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage-prepaid, addressed (until another address is
filed in writing with the Company) as follows:
Xxxxx Fargo Bank Minnesota, N.A.
000 Xxxxx Xxxxxxx Xxxxxxxx Xxxxxx
Xxxxx Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Manager--Shareowner Services
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage-prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company may and the Rights
Agent shall, if so directed by the Company, from time to time supplement or
amend this Agreement without the approval of any holders of Common Shares or
Right Certificates in order (a) to extend the Final Expiration Date, (b) to cure
any ambiguity, or to correct or supplement any provision contained in this
Agreement that may be defective or inconsistent with any other provisions in
this Agreement, (c) before the Distribution Date, to otherwise change or
supplement any provision in this Agreement in any manner that the Company may
deem necessary or desirable or (d) following the Distribution Date, to otherwise
change or supplement any provision in this Agreement in any manner that the
Company may deem necessary or desirable and that shall not adversely affect the
interests of the holders of Right Certificates (other than Right Certificates
evidencing Rights that shall have become void pursuant to Section 11(a)(2)).
Without limiting the foregoing, the Company may at any time before such time as
any Person becomes an Acquiring Person amend this Agreement to lower the
thresholds set forth in Sections 1(a) and 3(a) from 15% to not less than the
greater of (1) the sum of .001% and the largest percentage of the outstanding
Common Shares then known by the Company to be beneficially owned by any Person
(other than an Exempt Person) or (2) 10%.
Section 28. Successors. All the 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. Benefits of this Agreement.
(a) 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 Right
Certificates (and, before the Distribution Date, the registered holders of
Common Shares) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, before the Distribution Date, the registered holders of Common Shares).
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38
(b) The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board of Directors or the Company or
necessary or advisable in the administration of this Agreement, including
without limitation the right and power to interpret this Agreement and to make
all determinations deemed necessary or advisable for the administration of this
Agreement. All such acts, calculations, interpretations and determinations
(including, for purposes of clause (2) below, all omissions with respect to the
foregoing) that are done or made by the Board of Directors in good faith shall
(1) be final, conclusive and binding on the Company, the Rights Agent and the
holders of the Rights and all other parties and (2) not subject the Board of
Directors to any liability to the holders of the Rights or any other party.
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Minnesota and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number
of counterparts and each of such 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 33. 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.
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In Witness Whereof, the parties have caused this Agreement to be duly
executed as of the date first written above.
HUTCHINSON TECHNOLOGY INCORPORATED
By /s/ Xxxx X. Xxxxxxxx
-----------------------------------------------
Its Chief Financial Officer
--------------------------------------------
XXXXX FARGO BANK MINNESOTA, N.A.
By /s/ Xxxx Xxxxx
-----------------------------------------------
Its Assistant Vice President
--------------------------------------------
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EXHIBIT A
[FORM OF RIGHT CERTIFICATE]
Certificate No. R-__ _____ Rights
Not exercisable after August 10, 2010 or such earlier date as the Board
of Directors orders redemption or exchange. The Rights are subject to
redemption, at the option of the Company, at $.001 per Right (subject to
adjustment), and to exchange on the terms set forth in the Rights Agreement.
Under certain circumstances set forth in the Rights Agreement, Rights that are
or were beneficially owned by an Acquiring Person or an Affiliate or Associate
of an Acquiring Person (as those terms are defined in the Rights Agreement) may
become void.
RIGHT CERTIFICATE
XXXXXXXXXX TECHNOLOGY INCORPORATED
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 of the Rights
Agreement dated as of July 19, 2000 (the "Rights Agreement") between Hutchinson
Technology Incorporated, a Minnesota corporation (the "Company"), and Xxxxx
Fargo Bank Minnesota, N.A., a national banking association (the "Rights Agent"),
to purchase from the Company at any time after the Distribution Date (as defined
in the Rights Agreement) and before 5:00 p.m. (Minneapolis, Minnesota time) on
August 10, 2010 at the office or offices of the Rights Agent designated for such
purpose, or of its successor as Rights Agent, one-tenth of a fully paid,
nonassessable share of the Company's Common Stock, $.01 par value (the "Common
Shares"), of the Company, at a purchase price of $10.00 per one-tenth of a
Common Share (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly completed and
executed. The number of Rights evidenced by this Right Certificate (and the
number of one-tenths of a Common Share that may be purchased upon exercise
thereof) set forth above, and the Purchase Price set forth above, are, except
for adjustments required pursuant to the Rights Agreement, the number and
Purchase Price as of August 10, 2000, based on the Common Shares as constituted
at such date.
As provided in the Rights Agreement, the exercise price of the Rights
and the number of Common Shares that may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms of the Rights
Agreement, which terms are hereby incorporated herein by reference and made a
part hereof and which Rights Agreement contains 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 Right Certificates (which
limitations of rights include the voiding of the Rights under certain
circumstances specified in the Rights Agreement). Copies of the Rights Agreement
are on file with the Secretary at the principal executive office of the Company
and will be mailed without charge by the Company to
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41
the holder of this certificate promptly following receipt by the Company of a
written request therefor.
Upon the occurrence of a "Section 11(a)(2) Event" (as defined in the
Rights Agreement), any Rights evidenced by this Right Certificate that are
beneficially owned by an Acquiring Person or an Associate or Affiliate of such
Acquiring Person (as such terms are defined in the Rights Agreement) or were
beneficially owned by any Acquiring Person or an Associate or Affiliate of such
Acquiring Person after the Acquiring Person becomes an Acquiring Person, shall
be void from and after the occurrence of such Section 11(a)(2) Event.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Common Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (a) may, but are not required to, be redeemed by the Company
at a redemption price of $.001 per Right, subject to adjustment as provided in
the Rights Agreement, payable in cash, and (b) may, but are not required to, be
exchanged by the Company in whole or in part for Common Shares (as such term is
defined in the Rights Agreement) or other shares of capital stock of the
Company. The Board of Directors of the Company and the Company shall not have
any liability to any person as a result of the redemption or exchange of the
Rights pursuant to the provisions of the Rights Agreement.
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, if in lieu thereof a cash payment is made, as
provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Common
Shares or of any other securities of the Company that may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned, manually or by facsimile signature, by
the Rights Agent.
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WITNESS the manual or facsimile signatures of the proper officer of the
Company.
Dated as of , 20 .
----------- --
HUTCHINSON TECHNOLOGY INCORPORATED
By
-----------------------------------------------
Title:
------------------------------------------
Countersigned:
XXXXX FARGO BANK MINNESOTA, N.A.
By
-----------------------------------------------
Title:
------------------------------------------
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[FORM OF REVERSE SIDE OF RIGHT CERTIFICATE]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and
transfers unto (please print name and address of
transferee) this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
Attorney, to transfer the within Right Certificate on the
books of the within-named Company, with full power of substitution.
Dated: , 20
---------------- --
----------------------------------
Signature
Signature Medallion Guaranteed:
Signatures must be medallion guaranteed by a member firm of a
registered national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an office
or correspondent in the United States or by an eligible guarantor institution
(bank, stockbroker, savings and loan association or credit union with membership
in an approved signature guaranty medallion program), pursuant to Rule 17Ad-15
promulgated under the Securities Exchange Act of 1934, as amended.
A-4
44
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best of
its knowledge) by checking the appropriate boxes that:
(1) The Rights evidenced by this Right Certificate
[ ] are
or
[ ] are not
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement); and
(2) the undersigned
[ ] did
or
[ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who, at
any time that such Person beneficially owned such Rights, is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
------------------------------------
Signature
NOTICE
The signature on the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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45
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to exercise Rights represented by the
Right Certificate.)
To XXXXXXXXXX TECHNOLOGY INCORPORATED:
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the Common Shares issuable
upon the exercise of such Rights (or such other securities of the Company or of
any other person that may be issuable upon exercise of the Rights) and requests
that certificates for such shares (or other securities, if any) be issued in the
name of:
Please insert social security
or other identifying number
-----------------------------------------
-----------------------------------------
-----------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
-----------------------------------------
-----------------------------------------
-----------------------------------------
(Please print name and address)
Dated: , 20
--------------- --
--------------------------------
Signature
Signature Medallion Guaranteed:
Signatures must be medallion guaranteed by a member firm of a
registered national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an office
or correspondent in the United States or by an eligible guarantor institution
bank (bank, stockbroker, savings and loan association or credit union with
membership in an approved signature guarantee medallion program), pursuant to
Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended.
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46
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best of
its knowledge) by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
[ ] are
or
[ ] are not
being exercised by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement); and
(2) the undersigned
[ ] did
or
[ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who, at
any time that such Person beneficially owned such Rights, is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
---------------------------------
Signature
NOTICE
The signature on the foregoing Election to Exercise and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
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EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
OF
XXXXXXXXXX TECHNOLOGY INCORPORATED
On July 19, 2000, the Board of Directors of Xxxxxxxxxx Technology
Incorporated (the "Company"), declared a dividend of one common share purchase
right (a "Right") for each outstanding share of common stock, $.01 par value
(the "Common Shares"), of the Company. The dividend is payable on August 10,
2000 (the "Record Date") to shareholders of record at the close of business on
that date.
Each Right initially entitles the registered holder to purchase from
the Company one-tenth of a Common Share, $.01 par value (the "Common Shares"),
of the Company at a price of $10.00 per one-tenth of a Common Share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement"), dated as of
July 19, 2000, between the Company and Xxxxx Fargo Bank Minnesota, N.A., as
Rights Agent (the "Rights Agent").
Initially, the Rights will attach to all certificates representing
Common Shares then outstanding and no separate Right Certificates will be
distributed. The Rights will separate from the Common Shares and a Distribution
Date for the Rights will occur upon the earlier of:
(1) the close of business on the 15th day following a public
announcement that a person or group of affiliated or associated persons
has become an "Acquiring Person" (i.e., has, subject to certain
exceptions, become the beneficial owner of 15% or more of the
outstanding Common Shares), or
(2) the close of business on the 15th day following the first
public announcement relating to a tender offer or exchange offer the
consummation of which would result in a person or group of affiliated
or associated persons becoming, subject to certain exceptions, the
beneficial owner of 15% or more of the outstanding Common Shares (or
such later date as may be determined by the Board of Directors of the
Company before a person or group of affiliated or associated persons
becomes an Acquiring Person).
Until the Distribution Date,
(a) the Rights will be evidenced by the Common Share
certificates and will be transferred with and only with the Common
Shares,
(b) new Common Share certificates issued after the Record Date
upon transfer or new issuance of the Common Shares will contain a
notation incorporating the Rights Agreement by reference, and
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48
(c) the surrender for transfer of any Common Share
certificate, even without such notation or a copy of this Summary of
Rights attached to it, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate.
As promptly as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on August 10, 2010, unless extended or
earlier redeemed or exchanged by the Company as described below.
The exercise price payable, and the number of Common Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution.
The number of Common Shares issuable upon the exercise of a Right is
also subject to adjustment in the event of a dividend on Common Shares payable
in Common Shares, or a subdivision, combination or reclassification of the
Common Shares.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
the Purchase Price. No fractional Common Shares will be issued if in lieu of
such issuance, a payment in cash is made based on the closing price (pro-rated
for the fraction) of the Common Shares on the last trading date before the date
of exercise.
If any person or group of affiliated or associated persons becomes an
Acquiring Person, proper provision shall be made so that each holder of a Right,
other than Rights that are or were beneficially owned by the Acquiring Person
(which will thereafter be void), will have the right to receive upon exercise of
the Right, at an exercise price equal to ten times the Purchase Price multiplied
by the number of one-tenths of a Common Share subject to the Right immediately
before the person or group became an Acquiring Person (the "Adjusted Exercise
Price"), that number of Common Shares having a market value of two times the
Adjusted Exercise Price, subject to certain possible adjustments.
If, on or after the Distribution Date or within 15 days prior thereto,
the Company is acquired in certain mergers or other business combination
transactions or 50% or more of the assets or earning power of the Company and
its subsidiaries (taken as a whole) are sold on or after the Distribution Date
or within 15 days before the Distribution Date in one or a series of related
transactions, each holder of a Right (other than Rights that have become void
under the terms of the Rights Agreement) will have the right to receive, upon
exercise of the Right at the Adjusted Exercise Price, that number of common
shares of the acquiring company (or, in certain cases, one of its affiliates)
having a market value of two times the Adjusted Exercise Price.
B-2
49
In certain events specified in the Rights Agreement, the Company is
permitted temporarily to suspend the exercisability of the Rights.
At any time after a person or group of affiliated or associated persons
becomes an Acquiring Person and before the acquisition by a person or group of
affiliated or associated persons of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange the Rights (other
than Rights that have become void under the terms of the Rights Agreement), in
whole or in part, for Common Shares or equivalent securities at an exchange
ratio per Right equal to the result obtained by dividing the Adjusted Exercise
Price of a Right immediately after the person or group becomes an Acquiring
Person by the current per share market price of the Common Shares, subject to
adjustment.
At any time before the time that a person or group of affiliated or
associated persons has become an Acquiring Person, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price of $.001 per
Right, subject to adjustment (the "Redemption Price"), payable in cash. The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. The Board of Directors and the Company shall not have any liability
to any person as a result of the redemption or exchange of the Rights pursuant
to the provisions of the Rights Agreement.
The terms of the Rights may be amended by the Board of Directors of the
Company, subject to certain limitations after the Distribution Date, without the
consent of the holders of the Rights, including an amendment before the date a
person or group of affiliated or associated persons becomes an Acquiring Person
to lower the threshold for exercisability of the Rights from 15% to not less
than the greater of (a) the sum of .001% and the largest percentage of the
outstanding Common Shares then known by the Company to be beneficially owned by
any person or group of affiliated or associated persons, or (b) 10% (subject to
certain exceptions).
Until a Right is exercised, the holder of the Right, as such, will have
no rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
, 2000. A copy of the Rights Agreement is available free of
charge from the Company by contacting the Secretary at Xxxxxxxxxx Technology
Incorporated, 00 Xxxx Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000. 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.
B-3
