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EXHIBIT 1
MINNTECH CORPORATION
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Rights Agent
Rights Agreement
Dated as of July 1, 1999
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TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions.............................................................................1
Section 2. Appointment of Rights Agent.....................................................................5
Section 3. Issue of Right Certificates.....................................................................5
Section 4. Form of Right Certificates......................................................................7
Section 5. Countersignature and Registration...............................................................7
Section 6. Transfer, Split-Up, Combination and Exchange of Right Certificates;
Lost, Stolen, Destroyed or Mutilated Right Certificates.........................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...................................9
Section 8. Cancellation and Destruction of Right Certificates.............................................10
Section 9. Reservation and Availability of Preferred Shares...............................................10
Section 10. Preferred Shares Record Date...................................................................12
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights....................12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.....................................21
Section 13. Consolidation, Merger, Statutory Share Exchange or Sale or Transfer of
Assets or Earning Power........................................................................21
Section 14. Fractional Rights and Fractional Shares........................................................23
Section 15. Rights of Action...............................................................................25
Section 16. Agreement of Right Holders.....................................................................25
Section 17. Right Certificate Holder Not Deemed a Shareholder..............................................26
Section 18. Concerning the Rights Agent....................................................................26
Section 19. Merger or Consolidation or Change of Name of Rights Agent......................................27
Section 20. Duties of Rights Agent.........................................................................27
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Section 21. Change of Rights Agent.........................................................................29
Section 22. Issuance of New Right Certificates.............................................................30
Section 23. Redemption.....................................................................................30
Section 24. Exchange.......................................................................................31
Section 25. Notice of Certain Events.......................................................................33
Section 26. Notices........................................................................................34
Section 27. Supplements and Amendments.....................................................................34
Section 28. Successors.....................................................................................35
Section 29. Benefits of this Agreement.....................................................................35
Section 30. Severability...................................................................................35
Section 31. Governing Law..................................................................................35
Section 32. Counterparts...................................................................................35
Section 33. Descriptive Headings...........................................................................36
Exhibit A -- Certificate of Designation, Preferences and Rights of Series
A Junior Participating Preferred Shares
Exhibit B -- Form of Right Certificate
Exhibit C -- Summary of Rights to Purchase Preferred Shares
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RIGHTS AGREEMENT
Agreement, dated as of July 1, 1999 between MINNTECH
CORPORATION, a Minnesota corporation (the "Company"), and NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, a national banking association (the "Rights
Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (individually a
"Right" and collectively the "Rights") for each Common Share (as hereinafter
defined) of the Company outstanding at the Close of Business on July 22, 1999
(the "Record Date"), each Right initially representing the right to purchase one
one-hundredth of a Preferred Share (as hereinafter defined), upon the terms and
subject to the conditions set forth herein, and has further authorized the
issuance of one Right (as such number may hereafter be adjusted pursuant to the
provisions of Section 11 hereof) with respect to each Common Share that shall
become outstanding (i) at any time between the Record Date and the earliest of
the Distribution Date, the Redemption Date or the Final Expiration Date (as such
terms are hereinafter defined) or (ii) upon the exercise or conversion, prior to
the earlier of the Redemption Date or the Final Expiration Date, of any option
or other security exercisable for or convertible into Common Shares, which
option or other such security is outstanding on the Distribution Date.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 20% or more of the Common Shares
of the Company then outstanding, but shall not include (i) the Company, (ii) any
wholly owned Subsidiary (as such term is hereinafter defined) of the Company,
(iii) any employee benefit plan of the Company or of any Subsidiary of the
Company, (iv) any entity holding Common Shares for or pursuant to the terms of
any such plan described in clause (iii) of this sentence, or (v) any Person who,
as of the Close of Business on the date hereof, is the Beneficial Owner of 19%
or more of the Common Shares of the Company currently outstanding; PROVIDED,
HOWEVER, that if such a Person becomes the Beneficial Owner of a percentage of
the Company's outstanding Common Shares equal to the sum of 1% plus that
Person's percentage ownership as of the Close of Business on the date hereof,
then that Person shall be deemed an "Acquiring Person." Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reducing the number of
Common Shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 20% or more (or, in the case of a Person
described in clause (v) of this paragraph (a), to at least
the percentage calculated under the proviso to that clause) of the Common
Shares of the Company then outstanding; PROVIDED, HOWEVER, that if a Person,
together with all Affiliates or Associates of such Person, shall become the
Beneficial Owner of 20% or more (or, in the case of a Person described in
clause (v) of this paragraph (a), of at least the percentage calculated under
the proviso to that clause) of the Common Shares of the Company then
outstanding by reason of share acquisitions by the Company and if such Person
or such Person's Affiliates or Associates, after such share acquisitions by
the Company, shall become the Beneficial Owner of any additional Common
Shares of the Company, and, immediately after becoming the Beneficial Owner
of such additional Common Shares, such Person, together with all Affiliates
and Associates of such Person, shall be the Beneficial Owner of 20% or more
(or, in the case of a Person described in clause (v) of this paragraph (a),
of at least the percentage calculated under the proviso to that clause) of
the Common Shares of the Company then outstanding, then such Person (unless
such Person shall be (1) the Company, (2) any wholly owned Subsidiary of the
Company, (3) any employee benefit plan of the Company or of any Subsidiary of
the Company, or (4) any entity holding Common Shares for or pursuant to the
terms of any such plan described in clause (3) of this sentence) shall be
deemed an "Acquiring Person." An entity other than the Company or any wholly
owned Subsidiary of the Company holding Common Shares for or pursuant to the
terms of an employee benefit plan of the Company or of any Subsidiary of the
Company and in addition being the Beneficial Owner of Common Shares that are
not held for or pursuant to the terms of any such plan shall be deemed to
constitute an Acquiring Person, notwithstanding anything herein stated, if,
but only if, it, together with its Affiliates and Associates, shall be the
Beneficial Owner of 20% or more, exclusive of those Common Shares held by it
for or pursuant to the terms of any such plan, of the Common Shares then
outstanding. Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently (including, without limitation,
because (A) such Person was unaware that it beneficially owned a percentage
of the Common Shares that would otherwise cause such Person to be an
"Acquiring Person" or (B) such Person was aware of the extent of its
Beneficial Ownership but had no actual knowledge of the consequences of such
Beneficial Ownership under this Agreement), and without any intention of
changing or influencing control of the Company, and such Person divests as
promptly as practicable a sufficient number of Common Shares so that such
Person would no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be
deemed to be an "Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own", or have beneficial ownership of, any
securities:
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(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, including without
limitation securities with respect to which such Person or any of such
Person's Affiliates or Associates has "beneficial ownership" pursuant
to Rule 13d-3 of the General Rules and Regulations under the Exchange
Act;
(ii) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, (A) the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding, whether or not in writing (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, other rights (other
than the Rights), warrants or options, or otherwise; PROVIDED, HOWEVER,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own or to have beneficial ownership of, any securities
pursuant to subparagraph (i), (ii) or (iii) of this paragraph (c)
solely because such securities are tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right to vote or dispose
of (including without limitation pursuant to any agreement, arrangement
or understanding (whether or not in writing)); PROVIDED, HOWEVER, that
a Person shall not be deemed the Beneficial Owner of, or to
beneficially own or have beneficial ownership of, any security pursuant
to subparagraph (i), (ii) or (iii) of this paragraph (c) solely because
of the right to vote such security pursuant to an agreement,
arrangement or understanding if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable
proxy or consent given to such Person or any of such Person's
Affiliates or Associates in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
rules and regulations under the Exchange Act and (2) is not also then
reportable by such Person on Schedule 13D under the Exchange Act (or
any comparable or successor report) as being beneficially owned by such
Person; or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding, whether or not in writing
(other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the final proviso to
subparagraph (ii) of this paragraph (c)), or disposing of, any
securities of the Company.
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Notwithstanding anything in these definitions of Beneficial
Owner, beneficially own or beneficial ownership to the contrary, the
phrase "then outstanding," when used with reference to a Person's
beneficial ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding
which such Person would be deemed to beneficially own hereunder.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York or
Minnesota are authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00
P.M., Minneapolis, Minnesota time, on such date; PROVIDED, HOWEVER, that if such
date is not a Business Day it shall mean 5:00 P.M., Minneapolis, Minnesota time,
on the next succeeding Business Day.
(f) "Common Shares", when used with reference to the Company,
shall mean shares of Common Stock, $.05 par value (as such par value may be
changed from time to time), of the Company. "Common Shares", when used with
reference to any Person other than the Company, shall mean the class or series
of capital stock (or equity interest) with the greatest voting power of such
other Person or if such other Person is a Subsidiary of another Person, the
Person or Persons that ultimately control such first mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(h) "Final Expiration Date" shall have the meaning set forth
in Section 7 hereof.
(i) "Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor (by merger
or otherwise) of such entity.
(j) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, no par value (as such par value may be changed
from time to time), of the Company, having the rights and preferences set forth
in the form of Certificate of Designation, Preferences and Rights attached to
this Agreement as Exhibit A hereto.
(k) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(l) "Section 11(a)(ii) Event" shall mean an event described in
the first sentence of Section 11(a)(ii).
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(l) "Section 13 Event" shall mean any event described in
clauses (w), (x), (y) or (z) of Section 13(a).
(m) "Shares Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such.
(n) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting equity
securities or other equity interests entitled to vote in the election of
directors (or Persons with comparable responsibilities if the entity has no
directors) is beneficially owned, directly or indirectly, by such Person or
otherwise controlled by such Person.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents as
it may deem necessary or desirable.
Section 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the Close of Business on the 15th
day after the Shares Acquisition Date or (ii) the Close of Business on the 15th
day (or such later date as may be determined by action of the Board of Directors
of the Company prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than the Company, any
wholly owned Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such plan) of, or of the first public announcement
of the intention of any Person (other than the Company, any wholly owned
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant to
the terms of any such plan) to commence (which intention shall not have been
withdrawn within five business days (as defined in Rule 14d-1 of the General
Rules and Regulations under the Exchange Act) after such public announcement), a
tender or exchange offer the consummation of which would result in any Person
(other than the Company, any wholly owned Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company or any
entity holding Common Shares for or pursuant to the terms of any such plan)
becoming the Beneficial Owner of 20% or more of the then outstanding Common
Shares (including any such date that is after the date of this Agreement and
prior to the issuance of the Rights; the earlier of such dates being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for Common Shares registered in the names of the holders thereof
(which certificates shall also be deemed to be
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Right Certificates when the context so requires) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares. As soon
as practicable after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign, and the Company will send or
cause to be sent (and the Rights Agent will, if requested, send) by
first-class, postage-prepaid mail, to each record holder of Common Shares as
of the Close of Business on the Distribution Date, at the address of such
holder shown on the records of the Company, one or more Right Certificates,
in substantially the form of Exhibit B hereto (the "Right Certificates"),
evidencing one Right for each Common Share so held, subject to adjustment
pursuant to Section 11(i). In the event that an adjustment in the number of
Rights per Common Share has been made pursuant to Section 11(i), at the time
Right Certificates are distributed, the Company may, to the extent provided
in Section 14(a), make the necessary and appropriate rounding adjustments (as
set forth in Section 14(a)) so that Right Certificates are distributed
representing only whole numbers of Rights and pay cash in lieu of fractional
Rights pursuant to Section 14(a). As of and after the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Preferred
Shares, in substantially the form of Exhibit C hereto (the "Summary of Rights")
by first class, postage-prepaid mail, to each record holder of Common Shares as
of the Close of Business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for Common Shares
outstanding as of the Record Date, until the Distribution Date (or the earlier
Redemption Date or Final Expiration Date), the Rights will be evidenced by such
certificates registered in the names of the holders thereof and the registered
holders of the Common Shares shall also be the registered holders of the
associated Rights. Until the Distribution Date (or the earlier Redemption Date
or Final Expiration Date), the surrender for transfer of any certificate for
Common Shares (including without limitation the surrender for transfer of any
certificate for Common Shares outstanding as of the Record Date), with or
without a copy of the Summary of Rights attached thereto, shall also constitute
the transfer of the Rights associated with the Common Shares represented
thereby.
(c) Certificates for Common Shares which become outstanding
after the Record Date and (i) prior to the earliest of the Distribution Date,
the Redemption Date or the Final Expiration Date or (ii) upon the exercise or
conversion, prior to the earlier of the Redemption Date or the Final Expiration
Date, of any option or other security exercisable for or convertible into Common
Shares, which option or other security is outstanding on the Distribution Date,
shall have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between Minntech
Corporation (the "Company") and Norwest Bank Minnesota, National
Association, dated as of July 1, 1999 (the "Rights Agreement"), the
terms of which (including restrictions on the transfer of
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such Rights) are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of the
Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. The Company
will mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor
from such holder. Under certain circumstances, as set forth in the
Rights Agreement, Rights that are or were beneficially owned by an
Acquiring Person or any Associate or Affiliate thereof (as such
terms are defined in the Rights Agreement) may become null and void.
With respect to such certificates containing any such legend, until the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date, the
Rights associated with the Common Shares represented by such certificates shall
be evidenced by such certificates alone, the registered holders of the Common
Shares shall also be the registered holders of the associated Rights and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that the Company shall not
be entitled to exercise any Rights associated with the Common Shares which are
no longer outstanding.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates
(and the forms of election to purchase Preferred Shares and of assignment to be
printed on the reverse thereof) shall be in substantially the form of Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or automated quotation system on which the Rights may from time to time
be listed, or to conform to usage or to reflect adjustments to the Rights made
pursuant to this Agreement. Subject to the provisions of Section 11 and Section
22 hereof, the initial Right Certificates, whenever distributed, shall entitle
the holders thereof to purchase such number of one one-hundredths of a Preferred
Share as shall be set forth therein at the price per one-hundredth of a
Preferred Share set forth therein (the price per one-hundredth of a Preferred
Share being herein called the "Purchase Price"), but the amount and type of
securities purchasable upon the exercise of each Right and the Purchase Price
shall be subject to adjustment as provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman, Chief Executive Officer, President, or any Vice
President and by the Secretary or any Assistant Secretary or the Treasurer or
any Assistant Treasurer of the Company, either manually or by facsimile
signature. The Right Certificates shall be countersigned, either
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manually or by facsimile signature, 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 or whose facsimile signature shall appear on
any of the Right Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent, and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates had not ceased
to be such officer of the Company; and any Right Certificate may be signed on
behalf of the Company by any person who, at the actual date of the signing of
such Right Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or the office or offices
designated as the appropriate place for surrender of Rights Certificates upon
exercise or transfer, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates and the date and certificate
number of each of the Right Certificates.
Section 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; LOST, STOLEN, DESTROYED OR MUTILATED RIGHT CERTIFICATES.
(a) Subject to the provisions of Section 14 hereof, at any
time after the Close of Business on the Distribution Date, and at or prior to
the Close of Business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates (other than Right
Certificates representing Rights that have become void pursuant to Section
11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) may
be transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
one one-hundredths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder (or former holder in the case
of a transfer) to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Right Certificate or Rights Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Right Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office or offices of the Rights Agent designated for such
purpose. Thereupon the Rights Agent shall, subject to Section 14 hereof,
countersign and deliver to the Person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may require
payment by the registered holder of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer,
split-up, combination or exchange of Right Certificates. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have duly completed and
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executed the form of assignment on the reverse side of such Right Certificate
and shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) of such Right Certificate or
Affiliates or Associates thereof as the Company shall reasonably request.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.
(a) Subject to Section 11(a)(ii), the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
on the reverse side thereof duly completed and executed, to the Rights Agent at
the office or offices of the Rights Agent designated for such purpose, together
with payment of the Purchase Price for each one one-hundredth of a Preferred
Share as to which Rights are exercised, at or prior to the earliest of (i) the
Close of Business on July 22, 2009 (the "Final Expiration Date"), (ii) the time
at which the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date"), or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a
Preferred Share pursuant to the exercise of a Right shall initially be $65,
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly completed and
executed, accompanied by payment of the Purchase Price for the shares to be
purchased and an amount equal to any applicable transfer tax required to be paid
by the holder of such Right Certificate in accordance with Section 9 hereof in
cash, or by certified check or bank cashiers' check or money order payable to
the order of the Company, the Rights Agent shall, subject to Section 20(k)
hereof, thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Shares (or make available, if the Rights Agent is the transfer agent
for such shares) certificates for the number of Preferred Shares to be purchased
and the Company hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) if the Company shall have elected to deposit the total
number of Preferred Shares issuable upon exercise of the Rights under
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this Agreement with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a
Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company hereby directs the
depositary agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of
issuance of fractional interests in shares in accordance with Section 14
hereof, (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names
as may be designated by such holder and (iv) when appropriate, after receipt,
promptly deliver such cash for fractional interests to or upon the order of
the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to the registered holder of
such Right Certificate or to such holder's duly authorized assigns, subject to
the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) duly completed and executed the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) of such Right Certificate or
Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer,
split-up, combination or exchange shall, if surrendered to the Company or to any
of its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company.
Section 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred Shares
the number of Preferred Shares that will be sufficient to permit the exercise in
full of all outstanding Rights.
10
(b) At such time, if any, as, and so long as, the Preferred
Shares issuable upon the exercise of Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares reserved for
such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
(c) The Company will prepare and file, as soon as
practicable following the Shares Acquisition Date, a registration statement
under the Securities Act of 1933, as amended (the "Act"), with respect to the
Rights and the Company's securities purchasable upon exercise of the Rights
on an appropriate form, and use its best efforts to cause such registration
statement to (i) become effective as soon as practicable after such filing,
and (ii) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities or (B) the Final
Expiration Date. The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not to exceed 90 days
after the date the registration statement is filed, the exercisability of the
Rights in order to permit the registration statement to become effective.
Upon any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension is no longer
in effect. In addition, if the Company shall determine that a registration
statement is required following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights until such time as a
registration statement has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction if the requisite qualification in such
jurisdiction shall not have been obtained or the exercise thereof is not
permitted under applicable law.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred Shares delivered
upon exercise of Rights shall, at the time of delivery of the certificates
for such Preferred Shares (subject to payment of the Purchase Price and any
applicable transfer taxes), be duly and validly authorized and issued and
fully paid and nonassessable shares.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes and
charges that may be payable in respect of the issuance or delivery of the
Right Certificates or of any Preferred Shares upon the exercise of Rights.
The Company shall not, however, be required to pay any transfer tax that may
be payable in respect of any transfer or delivery of Right Certificates to a
person other than, or the issuance or delivery of certificates or depositary
receipts for the Preferred Shares in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered for
exercise or to issue or deliver any certificates or depositary receipts for
Preferred Shares upon the exercise of any Rights until any such tax shall
have been paid
11
(any such tax being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. PREFERRED SHARES RECORD DATE. Each person in
whose name any certificate for Preferred Shares is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of
record of the Preferred Shares represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; PROVIDED, HOWEVER, that if the date of
such surrender and payment is a date upon which the Preferred Shares transfer
books of the Company are closed, such person shall be deemed to have become
the record holder of such shares on, and such certificate shall be dated, the
next succeeding Business Day on which the Preferred Shares transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Right Certificate as such shall not be entitled to any rights
of a holder of Preferred Shares for which the Rights shall be exercisable,
including without limitation the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company, except as provided
herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND
OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of
shares covered by each Right and the number of Rights outstanding are subject
to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding Preferred Shares,
(C) combine the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such reclassification
in connection with a consolidation, merger or statutory share exchange in
which the Company is the continuing, surviving or acquiring corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in
effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number and
kind of shares of capital stock issuable on such date pursuant to the
exercise of the Rights, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect (and any applicable transfer
taxes), 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 Preferred Shares transfer books of the Company were open, such
holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both Section 11(a)(i)
and Section 11(a)(ii), 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).
12
(ii) Subject to Section 24 of this Agreement, in the event
any Person shall become an Acquiring Person (other than pursuant to any
Section 13 Event occurring on or after the Distribution Date or within 15 days
prior thereto), proper provision shall be made so that each holder of a
Right, subject to Section 11(a)(iii), shall thereafter have a right to
receive, upon exercise thereof by payment of the amount equal to the product
of the number of one one-hundredths of a Preferred Share which would
otherwise be issuable upon exercise of a Right and the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of Preferred
Shares, such number of Common Shares of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number of
one one-hundredths of a Preferred Share for which a Right is exercisable
immediately prior to the occurrence of the Section 11(a)(ii) Event and
(y) dividing that product by 50% of the then current per share market price
of the Company's Common Shares (determined pursuant to Section 11(d)) on the
date of such occurrence.
From and after the first occurrence of a Section 11(a)(ii)
Event or a Section 13 Event, any Rights that are beneficially owned by any
Acquiring Person (or any Associate or Affiliate thereof) or were beneficially
owned by any Acquiring Person (or any Associate or Affiliate thereof) after
the Acquiring Person became an Acquiring Person shall become null and void
without any further action and no holder of such Rights shall thereafter have
any rights to exercise such Rights or any other rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. No Right Certificate shall be issued pursuant to Section 3 that
represents Rights that would be void pursuant to the preceding sentence; no
Right Certificate shall be issued at any time upon the transfer of any Rights
to an Acquiring Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate of such an Acquiring Person or to any
nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
or any Associate or Affiliate of such Acquiring Person whose Rights would be
void pursuant to the preceding sentence shall be canceled. The Company shall
use all reasonable efforts to insure that the provisions of this
Section 11(a)(ii) are complied with, but shall have no liability to any
holder of a Right Certificate or other Person as a result of its failure in
good faith to make any determinations with respect to an Acquiring Person or
its Affiliates or Associates.
(iii) If, on the date of the occurrence of a
Section 11(a)(ii) Event (the "Adjustment Date"), the Company does not have
sufficient authorized, unissued and unreserved Common Shares available to
permit the exercise in full of all Rights that are exercisable on the
Adjustment Date for the number of Common Shares per Right provided for in
Section 11(a)(ii), then the Exercise Price (as defined below) and the number
of Common Shares to be delivered by the Company upon exercise of a Right
shall be further adjusted as provided in this subparagraph (iii).
13
(1) Definitions:
(A) The "Aggregate Market Value" is the product of
(i) the number of Available Shares and (ii) the current per share
market price of the Common Shares on the Adjustment Date, determined as
provided in Section 11(d).
(B) The "Available Shares" are all unreserved Common
Shares which are authorized and unissued immediately prior to the
Adjustment Date.
(C) The "Exercise Price" is the amount of the payment
that must be made by the holder of a Right in connection with the
exercise of one Right immediately prior to the Adjustment Date.
(D) The "Deficiency" is the amount by which (i) two
times the Exercise Price exceeds (ii) the quotient obtained by dividing
the Aggregate Market Value by the number of Rights remaining
outstanding immediately prior to the Adjustment Date (the "Remaining
Rights") (which number shall not include the Rights that are
beneficially owned by any Acquiring Person (or any Associate or
Affiliate thereof) or were beneficially owned by any Acquiring Person
(or any Associate or Affiliate thereof) after the Acquiring Person
became an Acquiring Person that shall have become void pursuant to
Section 11(a)(ii) hereof).
(2) If the Deficiency is less than or equal to the Exercise
Price, then
(A) the number of Common Shares to be delivered by
the Company upon exercise of a Right shall be adjusted to equal the
number of Available Shares divided by the number of Remaining Rights;
and
(B) the amount of cash required to be delivered by
the holder of a Right upon the exercise thereof shall be adjusted (the
"New Exercise Price") to equal the Exercise Price minus the Deficiency;
PROVIDED, HOWEVER, that in no event will the New Exercise Price be less
than the aggregate par value of the Common Shares required to be
delivered upon the exercise of one Right pursuant to subparagraph
(2)(A) above.
(3) If the Deficiency is greater than the Exercise Price,
then
(A) the number of Common Shares to be delivered by
the Company upon exercise of a Right shall be adjusted to equal the
quotient obtained by dividing the Exercise Price by the current per
share market price of the Common Shares on the Adjustment Date;
(B) the New Exercise Price shall equal the aggregate
par value of the Common Shares required to be delivered upon the
exercise of one Right pursuant to subparagraph 3(A) above; and
14
(C) In lieu of issuing Common Shares (in whole or in
part upon the exercise of Rights) the Company may issue, upon the
exercise of Rights at the New Exercise Price other equity securities of
the Company (including, without limitation, shares, or units or
fractions of shares, of preferred stock, which may include Preferred
Shares) which the Board of Directors of the Company has determined to
have substantially the same value, voting rights, dividend rights and
other rights as the Common Shares (such equity securities are herein
called "common share equivalents"). To the extent that such common
share equivalents (or fractions thereof) are substituted for Common
Shares upon exercise of the Rights following the occurrence of a
Section 11(a)(ii) Event, they shall be substituted on a pro rata basis
with respect to all Rights (other than Rights that are beneficially
owned by any Acquiring Person (or any Associate or Affiliate thereof)
or were beneficially owned by any Acquiring Person (or any Associate or
Affiliate thereof) after the Acquiring Person became an Acquiring
Person that shall have become void pursuant to Section 11(a)(ii)
hereof). Such common shares equivalents shall not be included in
Available Shares, and all of the Available Shares shall be reserved, as
of the Adjustment Date, for issuance, on a pro rata basis, upon
exercise of the Rights and may not be substituted for with common share
equivalents upon the exercise of any Right except to the extent that
the number of Common Shares required to be delivered under subparagraph
(3)(A) upon the exercise of such Right exceeds the quotient of the
number of Available Shares divided by the number of Remaining Rights.
(4) If, at the time any adjustment is required pursuant to
this Section 11(a)(iii), the Common Shares shall have no par value, then for
the purpose of this Section 11(a)(iii), the par value of the Common Shares
shall be deemed to be $.05 per share.
(5) In the event that there shall not be sufficient
authorized but unissued and unreserved Common Shares (or common share
equivalents the issuance of which is permitted under Section 11(a)(iii)(3)(C)),
to permit the exercise in full of the Rights in accordance with this
subparagraph (iii), the Company shall use its best efforts to cause the
authorization of sufficient additional Common Shares or common share
equivalents to permit such exercise and, if the Board of Directors of the
Company shall determine in good faith that it is likely that sufficient
additional Common Shares or common stock equivalents could be authorized to
permit such exercise, the Company may suspend the exercisability of the
Rights for a period not to exceed 90 days (and not beyond the Final
Expiration Date) in order to seek any authorization of additional Common
Shares or common share equivalents. In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Preferred Shares
15
(or shares having the same rights, privileges and preferences as the
Preferred Shares ("equivalent preferred shares")) or securities convertible
into Preferred Shares or equivalent preferred shares at a price per Preferred
Share or equivalent preferred share (or having a conversion price per share,
if a security convertible into Preferred Shares or equivalent preferred
shares) less than the current per share market price of the Preferred Shares
(as 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 Preferred
Shares outstanding on such record date, plus the number of Preferred Shares
which the aggregate offering price of the total number of Preferred Shares
and/or equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered)
would purchase, at such current per share market price, and the denominator
of which shall be the number of Preferred Shares outstanding on such record
date, plus the number of additional Preferred Shares and/or equivalent
preferred shares to be offered for subscription or purchase (or into which
the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid in a consideration part or all of
which shall be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights. Preferred Shares owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed;
and in the event that such rights, options or warrants are not so issued, the
Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Preferred Shares (including
any such distribution made in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation or in a
statutory share exchange) of evidences of indebtedness or cash or non-cash
assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price
in effect immediately prior to such record date by a fraction, the numerator
of which shall be the current per share market price of the Preferred Shares
(as determined pursuant to Section 11(d)) on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights) of the portion of the evidences of indebtedness or cash or non-cash
assets so to be distributed on, or of such subscription rights or warrants
applicable to, one Preferred Share, and the denominator of which shall be
such current per share market price of the Preferred 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,
16
the Purchase Price shall again be adjusted to be the Purchase Price that
would then be in effect if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security" for the
purpose of this Section 11(d)(i)) on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the
30 consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date; PROVIDED, HOWEVER, that in the event that the current per
share market price of the Security is determined during a period following
the announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in such Security or securities
convertible into such Security (other than the Rights) or (B) any
subdivision, combination or reclassification of such Security, and prior to
the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the current per
share market price shall be appropriately adjusted to reflect the current
market price per share equivalent of such Security. The closing price for
each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not listed
or admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported on the Nasdaq National Market,
the Nasdaq SmallCap Market or any similar system then in use, or, if on any
such date the Security is not quoted or reported by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by the
Board of Directors of the Company. Except as provided in Section 11(d)(ii)
with respect to Preferred Shares, if on any such day no market maker is
making a market in the Security, the fair value of such Security on such day
as determined in good faith by the Board of Directors of the Company (whose
determination shall be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the holders of the Rights) shall
be used in lieu of the closing price for such day. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) If the Preferred Shares are not publicly held or
listed or traded in a manner described in Section 11(d)(i), then,
notwithstanding anything to the contrary provided in Section 11(d)(i), the
"current per share market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market price of the Common
Shares
17
as determined pursuant to Section 11(d)(i) multiplied by one hundred
(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof). If neither the Common Shares
nor the Preferred Shares are publicly held or so listed or traded, the
"current per share market price" of the Preferred Shares 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 statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights.
(e) Anything herein to the contrary notwithstanding, except
as provided in the third sentence of this Section 11(e), no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; PROVIDED, HOWEVER,
that any adjustments 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 one-millionth of a Preferred Share or one
ten-thousandth of any other share or security, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11, but for the first sentence of this Section 11(e),
shall be made no later than the earlier of (i) three years from the date of
the transaction that requires such adjustment or (ii) the Final Expiration
Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a) or Section 13(a), the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the Company
other than Preferred Shares, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the shares contained in Section 11(a) through
(c) inclusive and the provisions of Sections 7, 9, 10, 13 and 14 with respect
to the Preferred Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of one
one-hundredths of a Preferred Share (or other securities) purchasable from
time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a Preferred Share (calculated to the
nearest one one-millionth of a Preferred Share) obtained by (i) multiplying
(x) the number of one one-hundredths of a share covered by a Right
immediately prior to such adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and
18
(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 one-one hundredths of a
Preferred Share purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-hundredths of a Preferred Share for
which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued on or after the Distribution Date, shall be at least 10 days
later than the date of the public announcement. If Right Certificates have
been issued on or after the Distribution Date, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 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, 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 of one one-hundredths of a Preferred Share
issuable upon the exercise of the Rights, the Right Certificates theretofore
and thereafter issued may continue to express the Purchase Price per one
one-hundredth of a Preferred Share and the number of one one-hundredths of a
Preferred Share which were expressed in the initial Right Certificates issued
hereunder.
(k) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such record
date of the Preferred Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Preferred
Shares and other capital stock or securities of the Company, if any, issuable
upon such exercise on the
19
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 shares upon the occurrence of the event requiring such adjustment.
(l) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that the Board of Directors of the Company
in its sole discretion shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Shares, (ii) issuance
wholly for cash of any of the Preferred Shares at less than the current per
share market price, (iii) issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or exchangeable for
Preferred Shares, (iv) dividends on Preferred Shares payable in Preferred
Shares or (v) issuance of rights, options or warrants referred to in
paragraph (b) of this Section 11, hereafter made by the Company to holders of
its Preferred Shares shall not be taxable to such shareholders.
(m) Anything in this Agreement or the Rights to the
contrary notwithstanding, in the event that at any time after the date of
this Agreement and prior to the Distribution Date, the Company shall
(i) declare or pay any dividend on the Common Shares payable in Common Shares
or (ii) effect a subdivision, combination or consolidation of the Common
Shares (by reclassification or otherwise) into a greater or lesser number of
Common Shares, then in any such case (x) the number of one one-hundredths of
a Preferred Share purchasable after such event upon proper exercise of each
Right shall be determined by multiplying the number of one one-hundredths of
a Preferred Share so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of Common Shares outstanding
immediately before such event and the denominator of which is the number of
Common Shares outstanding immediately after such event and (y) each Common
Share outstanding immediately after such event shall have issued with respect
to it that number of Rights which each Common Share outstanding immediately
prior to such event had issued with respect to it. The adjustments provided
for in this Section 11(m) shall be made successively whenever such a dividend
is declared or paid or such a subdivision, combination or consolidation is
effected. If an event occurs which would require an adjustment under
Section 11(a)(ii) and this Section 11(m), the adjustments provided for in
this Section 11(m) shall be in addition and prior to any adjustment required
pursuant to Section 11(a)(ii).
(n) If any adjustment in the Purchase Price pursuant to
paragraph (b) or (c) of this Section 11 would not be permitted by law, under
the Company's Articles of Incorporation or under the Certificate of
Designation, Preferences and Rights establishing the Preferred Shares, as
amended, no such issuance of securities or distribution of evidences of
indebtedness or other assets or subscription rights or warrants, as the case
may be, that would require such an adjustment but for the limitations
established by law, the Company's Articles
20
of Incorporation or such Certificate of Designation, Preferences and Rights,
as amended, shall be made by the Company.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR
NUMBER OF SHARES. Whenever an adjustment is made as provided in Sections 11
and 13 hereof, the Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Common Shares or the Preferred Shares a copy of such certificate
and (c) if such adjustment is made after the Distribution Date, mail a brief
summary thereof to each holder of record of a Right Certificate in accordance
with Section 25 hereof. The Rights Agent shall be fully protected in relying
on such certificate and on any adjustment therein contained.
Section 13. CONSOLIDATION, MERGER, STATUTORY SHARE EXCHANGE
OR SALE OR TRANSFER OF ASSETS OR EARNING POWER.
(a) In the event, on or after the Distribution Date or
within 15 days prior thereto, directly or indirectly,
(w) the Company shall consolidate with, or merge with
and into, any other Person, and the Company shall not be the continuing
or surviving corporation of such consolidation or merger,
(x) any Person shall consolidate with the Company, or
merge with and into the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all or part of
the outstanding Common Shares of the Company shall be changed into or
exchanged for stock or other securities of any other Person (or the
Company) or money or any other property (except as a result of the
exercise of statutory dissenters' rights),
(y) the Company shall effect a statutory share
exchange with outstanding Common Shares of the Company being exchanged
for stock or other securities of any other Person, money or other
property, or
(z) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise transfer), in
one or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company or one or more of its wholly owned
Subsidiaries),
then, and in each such case, proper provision shall be made so that (i) each
holder of a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise thereof by payment of the amount
equal to the product of the number of one one-
21
hundredths of a Preferred Share which would otherwise be issuable upon
exercise of a Right and the then current Purchase Price in accordance with
the terms of this Agreement and in lieu of Preferred Shares, such number of
validly authorized and issued, fully paid, nonassessable and freely tradeable
Common Shares of the Principal Party (as hereinafter defined), not subject to
any liens, encumbrances, rights of first refusal or adverse claims, as shall
be equal to the result obtained by (x) multiplying the then current Purchase
Price by the number of one one-hundredths of a Preferred Share for which a
Right is, immediately prior to the occurrence of the Section 13 Event,
exercisable and (y) dividing that product by 50% of the then current per
share market price of the Common Shares of such Principal Party (determined
pursuant to Section 11(d)) on the date of consummation of such Section 13
Event; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such merger, consolidation, statutory share exchange,
sale or transfer, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party; and (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
Common Shares to permit the exercise of all outstanding Rights) in connection
with the consummation of any such transaction as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable
upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clauses (w),
(x) or (y) of the first sentence of Section 13(a), the Person
(including, without limitation, the Company as successor thereto or as
the surviving corporation) that is the issuer of any securities into
which Common Shares of the Company are converted in such merger,
consolidation or exchange, or if no securities are so issued, the
Person that is the other party to such merger, consolidation or
exchange; and
(ii) in the case of any transaction described in clause (z)
of the first sentence of Section 13(a), the Person that is the
party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
PROVIDED, HOWEVER, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
12 month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person, the Common
Shares of which are and have been so registered, "Principal Party" shall
refer to such other Person, and (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common Shares of two or
more of which are and have been so registered, "Principal Party" shall refer
to whichever of such Persons is the issuer of the Common Shares having the
greatest aggregate market value.
22
(c) The Company shall not consummate any Section 13 Event unless the
Principal Party shall have a sufficient number of authorized, unissued and
unreserved Common Shares to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a)
and (b) of this Section 13 and further providing that, as soon as practicable
after the date of any Section 13 Event, the Principal Party will:
(i) prepare and file a registration statement under the
Act, with respect to the Rights and the securities purchasable upon
exercise of the Rights, on an appropriate form, and use its best
efforts to cause such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
earlier of (1) the date as of which the Rights are no longer
exercisable for such securities or (2) the Final Expiration Date;
(ii) take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
(d) The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction there are
any rights, warrants, instruments or securities outstanding or any agreements
or arrangements which, as a result of the consummation of such transaction,
would eliminate or substantially diminish or eliminate the benefits intended
to be afforded by the Rights.
The provisions of this Section 13 shall similarly apply to
successive mergers, consolidations, statutory share exchanges or sales or
other transfers.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there may be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for
any day shall be the last sale price, regular
23
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading or, if the
Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported on the
Nasdaq National Market or the Nasdaq SmallCap Market or any similar system
then in use or, if on any such date the Rights are not so quoted or reported,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board
of Directors of the Company. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be
used in lieu of the closing price for such day.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions that are integral multiples of one
one-hundredth of a Preferred Share, or, if a Right shall then be exercisable
for a fraction other than one one-hundredth of a Preferred Share, integral
multiples of that fraction) upon exercise of the Rights or to issue
certificates which evidence fractions of Preferred Shares (other than
fractions that are integral multiples of one one-hundredth of a Preferred
Share, or if a Right shall be then exercisable for a fraction other than one
one-hundredth of a Preferred Share, integral multiples of that fraction).
Fractions of Preferred Shares in integral multiples of one one-hundredth of a
Preferred Share or, if a Right shall then be exercisable for a fraction other
than one one-hundredth of a Preferred Share, integral multiples of that
fraction may, at the election of the Company, be evidenced by depositary
receipts pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement shall provide that
the holders of such depositary receipts shall have all the rights, privileges
and preferences to which they are entitled as beneficial owners of the
Preferred Shares represented by such depositary receipts. In lieu of
fractional Preferred Shares that are not integral multiples of one
one-hundredth of a Preferred Share, or, if a Right shall then be exercisable
for a fraction other than one one-hundredth of a Preferred Share, integral
multiples of that fraction, the Company may pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of
one Preferred Share. For purposes of this Section 14(b), the current market
value of a Preferred Share shall be the closing price of a Preferred Share
(as determined pursuant to the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of such exercise or if the
closing price is not determinable pursuant to the second sentence of
Section 11(d)(i) hereof, the current market value of a Preferred Share shall
be determined pursuant to Section 11(d)(ii).
24
(c) The holder of a Right by the acceptance of the Rights expressly
waives such holder's right to receive any fractional Rights or any fractional
shares (except as provided above) upon exercise of a Right.
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares), may,
in such holder's own behalf and for such holder's own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company
to enforce, or otherwise act in respect of, such holder's right to exercise
the Rights evidenced by such Right Certificate (or, prior to the Distribution
Date, the associated Common Shares certificate) in the manner provided in
such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at
law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this
Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of 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 or offices of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent shall
be affected by any notice to the contrary;
(d) the Company may issue Rights after the Effective Date but prior
to the Distribution Date, and in certain instances after the Distribution
Date, as provided in this Agreement; and
25
(e) notwithstanding anything in this Agreement or the Rights to the
contrary, the Company, the Rights Agent and the Board of Directors shall not
have any liability to any holder of a Right or other Person as a result of
the inability of the Company or the Rights Agent to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in Section 25 hereof), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability or expense (including the costs and
expenses of defending against any claim of liability), incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
Right Certificate or certificate for the Preferred Shares or Common Shares or
for other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it to
be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons, or otherwise upon the advice
of its counsel as set forth in Section 20 hereof.
26
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto; PROVIDED, HOWEVER,
that such corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and
in this Agreement.
(b) 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 the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates
(or, prior to the Distribution Date, the Common Shares certificates), by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of the "current per share market price") be proved or
established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and
established by a
27
certificate signed by any one of the Chairman, the Chief Executive Officer,
the President or any Vice President of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the
Rights (including the Rights becoming void pursuant to Section 11(a)(ii)
hereof) or any adjustment in the terms of the Rights (including the manner,
method or amount thereof) provided for in Sections 3, 11, 13, 23 or 24, or
the ascertaining of the existence of facts that would require any such change
or adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice that such change or adjustment is
required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares or Common Shares to be issued pursuant to this Agreement or
any Right Certificate or as to whether any Preferred Shares or Common Shares
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
instructions with respect to the performance of its duties hereunder from any
one of the Chairman, the Chief Executive Officer, the President or any Vice
President of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for
any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer or for delay in acting while waiting
for those instructions.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the
28
Company or become pecuniarily interested in any transaction in which the
Company or its Subsidiaries may be interested, or contract with or lend money
to the Company or its Subsidiaries or otherwise act as fully and freely as
though it were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company
or its Subsidiaries or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights or powers if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the form of assignment or form of
election to purchase, as the case may be, has either not been duly completed
and executed or indicates an affirmative response to enumerated clause 1
and/or 2 on the reverse side of the applicable Right Certificate, the Rights
Agent shall not take any further action with respect to such requested
exercise or transfer without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Shares and Preferred Shares by registered
or certified mail, and, if such notice is mailed after the Distribution Date,
to the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares and Preferred Shares by
registered or certified mail, and, if such notice is mailed after the
Distribution Date, to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who
shall, with such notice, submit such holder's Right Certificate for
inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
29
organized and doing business under the laws of the United States or of the
State of Minnesota or New York (or of any other state of the United States so
long as such corporation is authorized to do business as a banking
institution in the State of Minnesota or New York), in good standing, having
an office in the State of Minnesota or New York that is authorized under such
laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and that has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million or (b) an affiliate of a corporation described in clause
(a) of this sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Shares and Preferred Shares, and, if such notice is filed
after the Distribution Date, mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
Section 23. REDEMPTION.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (x) such time as a Person becomes an Acquiring
Person or (y) the Close of Business on the Final Expiration Date, redeem all
but not less than all of the then outstanding Rights at a redemption price of
$.001 per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date of this Agreement
(such redemption price being hereinafter referred to as the "Redemption
Price"). The Redemption Price shall be payable in cash by the Company. The
redemption of the Rights by the Board of Directors of the Company may be made
effective at such time, on such basis and with such conditions as the Board
of Directors of the Company in its sole discretion may establish. Except for
the obligation of the Company to pay the Redemption Price, the Board of
Directors and the Company shall not have any liability to any Person as a
result of the redemption of Rights pursuant to the terms of this Section 23.
30
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price for each Right so held.
Promptly after the action of the Board of Directors of the Company ordering the
redemption of the Rights, the Company shall give notice of such redemption to
the Rights Agent and the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares; PROVIDED, HOWEVER,
that the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Any notice which is mailed in the manner herein
provided shall be deemed given whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner except as specifically set forth in this Section 23 or in Section 24
or other than in connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at
any time after any person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights that
shall have become void pursuant to the provisions of Section 11(a)(ii) hereof)
for Common Shares with each Right to be exchanged for such number of Common
Shares as shall equal the result obtained by dividing (x) the Exercise Price (as
defined in Section 11(a)(iii)) by (y) the current per share market price of the
Common Shares (determined pursuant to Section 11(d)) on the date the Rights
first become exercisable for Common Shares pursuant to Section 11(a)(ii) (such
number of shares being hereinafter referred to as the "Exchange Ratio"). The
Exchange Ratio shall be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction affecting the Common Shares that occurs after
the date the Rights first become exercisable for Common Shares pursuant to
Section 11(a)(ii). 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 wholly owned Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate, and the only right thereafter of a holder
of such Rights shall be to receive that number of Common Shares equal to the
number of such Rights held by such holder multiplied by the Exchange
31
Ratio. The Company shall promptly give public notice of any such exchange;
PROVIDED, HOWEVER, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company promptly shall
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of Common Shares for
Rights will be effected and, in the event of any partial exchange, the number
of Rights which will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which shall have become
void pursuant to the provisions of Section 11(a)(ii) hereof) held by each
holder of Rights.
(c) In the event that there shall not be sufficient Common Shares
authorized, unissued and unreserved to permit an exchange of Rights as
contemplated in accordance with this Section 24, the Company, at its option, may
substitute Preferred Shares (or equivalent preferred shares, as such term is
defined in Section 11(b) hereof, or common share equivalents, as such term is
defined in Section 11(a)(iii)(3)(C) hereof), for Common Shares exchangeable for
Rights, at the initial rate of one one-hundredth of a Preferred Share (or
equivalent preferred share) or one common share equivalent for each Common
Share, as appropriately adjusted to reflect stock splits, stock dividends or
similar transactions affecting the Common Shares that occur after the date of
this Agreement.
(d) In the event that there shall not be sufficient Common Shares,
Preferred Shares, equivalent preferred shares, as such term is defined in
Section 11(b), or common share equivalents, as such term is defined in Section
11(a)(iii)(3)(C), authorized, unissued and unreserved to permit the exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorized additional Common Shares
or Preferred Shares, equivalent preferred shares or common share equivalents for
issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Company may pay to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
paragraph (e), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24. The Board of Directors and the Company
shall not have any liability to any Person as a result of the exchange of Rights
pursuant to the terms of this Section.
32
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of its Preferred Shares or to make any other distribution to the holders
of its Preferred Shares (other than a regular quarterly cash dividend), or (ii)
to offer to the holders of its Preferred Shares rights or warrants to subscribe
for or to purchase any additional Preferred Shares or shares of stock of any
class or any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding Preferred Shares), or (iv) to
effect any consolidation or merger into or with any other Person, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or a series of related transactions,
of 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person or Persons (other than the
Company and/or any of its wholly owned Subsidiaries), or (v) to effect any
statutory share exchange with outstanding Common Shares of the Company being
exchanged for stock or other securities of any other corporation or money or
other property, or (vi) to effect the liquidation, dissolution or winding up of
the Company, or (vi) to declare or pay any dividend on the Common Shares payable
in Common Shares or to effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise), then, in each such case, the
Company shall give to each holder of a Right Certificate, to the extent feasible
and in accordance with Section 26 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of such stock dividend or
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, exchange, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by the holders
of the Common Shares and/or Preferred Shares, if any such date is to be fixed,
and such notice shall be so given in the case of any action covered by clause
(i) or (ii) above at least 10 days prior to the record date for determining
holders of the Preferred Shares for purposes of such action, and in the case of
any such other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any
such case, the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which shall specify the event and the consequences
of the event to holders of Rights under Section 11(a)(ii) hereof.
33
Section 26. NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent
by first-class mail, postage-prepaid, or delivered by hand or express courier
service or faxed, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Minntech Corporation
00000 00xx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage-prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Norwest Bank Minnesota, National Association
000 Xxxxx Xxxxxxx Xxxxxxxx
Xxxxx Xx. Xxxx, Xxxxxxxxx 00000
Attention: Stock Transfer Manager
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage-prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. The Company may and the Rights
Agent shall, if so directed by the Company, from time to time supplement or
amend this Agreement without the approval of any holders of Common Shares or
Right Certificates in order (i) to extend the Final Expiration Date, (ii) to
cure any ambiguity, or to correct or supplement any provision contained in this
Agreement which may be defective or inconsistent with any other provisions in
this Agreement, (iii) prior to the Distribution Date, to otherwise change or
supplement any provision in this Agreement in any manner which the Company may
deem necessary or desirable or (iv) following the Distribution Date, to
otherwise change or supplement any provision in this Agreement in any manner
which the Company may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Right Certificates (other than Right
Certificates evidencing Rights that shall have become null and void pursuant to
Section 11(a)(ii)). Without limiting the foregoing, the Company may at any time
prior to such time as any Person becomes an Acquiring Person amend this
Agreement to lower the thresholds set forth in Sections 1(a) and 3(a) hereto
from 20% to not less than the greater of (i) the sum of .001% and the largest
percentage of the outstanding Common Shares then known by the Company to be
beneficially owned by any Person (other than (1) the Company, (2) any wholly
owned Subsidiary of the Company, (3) any employee benefit plan of
34
the Company or any Subsidiary of the Company, or (4) any entity holding
Common Shares for or pursuant to the terms of any plan described in clause
(3) of this sentence) or (ii) 10%.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. BENEFITS OF THIS AGREEMENT.
(a) Nothing in this Agreement shall be construed to give to any
Person other than the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of Common Shares) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
Common Shares).
(b) The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board of Directors or the Company or
necessary or advisable in the administration of this Agreement, including
without limitation the right and power to interpret this Agreement and to make
all determinations deemed necessary or advisable for the administration of this
Agreement. All such acts, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) that are done or made by the Board of Directors in good faith shall
(x) be final, conclusive and binding on the Company, the Rights Agent and the
holders of the Rights and all other parties and (y) not subject the Board of
Directors to any liability to the holders of the Rights or any other party.
Section 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 31. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Minnesota and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
35
Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
MINNTECH CORPORATION
By /s/ Xxxxxx X. XxXxxxxxxx
-----------------------------------------
Its President and Chief Executive Officer
-------------------------------------
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By /s/ Xxxxx X. XxxXxxx
-----------------------------------------
Its Assistant Vice President
-------------------------------------
36
EXHIBIT A
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES A JUNIOR PARTICIPATING PREFERRED SHARES
OF
MINNTECH CORPORATION
I, Xxxxxxx X. Xxxxxxx, the Secretary of Minntech Corporation, a
corporation organized and existing under the Business Corporation Act of the
State of Minnesota, in accordance with the provisions of Section 302A.401
thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Restated Articles of Incorporation of the corporation, as amended, the
Board of Directors on July 1, 1999, adopted the following resolution creating
a series of 200,000 Preferred Shares, no par value, designated as Series A
Junior Participating Preferred Shares:
RESOLVED, that pursuant to the authority granted to and vested in
the Board of Directors of this corporation in accordance with the provisions
of its Restated Articles of Incorporation, as amended, a series of Preferred
Stock of this corporation be, and it hereby is, created, and that the
designation and amount thereof and the relative rights and preferences of the
shares of such series, are as follows:
1. DESIGNATION AND AMOUNT. The shares of such series shall
be designated as "Series A Junior Participating Preferred Shares" (the
"Series A Preferred Shares"), and the number of shares constituting such
series shall be Two Hundred Thousand (200,000). The number of shares
constituting such series may, unless prohibited by the Articles of
Incorporation or by applicable law of the State of Minnesota, be
increased or decreased by resolution of the Board of Directors; PROVIDED,
that no decrease shall reduce the number of Series A Preferred Shares to a
number less than the number of shares then outstanding plus the number of
shares issuable upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
corporation convertible into Series A Preferred Shares.
2. DIVIDENDS AND DISTRIBUTIONS.
(i) The holders of Series A Preferred Shares, in
preference to the holders of Common Shares and of any other junior stock,
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the last day of March, June, September and December in
each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a Series A Preferred Share, or fraction thereof, in an
amount per share (rounded to the nearest cent) equal to the greater of (a)
$1.00 or (b) subject to the provision for adjustment hereinafter set forth,
A-1
one hundred (100) times the aggregate per share amount of all cash dividends,
and one hundred (100) times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions, other than a dividend
payable in Common Shares or a subdivision of the outstanding Common Shares
(by reclassification or otherwise), declared on the Common Shares since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any Series
A Preferred Share, or fraction thereof. In the event the corporation shall at
any time after July 22, 1999 declare or pay any dividend on Common Shares
payable in Common Shares, or effect a subdivision or combination or
consolidation of the outstanding Common Shares (by reclassification or
otherwise) into a greater or lesser number of Common Shares, then in each
such case the amount to which holders of Series A Preferred Shares were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of Common Shares outstanding immediately
after such event and the denominator of which is the number of Common Shares
that were outstanding immediately prior to such event.
(ii) The corporation shall declare a dividend or
distribution on the Series A Preferred Shares as provided in subparagraph (i)
of this paragraph 2 simultaneously with its declaration of a dividend or
distribution on the Common Shares (other than a dividend payable in Common
Shares or a subdivision of the outstanding Common Shares); provided that, in
the event no dividend or distribution shall have been declared on the Common
Shares during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series A Preferred Shares shall nevertheless be payable, out of
funds legally available for such purpose, on such subsequent Quarterly
Dividend Payment Date.
(iii) Dividends shall begin to accrue and be cumulative
on outstanding Series A Preferred Shares from the Quarterly Dividend Payment
Date immediately preceding the date of issue of such Series A Preferred
Shares, unless the date of issue of such shares is prior to the record date
for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of Series A Preferred
Shares entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin
to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
Series A Preferred Shares in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares outstanding at that
time. The Board of Directors may fix a record date for the determination of
holders of Series A Preferred Shares entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be not
more than sixty (60) days prior to the date fixed for the payment thereof.
A-2
3. VOTING RIGHTS. The holders of Series A Preferred Shares shall
have the following voting rights:
(i) Subject to the provision for adjustment hereinafter
set forth, each Series A Preferred Share shall entitle the holder thereof to one
hundred (100) votes on all matters submitted to a vote of the shareholders of
the corporation. In the event the corporation shall at any time after July 22,
1999 declare or pay any dividend on Common Shares payable in Common Shares, or
effect a subdivision or combination or consolidation of the outstanding Common
Shares (by reclassification or otherwise) into a greater or lesser number of
Common Shares, then in each such case the number of votes per share to which
holders of Series A Preferred Shares were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the numerator
of which is the number of Common Shares outstanding immediately after such event
and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(ii) Except as otherwise provided herein, in any other
Certificate of Designation, Preferences and Rights creating a series of
Preferred Stock or by law, the holders of Series A Preferred Shares and the
holders of Common Shares and any other capital shares of the corporation having
general voting rights shall vote together as one class on all matters submitted
to a vote of the shareholders of the corporation.
(iii) Except as otherwise provided herein or by law, the
holders of Series A Preferred Shares shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Shares and any other capital stock of the
corporation having general voting rights as set forth herein) for taking any
corporate action.
4. CERTAIN RESTRICTIONS.
(i) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Shares as provided in paragraph
2 hereof are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on Series A Preferred Shares
outstanding shall have been paid in full, the corporation shall not:
(a) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Shares;
(b) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Shares, except dividends paid ratably on the Series A Preferred Shares
and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then
entitled;
A-3
(c) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Shares,
provided that the corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of stock of the
corporation ranking junior (both as to dividends and upon liquidation,
dissolution or winding up) to the Series A Preferred Shares; or
(d) redeem or purchase or otherwise acquire for
consideration any Series A Preferred Shares, or any shares of stock ranking on a
parity with the Series A Preferred Shares, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among the
respective series or classes.
(ii) The corporation shall not permit any subsidiary of
the corporation to purchase or otherwise acquire for consideration any shares of
stock of the corporation unless the corporation could, under subparagraph (i) of
this paragraph 4, purchase or otherwise acquire such shares at such time and in
such manner.
5. REACQUIRED SHARES. Any Series A Preferred Shares purchased or
otherwise acquired by the corporation in any manner whatsoever shall constitute
authorized but unissued Preferred Shares and may be reissued as part of a new
series of Preferred Stock by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein, in the Articles of Incorporation, or in any other Certificate of
Designation, Preferences and Rights creating a series of Preferred Stock or as
otherwise required by law.
6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
dissolution or winding up of the corporation, no distribution shall be made (a)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Shares unless,
prior thereto, the holders of Series A Preferred Shares shall have received the
greater of (i) $100 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, or (ii) an aggregate amount per share, subject to the provision
for adjustment hereinafter set forth, equal to one hundred (100) times the
aggregate amount to be distributed per share to holders of Common Shares, or (b)
to the holders of shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred Shares,
except distributions made ratably on the Series A Preferred Shares and all other
such parity stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up. In
the event the corporation shall at any time after July 22, 1999 declare or pay
any dividend on the Common Shares payable in Common Shares, or effect a
subdivision or combination or consolidation of the outstanding Common Shares (by
reclassification or otherwise) into a greater or lesser number of Common
A-4
Shares, then in each such case the aggregate amount to which holders of
Series A Preferred Shares were entitled immediately prior to such event under
clause (a)(ii) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of Common
Shares outstanding immediately after such event and the denominator of which
is the number of Common Shares that were outstanding immediately prior to
such event.
7. CONSOLIDATION, MERGER, EXCHANGE, ETC. In case the corporation
shall enter into any consolidation, merger, combination, statutory share
exchange or other transaction in which the Common Shares are exchanged for or
changed into other stock or securities, money and/or any other property, then in
any such case the Series A Preferred Shares shall at the same time be similarly
exchanged or changed into an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to one hundred (100) times the aggregate
amount of stock, securities, money and/or any other property (payable in kind),
as the case may be, into which or for which each Common Share is changed or
exchanged. In the event the corporation shall at any time after July 22, 1999
declare or pay any dividend on Common Shares payable in Common Shares, or effect
a subdivision or combination or consolidation of the outstanding Common Shares
(by reclassification or otherwise) into a greater or lesser number of Common
Shares, then in each such case the amount set forth in the preceding sentence
with respect to the exchange or change of Series A Preferred Shares shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of Common Shares outstanding immediately after such event and the
denominator of which is the number of Common Shares that were outstanding
immediately prior to such event.
8. NO REDEMPTION. The Series A Preferred Shares shall not be
redeemable.
9. RANK. The Series A Preferred Shares shall rank junior in terms
of dividend and liquidation, dissolution and winding up rights to all other
series of the corporation's Preferred Stock hereafter issued that specifically
provide that they shall rank senior to the Series A Preferred Shares.
10. FRACTIONAL SHARES. Series A Preferred Shares may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to receive dividends, participate in distributions
and to have the benefit of all other rights of holders of Series A Preferred
Shares.
IN WITNESS WHEREOF, I have executed this Certificate of Designation,
Preferences and Rights this ____ day of July, 1999.
-------------------------------------------------------
Xxxxxxx X. Xxxxxxx, Secretary
A-5
EXHIBIT B
[FORM OF RIGHT CERTIFICATE]
Certificate No. R- ______ _________ Rights
NOT EXERCISABLE AFTER JULY 22, 2009 OR SUCH EARLIER DATE AS THE BOARD
OF DIRECTORS ORDERS REDEMPTION OR EXCHANGE OF THE RIGHTS. THE RIGHTS ARE SUBJECT
TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER RIGHT (SUBJECT TO
ADJUSTMENT) AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE
OR WERE ACQUIRED OR BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) MAY BECOME NULL AND VOID.
Right Certificate
MINNTECH CORPORATION
This certifies that _________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of July 1, 1999 (the "Rights Agreement") between
Minntech Corporation, a Minnesota corporation (the "Company"), and Norwest Bank
Minnesota, National Association (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. (Minneapolis, Minnesota time) on July
22, 2009 at the office or offices of the Rights Agent designated for such
purpose, or of its successor as Rights Agent, one one-hundredth of a fully paid,
nonassessable Series A Junior Participating Preferred Share, no par value, (the
"Preferred Shares") of the Company, at a purchase price of $65 per one
one-hundredth of a Preferred Share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
completed and executed. The number of Rights evidenced by this Right Certificate
(and the number of one one-hundredths of a Preferred Share which may be
purchased upon exercise thereof) set forth above, and the Purchase Price set
forth above, are, except for adjustments required pursuant to the Rights
Agreement, the number and Purchase Price as of July 22, 1999, based on the
Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and
the number of one one-hundredths of a Preferred Share which may be purchased
upon the exercise of the Rights evidenced by this Right Certificate are subject
to modification and adjustment upon the happening of certain events.
B-1
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 which contains a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Right Certificates (which limitations of rights include
the voiding of the Rights under certain circumstances specified in the Rights
Agreement). Copies of the Rights Agreement are on file with the Secretary at the
principal executive office of the Company and will be mailed without charge by
the Company or the Rights Agent to the holder of this certificate promptly
following receipt by the Company or the Rights Agent of a written request
therefor.
Upon the occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement), any Rights evidenced by this Right
Certificate that are beneficially owned by an Acquiring Person or an Associate
or Affiliate of such Acquiring Person (as such terms are defined in the Rights
Agreement) or were beneficially owned by any Acquiring Person or an Associate or
Affiliate of such Acquiring Person after the Acquiring Person becomes an
Acquiring Person shall be null and void from and after the occurrence of such
Section 11(a)(ii) Event.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number of one one-hundredths of a Preferred Share
as the Rights evidenced by the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. If this Right Certificate
shall be exercised in part, the holder shall be entitled to receive upon
surrender hereof another Right Certificate or Right Certificates for the number
of Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may, but are not required to, be redeemed by
the Company at a redemption price of $.001 per Right, subject to adjustment as
provided in the Rights Agreement, payable in cash and (ii) may, but are not
required to, be exchanged by the Company in whole or in part for Common Shares
or other shares of capital stock of the Company. The Board of Directors of the
Company and the Company shall not have any liability to any person as a result
of the redemption or exchange of the Rights pursuant to the provisions of the
Rights Agreement.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractional shares
which are integral multiples of one one-hundredth of a Preferred Share or, if a
Right shall then be exercisable for a fraction other than one one-hundredth of a
Preferred Share, integral multiples of that fraction, which may, at the election
of the Company, be evidenced by depositary receipts), if in lieu thereof a cash
payment is made, as provided in the Rights Agreement.
B-2
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 Preferred Shares or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the manual or facsimile signature of the proper
officer of the Company.
Dated:-----------------
MINNTECH CORPORATION
By:--------------------------
Its:------------------------
Countersigned:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By:------------------------------------
Authorized Manual or
Facsimile Signature
B-3
[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:--------------
-----------------------------------
Signature
Signature Guaranteed:
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 or by an eligible guarantor institution
(bank, stockbroker, savings and loan association or credit union with membership
in an approved signature guarantee medallion program), pursuant to Rule 17Ad-15
promulgated under the Securities Exchange Act of 1934, as amended.
B-4
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the
best of its knowledge) by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
/ / are
or
/ / are not
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement); and
(2) the undersigned
/ / did
or
/ / did not
acquire the Rights evidenced by this Right Certificate from any Person who, at
any time that such Person beneficially owned such Rights, is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
--------------------------------------------
Signature
NOTICE
The signature of the foregoing Assignment and Certificate 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.
B-5
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
TO: MINNTECH CORPORATION
The undersigned hereby irrevocably elects to exercise
__________ Rights represented by this Right Certificate to purchase the
Preferred Shares issuable upon the exercise of such Rights (or such other
securities of the Company or of any other person which may be issuable upon
exercise of the Rights) and requests that certificates for such shares be issued
in the name of:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
Dated: --------------------
---------------------------
Signature
B-6
Signature Guaranteed:
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 or by an eligible guarantor institution
(bank, stockbroker, savings and loan association or credit union with membership
in an approved signature guarantee medallion program), pursuant to Rule 17Ad-15
promulgated under the Securities Exchange Act of 1934, as amended.
B-7
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the
best of its knowledge) by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
/ / are
or
/ / are not
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement); and
(2) the undersigned
/ / did
or
/ / did not
acquire the Rights evidenced by this Right Certificate from any Person who, at
any time that such Person beneficially owned such Rights, is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
--------------------------------------
Signature
NOTICE
The signature of the foregoing Election to Exercise and
Certificate 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.
B-8
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
OF
MINNTECH CORPORATION
On July 1, 1999, the Board of Directors of Minntech
Corporation (the "Company") declared a dividend of one preferred share purchase
right (a "Right") for each outstanding Common Share of the par value of $.05 per
share (the "Common Shares") of the Company. The dividend is payable on July 22,
1999 (the "Record Date") to shareholders of record on that date.
Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a Series A Junior Participating Preferred Share, no
par value (the "Preferred Shares"), of the Company at a price of $65 per one
one-hundredth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement"), dated as of July 1, 1999, between the
Company and Norwest Bank Minnesota, National Association, as Rights Agent (the
"Rights Agent").
Initially, the Rights will attach to all certificates
representing Common Shares then outstanding and no separate Right Certificates
will be distributed. The Rights will separate from the Common Shares and a
Distribution Date for the Rights will occur upon the earlier of:
(i) the close of business on the fifteenth day
following a public announcement that a person or group of affiliated or
associated persons has become an "Acquiring Person" (i.e., has become, subject
to certain exceptions, the beneficial owner of 20% or more of the outstanding
Common Shares), or
(ii) the close of business on the fifteenth day
following the commencement or public announcement of a tender offer or exchange
offer the consummation of which would result in a person or group of affiliated
or associated persons becoming, subject to certain exceptions, the beneficial
owner of 20% or more of the outstanding Common Shares (or such later date as may
be determined by the Board of Directors of the Company prior to a person or
group of affiliated or associated persons becoming an Acquiring Person).
Until the Distribution Date,
(i) the Rights will be evidenced by the Common
Share certificates and will be transferred with and only with the Common Shares,
C-1
(ii) new Common Share certificates issued after
the Record Date upon transfer or new issuance of the Common Shares will contain
a notation incorporating the Rights Agreement by reference, and
(iii) the surrender for transfer of any Common
Share certificate, even without such notation or a copy of this Summary of
Rights attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate.
As promptly as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on July 22, 2009, unless
extended or earlier redeemed or exchanged by the Company as described below.
The Purchase Price payable, and the number of Preferred Shares
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution:
(i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Shares,
(ii) upon the grant to holders of the Preferred
Shares of certain rights, options or warrants to subscribe for or purchase
Preferred Shares or convertible securities at less than the then current market
price of the Preferred Shares, or
(iii) upon the distribution to holders of the
Preferred Shares of evidences of indebtedness or assets (excluding regular
periodic cash dividends or dividends payable in Preferred Shares) or of
subscription rights or warrants (other than those described in clause (ii)
hereof).
The number of Preferred Shares issuable upon the exercise of a Right is also
subject to adjustment in the event of a dividend on Common Shares payable in
Common Shares, or a subdivision, combination or consolidation of the Common
Shares.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in the Purchase Price. No fractional Preferred Shares will be issued (other
than fractional shares which are integral multiples of one one-hundredth
(subject to adjustment) of a Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts) if in lieu thereof a payment in
C-2
cash is made based on the closing price (pro-rated for the fraction) of the
Preferred Shares on the last trading date prior to the date of exercise.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, proper provision shall be made
so that each holder of a Right, other than Rights that are or were beneficially
owned by the Acquiring Person (which will thereafter be void), will thereafter
have the right to receive upon exercise thereof at the then current exercise
price of the Right that number of Common Shares having a market value of two
times the exercise price of the Right, subject to certain possible adjustments.
In the event that, on or after the Distribution Date or within
15 days prior thereto, the Company is acquired in certain mergers or other
business combination transactions or 50% or more of the assets or earning power
of the Company and its subsidiaries (taken as a whole) are sold on or after the
Distribution Date or within 15 days prior to the Distribution Date in one or a
series of related transactions, each holder of a Right (other than Rights which
have become void under the terms of the Rights Agreement) will thereafter have
the right to receive, upon exercise thereof at the then current exercise price
of the Right, that number of common shares of the acquiring company (or, in
certain cases, one of its affiliates) having a market value of two times the
exercise price of the Right.
In certain events specified in the Rights Agreement, the
Company is permitted to temporarily suspend the exercisability of the Rights.
At any time after a person or group of affiliated or
associated persons becomes an Acquiring Person (subject to certain exceptions)
and prior to the acquisition by a person or group of affiliated or associated
persons of 50% or more of the outstanding Common Shares, the Board of Directors
of the Company may exchange all or part of the Rights (other than Rights which
have become void under the terms of the Rights Agreement) for Common Shares or
equivalent securities at an exchange ratio per Right equal to the result
obtained by dividing the exercise price of a Right by the current per share
market price of the Common Shares, subject to adjustment.
At any time prior to the time that a person or group of
affiliated or associated persons has become an Acquiring Person, the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at a
price of $.001 per Right, subject to adjustment (the "Redemption Price"),
payable in cash. The redemption of the Rights may be made effective at such
time, on such basis and with such conditions as the Board of Directors in its
sole discretion may establish. The Board of Directors and the Company shall not
have any liability to any person as a result of the redemption or exchange of
the Rights pursuant to the provisions of the Rights Agreement.
The terms of the Rights may be amended by the Board of
Directors of the Company, subject to certain limitations after the Distribution
Date, without the consent of the
C-3
holders of the Rights, including an amendment prior to the date a person or
group of affiliated or associated persons becomes an Acquiring Person to
lower the 20% threshold for exercisability of the Rights to not less than the
greater of (i) the sum of .001% and the largest percentage of the outstanding
Common Shares then known by the Company to be beneficially owned by any
person or group of affiliated or associated persons (subject to certain
exceptions) or (ii) 10%.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without limitation,
the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A dated July __, 1999. A copy of the Rights Agreement is available free
of charge from the Company by contacting the Secretary at Minntech Corporation,
00000 00xx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000. This summary description
of the Rights does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement, which is hereby incorporated herein by
reference.
C-4
