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SCI SYSTEMS, INC.
AND
MELLON INVESTOR SERVICES LLC
RIGHTS AGREEMENT
DATED AS OF DECEMBER 20, 2000
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TABLE OF CONTENTS
Form of Right Certificate Exhibit A
Summary of Rights to Purchase Common Stock Exhibit B
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RIGHTS AGREEMENT
This RIGHTS AGREEMENT, dated as of December 20, 2000 (this
"Agreement"), is made and entered into by and between SCI Systems, Inc., a
Delaware corporation (the "Company"), and Mellon Investor Services LLC, a New
Jersey Limited Liability Company (the "Rights Agent").
RECITALS
WHEREAS, on December 20, 2000, the Board of Directors of the Company
(the "Board of Directors") authorized and declared a dividend distribution of
one right ("Right") for each share of Common Stock, par value $ .10 per share,
of the Company (a "Common Share") outstanding as of the Close of Business (as
hereinafter defined) on January 2, 2001, (the "Record Date"), each Right
initially representing the right to purchase one Common Share, upon the terms
and subject to the conditions herein set forth, and further authorized and
directed the issuance of one Right with respect to each Common Share issued or
delivered by the Company (whether originally issued or delivered from the
Company's treasury) after the Record Date but prior to the earlier of the
Distribution Date (as hereinafter defined) and the Expiration Date (as
hereinafter defined).
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (other than the
Company or any Subsidiary of the Company or any employee benefit or stock
ownership plan of the Company or of any Subsidiary of the Company or any Person
holding Common Shares for or pursuant to the terms
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of any such plan) 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
then outstanding; provided, however, that a Person shall not be deemed to have
become an Acquiring Person solely as a result of a reduction in the number of
Common Shares outstanding unless and until (i) such time as such Person or any
Affiliate or Associate of such Person shall thereafter become the Beneficial
Owner of any additional Common Shares, other than as a result of a stock
dividend, stock split or similar transaction effected by the Company in which
all holders of Common Shares are treated equally, or (ii) any other Person who
is the Beneficial Owner of any Common Shares shall thereafter become an
Affiliate or Associate of such Person.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and to
"beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise (in each case, other than
upon exercise or exchange of the Rights); provided, however,
that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any
of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; or
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(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or
dispose of, including pursuant to any agreement, arrangement
or understanding (whether or not in writing); or
(iii) of which any other Person is the Beneficial Owner, if such
Person or any of such Person's Affiliates or Associates has
any agreement, arrangement or understanding (whether or not in
writing) with such other Person (or any of such other Person's
Affiliates or Associates) with respect to acquiring, holding,
voting or disposing of any securities of the Company;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security (A)
if such Person has the right to vote such security pursuant to
an agreement, arrangement or understanding (whether or not in
writing) which (1) arises solely from a revocable proxy given
to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange Act and (2)
is not also then reportable on Schedule 13D under the Exchange
Act (or any comparable or successor report), or (B) if such
beneficial ownership arises solely as a result of such
Person's status as a "clearing agency", as defined in Section
3(a)(23) of the Exchange Act; and provided, further, that
nothing in this paragraph (c) shall cause a Person engaged in
business as an underwriter of securities to be the Beneficial
Owner of, or to beneficially own, any securities acquired
through such Person's participation in good faith in an
underwriting syndicate until the expiration of 40 calendar
days after the date of such acquisition, or such later date as
the Board of Directors of the Company may determine in any
specific case.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of Alabama or the
State of New Jersey (or such other state
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in which the designated office of the Rights Agent is located) are authorized or
obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
Eastern time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Eastern time, on the next succeeding
Business Day.
(f) "Common Shares" when used with reference to the Company shall
mean the Common Stock, par value $ .10 per share, of the Company; provided,
however, that, if the Company is the continuing or surviving corporation in a
transaction described in Section 11(a)(ii) or Section 13(a)(ii) hereof, "Common
Shares" when used with reference to the Company shall mean the capital stock or
equity security with the greatest aggregate voting power of the Company. "Common
Shares" when used with reference to any corporation or other Person, other than
the Company, including an Issuer, shall mean the capital stock or equity
security with the greatest aggregate voting power of such corporation or other
Person.
(g) "Company" shall mean SCI Systems, Inc., a Delaware
corporation.
(h) "Distribution Date" shall mean the earliest of: (i) the Close
of Business on the tenth Business Day (or, unless the Distribution Date shall
have previously occurred, such later date as may be specified by the Board of
Directors of the Company) after the Share Acquisition Date, (ii) the Close of
Business on the tenth Business Day (or, unless the Distribution Date shall have
previously occurred, such later date as may be specified by the Board of
Directors of the Company) after the date of the commencement of a tender or
exchange offer by any Person (other than the Company or any Subsidiary of the
Company or any employee benefit or stock ownership plan of the Company or of any
Subsidiary of the Company or any Person holding Common Shares for or pursuant to
the terms of any such plan), if upon the consummation thereof such Person
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would be the Beneficial Owner of 15% or more of the outstanding Common Shares,
and (iii) the Close of Business on the tenth Business Day after the first date
of public announcement by the Company or an Acquiring Person (by press release,
filing made with the Securities and Exchange Commission or otherwise) of the
first occurrence of a Triggering Event; provided, however, that if the earliest
of such dates would otherwise occur prior to the Record Date, the Distribution
Date shall mean the Close of Business on the Record Date.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(j) "Expiration Date" shall mean the earliest of (i) the Close of
Business on the Final Expiration Date, (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof, and (iii) the time at which all
exercisable Rights are exchanged as provided in Section 27 hereof.
(k) "Final Expiration Date" shall mean the tenth anniversary of
the Record Date.
(l) "Flip-in Event" shall mean any event described in clauses (A),
(B) or (C) of Section 11(a)(ii) hereof.
(m) "Flip-over Event" shall mean any event described in
subsections (i), (ii) or (iii) of Section 13(a) hereof.
(n) "Issuer" shall have the meaning set forth in Section 13(b)
hereof.
(o) "NYSE" shall mean the New York Stock Exchange.
(p) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, joint venture, trust, association,
unincorporated organization, group or other legal entity, and shall include any
successor (by merger or otherwise) of such entity.
(q) "Purchase Price" shall mean initially $240 per Common Share
and shall be subject to adjustment from time to time as provided in this
Agreement.
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(r) "Redemption Price" shall mean $0.01 per Right, subject to
adjustment by resolution of the Board of Directors of the Company to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof.
(s) "Right" shall have the meaning set forth in the Recitals to
this Agreement.
(t) "Right Certificates" shall mean certificates evidencing the
Rights, in substantially the form of Exhibit A attached hereto.
(u) "Rights Agent" shall mean Mellon Investor Services LLC, unless
and until a successor Rights Agent shall have become such pursuant to the terms
of this Agreement, and thereafter, "Rights Agent" shall mean such successor
Rights Agent.
(v) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(w) "Share Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person (by press release, filing
made with the Securities and Exchange Commission or otherwise) that an Acquiring
Person has become such.
(x) "Subsidiary" when used with reference to any Person shall mean
any corporation or other legal entity of which a majority of the voting power of
the voting equity securities or equity interests is owned, directly or
indirectly, by such Person; provided, however, that for purposes of Section
13(b) hereof, "Subsidiary" when used with reference to any Person shall mean any
corporation or other legal entity of which at least 20% of the voting power of
the voting equity securities or equity interests is owned, directly or
indirectly, by such Person.
(y) "Summary of Rights to Purchase Common Stock" shall mean the
Summary of Rights to Purchase Common Shares, in substantially the form of
Exhibit B attached hereto.
(z) "Trading Day" shall mean any day on which the principal
national securities exchange on which the Common Shares are listed or admitted
to trading is open for the transaction
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of business or, if the Common Shares are not listed or admitted to trading on
any national securities exchange, a Business Day.
(aa) "Triggering Event" shall mean any Flip-in Event or Flip-over
Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment and
hereby certifies that it complies with the requirements of the NYSE governing
transfer agents and registrars. The Company may from time to time act as
Co-Rights Agent or appoint such Co-Rights Agents as it may deem necessary or
desirable. The Rights Agent shall have no duty to supervise, and in no event
shall be liable for, the acts or omissions of any such Co-Rights Agent. Any
actions which may be taken by the Rights Agent pursuant to the terms of this
Agreement may be taken by any such Co-Rights Agent. To the extent that any
Co-Rights Agent takes any action pursuant to this Agreement, such Co-Rights
Agent shall be entitled to all of the rights and protections of, and subject to
all of the applicable duties and obligations imposed upon, the Rights Agent
pursuant to the terms of this Agreement.
Section 3. Issue of Right Certificates. (a) Until the Distribution
Date, (i) the Rights shall be evidenced by the certificates representing Common
Shares registered in the names of the record holders thereof (which certificates
representing Common Shares shall also be deemed to be Right Certificates),
together with a copy of the Summary of Rights, (ii) the Rights shall be
transferable only in connection with the transfer of the underlying Common
Shares, and (iii) the surrender for transfer of any certificates evidencing
Common Shares in respect of which Rights have been issued, with or without a
copy of the Summary of Rights, shall also constitute the transfer of the Rights
associated with the Common Shares evidenced by such certificates.
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(b) As promptly as practicable after the Record Date, the Company
shall send a copy of 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
as of such date.
(c) Rights shall be issued by the Company in respect of all Common
Shares (other than Common Shares issued upon the exercise or exchange of any
Right) issued or delivered by the Company (whether originally issued or
delivered from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates
evidencing such Common Shares shall have stamped on, impressed on, printed on,
written on or otherwise affixed to them the following legend or such similar
legend as the Company may deem appropriate (which do not affect the duties or
responsibilities of the Rights Agent) and as is 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 transaction reporting system on
which the Common Shares may from time to time be listed or quoted, or to conform
to usage:
This Certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between SCI Systems,
Inc. and Mellon Investor Services LLC, dated as of December 20, 2000
(the "Rights Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal
executive offices of SCI Systems, Inc. Under certain circumstances, as
set forth in the Rights Agreement, such Rights may be redeemed, may
expire, may be amended or may be evidenced by separate certificates and
no longer be evidenced by this Certificate. SCI Systems, Inc. will mail
to the holder of this Certificate a copy of the Rights Agreement without
charge promptly after receipt of a written request therefor. Under
certain circumstances as set forth in the Rights Agreement, Rights
beneficially owned by an Acquiring Person or any Affiliate or Associate
of an Acquiring Person (as such terms are defined in the Rights
Agreement) may become null and void.
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(d) As promptly as practicable after the Distribution Date, the
Company shall promptly notify in writing the Rights Agent thereof and provide
the Rights Agent with the names and addresses of all record holders of Common
Shares (together with all other necessary information), and the Company shall
prepare and execute, the Rights Agent shall countersign and the Company shall
send or cause to be sent (and the Rights Agent shall, if requested, send), by
first-class, insured, postage prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the address of
such holder shown on the records of the Company, a Right Certificate, evidencing
one Right for each Common Share so held, subject to adjustment. As of and after
the Distribution Date, the Rights shall be evidenced solely by such Right
Certificates.
Section 4. Form of Right Certificates. The Right Certificates (and the
form of election to purchase and form of assignment to be printed on the reverse
thereof) shall be substantially in the form set forth as Exhibit A hereto with
such changes, marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate provided
that such marks, legends, summaries or endorsements do not affect the rights,
duties or responsibilities of the Rights Agent 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 transaction reporting system on
which the Rights may from time to time be listed or quoted, or to conform to
usage. Subject to the provisions of Section 22 hereof, the Right Certificates,
whenever issued, on their face shall entitle the holders thereof to purchase
such number of Common Shares as shall be set forth therein at the Purchase Price
set forth therein, but the Purchase Price, the number and kind of
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securities issuable upon exercise of each Right and the number of Rights
outstanding 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 of the
Board, Chief Executive Officer, or Chief Financial Officer, either manually or
by facsimile signature, and shall have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the 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 execution 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, receipt by the Rights Agent
of written notice to that effect and all other relevant information referred to
in Section 3(a), the Rights Agent shall keep or cause to be kept, at the office
of the Rights Agent designated for such purpose and at such other offices 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
any transaction reporting system on which the Rights may from time to time be
listed or quoted, books for
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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 of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Sections 7(d) and 14 hereof, at any time after the
Close of Business on the Distribution Date and prior to the Expiration Date, any
Right Certificate or Right Certificates representing exercisable Rights may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
Common Shares (or other securities, as the case may be) 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 such Right Certificate shall make such request
in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose.
Thereupon or as promptly as practicable thereafter, subject to the provisions of
Sections 7(d) and 14 hereof, the Company shall prepare, execute and deliver to
the Rights Agent, and the Rights Agent shall countersign and deliver a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates. The Rights Agent shall have no
duty or obligation under this Section 6 or any other similar provision of the
Agreement unless and until it is satisfied that all such taxes and/or
governmental charges have been paid in full.
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(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 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 shall prepare, execute and deliver a new Right
Certificate of like tenor to the Rights Agent and the Rights Agent shall
countersign and deliver such new Right Certificate to the registered holder in
lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date and prior to the Expiration Date,
upon surrender of the Right Certificate, with the form of election to purchase
on the reverse side thereof duly executed, to the Rights Agent at the office or
offices of the Rights Agent designated for such purpose, together with payment
in cash, in lawful money of the United States of America by certified check or
bank draft payable to the order of the Company, equal to the sum of (i) the
exercise price for the total number of securities as to which such surrendered
Rights are exercised and (ii) an amount equal to any applicable tax or charge
required to be paid by the holder of such Right Certificate in accordance with
the provisions of Section 9 hereof. In lieu of the cash payment referred to in
the immediately preceding sentence, following the occurrence of a Triggering
Event the registered holder of a Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part upon
surrender of the Right Certificate as described above together with an election
to exercise such Rights without payment of cash on the reverse side thereof duly
completed. With respect to any Rights as to which such an
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election is made, the holder shall receive a number of Common Shares or other
securities having a value equal to the difference between (i) the value of the
Common Shares or other securities that would have been issuable upon payment of
the cash amount as described above, and (ii) the amount of such cash payment.
For purposes of this Section 7(a), the value of any Common Share or other
security shall be the current per share market price of a Common Share
(determined pursuant to the applicable provisions of Section 11(d) hereof) on
the Trading Day immediately preceding the date of the first occurrence of a
Triggering Event.
(b) Upon receipt of a Right Certificate representing exercisable
Rights with the form of election to purchase duly executed, accompanied by
either payment as described above or a duly completed election to exercise
without payment of cash, the Rights Agent shall promptly (i) requisition from
any transfer agent of the Common Shares (or make available, if the Rights Agent
is the transfer agent) certificates representing the number of Common Shares to
be purchased (and the Company hereby irrevocably authorizes and directs its
transfer agent to comply with all such requests), (ii) after receipt of such
certificates (or depositary receipts, as the case may be), 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, (iii) when necessary to comply with this Agreement, requisition from the
Company or any transfer agent therefor (or make available, if the Rights Agent
is the transfer agent) certificates representing the number of equivalent common
shares to be issued in lieu of the issuance of Common Shares in accordance with
the provisions of Section 11(a)(iii) hereof, (iv) when necessary to comply with
this Agreement, after receipt of such certificates, 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, (v) when necessary to comply with this Agreement, requisition from the
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Company the amount of cash to be paid in lieu of the issuance of fractional
shares in accordance with the provisions of Section 14 hereof or in lieu of the
issuance of Common Shares in accordance with the provisions of Section
11(a)(iii) hereof, (vi) when necessary to comply with this Agreement, after
receipt, deliver such cash to or upon the order of the registered holder of such
Right Certificate, and (vii) when necessary to comply with this Agreement,
deliver any due xxxx or other instrument provided to the Rights Agent by the
Company for delivery to the registered holder of such Right Certificate as
provided by Section 11(l) hereof.
(c) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, the Company shall prepare,
execute and deliver a new Right Certificate evidencing Rights equivalent to the
Rights remaining unexercised and the Rights Agent shall countersign and deliver
such new Right Certificate to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of Section 14 hereof.
(d) 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 any purported transfer, split up, combination or exchange
of any Right Certificate pursuant to Section 6 hereof or exercise of a Right
Certificate as set forth in this Section 7 unless the registered holder of such
Right Certificate shall have (i) properly completed and signed the certificate
following the form of assignment or the form of election to purchase, as
applicable, set forth on the reverse side of the Right Certificate surrendered
for such transfer, split up, combination, exchange or exercise and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company or the
Rights Agent shall have reasonably requested.
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(e) Neither the Company nor the Rights Agent shall have any
liability to any holder of Rights or any other Person as a result of the
Company's failure to make any determination under this Section 7 or any other
section with respect to an Acquiring Person on an Affiliate or Associate of an
Acquiring Person or transferees hereunder.
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 surrendered to the Company or to any of its
stock transfer agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no 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
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Company Covenants Concerning Securities and Rights. The
Company covenants and agrees that:
(a) So long as the Common Shares issuable upon the exercise of the
Rights may be listed on a national securities exchange, it shall endeavor to
cause, from and after such time as the Rights become exercisable, all securities
reserved for issuance upon the exercise of Rights to be listed on such exchange
upon official notice of issuance upon such exercise.
(b) It shall take all such action as may be necessary to ensure
that all Common Shares and/or other securities delivered upon exercise of
Rights, at the time of delivery of the certificates
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for such securities, shall be (subject to payment of the Purchase Price) duly
and validly authorized and issued, fully paid and nonassessable securities.
(c) It shall pay when due and payable any and all taxes and
charges that may be payable in respect of the issuance or delivery of the Right
Certificates and of any certificates representing securities issued upon the
exercise of Rights; provided, however, that the Company shall not be required to
pay any tax or charge which 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 representing securities issued
upon the exercise of Rights 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 representing securities
issued upon the exercise of any Rights until any such tax or charge shall have
been paid (any such tax or charge being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's reasonable satisfaction that no such tax or change is due.
(d) It shall use its best efforts (i) to file on an appropriate
form, as soon as practicable following the later of the first occurrence of a
Triggering Event or the Distribution Date, a registration statement under the
Securities Act with respect to the securities issuable upon exercise of the
Rights, (ii) to cause such registration statement to become effective as soon as
practicable after such filing, and (iii) to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The Company shall
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 after the date set forth in
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clause (i) of the first sentence of this Section 9(d), the exercisability of the
Rights in order to prepare and file such registration statement and to permit it
to become effective. Upon any such suspension, the Company shall promptly notify
the Rights Agent in writing of such suspension and 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 (with prompt written notice to the Rights Agent that such
suspension is no longer in effect). In addition, if the Company shall determine
that a registration statement should be filed under the Securities Act or any
state securities laws following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights in each relevant
jurisdiction until such time as a registration statement has been declared
effective and, upon any such suspension, the Company shall promptly notify the
Rights Agent in writing of such suspension and 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 (with prompt written notice to the Rights Agent that such suspension is
no longer in effect). Notwithstanding anything in this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite registration or qualification in such jurisdiction shall not have been
effected or the exercise of the Rights shall not be permitted under applicable
law.
(e) Notwithstanding anything in this Agreement to contrary, after
the Distribution Date it shall not, except as permitted by Section 23 or Section
26 hereof, take (or permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will
eliminate or otherwise diminish the benefits intended to be afforded by the
Rights.
(f) In the event that the Company is obligated to issue other
securities of the Company and/or pay cash pursuant to Sections 11, 13 or 14
hereof, it shall make all arrangements necessary
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so that such other securities and/or cash are available for distribution by the
Rights Agent, if and when necessary to comply with this Agreement.
Section 10. Record Date. Each Person in whose name any certificate
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 (and all applicable taxes or charges) 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 securities on, and such
certificate shall be dated, the next succeeding Business Day on which the Common
Shares transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a stockholder of the Company with respect to
securities 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
Securities or Number of Rights. The Purchase Price, the number and kind of
securities issuable upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this
Section 11.
(a) (i) In the event that the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Common Shares payable in
Common Shares, (B) subdivide the outstanding Common Shares, (C) combine the
outstanding Common Shares into a
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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 or merger in which the Company is the continuing
or surviving corporation), 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/or the number and/or kind of shares of
capital stock issuable on such date upon exercise of a Right, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive upon payment of the Purchase Price then in
effect the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
Common Shares transfer books of the Company were open, the holder of such Right
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. If an event occurs
which would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof or Section 13 hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) or Section 13 hereof.
(ii) Subject to the provisions of Section 27 hereof, in
the event that:
(A) any Acquiring Person or any Affiliate or Associate of
any Acquiring Person, at any time after the date of this Agreement,
directly or indirectly, shall (1) merge into the Company or otherwise
combine with the Company and the Company shall be the continuing or
surviving corporation of such merger or combination (other than in a
transaction subject to Section 13 hereof), (2) merge or otherwise
combine with any Subsidiary of the Company, (3) in one or more
transactions (other than in connection with the exercise or exchange of
Rights or the exercise or conversion of securities exercisable for
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or convertible into shares of any class of capital stock of the Company
or any of its Subsidiaries) transfer any assets to the Company or any
of its Subsidiaries in exchange (in whole or in part) for shares of any
class of capital stock of the Company or any of its Subsidiaries or for
securities exercisable for or convertible into shares of any class of
capital stock of the Company or any of its Subsidiaries, or otherwise
obtain from the Company or any of its Subsidiaries, with or without
consideration, any additional shares of any class of capital stock of
the Company or any of its Subsidiaries or securities exercisable for or
convertible into shares of any class of capital stock of the Company or
any of its Subsidiaries (other than as part of a pro rata distribution
to all holders of such shares of any class of capital stock of the
Company, or any of its Subsidiaries), (4) sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise dispose (in one or
more transactions), to, from, with or of, as the case may be, the
Company or any of its Subsidiaries (other than in a transaction subject
to Section 13 hereof), assets, including securities, on terms and
conditions less favorable to the Company than the Company would be able
to obtain in arm's-length negotiation with an unaffiliated third party,
(5) receive any compensation from the Company or any of its
Subsidiaries other than compensation as a director or for full-time
employment as a regular employee, in either case, at rates in
accordance with the Company's (or its Subsidiaries') past practices, or
(6) receive the benefit, directly or indirectly (except proportionately
as a stockholder), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantage provided
by the Company or any of its Subsidiaries; or
(B) during such time as there is an Acquiring Person,
there shall be any reclassification of securities (including any
reverse stock split), or recapitalization of the
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Company, or any merger or consolidation of the Company with any of its
Subsidiaries or any other transaction or series of transactions
involving the Company or any of its Subsidiaries (whether or not with
or into or otherwise involving an Acquiring Person), other than a
transaction subject to Section 13 hereof, which has the effect,
directly or indirectly, of increasing by more than 1% the proportionate
share of the outstanding shares of any class of equity securities or of
securities exercisable for or convertible into equity securities of the
Company or any of its Subsidiaries of which an Acquiring Person or any
Affiliate or Associate of any Acquiring Person, is the Beneficial
Owner; or
(C) any Person (other than the Company or any Subsidiary
of the Company or any employee benefit or stock ownership plan of the
Company or of any Subsidiary of the Company or any entity holding
Common Shares for or pursuant to the terms of any such plan) who or
which, together with all Affiliates and Associates of such Person,
shall at any time after date of this Agreement, become the Beneficial
Owner of 20% or more of the Common Shares then outstanding (other than
pursuant to any transaction set forth in Section 13(a) hereof);
provided, however, that a Person shall not be deemed to have become the
Beneficial Owner of 20% or more of the Common Shares then outstanding
for the purposes of this Section 11(a)(ii)(C) solely as a result of a
reduction in the number of Common Shares outstanding unless and until
such time as (1) such Person or any Affiliate or Associate of such
Person shall thereafter become the Beneficial Owner of any additional
Common Shares other than as a result of a stock dividend, stock split
or similar transaction effected by the Company in which all holders of
Common Shares are treated equally, or (2) any other Person who is the
Beneficial Owner of any Common Shares shall thereafter become an
Affiliate or Associate of such Person, then, and in each such case,
proper
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provision shall be made so that each holder of a Right, except as
provided below, shall thereafter have a right to receive, upon exercise
thereof in accordance with the terms of this Agreement at an exercise
price per Right equal to the product of the then-current Purchase Price
multiplied by the number of Common Shares for which a Right was
exercisable immediately prior to the first occurrence of a Triggering
Event, such number of Common Shares as shall equal the result obtained
by (x) multiplying the then-current Purchase Price by the number of
Common Shares for which a Right was exercisable immediately prior to
the first occurrence of a Triggering Event, and dividing that product
by (y) 50% of the current per share market price of the Common Shares
(determined pursuant to Section 11(d) hereof) on the date of the first
occurrence of a Triggering Event. Notwithstanding anything in this
Agreement to the contrary, from and after the later of the Distribution
Date and the first occurrence of a Flip-in Event, (1) any Rights that
are or were acquired or beneficially owned by any Acquiring Person (or
any Affiliate or Associate of such Acquiring Person) shall be null and
void and any holder of such Rights shall thereafter have no right to
exercise such Rights under any provision of this Agreement, (2) no
Right Certificate shall be issued pursuant to this Agreement that
represents Rights beneficially owned by an Acquiring Person or any
Affiliate or Associate thereof, (3) no Right Certificate shall be
issued at any time upon the transfer of any Rights to an Acquiring
Person or any Affiliate or Associate thereof or to any nominee of such
Acquiring Person or Affiliate or Associate thereof, and (4) any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring
Person or any Affiliate or Associate thereof shall be cancelled.
(iii) Upon the occurrence of a Flip-in Event, if there
shall not be sufficient Common Shares authorized but unissued or issued but not
outstanding to permit the issuance of all the
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Common Shares issuable in accordance with subsection (ii) hereof upon the
exercise of a Right, the Board of Directors of the Company shall use its best
efforts promptly to authorize and, subject to the provisions of Section 9(d)
hereof, make available for issuance additional Common Shares or other equity
securities of the Company having equivalent voting rights and an equivalent
value (as determined in good faith by the Board of Directors of the Company) to
the Common Shares (for purposes of this Section 11(a)(iii), "equivalent common
shares"). In the event that equivalent common shares are so authorized, upon the
exercise of a Right in accordance with the provisions of Section 7 hereof, the
registered holder shall be entitled to receive (A) Common Shares, to the extent
any are available and (B) a number of equivalent common shares, which the Board
of Directors of the Company shall have determined in good faith to have a value
equivalent to the excess of (x) the aggregate current per share market value of
all the Common Shares issuable in accordance with subsection (ii) hereof upon
the exercise of a Right (the "Exercise Value") over (y) the aggregate current
per share market value of any Common Shares available for issuance upon the
exercise of such Right; provided, however, that if at any time after 90 calendar
days after the first occurrence of a Flip-in Event, there shall not be
sufficient Common Shares and/or equivalent common shares available for issuance
upon the exercise of a Right, then the Company shall be obligated to deliver,
upon the surrender of such Right and without requiring payment of the Purchase
Price, Common Shares (to the extent available), equivalent common shares (to the
extent available) and then cash (to the extent permitted by applicable law and
any agreements or instruments to which the Company is a party in effect
immediately prior to the first
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occurrence of any Flip-in Event), which securities and cash shall have an
aggregate value equal to the excess of (1) the Exercise Value over (2) the
product of the then-current Purchase Price multiplied by the number of Common
Shares for which a Right was exercisable immediately prior to the first
occurrence of a Triggering Event. To the extent that any legal or contractual
restrictions prevent the Company from paying the full amount of cash payable in
accordance with the foregoing sentence, the Company shall pay to holders of the
Rights as to which such payments are being made all amounts which are not then
restricted on a pro rata basis and shall continue to make payments on a pro rata
basis as funds become available until the full amount due to each such Rights
holder has been paid.
(b) In the event that 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 having
equivalent rights, privileges and preferences as the Common Shares (for purposes
of this Section 11(b), "equivalent common shares")) or securities convertible
into Common Shares or equivalent common shares at a price per Common Share or
equivalent common share (or having a conversion price per share, if a security
convertible into Common Shares or equivalent common shares) less than the
current per share market price of the Common Shares (determined pursuant to
Section 11(d) hereof) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of Common Shares outstanding on such record date plus
the number of Common Shares which the aggregate offering price of the total
number of Common Shares and/or equivalent 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 and/or equivalent common
shares to be offered for subscription or purchase (or into which the convertible
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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 reasonably detailed statement filed with
the Rights Agent. 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 be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In the event that the Company shall fix a record date for the
making of a distribution to all holders of Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend), assets, stock
(other than a dividend payable in Common Shares) or subscription rights, options
or warrants (excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current per share market price of
the Common Shares (as determined pursuant to Section 11(d) hereof) on such
record date or, if earlier, the date on which Common Shares begin to trade on an
ex-dividend or when-issued basis for such distribution, 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 reasonably detailed statement filed
with the Rights Agent) of the portion of the evidences of indebtedness, cash,
assets or stock so to be distributed or of such subscription rights, options or
warrants applicable to one
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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
which would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
per share market price" of Common Shares on any date shall be deemed to be the
average of the daily closing prices per share of such Common Shares for the 30
consecutive Trading Days immediately prior to but not including such date;
provided, however, that in the event that the current per share market price of
the Common Shares is determined during a period following the announcement by
the issuer of such Common Shares of (A) a dividend or distribution on such
Common Shares payable in such Common Shares or securities convertible into such
Common Shares (other than the Rights) or (B) any subdivision, combination or
reclassification of such Common Shares, and prior to but not including 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 take into account ex-dividend trading
or to reflect the current per share market price per Common Share equivalent.
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 NYSE or, if the Common Shares are not listed or
admitted to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the
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Common Shares are listed or admitted to trading or, if the Common Shares are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use, or, if on any such date the Common Shares are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common Shares
selected by the Board of Directors of the Company. If the Common Shares are not
publicly held or not so listed or traded, or not the subject of available bid
and asked quotes, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a reasonably detailed statement filed
with the Rights Agent.
(e) Except as set forth below, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in such price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest one ten-thousandth of a Common Share or other security, as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment and (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any securities of the Company other than Common Shares, thereafter the
number of such other securities so receivable upon exercise of
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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
Common Shares contained in this Section 11, and the provisions of Sections 7, 9,
10 and 13 hereof with respect to the Common Shares shall apply on like terms to
any such other securities.
(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 issuable
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) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Section 11(b) and Section 11(c) hereof with
respect to a distribution of subscription rights, options or warrants applicable
to Common Shares, each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number Common Shares (calculated to the nearest
one-thousandth a Common Share) obtained by (i) multiplying (x) the number of
Common Shares issuable upon exercise of a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect, on or after the date of any adjustment
of the Purchase Price, to adjust the number of Rights in substitution for any
adjustment in the number of Common Shares issuable 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 prior to such
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adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest
one-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall promptly
notify the Rights Agent in writing of such election and shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 calendar days later than the date of the
public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to the provisions of Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number or kind of securities issuable upon the exercise of the Rights,
the Right Certificates theretofore and
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thereafter issued may continue to express the Purchase Price and the number and
kind of securities which were expressed in the initial Right Certificate issued
hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the Common
Shares or any other securities of the Company issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Common Shares or such other securities, as
the case may be, at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer (with prompt written notice
thereof to the Rights Agent) until the occurrence of such event the issuance to
the holder of any Right exercised after such record date the number of Common
Shares or other securities of the Company, if any, issuable upon such exercise
over and above the number of Common Shares or other securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due xxxx or other appropriate instrument evidencing such holder's
right to receive such additional Common Shares or other securities upon the
occurrence of the event requiring such adjustment.
(m) Notwithstanding anything in this Agreement to the contrary,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in its good faith judgment the Board of Directors of the Company
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Common Shares, (ii) issuance wholly for cash of Common Shares
at less than
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the current per share market price therefor, (iii) issuance wholly for cash of
Common Shares or securities which by their terms are convertible into or
exchangeable for Common Shares, (iv) stock dividends, or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter made by the
Company to holders of its Common Shares shall not be taxable to such
stockholders.
Section 12. Certificate of Adjusted Purchase Price or Number of
Securities. Whenever an adjustment is made as provided in Section 11 or Section
13 hereof, the Company shall promptly (a) prepare a certificate setting forth
such adjustment and a brief, reasonably detailed, statement of the facts,
computations and methodology accounting for such adjustment, (b) 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 of such adjustment to each holder of a Right Certificate in
accordance with Section 25 hereof. The Rights Agent shall be fully authorized
and protected in relying on such certificates and any adjustments contained
therein, and shall have no duty with respect to, and shall not be deemed to have
knowledge of any adjustment, unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event that, following the Share Acquisition Date,
directly or indirectly:
(i) the Company shall consolidate with, or merge with or into, any
other Person and the Company shall not be the continuing or surviving
corporation of such consolidation or merger; or
(ii) any Person shall consolidate with the Company, or merge with
or into the Company and the Company shall be the continuing or
surviving corporation of such merger or consolidation and, in
connection with such merger or consolidation, all or part of the
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Common Shares shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property; or
(iii) the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power (including, without limitation,
securities creating any obligation on the part of the Company and/or
any of its Subsidiaries) representing in the aggregate more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to any Person or Persons,
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 in accordance with the terms of
this Agreement at an exercise price per Right equal to the product of the
then-current Purchase Price multiplied by the number of Common Shares for which
a Right was exercisable immediately prior to the first occurrence of a
Triggering Event, such number of validly authorized and issued, fully paid,
nonassessable and freely tradable Common Shares of the Issuer, free and clear of
any liens, encumbrances and other adverse claims and not subject to any rights
of call or first refusal, as shall be equal to the result obtained by (x)
multiplying the then-current Purchase Price by the number of Common Shares for
which a Right is exercisable immediately prior to the first occurrence of a
Triggering Event and dividing that product by (y) 50% of the current per share
market price of the Common Shares of the Issuer (determined pursuant to Section
11(d) hereof), on the date of consummation of such Flip-over Event; (B) the
Issuer shall thereafter be liable for, and shall assume, by virtue of the
consummation of such Flip-over Event, all the obligations and duties of the
Company pursuant to this Agreement; (C) the term "Company" shall thereafter be
deemed to refer to the Issuer; and (D) the Issuer shall take such steps
(including, without limitation, the reservation of a sufficient number of its
Common
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Shares to permit the exercise of all outstanding Rights) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be possible, in relation
to its Common Shares thereafter deliverable upon the exercise of the Rights.
(b) For purposes of this Section 13, "Issuer" shall mean (i) in
the case of any Flip-over Event described in Sections 13(a)(i) or (ii) above,
the Person that is the continuing, surviving, resulting or acquiring Person
(including the Company as the continuing or surviving corporation of a
transaction described in Section 13(a)(ii) above), and (ii) in the case of any
Flip-over Event described in Section 13(a)(iii) above, the Person that is the
party receiving the greatest portion of the assets or earning power (including,
without limitation, securities creating any obligation on the part of the
Company and/or any of its Subsidiaries) transferred pursuant to such transaction
or transactions; provided, however, that, in any such case, (A) if (1) no class
of equity security of such Person is, at the time of such merger, consolidation
or transaction and has been continuously over the preceding 12-month period,
registered pursuant to Section 12 of the Exchange Act, and (2) such Person is a
Subsidiary, directly or indirectly, of another Person, a class of equity
security of which is and has been so registered, the term "Issuer" shall mean
such other Person; and (B) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, a class of equity security of two or more
of which are and have been so registered, the term "Issuer" shall mean whichever
of such Persons is the issuer of the equity security having the greatest
aggregate market value. Notwithstanding the foregoing, if the Issuer in any of
the Flip-over Events listed above is not a corporation or other Person having
outstanding equity securities, then, and in each such case, (x) if the Issuer is
directly or indirectly wholly owned by a corporation or other Person having
outstanding equity securities, then all references to Common Shares of the
Issuer shall be deemed
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to be references to the Common Shares of the corporation or other Person having
outstanding equity securities which ultimately controls the Issuer, and (y) if
there is no such corporation or other Person entity having outstanding equity
securities, (i) proper provision shall be made so that the Issuer shall create
or otherwise make available for purposes of the exercise of the Rights in
accordance with the terms of this Agreement, a kind or kinds of security or
securities having a fair market value at least equal to the economic value of
the Common Shares which each holder of a Right would have been entitled to
receive if the Issuer had been a corporation or other Person having outstanding
equity securities; and (ii) all other provisions of this Agreement shall apply
to the issuer of such securities as if such securities were Common Shares.
(c) The Company shall not consummate any Flip-over Event, unless
the Issuer shall have a sufficient number of authorized Common Shares (or other
securities as contemplated in Section 13(b) above) which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior to such consummation the Company and the
Issuer shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in subsections (a) and (b) of this
Section 13 and further providing that as promptly as practicable after the
consummation of any Flip-over Event, the Issuer shall:
(i) prepare and file a registration statement under the Securities
Act, with respect to the Rights and the securities issuable upon
exercise of the Rights on an appropriate form, and shall 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 Securities Act)
until the Expiration Date;
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(ii) take all 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
(iii) deliver to holders of the Rights historical financial
statements for the Issuer and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under
the Exchange Act.
(d) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Flip-over Event occurs at any time after the occurrence of a Flip-in
Event, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a) hereof.
Section 14. Fractional Rights and Fractional Securities. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, the Company shall pay as promptly as practicable to the registered
holders of the Right Certificates with regard to which such fractional Rights
otherwise would be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights otherwise would have been 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 NYSE or,
if the Rights are not listed or admitted to trading on the NYSE, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national
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securities exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no such
market maker is making a market in the Rights the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the Company
shall be used.
(b) The Company shall not be required to issue fractions of Common
Shares or other securities issuable upon exercise or exchange of the Rights or
to distribute certificates which evidence any such fractional securities. In
lieu of issuing any such fractional securities, the Company may pay to any
Person to whom or which such fractional securities would otherwise be issuable
an amount in cash equal to the same fraction of the current market value of one
such security. For purposes of this Section 14(b), the current market value of a
Common Share or other security issuable upon the exercise or exchange of Rights
shall be the closing price thereof (as determined in the same manner as set
forth for Common Shares in the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of such exercise or exchange;
provided, however, that if neither the Common Shares nor any such other
securities are publicly held or listed or admitted to trading on any national
securities exchange, or the subject of available bid and asked quotes, the
current market value of one Common Share or such other security shall be
determined in good faith by the Board of Directors of the Company.
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(c) The Rights Agent shall have no duty or obligation with respect
to the Section 14 or any other Section hereof concerning the fractional shares
unless and until it has received specific instructions (and sufficient cash, if
required) from the Company with respect to its duties and obligations under such
Section.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 and Section 20 hereof, are vested in the respective registered
holders of the Right Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares), without
the consent of the Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the holder of any Common Shares), may in
his or her own behalf and for his or her own benefit enforce, and may institute
and maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his or her right to exercise the Rights evidenced
by such Right Certificate or Common Share 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 shall be entitled to specific performance of the
obligations under this Agreement, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to this
Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
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(a) Prior to the Distribution Date, the Rights shall 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 Agent if surrendered at
the office of the Rights Agent designated for such purpose, 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, prior to the Distribution Date, the
associated Common Share 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 Share 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) Such holder expressly waives any right to receive any
fractional Rights and any fractional securities upon exercise or exchange of a
Right, except as otherwise provided in Section 14 hereof; and
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree, judgment or ruling (whether interlocutory or
final) 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
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obligation; provided, however, that the Company shall use its best efforts to
have any such injunction, order, decree, judgment or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Common Shares or any
other securities of the Company which may at any time be issuable upon the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of Directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions of this Agreement or exchanged pursuant to the provisions of Section
27 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, preparation, delivery, amendment 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, suit, action, judgment, proceeding, damage, fine, penalty,
claim, demand, settlement, cost or expense, incurred without gross negligence,
bad faith or willful misconduct (each as determined by a court of competent
jurisdiction) on the part of the Rights Agent, for any action taken, suffered or
omitted by the
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Rights Agent in connection with the acceptance and administration of this
Agreement or the exercise or performance of its duties hereunder, including,
without limitation, the costs and expenses of defending against any claim of
liability arising therefrom, directly or indirectly. The indemnity provided
herein shall survive the termination of this Agreement and the termination and
expiration of the Rights. The costs and expenses incurred in enforcing this
right of indemnification shall be paid by the Company.
(b) The Rights Agent shall be authorized, shall be protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with the acceptance and administration of this
Agreement and the exercise and performance of its duties hereunder in reliance
upon any Right Certificate or certificate evidencing Common Shares or 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. The Rights Agent shall not be deemed to have any
duty or notice unless and until the Company has provided the Rights Agent with
actual written notice.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the Shareholder Services business
of the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the
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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) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes only
the duties and obligations expressly imposed by this Agreement (and no implied
duties or obligations) upon the following terms and conditions, by all of which
the Company and the holders of Right Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the advice or opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability for or in respect of any action taken or
omitted by it in good faith and in accordance with such advice or opinion.
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(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 be
proved or established by the Company prior to taking, suffering or omitting 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 of the Board,
Chief Executive Officer, Chief Financial Officer or any Vice President of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization and protection to the Rights Agent and the Rights Agent shall
incur no liability for or in respect of any action taken, suffered or omitted in
good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct (each as finally determined by
a court of competent jurisdiction). Anything in the Agreement to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, incidental or consequential loss or damage of any kind
whatsoever (including but not limited to, lost profits), even if the Rights
Agent has been advised of the possibility of such loss or damage. Any liability
of the Rights Agent under this Agreement shall be limited to the amount of fees
paid by the Company to the Rights Agent.
(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 have any liability for, nor be
under any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due
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execution and delivery hereof by the Rights Agent) or in respect of the validity
or execution of any Right Certificate (except its countersignature thereof); nor
shall it have any liability for, nor 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 have any liability for, nor be responsible for any
adjustment required under the provisions of Section 11 or Section 13 hereof
(including any adjustment which results in Rights becoming null and void) or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any shares of stock or other securities to be issued pursuant to
this Agreement or any Right Certificate or as to whether any shares of stock or
other securities will, when issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
advice or instructions with respect to the performance of its duties hereunder
from any one of the Chairman of the Board, Chief Executive Officer, the Chief
Financial Officer or any Vice President of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and such
advice or instructions shall be full authorization and protection to the Rights
Agent and the Rights Agent shall incur no liability for or in respect of any
action taken or suffered to be taken by it in good
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faith in accordance with such advice or instructions of any such officer. The
Rights Agent shall be fully authorized and protected in relying upon the most
recent advice or instructions received by any such officer.
(h) The Rights Agent and any stockholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other Person.
(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, absent gross negligence or willful misconduct (each as
finally determined by a court of competent jurisdiction) in the selection and
continued employment thereof. The Rights Agent shall not be under any duty or
responsibility to insure compliance with any applicable federal or state
securities laws in connection with the issuance, transfer or exchange of Right
Certificates.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise, transfer, split up, combination or exchange, the
certificate attached to the form of assignment or form of election to purchase,
as the case may be, has either not been properly completed or indicates an
affirmative response to clause 1 or 2 thereof, the Rights Agent shall not
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take any further action with respect to such requested exercise, transfer, split
up, combination or exchange without first consulting with the Company.
(k) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its rights
if it believes that the repayment of such funds or adequate indemnification
against such risk or liability is not assured it.
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 calendar days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 calendar 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 to the holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 calendar days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for 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 (i) a Person organized and doing
business under the laws of the United States or of the States of Alabama, New
Jersey or New York (or of any other state of
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the United States so long as such Person is authorized to do business as a
banking institution in the States of Alabama or New York), in good standing,
having an office in the States of Alabama, New Jersey or New York, which is
authorized under such laws to conduct or otherwise engage in the shareholder
services business or exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million or (ii) an Affiliate of such Person. 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 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 per share and the number or kind of securities issuable
upon exercise of the Rights made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale by the Company
of Common Shares following the
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Distribution Date and prior to the Expiration Date, the Company (a) shall, with
respect to Common Shares so issued or sold pursuant to the exercise or
conversion of securities issued prior to the Distribution Date which are
exercisable for, or convertible into Common Shares, and (b) may, in any other
case, if deemed necessary, appropriate or desirable by the Board of Directors of
the Company, issue Right Certificates representing an equivalent number of
Rights as would have been issued in respect of such Common Shares if they had
been issued or sold prior to the Distribution Date, as appropriately adjusted as
provided herein as if they had been so issued or sold; provided, however, that
(i) no such Right Certificate shall be issued if, and to the extent that, in its
good faith judgment the Board of Directors of the Company shall have determined
that the issuance of such Right Certificate could have a material adverse tax
consequence to the Company or to the Person to whom or which such Right
Certificate otherwise would be issued, and (ii) no such Right Certificate shall
be issued if, and to the extent that, appropriate adjustment otherwise shall
have been made in lieu of the issuance thereof.
Section 23. Redemption. (a) Prior to the Expiration Date, the Board of
Directors of the Company may, at its option, redeem all but not less than all of
the then-outstanding Rights at the Redemption Price at any time prior to the
Close of Business on the later of (i) the Distribution Date and (ii) the Share
Acquisition Date.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights shall terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Promptly after the action of its Board of Directors ordering
the redemption of the Rights, the Company shall promptly notify the Rights Agent
in writing of such redemption and shall publicly announce such action, and
within 10 calendar days thereafter, the
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Company shall give notice of such redemption to 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 Company; provided,
however, that the failure to give, or any defect in, any such notice shall not
affect the validity of the redemption of the Rights. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. The notice of redemption mailed to the holders of Rights
shall state the method by which the payment of the Redemption Price will be
made. The Company may, at its option, pay the Redemption Price in cash, Common
Shares (based upon the current per share market price of the Common Shares
(determined pursuant to Section 11(d) hereof) at the time of redemption) or any
other form of consideration deemed appropriate by the Board of Directors of the
Company (based upon the fair market value of such other consideration,
determined by the Board of Directors of the Company in good faith) or any
combination thereof.
(c) At any time following the Share Acquisition Date, the Board of
Directors of the Company may relinquish the right to redeem the Rights under
this Section 23 by duly adopting a resolution to that effect. Immediately upon
adoption of such resolution, the rights of the Board of Directors of the Company
to redeem the Rights shall terminate without further action and without any
notice. Promptly after adoption of such a resolution, the Company shall publicly
announce such action (with prompt written notice to the Rights Agent of such
action); provided, however, that the failure to give, or any defect in, any such
notice shall not affect the validity of the action of the Board of Directors of
the Company.
Section 24. Notice of Certain Events. (a) In case, after the
Distribution Date, the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of Common Shares or to make any other
distribution to the holders of Common Shares (other than a
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regular periodic cash dividend), (ii) to offer to the holders of Common Shares
rights, options 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, (iii) to effect any reclassification of its Common Shares (other than a
reclassification involving only the subdivision of outstanding Common Shares),
(iv) to effect any consolidation or merger into or with, or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of assets or earning power
(including, without limitation, securities creating any obligation on the part
of the Company and/or any of its Subsidiaries) representing more than 50% of the
assets and earning power of the Company and its Subsidiaries, taken as a whole,
to any other Person or Persons, (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
the Rights Agent and to each holder of a Right Certificate, in accordance with
Section 25 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution or offering of
rights, options or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
Common Shares, if any such date is to be fixed, and such notice shall be so
given, in the case of any action covered by clause (i) or (ii) above, at least
10 calendar days prior to 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 calendar days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the Common Shares,
whichever shall be the earlier.
(b) In case any Triggering Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to the Rights
Agent and each holder of a Right Certificate, in
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accordance with Section 25 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights.
Section 25. Notices. (a) Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
SCI Systems, Inc.
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Secretary
(b) Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:
Mellon Investor Services LLC
One Mellon Bank Center
000 Xxxxx Xxxxxx
Xxxx 0000
Xxxxxxxxxx, XX 00000-0000
Attention: Relationship Manager
With a copy to:
Mellon Investor Services LLC
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, XX 00000
Attention: General Counsel
(c) 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
(or, if prior the Distribution Date, to the holder of any certificate evidencing
Common Shares) shall be sufficiently given or
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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 26. Supplements and Amendments. Prior the Distribution Date
and subject to the last sentence of this Section 26, if the Company so directs,
the Company and the Rights Agent shall supplement or amend any provision of this
Agreement without the approval of any holders of certificates representing
Common Shares. From and after the Distribution Date and subject to the last
sentence of this Section 26, if the Company so directs, the Company and the
Rights Agent shall supplement or amend this Agreement without the approval of
any holders of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder, or (iv) to supplement or amend the provisions hereunder
in any manner which the Company may deem desirable, including, without
limitation, the addition of other events requiring adjustment to the Rights
under Sections 11 or 13 hereof or procedures relating to the redemption of the
Rights, which supplement or amendment shall not, in the good faith determination
of the Board of Directors of the Company, adversely affect the interests of the
holders of Right Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). Upon the delivery of a certificate from an
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 26 and, provided such supplement or
amendment does not adversely change or increase the Rights Agent's rights,
duties, liabilities or obligations hereunder, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment shall be made which decreases the stated
Redemption Price or the period of time
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remaining until the Final Expiration Date or which modifies a time period
relating to when the Rights may be redeemed at such time as the Rights are not
then redeemable.
Section 27. Exchange. (a) The Board of Directors of the Company may,
at its option, at any time after the later of the Distribution Date and the
first occurrence of a Triggering Event, exchange all or part of the
then-outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 11(a)(ii) hereof) for
Common Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding Common
Shares for or pursuant to the terms of any such plan), who or which, 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 Section 27(a) hereof,
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right with respect to such Rights
thereafter of the 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. Promptly after the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to Section 27(a)
hereof, the Company shall promptly notify the Rights Agent in writing of such
actions and shall publicly announce such action, and within 10 calendar days
thereafter shall give notice of any such exchange to all of the holders of such
Rights at their last
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addresses as they appear upon the registry books of the Rights Agent; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. 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 shall state the method by which the
exchange of the 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 have become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 27, the Company, at
its option, may substitute for any Common Share exchangeable for a Right, (i)
equivalent common shares (as such term is used in Section 11(a)(iii) hereof),
(ii) cash, (iii) debt securities of the Company, (iv) other assets, or (v) any
combination of the foregoing, in any event having an aggregate value which the
Board of Directors of the Company shall have determined in good faith to be
equal to the current market value of one Common Share (determined pursuant to
Section 11(d) hereof) on the Trading Day immediately preceding the date of
exchange pursuant to this Section 27.
Section 28. Successors; Certain Covenants. All the covenants and
provisions of this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
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exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (or prior to the Distribution Date, the Common Shares).
Section 30. Determinations and Actions by the Board of Directors, etc.
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 or the Company or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including, without limitation, a
determination to redeem or not redeem the Rights or to amend this Agreement,
whether a Person is an Acquiring Person and whether any proposed amendment
adversely affects the interests of the holders of Right Certificates). For all
purposes of this Agreement, any calculation of the number of Common Shares or
other securities outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares or any
other securities of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) under the Exchange Act
as in effect on the date of this Agreement. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Right Certificates and all other parties, and
(y) not subject the Board to any liability to the holders of the Right
Certificates. The Rights Agent shall always be entitled to assume that the
Company's Board of Directors acted in good faith and shall be fully protected
and incur no liability in reliance thereon.
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Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the internal
substantive laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the internal substantive laws of such State
applicable to contracts to be made and performed entirely within such State;
provided, however, that all provisions regarding the rights, duties and
obligations of the Rights Agent shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be
performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
[SEAL]
Attest: SCI Systems, Inc.
/s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxx, Xx.
---------------------------------- --------------------------------
Xxxxxxx X. Xxxxxxxx Xxxxx X. Xxxxxx, Xx.
Secretary Senior Vice President and Chief
Financial Officer
[SEAL]
Attest: Mellon Investor Services LLC
By: /s/ Xxxxxxx X. Xxxxxxxxx By: /s/ Xxxxxxxx Xxxxxxxx
------------------------------- ------------------------------
Name: Xxxxxxx X. Xxxxxxxxx Name: Xxxxxxxx Xxxxxxxx
----------------------------- ---------------------------
Title: Vice President Title: Vice President and
---------------------------- ---------------------------
Regional Manager
---------------------------
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EXHIBIT A
FORM OF RIGHT CERTIFICATE
Certificate No. R-
Rights
NOT EXERCISABLE AFTER DECEMBER 20, 2010 OR EARLIER IF REDEEMED.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS
AGREEMENT, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR
AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) MAY BECOME NULL AND
VOID.
RIGHT CERTIFICATE
SCI SYSTEMS, INC.
This certifies that ________, or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of December 20, 2000 (the "Rights Agreement"), between SCI
Systems, Inc., a Delaware corporation (the "Company"), and Mellon Investor
Services LLC, a New Jersey Limited Liability Company (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 P.M. (Eastern time) on
December 20, 2010 at the principal office or offices of the Rights Agent
designated for such purpose, one fully paid
60
nonassessable share of common stock, par value $ .10 per share (the "Common
Shares"), of the Company, at a purchase price of $240 per Common Share (the
"Purchase Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase and related Certificate duly executed. 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 whole Rights not exercised. The number of Rights evidenced by
this Right Certificate (and the number of Common Shares which may be purchased
upon exercise thereof) set forth above, and the Purchase Price set forth above,
are the number and Purchase Price as of January 2, 2001, based on the Common
Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of securities issuable upon the exercise of the Rights evidenced by
this Right Certificate are subject to adjustment upon the happening of certain
events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of the Right Certificates, which limitations of
rights include the temporary suspension of the exercisability of the Rights
under the circumstances specified in the Rights Agreement. Copies of the Rights
Agreement are on file at the above-mentioned office of the Rights Agent.
Pursuant to the Rights Agreement, from and after the later of the
Distribution Date and the first occurrence of a Flip-in Event (as such terms is
defined in the Rights Agreement), (i) any Rights that are or were acquired or
beneficially owned by any Acquiring Person (or
61
any Affiliate or Associate of such Acquiring Person) shall be void and any such
holder of such Rights shall thereafter have no right to exercise such Rights
under any provision of the Rights Agreement, (ii) no Right Certificate shall be
issued pursuant to the Rights Agreement that represents Rights beneficially
owned by an Acquiring Person or any Affiliate or Associate thereof, (iii) no
Right Certificate shall be issued at any time upon the transfer of any Rights to
an Acquiring Person or any Affiliate or Associate thereof or to any nominee of
such Acquiring Person or Affiliate or Associate thereof, and (iv) any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person or
any Affiliate or Associate thereof shall be cancelled.
This Right Certificate, with or without other Right Certificates, may
be transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the holder to purchase a like number of Common
Shares (or other securities, as the case may be) as the Right Certificate or
Right Certificates surrendered shall have entitled such holder (or former holder
in the case of a transfer) to purchase, upon presentation and surrender hereof
at the principal office of the Rights Agent designated for such purpose, with
the Form of Assignment (if appropriate) and the related Certificate duly
executed.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $0.01 per Right. The Rights Agreement may be supplemented and amended
by the Company, as provided therein.
The Company is not required to issue fractional Common Shares or other
securities issuable upon the exercise of any Right or Rights evidenced hereby.
In lieu of issuing such
62
fractional Common Shares or other securities, the Company may make a cash
payment, 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 which may at any time be
issuable upon the exercise of the Right or Rights represented hereby, nor shall
anything contained herein or in the Rights Agreement be construed to confer upon
the holder hereof, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised in accordance with
the provisions of the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
[Remainder of Page Intentionally Left Blank]
63
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of December 20, 2000.
ATTEST: SCI Systems, Inc.
By:
----------------------------------- --------------------------------
Xxxxxxx X. Xxxxxxxx Xxxxx X. Xxxxxx
Secretary Senior Vice President and Chief
Financial Officer
[SEAL]
Countersigned:
Mellon Investor Services LLC
By:
---------------------------------
Authorized Signature
64
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: , 200__
---------------
--------------------------------------
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being sold, assigned, transferred, split up, combined or exchanged by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: , 200__
---------------
--------------------------------------
Signature
65
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To SCI Systems, Inc:
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Right Certificate to purchase the Common Shares or
other securities issuable upon the exercise of such Rights and requests that
certificates for such securities 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)
--------------------------------------------------------------------------------
Optional Election to Exercise without Payment of Cash:
With respect to the exercise of ________________ of the Rights
specified above, the undersigned hereby elects to exercise such Rights without
payment of cash and to receive a number of Common Shares or other securities
having a value (as determined pursuant to the Rights Agreement) equal to the
difference between (i) the value of the Common Shares or other securities that
would have been issuable upon the exercise thereof upon payment of the cash
amount as provided in the Rights Agreement, and (ii) the amount of such cash
payment.
Dated: , 200__
---------------
----------------------------------
Signature
Signature Guaranteed:
66
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: , 200__
---------------
----------------------------------
Signature
NOTICE
Signatures on the foregoing Form of Assignment and Form of Election to
Purchase and in the related Certificates must correspond to the name as written
upon the face of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
Signatures must be 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.
67
EXHIBIT B
TO: THE SHAREHOLDERS OF SCI SYSTEMS, INC.
RE: SUMMARY OF SCI RIGHTS PLAN
The Board of Directors of SCI Systems, Inc. (the "Company") has
declared a dividend distribution of one right (a "Right") for each outstanding
share of Common Stock, par value $.10 per share (the "Common Shares"), of the
Company. The distribution is payable on January 2, 2001 (the "Record Date") to
the shareholders of record as of the close of business on the Record Date. Each
Right entitles the registered holder to purchase from the Company one share of
Common Stock of the Company at a price of $240 per Common Share (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement, dated as of December 20, 2000 (the "Rights
Agreement"), between the Company and Mellon Investor Services LLC, as Rights
Agent (the "Rights Agent").
Until the earliest to occur of (i) the close of business on the tenth
business day (or such later date as may be specified by the Board of Directors)
following a public announcement that a person or group of affiliated or
associated persons has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding Common Shares (an "Acquiring
Person"), (ii) the close of business on the tenth business day (or such later
date as may be specified by the Board of Directors) following the commencement
of a tender offer or exchange offer by a person or group of affiliated or
associated persons, the consummation of which would result in beneficial
ownership by such person or group of 15% or more of the outstanding Common
Shares, or (iii) the close of business on the tenth business day following the
first date of public announcement of the first occurrence of a Flip-in Event or
a Flip-over Event (as such terms are hereinafter defined) (the earliest of such
dates being hereinafter called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Share certificates outstanding as
of the Record Date, by such Common Share certificates.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares in respect of which Rights have been issued will also constitute
the transfer of the Rights associated with the Common Shares represented by such
certificates. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "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.
No Right is exercisable at any time prior to the Distribution Date. The
Rights will expire on December 20, 2010 (the "Final Expiration Date") unless
earlier redeemed or exchanged by the Company as described below. Until a Right
is exercised, the holder thereof, as such, will have
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no rights as a shareholder of the Company, including without limitation the
right to vote or to receive dividends.
The Purchase Price payable, the number of outstanding Rights and the
number of Common Shares or other securities issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Shares, (ii) upon the grant to holders of the
Common Shares of certain rights or warrants to subscribe for or purchase Common
Shares at a price, or securities convertible into Common Shares with a
conversion price, less than the then current market price of the Common Shares,
or (iii) upon the distribution to holders of the Common Shares of evidences of
indebtedness or cash (excluding regular periodic cash dividends), assets, stock
(excluding dividends payable in Common Shares) or of subscription rights or
warrants (other than those referred to above).
In the event (a "Flip-in Event") that (i) any person or group of
affiliated or associated persons becomes the beneficial owner of 20% or more of
the outstanding Common Shares, (ii) any Acquiring Person merges into or combines
with the Company and the Company is the surviving corporation or any Acquiring
Person effects certain other transactions with the Company, as described in the
Rights Agreement, or (iii) during such time as there is an Acquiring Person,
there shall be any reclassification of securities or recapitalization or
reorganization of the Company which has the effect of increasing by more than 1%
the proportionate share of the outstanding shares of any class of equity
securities of the Company or any of its subsidiaries beneficially owned by the
Acquiring Person, proper provision shall be made so that each holder of a Right,
other than Rights that are or were owned beneficially by the Acquiring Person
(which, from and after the later of the Distribution Date and the date of the
earliest of any such events, will be void), will thereafter have the right to
receive, upon exercise thereof at the then current exercise price of the Right,
that number of Common Shares (or, under certain circumstances, an economically
equivalent security or securities of the Company) having a market value of two
times the exercise price of the Right.
To illustrate the operation of such an adjustment, at a Purchase Price
of $240, assuming the current market price (as determined pursuant to the
provisions of the Rights Agreement) per Common Share were $30, each Right not
owned beneficially by an Acquiring Person at or after the time of such an
occurrence would entitle its holder to purchase (after the Distribution Date)
from the Company 16 Common Shares (having a market value of $480) for $240.
In the event (a "Flip-over Event") that, following the first date of
public announcement that a person has become an Acquiring Person, (i) the
Company merges with or into any person and the Company is not the surviving
corporation, (ii) any person merges with or into the Company and the Company is
the surviving corporation, but its Common Shares are changed or exchanged, or
(iii) 50% or more of the Company's assets or earning power, including without
limitation securities creating obligations of the Company, are sold, proper
provision shall be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock (or, under certain
circumstances, an economically equivalent security or securities) of such other
2
69
person which at the time of such transaction would have a market value of two
times the exercise price of the Right.
At any time after the later of the Distribution Date and the first
occurrence of a Flip-in Event or a Flip-over Event and prior to the acquisition
by any 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 any Rights which have become void), in whole or in part,
at an exchange ratio of one Common Share per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment in the Purchase
Price of at least 1%. The Company is not required to issue fractional Common
Shares or other securities issuable upon the exercise of Rights. In lieu of
issuing such securities, the Company may make a cash payment, as provided in the
Rights Agreement.
The Company may redeem the Rights in whole, but not in part, at a price
of $0.01 per Right (the "Redemption Price"), at any time prior to the close of
business on the later of (i) the Distribution Date and (ii) the first date of
public announcement that a person has become an Acquiring Person. Immediately
upon any redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
The Rights Agreement may be amended by the Company without the approval
of any holders of Right Certificates, including amendments which add other
events requiring adjustment to the Purchase Price payable and the number of
Common Shares or other securities issuable upon the exercise of the Rights or
which modify procedures relating to the redemption of the Rights, provided that
no amendment may be made which decreases the stated Redemption Price or the
period of time remaining until the Final Expiration Date or which modifies a
time period relating to when the Rights may be redeemed at such time as the
Rights are not then redeemable.
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. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights is as of January 2, 2001, does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by this reference.
3
