EXHIBIT 1
ACUSON CORPORATION
and
BANKBOSTON, N.A.
as Rights Agent
AMENDED AND RESTATED RIGHTS AGREEMENT
Dated as of November 5, 1998
TABLE OF CONTENTS
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SECTION PAGE
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Section 1. Certain Definitions...................................................... 1
Section 2. Appointment of Rights Agent.............................................. 6
Section 3. Issue of Rights Certificates............................................. 6
Section 4. Form of Rights Certificates.............................................. 7
Section 5. Countersignature and Registration........................................ 8
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates................. 8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights............ 9
Section 8. Cancellation and Destruction of Rights Certificates...................... 11
Section 9. Reservation and Availability of Capital Stock............................ 11
Section 10. Preferred Stock Record Date.............................................. 13
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights......................................................... 13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares............... 21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power..... 21
Section 14. Fractional Rights and Fractional Shares.................................. 24
Section 15. Rights of Action......................................................... 25
Section 16. Agreement of Rights Holders.............................................. 26
Section 17. Rights Certificate Holder Not Deemed a Stockholder....................... 27
Section 18. Concerning the Rights Agent.............................................. 27
Section 19. Merger or Consolidation or Change of Name of Rights Agent................ 27
Section 20. Duties of Rights Agent................................................... 28
Section 21. Change of Rights Agent................................................... 30
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Section 22. Issuance of New Rights Certificates...................................... 31
Section 23. Redemption and Termination............................................... 31
Section 24. Notice of Certain Events................................................. 32
Section 25. Notices.................................................................. 33
Section 26. Supplements and Amendments............................................... 33
Section 27. Successors............................................................... 34
Section 28. Determinations and Actions by the Board of Directors, etc................ 34
Section 29. Benefits of this Agreement............................................... 34
Section 30. Severability............................................................. 35
Section 31. Governing Law............................................................ 35
Section 32. Counterparts............................................................. 35
Section 33. Descriptive Headings..................................................... 35
Section 34. Exchange................................................................. 35
Exhibit A Form of Rights Certificate Form of Summary of Rights.................... A-1
Exhibit B Form of Summary of Rights................................................ B-1
Exhibit C Certificate of Designation............................................... C-1
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AMENDED AND RESTATED RIGHTS AGREEMENT
This AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of November 5, 1998
(the "Agreement"), hereby replaces and supersedes in its entirety that certain
Rights Agreement dated as of June 8, 1998 between Acuson Corporation, a Delaware
corporation (the "Company"), and BankBoston, N.A. (the "Rights Agent").
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WHEREAS, effective June 8, 1998 (the "Rights Dividend Declaration Date"),
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the Board of Directors of the Company (i) authorized and declared a dividend
distribution of one Right for each share of Common Stock, par value $.0001 per
share, of the Company (the "Company Common Stock") outstanding at the Close of
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Business on June 8, 1998 (the "Record Date"), and (ii) authorized the issuance
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of one Right (as such number may hereinafter be adjusted pursuant hereto) for
each share of Company Common Stock issued between the Record Date (whether
originally issued or delivered from the Company's treasury) and, except as
otherwise provided in Section 22, the Distribution Date, each Right initially
representing the right to purchase upon the terms and subject to the conditions
hereinafter set forth one Unit of Series A Preferred Stock (the "Rights");
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NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
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following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
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with all Affiliates or Associates of such Person, shall be the Beneficial
Owner of 15% or more of the shares of Company Common Stock then
outstanding. Notwithstanding the foregoing: (i) an "Acquiring Person"
shall not include: (A) the Company; (B) any Subsidiary of the Company; (C)
any employee benefit plan maintained by the Company or any of its
Subsidiaries; (D) any trustee or fiduciary with respect to such employee
benefit plan acting in such capacity or a trustee or fiduciary holding
shares of Company Common Stock for the purpose of funding any such plan or
employee benefits; (E) any Person who has reported or is eligible to report
such ownership on Schedule 13G under the Exchange Act (or any comparable or
successor report), but only so long as (x) such Person is eligible to
report such ownership on Schedule 13(G) under the Exchange Act (or any
comparable or successor report), (y) such Person has not reported and is
not required to report such ownership on Schedule 13(D) under the Exchange
Act (or any comparable or successor report), and (z) such Person does not
beneficially own 20% or more of the shares of Company Common Stock then
outstanding; (F) any Person who was the Beneficial Owner of 15% or more of
the shares of Company Common Stock outstanding on the date of this
Agreement, so long as he does not beneficially own 20% or more (excluding
any shares acquired pursuant to a Company stock option plan) of the shares
of Company Common Stock then outstanding; (G) any Person if the Board of
Directors of the Company determines in good faith that such Person who
would otherwise be an "Acquiring Person" became such inadvertently
(including, without limitation, because (x) such Person was unaware that it
beneficially owned a percentage of Company Common Stock that would
otherwise cause such Person to be an "Acquiring Person" or (y) such
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Person was aware of the extent of its Beneficial Ownership of Company
Common Stock 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 if such Person does not
acquire any additional shares of Company Common Stock and as promptly as
practicable divested or divests itself of Beneficial Ownership of a
sufficient number of shares of Company Common Stock so that such Person
would no longer be an "Acquiring Person;" or (H) any Person who becomes the
Beneficial Owner of 15% or more of the then outstanding shares of Company
Common Stock as a result of the acquisition of shares of Company Common
Stock directly from the Company in one or more transactions approved by a
majority of the Board of Directors, and (ii) no Person shall be deemed an
"Acquiring Person" as a result of the acquisition of shares of Company
Common Stock by the Company which, by reducing the number of shares of
Company Common Stock outstanding, increases the proportional number of
shares beneficially owned by such Person; provided, however, that if (x) a
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Person would become an Acquiring Person (but for the operation of this
subclause (ii)) as a result of the acquisition of shares of Company Common
Stock by the Company and (y) after such share acquisition by the Company,
such Person becomes the Beneficial Owner of any additional shares of
Company Common Stock (other than pursuant to the grant or exercise of an
option under a Company stock option plan or pursuant to a dividend or
distribution paid or made by the Company on the outstanding shares of
Company Common Stock or pursuant to a split or subdivision of the Company
Common Stock), then such Person shall be deemed an Acquiring Person. Each
Person identified in subclauses (A), (B), (C), (D), (E), (F) and (G) of
this Section (1)(a) is individually an "Exempt Person" and collectively
"Exempt Persons."
(b) "Affiliate" and "Associate" shall have the respective meanings
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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"),
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as in effect on the date hereof.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
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deemed to have "Beneficial Ownership" of and to "beneficially own", any
securities:
(i) of which such Person or any of such Person's Affiliates or
Associates is considered to be a "beneficial owner" under Rule 13d-3
of the General Rules and Regulations under the Exchange Act (the
"Exchange Act Regulations") as in effect on the date hereof; provided,
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however, that a Person shall not be deemed the "Beneficial Owner" of,
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or to "beneficially own", any securities under this subparagraph (i)
as a result of an agreement, arrangement or understanding to vote such
securities if such agreement, arrangement or understanding (A) arises
solely from a revocable proxy or consent given in response to a public
proxy or consent solicitation made pursuant to, and in accordance
with, the applicable provisions of the Exchange Act and the Exchange
Act Regulations, and (B) is not reportable by such Person on Schedule
13D under the Exchange Act (or any comparable or successor report);
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(ii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate of such other Person)
with which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding (whether
or not in writing), for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of this paragraph (c)) or disposing of
such securities; or
(iii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time or upon the satisfaction of conditions) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or
upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise;
provided, however, that under this paragraph (c) a Person shall not be
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deemed the "Beneficial Owner" of, to have "Beneficial Ownership" of, or to
"beneficially own", (A) securities tendered pursuant to a tender or
exchange offer made in accordance with Exchange Act Regulations by such
Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (B) securities that may
be issued upon exercise of Rights at any time prior to the occurrence of a
Triggering Event, or (C) securities that may be issued upon exercise of
Rights from and after the occurrence of a Triggering Event, which Rights
were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(c) or
Section 22 hereof (the "Original Rights") or pursuant to Section 11(i)
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hereof in connection with an adjustment made with respect to any Original
Rights; and further provided, however, that (x) nothing in this paragraph
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(c) shall cause a Person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such Person's participation in good faith in a
firm commitment underwriting until the expiration of forty days after the
date of such acquisition, (y) no decision reached, or action taken, by the
Board of Directors of the Company or any committee thereof shall cause any
Person (or any Affiliate or Associate of such Person) who is a member of
the Board of Directors of the Company or such committee to be deemed, for
the purposes of this Agreement, to be a Beneficial Owner of any securities
beneficially owned by any other Person (or any Affiliate or Associate of
such Person) who is a member of the Board of Directors of the Company or
any committee thereof solely by reason of such membership of the Board of
Directors or any committee thereof or participation in the decisions or
actions thereof on the part of either or both of such Persons and (z) no
Person who is an officer, director or employee of an Exempt Person shall be
deemed, solely by reason of such Person's status or authority as such, to
be the "Beneficial Owner" of, to have "Beneficial Ownership" of or to
"beneficially own" any securities that are "beneficially owned" (as defined
in this paragraph (c)), including, without limitation, in a fiduciary
capacity, by an Exempt Person or by any other such officer, director or
employee of an Exempt Person.
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(d) "Business Day" shall mean any day other than a Saturday, Sunday
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or a day on which banking institutions in the city of San Francisco,
California is authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
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Massachusetts time, on such date; provided, however, that if such date is
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not a Business Day it shall mean 5:00 P.M., Massachusetts time, on the next
succeeding Business Day.
(f) "Common Stock" of any Person other than the Company shall mean
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the capital stock of such Person with the greatest voting power, or, if
such Person shall have no capital stock, the equity securities or other
equity interest having power to control or direct the management of such
Person.
(g) "Company" means Acuson Corporation, a Delaware corporation, and
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also means a Principal Party to the extent provided in Section 13(a).
(h) "Company Common Stock" has the meaning set forth in the Whereas
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Clause.
(i) "Distribution Date" has the meaning set forth in Section 3(a).
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(j) "Expiration Date" has the meaning set forth in Section 7(a).
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(l) "Person" shall mean any individual, partnership, firm,
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corporation, association, trust, unincorporated organization or other
entity, as well as any syndicate or group deemed to be a person under
Section 14(d)(2) of the Exchange Act as in effect on the date hereof.
(m) "Preferred Stock" shall mean the Series A Preferred Stock, par
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value $.0001 per share, of the Company having the voting powers,
designation, preferences and relative, participating, optional or other
special rights and qualifications, limitations and restrictions described
in the Certificate of Designation set forth as Exhibit C hereto and as
amended from time to time.
(n) "Purchase Price" has the meaning set forth in Section 7(b).
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(o) "Record Date" has the meaning set forth in the Whereas Clause.
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(p) "Right" has the meaning set forth in the Whereas Clause.
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(q) "Rights Certificate" has the meaning set forth in Section 3(a).
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(r) "Rights Dividend Declaration Date" has the meaning set forth in
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the Whereas Clause.
(s) "Section 11(a)(ii) Event" shall mean the event described in
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Section 11(a)(ii) hereof.
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(t) "Section 13 Event" shall mean any event described in clause (x),
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(y) or (z) of Section 13(a) hereof.
(u) "Stock Acquisition Date" shall mean the first date of public
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announcement (including, without limitation, the filing of any report
pursuant to Section 13(d) of the Exchange Act (or any comparable or
successor report)) by the Company or an Acquiring Person that an Acquiring
Person has become such.
(v) "Subsidiary" shall mean, with reference to any Person, any other
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Person of which an amount of voting securities or equity interests
sufficient to elect at least a majority of the directors or equivalent
governing body of such other Person is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such first-mentioned
Person.
(w) "Summary of Rights" has the meaning set forth in Section 3(b).
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(x) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
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Section 13 Event.
(y) "Unit" has the meaning set forth in Section 7(b).
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In addition, the following terms are defined in the Sections indicated
below:
Defined Term Section Number
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Adjustment Shares 11(a)(ii)
Adjustment Spread 34(a)
common stock equivalents 11(a)(iii)
Current Value 11(a)(iii)
Depositary Agent 7(c)
Distribution Date 3(a)
Equivalent Preferred Stock 11(b)
Exchange Act 1(b)
Exchange Act Regulations 1(c)
Exchange Ratio 34(a)
Exempt Person 1(a)
Expiration Date 7(a)
Final Expiration Date 7(a)
Nasdaq 11(d)(i)
Original Rights 1(c)
Purchase Price 7(b)
Redemption Price 23(a)
Registered Common Stock 13(b)(ii)
Registration Date 9(c)
Registration Statement 9(c)
Rights Certificates 3(a)
Section 11(a)(ii) Event 11(a)(ii)(C)
Section 11(a)(iii) Trigger Date 11(a)(iii)
Section 13 Event 13(a)
Securities Act 9(c)
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Spread 11(a)(iii)
Summary of Rights 3(b)
Trading Day 11(d)(i)
Unit 7(b)
Section 2. Appointment of Rights Agent. The Company hereby appoints the
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Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. With
the consent of the Rights Agent, the Company may from time to time appoint such
co-rights agents as it may deem necessary or desirable, upon ten (10) days'
prior written notice to the Rights Agent. The Rights Agent shall have no duty
to supervise, and in no event be liable for, the acts or omissions of any such
co-Rights Agent.
Section 3. Issue of Rights Certificates. (a) Until the earlier of (i) the
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Close of Business on the tenth Business Day after the Stock Acquisition Date,
and (ii) the Close of Business on the tenth Business Day (or such later date as
may be determined by action of a majority of the Board of Directors of the
Company prior to the occurrence of a Section 11(a)(ii) Event) after the date
that a tender or exchange offer by any Person (other than an Exempt Person) is
first published or sent or given within the meaning of Rule 14d-4(a) of the
Exchange Act Regulations or any successor rule, if upon consummation thereof
such Person would be an Acquiring Person (including, in the case of both clause
(i) and (ii), any such date which is after the date of this Agreement and prior
to the issuance of the Rights)(the earlier of (i) and (ii) above being the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
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provisions of paragraph (b) of this Section 3) by the certificates for shares of
Company Common Stock registered in the names of the holders of shares of Company
Common Stock as of and subsequent to the Record Date (which certificates for
shares of Company Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Company Common Stock including a transfer to the Company; provided, however,
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that if a tender or exchange offer is terminated prior to the occurrence of a
Distribution Date, then no Distribution Date shall occur as a result of such
tender or exchange offer. As soon as practicable after the Distribution Date,
the Rights Agent will send by first-class, insured, postage prepaid mail, to
each record holder of shares of Company Common Stock as of the Close of Business
on the Distribution Date, at the address of such holder shown on the records of
the Company, one or more rights certificates, in substantially the form of
Exhibit A hereto (the "Rights Certificates"), evidencing one Right for each
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share of Company Common Stock so held, subject to adjustment as provided herein.
In the event that an adjustment in the number of Rights per share of
Company Common Stock has been made pursuant to Section 11(p) hereof, at the time
of distribution of the Rights Certificates, the Company may make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a) hereof)
so that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
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(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form attached hereto as Exhibit B (the "Summary of Rights"),
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by first-class, postage prepaid mail, to each record holder of shares of Company
Common Stock 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 Company Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates registered
in the names of the holders thereof together with the Summary of Rights. Until
the Distribution Date (or, if earlier, the Expiration Date), the surrender for
transfer of any such certificate for Company Common Stock outstanding as of the
Record Date, with or without a copy of the Summary of Rights, shall also
constitute the transfer of the Rights associated with the Company Common Stock
represented thereby.
(c) Rights shall, without any further action, be issued in respect of
all shares of Company Common Stock which are issued (including any shares of
Company Common Stock held in treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates,
representing such shares of Company Common Stock, issued after the Record Date
shall bear the following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in the Rights Agreement between Acuson Corporation (the
"Company") and BankBoston, N.A. (the "Rights Agent") dated as of June 8,
1998, as amended from time to time (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of which is on
file at the principal office of the stock transfer administration office of
the Rights Agent. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and will
no longer be evidenced by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights Agreement, as in effect on
the date of mailing, without charge promptly after receipt of a written
request therefor. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES
AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF
SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.
With respect to certificates representing shares of Company Common Stock that
bear the foregoing legend until the earlier of the Distribution Date and the
Expiration Date, the Rights associated with the shares of Company Common Stock
represented by such certificates shall be evidenced by such certificates alone
and registered holders of the shares of Company Common Stock shall also be the
registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the shares of Company Common Stock represented by such certificates.
Section 4. Form of Rights Certificates. (a) The Rights Certificates (and
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the forms of election to purchase, assignment and certificate to be printed on
the reverse thereof) shall each be substantially in the form set forth in
Exhibit A hereto and may have such marks of identification
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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
any rule or regulation thereunder 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. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever distributed, shall be dated
as of the Record Date and on their face shall entitle the holders thereof to
purchase such number of Units of Preferred Stock as shall be set forth therein
at the price set forth therein, but the amount and type of securities, cash or
other assets that may be acquired upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration . (a) Rights Certificates
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shall be executed on behalf of the Company by its Chairman, the President or one
of its Vice Presidents under its corporate seal reproduced thereon attested by
its Secretary, Treasurer or one of its Assistant Secretaries. The signature of
any of these officers on the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of the
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature of such Rights Certificates or
did not hold such offices at the date of such Rights Certificates. No Rights
Certificate shall be entitled to any benefit under this Agreement or be valid
for any purpose unless there appears on such Rights Certificate a
countersignature duly executed by the Rights Agent by manual signature of an
authorized signatory, and such countersignature upon any Rights Certificate
shall be conclusive evidence, and the only evidence, that such Rights
Certificate has been duly countersigned as required hereunder.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for surrender of Rights Certificates
upon exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the name and address of
each holder of the Rights Certificates, the number of Rights evidenced on its
face by each Rights Certificate and the date of each Rights Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
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Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. (a)
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Subject to the provisions of Sections 4, 7(e) and 14 hereof, at any time after
the Close of Business on the Distribution Date, and at or prior to the Close of
Business on the Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of Units
of Preferred Stock (or, following a Triggering Event, other securities, cash or
other assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the office of the Rights Agent designated for
such purpose. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have completed and executed
the certificate set forth in the form of assignment on the reverse side of such
Rights Certificate and
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shall have provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) of the Rights represented by such Rights
Certificate or Affiliates or Associates thereof as the Company shall reasonably
request; whereupon the Rights Agent shall, subject to the provisions of Section
7(e) and Section 14 hereof, countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates.
(b) Subject to Section 7(e) hereof, if a Rights Certificate shall be
mutilated, lost, stolen or destroyed, upon request by the registered holder of
the Rights represented thereby and upon payment to the Company and the Rights
Agent of all reasonable expenses incident thereto, there shall be issued, in
exchange for and upon cancellation of the mutilated Rights Certificate, or in
substitution for the lost, stolen or destroyed Rights Certificate, a new Rights
Certificate, in substantially the form of the prior Rights Certificate, of like
tenor and representing the equivalent number of Rights, but, in the case of
loss, theft or destruction, only upon receipt of evidence satisfactory to the
Company and the Rights Agent of such loss, theft or destruction of such Rights
Certificate and, if requested by the Company or the Rights Agent, indemnity also
satisfactory to it.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
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(a) Prior to the earlier of (i) the Close of Business on the tenth anniversary
hereof (the "Final Expiration Date"), (ii) the time at which the Rights are
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redeemed as provided in Section 23 hereof, (iii) the time at which the Rights
are exchanged as provided in Section 34 hereof, and (iv) the closing of any
merger or other acquisition transaction involving the Company pursuant to an
agreement of the type described in Section 13(f) hereof, at which time the
Rights are deemed terminated (the earlier of (i), (ii), (iii) and (iv) being the
"Expiration Date"), the registered holder of any Rights Certificate may, subject
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to the provisions of Sections 7(e) and 9(c) hereof, exercise the Rights
evidenced thereby, in whole or in part, at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose, together
with payment of the aggregate Purchase Price (as hereinafter defined) for the
number of Units of Preferred Stock (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) for which such surrendered
Rights are then exercisable.
(b) The purchase price for each one one-hundredth of a share (each
such one one-hundredth of a share being a "Unit") of Preferred Stock upon
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exercise of Rights shall be $120, subject to adjustment from time to time as
provided in Sections 11 and 13(a) hereof (such purchase price, as so adjusted,
being the "Purchase Price"), and shall be payable in accordance with paragraph
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(c) below.
(c) As promptly as practicable following the occurrence of the
Distribution Date, the Company shall deposit with the Rights Agent or other
corporation in good standing organized under the laws of the United States or
any State of the United States, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority (such institution being the
"Depositary Agent"),
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9
certificates representing the shares of Preferred Stock that may be acquired
upon exercise of the Rights and shall cause such Depositary Agent to enter into
an agreement pursuant to which the Depositary Agent shall issue receipts
representing interests in the shares of Preferred Stock so deposited. Upon
receipt of a Rights Certificate representing exercisable Rights, with the form
of election to purchase and the certificate duly executed, accompanied by
payment, with respect to each Right so exercised, of the Purchase Price for the
Units of Preferred Stock (or, following a Triggering Event, other securities,
cash or other assets, as the case may be) to be purchased thereby as set forth
below and an amount equal to any applicable transfer tax or evidence
satisfactory to the Company of payment of such tax, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) requisition from the
Depositary Agent depositary receipts representing such number of Units of
Preferred Stock as are to be purchased and the Company will direct the
Depositary Agent to comply with such request, (ii) requisition from the Company
the amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) after receipt thereof, deliver such cash, if
any, to or upon the order of the registered holder of such Rights Certificate.
In the event that the Company is obligated to issue Company Common Stock, other
securities of the Company, pay cash and/or distribute other property pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary so that
such Company Common Stock, other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate. The
payment of the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) may be made in cash or by certified or bank check or money
order payable to the order of the Company.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing the Rights remaining unexercised shall be issued by the Rights Agent
and delivered to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of any Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and which receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person (or any such Associate or Affiliate) to holders of equity interests in
such Acquiring Person (or any such Associate or Affiliate) or to any Person with
whom the Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights, shares
of Company Common Stock or the Company or (B) a transfer which the Board of
Directors has determined to be part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(e),
shall be null and void without any further action, and no holder of such Rights
shall have any rights whatsoever with respect to such Rights, whether under any
provision of this
10
Agreement or otherwise. The Company shall use all reasonable efforts to ensure
that the provisions of this Section 7(e) hereof are complied with, but shall
have no liability to any holder of Rights or any other Person as a result of its
failure to make any determination under this Section 7(e) with respect to an
Acquiring Person or its Affiliates, Associates or transferees.
(f) Notwithstanding anything in this Agreement or any Rights
Certificate 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 by such registered holder unless such
registered holder shall have (i) completed and executed the certificate
following the form of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of the Rights represented by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
---------------------------------------------------
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any Rights
Certificates acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock. (a) The Company
---------------------------------------------
shall at all times prior to the Expiration Date cause to be reserved and kept
available, out of its authorized and unissued shares of preferred stock, the
number of shares of Preferred Stock that, as provided in this Agreement, will be
sufficient to permit the exercise in full of all outstanding Rights. Upon the
occurrence of any events resulting in an increase in the aggregate number of
shares of Preferred Stock (or other equity securities of the Company) issuable
upon exercise of all outstanding Rights above the number then reserved, the
Company shall make appropriate increases in the number of shares so reserved to
the extent practicable.
(b) If the shares of Preferred Stock to be issued and delivered upon
the exercise of the Rights may be listed on any national securities exchange or
automated quotation system, the Company shall during the period from the
Distribution Date through the Expiration Date use its best efforts to cause all
securities reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) as soon as practicable
following the occurrence of a Section 11(a)(ii) Event and a determination by the
Company in accordance with Section 11(a)(iii) hereof of the consideration to be
delivered by the Company upon exercise of the Rights or, if so required by law,
as soon as practicable following the Distribution Date (such date being the
"Registration Date"), to file a registration statement on an appropriate form
-----------------
under
11
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
--------------
the securities that may be acquired upon exercise of the Rights (the
"Registration Statement"), (ii) to cause the Registration Statement to become
----------------------
effective as soon as practicable after such filing, (iii) to cause the
Registration Statement to continue to be effective (and to include a prospectus
complying with the requirements of the Securities Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for the securities
covered by the Registration Statement, and (B) the Expiration Date and (iv) to
take as soon as practicable following the Registration Date such action as may
be required to ensure that any acquisition of securities upon exercise of the
Rights complies with any applicable state securities or "blue sky" laws. The
Company may temporarily suspend, for a period of time not to exceed one hundred
twenty (120) days after the date set forth in clause (i) of the first sentence
of this Section 9(c), the exercisability of the Rights in order to prepare and
file such registration statement and permit it to become effective. 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, the
exercise thereof shall not be permitted under applicable law or a registration
statement shall not have been declared effective.
(d) The Company shall take such action as may be necessary to ensure
that all shares of Preferred Stock (and, following the occurrence of a
Triggering Event, any other securities that may be delivered upon exercise of
Rights) shall be, at the time of delivery of the certificates or depositary
receipts for such securities (subject to payment of the Purchase Price), duly
and validly authorized and issued and fully paid and non-assessable.
(e) The Company shall pay any documentary, stamp or transfer tax
imposed in connection with the issuance or delivery of the Rights Certificates
or upon the exercise of Rights; provided, however, the Company shall not be
-------- -------
required to pay any such tax imposed in connection with the issuance or delivery
of Units of Preferred Stock, or any certificates or depositary receipts for such
Units of Preferred Stock (or, following the occurrence of a Triggering Event,
any other securities, cash or assets, as the case may be) to any person other
than the registered holder of the Rights Certificates evidencing the Rights
surrendered for exercise. The Company shall not be required to issue or deliver
any certificates or depositary receipts for Units of Preferred Stock (or,
following the occurrence of a Triggering Event, any other securities, cash or
assets, as the case may be) to, or in a name other than that of, the registered
holder upon the exercise of any Rights until any such tax shall have been paid
(any such tax being payable by the holder of such Rights Certificate at the time
of surrender) or until it has been established to the Company's satisfaction
that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
---------------------------
certificate or depositary receipt for Units of Preferred Stock (or, following
the occurrence of a Triggering Event, other securities) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Units of Preferred Stock (or, following the occurrence of
12
a Triggering Event, other securities) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
-------- -------
date of such surrender and payment is a date upon which the Preferred Stock (or,
following the occurrence of a Triggering Event, other securities) transfer books
of the Company are closed, such Person shall be deemed to have become the record
holder of such securities on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock (or, following the
occurrence of a Triggering Event, other securities) transfer books of the
Company are open and, further provided, however, that if delivery of Units of
------- -------- -------
Preferred Stock is delayed pursuant to Section 9(c) hereof, such Persons shall
be deemed to have become the record holders of such Units of Preferred Stock
only when such Units first become deliverable. Prior to the exercise of the
Rights evidenced thereby, the holder of a Rights Certificate shall not be
entitled to any rights of a stockholder of the Company with respect to
securities for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
----------------------------------------------------------
Number of Rights. The Purchase Price, the number and kind of securities
----------------
purchasable upon exercise of each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock,
(C) combine the outstanding Preferred Stock into a smaller number of
shares, or (D) issue any shares of its capital stock in a reclassification
of the Preferred Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section 11(a),
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 Preferred Stock or
capital stock, as the case may be, issuable on such date upon 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, the aggregate number and kind of
shares of Preferred Stock or capital stock, as the case may be, which, if
such Right had been exercised immediately prior to such date, such holder
would have owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification; provided,
--------
however, that in no event shall the consideration to be paid upon the
-------
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon the exercise of one Right. If an
event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
13
(ii) In the event any Person shall become an Acquiring Person, other
than pursuant to any transaction set forth in Section 13(a) hereof, then,
----
immediately upon the occurrence of such event (a "Section 11(a)(ii)
-----------------
Event"), proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e) hereof) shall, subject to
Section 34 hereof, thereafter have the right to receive, upon exercise of
such Right at the then current Purchase Price in accordance with the terms
of this Agreement, in lieu of the number of Units of Preferred Stock for
which a Right was exercisable immediately prior to the first occurrence of
a Section 11(a)(ii) Event (whether or not such Right was then exercisable),
such number of Units of Preferred Stock as shall equal the result obtained
by (x) multiplying the then current Purchase Price by the then number of
Units of Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event (whether or not
such Right was then exercisable) (such product thereafter being, for all
purposes of this Agreement, other than Section 13 hereof, the "Purchase
--------
Price"), and (y) dividing that product by 50% of the then current market
-----
price (determined pursuant to Section 11(d) hereof) per Unit of Preferred
Stock on the date of such first occurrence (such Units of Preferred Stock
being the "Adjustment Shares"); provided, however, that the Purchase Price
----------------- -------- -------
and the number of Units of Preferred Stock so receivable upon exercise of a
Right shall, following the Section 11(a)(ii) Event, be subject to further
adjustment as appropriate in accordance with Section 11 hereof.
Notwithstanding the foregoing, the Rights shall not be exercisable pursuant
to this Section 11(a)(ii) until the time period during which the Rights may
be redeemed pursuant to Section 23 hereof shall have expired.
(iii) The Company, by the vote of a majority of the Board of
Directors, may at its option substitute for a Unit of Preferred Stock
issuable upon the exercise of Rights in accordance with the foregoing
subparagraph (ii), shares of Company Common Stock or fractions thereof
having a current market price (as determined by Section 11(d) hereof) equal
to the current market price of a Unit of Preferred Stock on the date of the
Section 11(a)(ii) Event. In the event that the number of shares of
Preferred Stock which are authorized by the Company's Restated Certificate
of Incorporation but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company, by the vote of a
majority of the Board of Directors, shall to the extent permitted by
applicable law and any material agreements then in effect to which the
Company is a party or by which it is bound: (A) determine the excess of (1)
the value of the Adjustment Shares issuable upon the exercise of a Right
(the "Current Value") over (2) the Purchase Price (such excess being the
-------------
"Spread"), and (B) with respect to each Right (other than Rights which have
------
become void pursuant to Section 7(e)), make adequate provision to
substitute, in whole or in part, for such Adjustment Shares, upon exercise
of a Right and payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) shares of Company Common Stock or
other equity securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock (such other shares being
"common stock equivalents")), (4) debt securities of the Company, (5) other
------------------------
assets, or (6) any combination of the foregoing, having an aggregate value
which, when added to the value of the Units of
14
Preferred Stock actually issued upon exercise of such Right, shall have an
aggregate value equal to the Current Value (less the amount of any
reduction in such Purchase Price), where such aggregate value has been
determined by a majority of the Board of Directors, after receiving advice
from a nationally recognized investment banking firm; provided, however,
-------- -------
that if the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty days following the later of (x)
the first occurrence of a Section 11(a)(ii) Event and (y) the date on which
the Company's right of redemption pursuant to Section 23(a) expires (the
later of (x) and (y) being referred to herein as the "Section 11(a)(iii)
------------------
Trigger Date"), then, subject to Section 34 hereof, the Company shall be
------------
obligated (to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party or by which it is
bound) to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Units of Preferred Stock (to the
extent available) and then, if necessary, shares (or fractions of shares,
at the discretion of the Board of Directors) of Company Common Stock, cash
or a combination thereof, which Units of Preferred Stock, shares (or
fractions of shares) of Company Common Stock and/or cash shall have an
aggregate value equal to the Spread; further provided, however, that if the
------- -------- -------
Company is unable to comply with the immediately foregoing provision within
such thirty day period, then the Company shall (to the extent permitted by
law) take all such action as may be necessary to comply with such
provision, including the calling of a meeting of stockholders to authorize
additional shares of Preferred Stock or Company Common Stock. To the extent
that the Company determines that some action need be taken pursuant to the
first sentence of this Section 11(a)(iii), the Company shall provide,
subject to Section 7(e) hereof, that such action shall apply uniformly to
all outstanding Rights. For purposes of this Section 11(a)(iii), the value
of a Unit of Preferred Stock or share of Company Common Stock shall be the
current market price (as determined pursuant to Section 11(d) hereof) per
Unit of Preferred Stock or share of Company Common Stock, as the case may
be, on the Section 11(a)(iii) Trigger Date and the value of any common
stock equivalent shall be deemed to have the same value as the Preferred
Stock on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling
them to subscribe for or purchase (for a period expiring within forty-five
calendar days after such record date) shares of Preferred Stock (or shares
having substantially the same rights, privileges and preferences as shares
of Preferred Stock ("Equivalent Preferred Stock")) or securities
--------------------------
convertible into Preferred Stock or Equivalent Preferred Stock at a price
per share of Preferred Stock or per share of Equivalent Preferred Stock (or
having a conversion price per share, if a security convertible into
Preferred Stock or Equivalent Preferred Stock) less than the current market
price (as determined pursuant to Section l1(d) hereof) per share of
Preferred Stock on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the sum of the number of shares of Preferred
Stock outstanding on such record date plus the number of shares of
Preferred Stock which the aggregate offering price of the total number of
shares of Preferred Stock and/or Equivalent Preferred Stock so to be
offered (and/or the aggregate
15
initial conversion price of the convertible securities so to be offered)
would purchase at such current market price, and the denominator of which
shall be the number of shares of Preferred Stock outstanding on such record
date plus the number of additional shares of Preferred Stock and/or
Equivalent Preferred Stock to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by delivery of
consideration part or all of which may be in a form other than cash, the
value of such consideration shall be as determined in good faith by a
majority of the Board of Directors, 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. Shares of Preferred Stock owned
by or held for the account of the Company or any Subsidiary shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed, and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of shares of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is
the continuing or surviving corporation) of evidences of indebtedness, cash
(other than a regular quarterly cash dividend paid out of funds legally
available therefor), assets (other than a dividend payable in shares of
Preferred Stock, but including any dividend payable in stock other than
Preferred Stock) or subscription rights, options or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock
on such record date less the fair market value (as determined in good faith
by a majority of the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding
on the Rights Agent and the holder of the Rights) of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription
rights, options or warrants distributable in respect of a share of
Preferred Stock and the denominator of which shall be such current market
price (as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock. Such adjustments shall be made successively whenever such
a record date is fixed, and in the event that such distribution is not so
made, the Purchase Price shall be adjusted to be the Purchase Price which
would have been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
market price" per share of Company Common Stock or Common Stock on any date
shall be deemed to be the average of the daily closing prices per share of
such shares for the ten consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however, if
-------- -------
prior to the expiration of such requisite ten Trading Day period the issuer
announces either (A) a dividend or distribution on such shares payable in
such shares or securities convertible into such shares (other than the
Rights), or (B) any subdivision, combination or reclassification of such
shares, then, following the
16
ex-dividend date for such dividend or the record date for such subdivision,
combination or reclassification, as the case may be, the "current market
price" shall be properly adjusted to take into account such event. The
closing price for each day shall be, if the shares are listed and admitted
to trading on a national securities exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which such shares are
listed or admitted to trading or, if such shares are not listed or admitted
to trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the Nasdaq National Market
("Nasdaq") or such other system then in use, or, if on any such date such
------
shares are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in such shares selected by a majority of the Board of Directors. If
on any such date no market maker is making a market in such shares, the
fair value of such shares on such date as determined in good faith by a
majority of the Board of Directors shall be used. If such shares are not
publicly held or not so listed or traded, "current market price" per share
shall mean the fair value per share as determined in good faith by a
majority of the Board of Directors, whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all
purposes. The term "Trading Day" shall mean, if such shares are listed or
-----------
admitted to trading on any national securities exchange, a day on which the
principal national securities exchange on which such shares are listed or
admitted to trading is open for the transaction of business or, if such
shares are not so listed or admitted, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined in
the same manner as set forth above for Company Common Stock in clause (i)
of this Section 11(d) (other than the fourth sentence thereof). If the
current market price per share of Preferred Stock cannot be determined in
the manner provided above or if the Preferred Stock is not publicly held or
listed or traded in a manner described in clause (i) of this Section 11(d),
the "current market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 100 (as such amount may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to Company Common Stock occurring after the
date of this Agreement) multiplied by the current market price per share of
Company Common Stock. If neither Company Common Stock nor Preferred Stock
is publicly held or so listed or traded, "current market price" per share
of the Preferred Stock shall mean the fair value per share as determined in
good faith by a majority of the Board of Directors 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. For all purposes
of this Agreement, the "current market price" of a Unit of Preferred Stock
shall be equal to the "current market price" of one share of Preferred
Stock divided by 100.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least 1% in the Purchase Price; provided,
--------
however, that any adjustments
-------
17
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-hundredth of a share of Company Common Stock or Common
Stock or other share or ten-thousandth of a share of Preferred Stock, as
the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which mandates
such adjustment and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject
to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred
Stock contained in Sections 11(a), (b), (c), (d), (e), (g), (h), (i), (j),
(k), (l) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof
with respect to the Preferred Stock 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 Units of Preferred
Stock (or other securities or amount of cash or combination thereof) that
may be acquired from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number
of Units of Preferred Stock (calculated to the nearest one ten-thousandth
of a Unit) obtained by (i) multiplying (x) the number of Units of Preferred
Stock covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of Units of Preferred Stock that may be acquired
upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of
Units of Preferred Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the
18
time, the amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day thereafter, but, if
the Rights Certificates have been issued, shall be at least ten days later
than the date of such public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for
the Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Rights Certificates to be so distributed
shall be issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of Units of Preferred Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per Unit and the number of Units of
Preferred Stock which were expressed in the Initial Rights Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value of the number of Units of
Preferred Stock issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue such
fully paid and non-assessable number of Units of Preferred Stock at such
adjusted Purchase Price.
(1) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such
record date of that number of Units of Preferred Stock and shares of other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of Units of Preferred Stock and shares
of other capital stock or other securities, assets or cash of the Company,
if any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company shall
-------- -------
deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that in their good faith judgment a majority of the Board of
Directors shall determine to be advisable in
19
order that any (i) consolidation or subdivision of the Preferred Stock,
(ii) issuance wholly for cash of any shares of Preferred Stock at less than
the current market price, (iii) issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Stock, shall not
be taxable to such holders or shall reduce the taxes payable by such
holders.
(n) The Company shall not, at any time after the Distribution Date,
(i) consolidate with any other Person (other than a wholly owned Subsidiary
of the Company in a transaction which complies with Section 11(o) hereof),
(ii) merge with or into any other Person (other than a wholly owned
Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell
or transfer), in one transaction, or a series of transactions, assets or
earning power aggregating more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o) hereof), if (x)
at the time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights or
(y) prior to, simultaneously with or immediately after such consolidation,
merger or sale, the Person which constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) hereof shall have
distributed or otherwise transferred to its shareholders or other persons
holding an equity interest in such Person Rights previously owned by such
Person or any of its Affiliates and Associates; provided, however, this
-------- -------
Section 11(n) shall not affect the ability of any wholly owned Subsidiary
of the Company to consolidate with, merge with or into, or sell or transfer
assets or earning power to, any other wholly owned Subsidiary of the
Company.
(o) After the Distribution Date, the Company shall not, except as
permitted by Section 23, Section 26 or Section 34 hereof, take (or permit
any Subsidiary to take) any action if at the time such action is taken it
is reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a dividend
on the outstanding shares of Company Common Stock payable in shares of
Company Common Stock, (ii) subdivide the outstanding shares of Company
Common Stock, (iii) combine the outstanding shares of Company Common Stock
into a smaller number of shares, or (iv) issue any shares of its capital
stock in a reclassification of Company Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), the number of Rights
associated with each share of Company Common Stock then outstanding, or
issued or delivered thereafter prior to the
20
Distribution Date or in accordance with Section 22 hereof, shall be
proportionately adjusted so that the number of Rights thereafter associated
with each share of Company Common Stock following any such event shall
equal the result obtained by multiplying the number of Rights associated
with each share of Company Common Stock immediately prior to such event by
a fraction the numerator of which shall be the total number of shares of
Company Common Stock outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of shares of
Company Common Stock outstanding immediately following the occurrence of
such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
----------------------------------------------------------
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Company Common Stock, a copy of such certificate, and
(c) mail a brief summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate representing
shares of Company Common Stock) in accordance with Section 25 hereof. The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
--------------------------------------------------------------
Power. (a) In the event that, following the first occurrence of a Section
-----
11(a)(ii) Event, directly or indirectly, either (x) the Company shall
consolidate with, or merge with and into, any other Person (other than a wholly
owned Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), and the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (y) any Person (other than a wholly
owned Subsidiary of the Company in a transaction which compiles with Section
11(o) hereof) shall consolidate with, or merge with or 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 shares of Company Common Stock shall be changed
into or exchanged for stock or other securities of the Company or any other
Person or cash or any other property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer)
to any Person or Persons (other than the Company or any of its wholly owned
Subsidiaries in one or more transactions each of which complies with Section
11(o) hereof), in one or more 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) (any such event being a "Section 13 Event"), then, and in
----------------
each such case, proper provision shall be made so that: (i) each holder of a
Right, (other than Rights which have become void as provided in Section 7(e)
hereof), shall thereafter have the right to receive, upon the exercise thereof
at the then current Purchase Price, in accordance with this Agreement and in
lieu of Units of Preferred Stock or shares of Company Common Stock, such number
of validly authorized and issued, fully paid, non-assessable and freely tradable
shares of Common Stock of the Principal Party (as such term is hereinafter
defined), which shares shall not be subject to any liens, encumbrances, rights
of call or first refusal, transfer restrictions or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of Units of Preferred
21
Stock for which a Right is exercisable immediately prior to the first occurrence
of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to
the first occurrence of a Section 13 Event, multiplying the number of such Units
for which a Right would be exercisable hereunder but for the occurrence of such
Section 11(a)(ii) Event by the Purchase Price which would be in effect hereunder
but for such first occurrence) and (2) dividing that product (which, following
the first occurrence of a Section 13 Event, shall be the "Purchase Price" for
all purposes of this Agreement) by 50% of the current market price (determined
pursuant to Section 11(d) hereof) per share of the Common Stock of such
Principal Party on the date of consummation of such Section 13 Event, provided,
--------
however, that the Purchase Price (as theretofore adjusted in accordance with
-------
Section 11(a)(ii) hereof) and the number of shares of Common Stock of such
Principal Party so receivable upon exercise of a Right shall be subject to
further adjustment as appropriate in accordance with Section 11(f) hereof to
reflect any events occurring in respect of the Common Stock of such Principal
Party after the occurrence of such Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such Principal
Party in all respects; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of shares
of its Common Stock in accordance with Section 9 hereof) in connection with the
consummation of any such transaction as may be necessary to assure that the
provisions of this Agreement shall thereafter be applicable, as nearly as
reasonably may be, in relation to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights, to its shares of Common Stock;
provided, however, that, upon the subsequent occurrence of any merger,
-------- -------
consolidation, sale of all or substantially all of the assets, recapitalization,
reclassification of shares, reorganization or other extraordinary transaction in
respect of such Principal Party, each holder of a Right shall thereupon be
entitled to receive, upon exercise of a Right and payment of the Purchase Price,
such cash, shares, rights, warrants and other property which such holder would
have been entitled to receive had it, at the time of such transaction, owned the
shares of Common Stock of the Principal Party purchasable upon the exercise of a
Right, and such Principal Party shall take such steps (including, but not
limited to, reservation of shares of stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms hereof for such
cash, shares, rights, warrants and other property; and (v) the provisions of
Section 11(a)(ii) hereof shall be of no further effect following the first
occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a), (A) the Person that is the
issuer of any securities into which shares of Company Common Stock are
converted in such merger or consolidation, or, if there is more than
one such issuer, the issuer of Common Stock that has the highest
aggregate current market price (determined pursuant to Section 11(d)
hereof) and (B) if no securities are so issued, the Person that is the
other party to such merger or consolidation, or, if there is more than
one such Person, the Person the Common Stock of which has the highest
aggregate current market price (determined pursuant to Section 11(d)
hereof); and
22
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a) hereof, the Person that is the
party receiving the largest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives
the same portion of the assets or earning power transferred pursuant
to such transaction or transactions or if the Person receiving the
largest portion of the assets or earning power cannot be determined,
whichever Person the Common Stock of which has the highest aggregate
current market price (determined pursuant to Section 11(d) hereof);
provided, however, that in any such case, (1) if the Common Stock of
-------- -------
such Person is not at such time and has not been continuously over the
preceding twelve-month period registered under Section 12 of the
Exchange Act ("Registered Common Stock"), or such Person is not a
-----------------------
corporation, and such Person is a direct or indirect Subsidiary of
another Person that has Registered Common Stock outstanding,
"Principal Party" shall refer to such other Person; (2) if the Common
Stock of such Person is not Registered Common Stock or such Person is
not a corporation, and such Person is a direct or indirect Subsidiary
of another Person but is not a direct or indirect Subsidiary of
another Person which has Registered Common Stock outstanding,
"Principal Party" shall refer to the ultimate parent entity of such
first-mentioned Person; (3) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such
Person is directly or indirectly controlled by more than one Person,
and one or more of such other Persons has Registered Common Stock
outstanding, "Principal Party" shall refer to whichever of such other
Persons is the issuer of the Registered Common Stock having the
highest aggregate current market price (determined pursuant to Section
11(d) hereof); and (4) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such
Person is directly or indirectly controlled by more than one Person,
and none of such other Persons have Registered Common Stock
outstanding, "Principal Party" shall refer to whichever ultimate
parent entity is the corporation having the greatest shareholders
equity or, if no such ultimate parent entity is a corporation, shall
refer to whichever ultimate parent entity is the entity having the
greatest net assets
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number
of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13, and unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that the Principal
Party, at its own expense, shall:
(i) (A) file on an appropriate form, as soon as practicable
following the execution of such agreement, a registration statement
under the Securities Act with respect to the Common Stock that may be
acquired upon exercise of the Rights, (B) cause such registration
statement to remain effective (and to include a
23
prospectus complying with the requirements of the Securities Act)
until the Expiration Date, and (C) as soon as practicable following
the execution of such agreement, take such action as may be required
to assure that any acquisition of such Common Stock upon the exercise
of the Rights complies with any applicable state securities or "blue
sky" laws; and
(ii) as soon as practicable following the execution of such
agreement, 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) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Certificate of Incorporation or By-laws or
other instrument governing its corporate affairs, which provision would
have the effect of (i) causing such Principal Party to issue, in connection
with, or as a consequence of, the consummation of a transaction referred to
in this Section 13, shares of Common Stock of such Principal Party at less
than the then current market price per share (determined pursuant to
Section 11(d) hereof) or securities exercisable for, or convertible into,
Common Stock of such Principal Party at less than such then current market
price (other than to holders of Rights pursuant to this Section 13) or (ii)
providing for any special payment, tax or similar provisions in connection
with the issuance of the Common Stock of such Principal Party pursuant to
the provisions of this Section 13; then, in such event, the Company shall
not consummate any such transaction unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement providing that the provision in question of such
Principal Party shall have been cancelled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision
will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
(e) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the
event that a Section 13 Event shall occur at any time after the occurrence
of a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable, in the manner and for the
securities described in Section 13(a).
(f) Notwithstanding anything contained herein to the contrary, in the
event of any merger or other acquisition transaction involving the Company
pursuant to a merger or other acquisition agreement between the Company and
any Person (or one or more of such Person's Affiliates or Associates) which
agreement has been approved by the Board of Directors prior to any Person
becoming an Acquiring Person, this Agreement and the rights of holders of
Rights hereunder shall be terminated in accordance with Section 7(a)
hereof.
Section 14. Fractional Rights and Fractional Shares. (a) The Company
---------------------------------------
shall not be required to issue fractions of Rights or to distribute Rights
Certificates which evidence fractional Rights. In lieu of issuing such
fractional Rights, there shall be paid to the Persons to which such
24
fractional Rights would otherwise be issuable, an amount in cash equal to such
fraction of the market value of a whole Right. For purposes of this Section
14(a), the market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price of the
Rights for any day shall be, if the Rights are listed or admitted to trading on
a national securities 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 by
Nasdaq or such other system then in use or, if on any such date the Rights are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Rights
selected by a majority of the Board of Directors. 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 a majority of the Board of Directors
shall be used and such determination shall be described in a statement filed
with the Rights Agent and the holders of the Rights.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one one-
hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence such fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock); provided, however, that in lieu of fractions of
-------- -------
shares of Preferred Stock which are integral multiples of one one-hundredth of a
share of Preferred Stock, the Company may provide for the issuance of depositary
receipts pursuant to Section 7(c) hereof. In lieu of such fractional shares of
Preferred Stock that are not integral multiples of one one-hundredth of a share,
the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the then current market price of a share of Preferred Stock on the
day of exercise (as determined in accordance with Section 14(a) for the Trading
Day immediately prior to the date of such exercise or exchange).
(c) Cash in Lieu of Fractional Common Shares. The Company shall not be
----------------------------------------
required to issue fractions of Common Shares or to distribute certificates which
evidence fractional Common Shares upon the exercise or exchange of Rights. In
lieu of such fractional Common Shares, the Company shall pay to the registered
holders of the Rights 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 price of a whole Common Share on the day of exercise (as
determined in accordance with Section 14(a) for the Trading Day immediately
prior to the date of such exercise or exchange).
(d) The holder of a Right by the acceptance of the Rights expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
----------------
Agreement, other than rights of action vested in the Rights Agent pursuant to
Section 18 hereof, are vested in the
25
respective registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of certificates representing shares of
Company Common Stock); and any registered holder of a Rights Certificate (or,
prior to the Distribution Date, of a certificate representing shares of Company
Common Stock), without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, of a certificate
representing shares of Company Common Stock), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company or any other Person to enforce, or otherwise act
in respect of, his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
---------------------------
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Company Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the office of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Company
Common Stock certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Rights Certificates or the associated Company Common
Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7 (e) hereof, shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or any other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts to have any such
-------- -------
order, decree or ruling lifted or otherwise overturned as promptly as
practicable.
26
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder,
--------------------------------------------------
as such, of any Rights Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the number of shares of Preferred
Stock 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 Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action, or, except as provided in Section 24 hereof, to receive
notice of meetings or other actions affecting stockholders, or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof. This Section 17 shall also apply to holders, as
such, of Rights prior to the issuance of Rights Certificates.
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, including reasonable fees and disbursements of its counsel, incurred
in connection with the execution and administration of this Agreement and the
exercise and performance of its duties hereunder. The Company shall indemnify
the Rights Agent for, and hold it harmless against, any loss, liability, or
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this Agreement,
including the reasonable costs and expenses of defending against any claim of
liability hereunder.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any Rights Certificate or
certificate for Preferred Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to have been signed, executed and,
where necessary, verified or acknowledged by the proper Person or Persons.
(c) The indemnity provided herein shall survive the expiration of the
Rights and the termination of this Agreement. In no case will the Rights Agent
be liable for special, indirect, incidental or consequential loss or damage of
any kind whatsoever (including but not limited to lost profits), even if the
Rights Agent has been advised of the possibility of such loss or damage.
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 shareholder services businesses 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 document 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
27
shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
----------------------
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person
and the determination of "current market price") be proved or established
by the Company prior to taking or suffering any action hereunder, such fact
or matter (unless other evidence in respect thereof be specified herein)
may be deemed to be conclusively proved and established by a certificate
signed by the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; provided, however, that so long as any Person is an Acquiring
-------- -------
Person hereunder, such certificate shall be signed and delivered by a
majority of the Board of Directors; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all
28
such statements and recitals are and shall be deemed to have been made by
the Company only.
(e) The Rights Agent shall not have any responsibility for the
validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or for the validity or execution
of any Rights Certificate (except its countersignature thereof); nor shall
it be responsible for any breach by the Company of any covenant or failure
by the Company to satisfy conditions contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 hereof or for the manner,
method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Rights Certificates after
receipt by the Rights Agent of the certificate describing any such
adjustment contemplated by Section 12); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any shares of Preferred Stock or any other securities to be
issued pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Preferred Stock or any other securities will, when so
issued, be validly authorized and issued, fully paid and non-assessable.
(f) The Company shall perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such
further acts, instruments and assurances as may reasonably be required by
the Rights Agent for the performance by the Rights Agent of its duties
under this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the Chief Executive Officer, the President, any
Vice President, the Secretary, any Assistant Secretary, the Treasurer or
any Assistant Treasurer 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; provided, however, that
-------- -------
so long as any Person is an Acquiring Person hereunder, the Rights Agent
shall accept such instructions and advice only from a majority of the Board
of Directors and shall not be liable for any action taken or suffered to be
taken by it in good faith in accordance with such instructions of the
majority of the Board of Directors. Any application by the Rights Agent
for written instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or omitted by
the Rights Agent under this Rights Agreement and the date on and/or after
which such action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken by, or omission of,
the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date
shall not be less than five Business Days after the date any such officer
of the Company actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior to taking
any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
29
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or have a pecuniary interest in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents.
(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 or in the exercise of its rights
hereunder if the Rights Agent shall have reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has
either not been completed, not signed or indicates an affirmative response
to clause 1 and/or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise or transfer without first
consulting with the Company. If such certificate has been completed and
signed and shows a negative response to clauses 1 and 2 of such
certificate, unless previously instructed otherwise in writing by the
Company (which instructions may impose on the Rights Agent additional
ministerial responsibilities, but no discretionary responsibilities), the
Rights Agent may assume without further inquiry that the Rights Certificate
is not owned by a Person described in Section 7(e) hereof and shall not be
charged with any knowledge to the contrary.
Section 21. Change of Rights Agent. The Rights Agent or any successor
----------------------
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty days' prior notice in writing mailed to the Company, and to each
transfer agent of the Preferred Stock and the Company Common Stock, by
registered or certified mail, and to the holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty days' prior notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Preferred Stock and the Company Common Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then any registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
30
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a corporation organized and
doing business under the laws of the United States or any state of the United
States in good standing, shall be authorized under applicable laws to exercise
corporate trust or stock transfer powers and shall be subject to supervision or
examination by federal or state authorities or (b) an Affiliate of a corporation
described in clause (a). 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 Preferred Stock and the Company Common Stock, and mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
-----------------------------------
the provisions of this Agreement or the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by a majority of the Board of Directors to reflect any
adjustment or change made in accordance with the provisions of this Agreement in
the Purchase Price or the number or kind or class of shares or other securities
or property that may be acquired under the Rights Certificates. In addition, in
connection with the issuance or sale of shares of Company Common Stock following
the Distribution Date and prior to the Expiration Date, the Company (a) shall,
with respect to shares of Company Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by a
majority of the Board of Directors, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
--------
however, that (i) no such Rights Certificate shall be issued if, and to the
-------
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
the Person to whom such Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination. (a) Subject to Section 30 hereof,
--------------------------
the Company may, at its option, by action of a majority of the Board of
Directors, at any time prior to the earlier of (i) the Close of Business on the
tenth Business Day following the Stock Acquisition Date or (ii) the Final
Expiration Date, redeem all but not less than all of the then outstanding Rights
at a redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being the "Redemption
----------
Price"). The Company may, at its option, by action of a majority of the Board
-----
of Directors, pay the Redemption Price either in shares of Company Common Stock
(based on the "current market price", as defined in Section 11(d) hereof, of the
shares of Company Common Stock at the time of redemption) or cash or any other
form of
31
consideration deemed appropriate by the Board of Directors and the redemption of
the Rights shall be effective at such time and on the basis and with such
conditions as the Board of Directors may in its sole discretion establish.
(b) Immediately upon the action of a majority of the Board of Directors
ordering the redemption of the Rights (or at such later time as the Board of
Directors may establish for the effectiveness of such redemption), evidence of
which shall be filed with the Rights Agent, and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price for each Right so held. The Company shall promptly give public notice of
any such redemption; provided, however, that the failure to give, or any defect
-------- -------
in, any such notice shall not affect the validity of such redemption. Promptly
after the action of a majority of the Board of Directors ordering the redemption
of the Rights, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice to
all such holders at each holder's last address as it appears upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Company Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made.
Section 24. 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 Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than a regular
periodic cash dividend paid out of funds legally available therefor), (ii) to
offer to the holders of Preferred Stock rights or warrants to subscribe for or
to purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification involving
only the subdivision of outstanding shares of Preferred Stock), (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 more transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than a transfer by the Company and/or any
of its wholly owned Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 25 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take place
and the date of participation therein by the holders of the shares of Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least twenty (20) days
prior to the record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such other action, at
least twenty (20) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the shares of Preferred
Stock whichever shall be the earlier; provided, however, no such notice shall be
-------- -------
required pursuant to this Section 24, if any wholly owned Subsidiary of the
Company effects a consolidation or
32
merger with or into, or effects a sale or other transfer of assets or earnings
power to, any other wholly owned Subsidiary of the Company.
(b) In case any Triggering Event shall occur, then, in any such case, (i)
the Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate, to the extent feasible and in accordance with Section 25
hereof, a notice of the occurrence of such event, which shall specify the event
and the consequences of the event to holders of Rights under Section 11(a)(ii)
or Section 13 hereof, as the case may be.
Section 25. Notices. All notices and other communications provided for
-------
hereunder shall, unless otherwise stated herein, be in writing (including by
telex, telegram or cable) and mailed or sent or delivered, if to the Company, at
its address at:
Acuson Corporation
0000 Xxxxxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxx Xxxx, XX 00000
Attention: President
and if to the Rights Agent, at its address at:
BankBoston, N.A.
c/o Boston EquiServe Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Company Common Stock) 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 26. Supplements and Amendments. For so long as the Rights are
--------------------------
then redeemable, and, subject to the penultimate sentence of this Section 26,
the Company may, in its sole and absolute discretion, and the Rights Agent
shall, if the Company so directs, supplement or amend any provision of this
Agreement in any respect without the approval of any holders of certificates
representing Rights or shares of Company Common Stock. From and after the time
that the Rights are no longer redeemable and subject to the penultimate sentence
of this Section 26, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen any time period
hereunder, or (iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of
33
the holders of Rights Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); provided, however, that this
-------- -------
Agreement may not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) subject to Section 30 hereof, a time period relating
to when the Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Company or, so long as any Person is an Acquiring
Person hereunder, from the majority of the Board of Directors which states that
the proposed supplement or amendment is in compliance with the terms of this
Section 26, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, (i) no
supplement or amendment shall be made which changes the Redemption Price, the
Purchase Price, the Expiration Date or the number of Units of Preferred Stock or
other securities or assets for which a Right is exercisable without the approval
of a majority of the Board of Directors, and (ii) following the occurrence of a
Section 11(a)(ii) Event, no supplement or amendment whatsoever shall be made
without the approval of the Board of Directors. Prior to the Distribution Date,
the interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Company Common Stock.
Section 27. 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 28. Determinations and Actions by the Board of Directors, etc.
---------------------------------------------------------
For all purposes of this Agreement, any calculation of the number of shares of
Company Common Stock outstanding at any particular time, including for purposes
of determining the particular percentage of such outstanding shares of Company
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the Exchange Act
Regulations as in effect on the date hereof. Except as otherwise specifically
provided herein, 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 to the Company, or as
may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power (i) to interpret the
provisions of this Agreement, and (ii) to make all determinations deemed
necessary or advisable for the administration of this Agreement. All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board of Directors or any member thereof
to any liability to the holders of the Rights.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
--------------------------
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company Common Stock) 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
34
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of shares of Company Common Stock).
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;
provided, however, that notwithstanding anything in this Agreement to the
-------- -------
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and a majority of the
Board of Directors determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement and the Rights shall not then be redeemable, the right
of redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth Business Day following the date
of such determination by a majority of the Board of Directors.
Section 31. Governing Law. This Agreement, each Right and each Rights
-------------
Certificate issued hereunder shall be governed by, and construed in accordance
with, the laws of the State of Delaware applicable to contracts executed in and
to be performed entirely in such State.
Section 32. Counterparts. This Agreement may be executed (including by
------------
facsimile) in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be an
original, but all of which taken together shall constitute one and the same
instrument.
Section 33. Descriptive Headings. The headings contained in this
--------------------
Agreement are for descriptive purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 34. Exchange. (a) The Company, upon resolution of a majority of
--------
the Board of Directors may, at its option, at any time after the first
occurrence of a Section 11(a)(ii) Event, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to Section 7(e) hereof) for Units of Preferred Stock or
shares of Company Common Stock (at the election of the Board of Directors) at an
exchange ratio of one Unit of Preferred Stock or one share of Company Common
Stock, as the case may be, per Right, as appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being the "Exchange Ratio"). Notwithstanding the
--------------
foregoing, the Board of Directors shall not be empowered to effect such exchange
at any time after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of shares
of Company Common Stock aggregating 50% or more of the shares of Company Common
Stock then outstanding. From and after the occurrence of a Section 13(a) Event,
any Rights that theretofore have not been exchanged pursuant to this Section
34(a) shall thereafter be exercisable only in accordance with Section 13 and may
not be exchanged pursuant to this Section 34(a). The exchange of the Rights by
the Board of Directors may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish.
35
(b) Immediately upon the action of a majority of the Board of Directors
ordering the exchange of any Rights pursuant to Section 34(a) 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 Units of Preferred Stock or shares of Company Common
Stock, as the case may be, equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to give, or any
-------- -------
defect in, such notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to all of the holders
of such Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange shall state the method by which the exchange of Units of Preferred
Stock or shares of Company Common Stock, as the case may be, for Rights will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In the event that the number of shares of Preferred Stock or Company
Common Stock, as the case may be, which are authorized by the Company's Restated
Certificate of Incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to permit any
exchange of Rights as contemplated in accordance with this Section 34, the
Company, upon a resolution of a majority of the Board of Directors, shall take
all such action as may be necessary to authorize additional shares of Preferred
Stock or Company Common Stock, as the case may be, for issuance upon exchange of
the Rights or make adequate provision to substitute, in whole or in part, (1)
cash, (2) other equity securities of the Company, (3) debt securities of the
Company, (4) other assets, or (5) any combination of the foregoing, having an
aggregate value for each Right to be exchanged equal to the per share market
price of one Unit of Preferred Stock or share of Company Common Stock, as the
case may be (determined pursuant to Section 11(d) hereof) as of the date of a
Section 11(a)(ii) Event, where such aggregate value has been determined by a
majority of the Board of Directors.
(d) The Company shall not be required to issue fractions of Units of
Preferred Stock or fractions of shares of Company Common Stock or to distribute
certificates which evidence fractional Units or fractional shares. In lieu of
issuing fractional Units or fractional shares, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are exchanged
as herein provided an amount in cash equal to the same fraction of the current
market price (determined pursuant to Section 11(d) hereof) of one Unit of
Preferred Stock or one share of Company Common Stock, as the case may be, on the
Trading Day immediately prior to the date of exchange pursuant to this Section
34.
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, all as of the date first above written.
Acuson Corporation
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------ ------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman and CEO Title: Secretary
BankBoston, N.A.
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxxxxx Xxxxxxxx
------------------------ ------------------------
Name: Xxxxx Xxxxx Name: Xxxxxxxx Xxxxxxxx
Title: Account Manager Title: Administration Manager
37
