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AMENDED AND RESTATED
RIGHTS AGREEMENT
between
ARTESYN TECHNOLOGIES, INC.
and
THE BANK OF NEW YORK
as Rights Agent
Dated as of November 21, 1998
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Amended and Restated Rights Agreement dated as of November 21, 1998 between
Artesyn Technologies, Inc., a Florida corporation (the "Company"), and The Bank
of New York, a New York banking corporation, as rights agent (the "Rights
Agent").
RECITALS
A. The Company heretofore distributed to holders of Common Shares (as
hereinafter defined) of the Company on November 21, 1988 (the "Old Record Date")
and in respect of Common Shares issued thereafter and prior to the Close of
Business (as hereinafter defined) on December 22, 1998, one common stock
purchase right (each, an "Old Right" and collectively, the "Old Rights") for
each Common Share outstanding on the Old Record Date and so issued thereafter,
entitling the registered holder of an Old Right to purchase one Common Share
upon the terms and subject to the conditions set forth in a certain Rights
Agreement dated as of November 9, 1988 between the Company and the Rights Agent
(the "Original Agreement") for the purpose of preserving long term stockholder
value in case of a proposed takeover of the Company.
B. Considering that the Old Rights expire at the Close of Business on November
21, 1998, and desiring to continue to preserve long term value for the Company's
stockholders in case of a proposed takeover of the Company, the Board of
Directors of the Company (the "Board") has authorized and declared a dividend of
one preferred share purchase right (each, a "New Right" and collectively the
"New Rights") for each Common Share of the Company outstanding as of the close
of business on a record date to be designated by certain executive officers of
the Company, currently December 22, 1998 (the "Record Date"), each New Right
representing the right to purchase one one-hundredth of a Preferred Share (as
hereinafter defined), upon the terms and subject to the conditions set forth in
the Original Agreement as amended and restated in its entirety by this
Agreement, and has further authorized and directed the issuance of one New
Right, subject to adjustment as provided herein, with respect to each Common
Share that shall become outstanding between the Record Date and the earliest of
the Distribution Date and the Expiration Date (as such terms are hereinafter
defined).
Accordingly, in consideration of the Recitals and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
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"Acquiring Person" means any Person (as hereinafter defined) who or which,
together with all Affiliates and Associates (as such terms are hereinafter
defined) of such Person, shall be the Beneficial Owner (as hereinafter defined)
of 20% or more of the Common Shares then outstanding, but shall not include the
Company, any Subsidiary (as hereinafter defined) of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an "Acquiring Person" as
the result of (A) a Permitted Transaction, or (B) an acquisition of Common
Shares by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such Person
to 20% or more of the Common Shares then outstanding; provided, however, that if
a Person shall become the Beneficial Owner of 20% or more of the Common Shares
then outstanding by reason of share purchases by the Company and shall, after
such share purchases by the Company, become the Beneficial Owner of any
additional Common Shares of the Company (other than pursuant to a Permitted
Transaction), then such Person shall be deemed to be an "Acquiring Person".
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person", as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently, and such Person divests as promptly as
practicable (and in all events within five days following such determination) of
a sufficient number of Common Shares so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
definition, then such Person shall not be deemed to be an "Acquiring Person" for
any purposes of this Agreement.
"Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the
"Exchange Act" (as hereinafter defined), as in effect on the date of this
Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall be deemed to
"beneficially own" any securities:
(1) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly;
(2) which such Person or any of such Person's Affiliates or Associates has
(A) the right to acquire (whether such right is exercisable immediately or only
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after the passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights
(other than these New Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or exchange;
or (B) the right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the agreement,
engagement or understanding to vote such security (i) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations promulgated under the Exchange Act and (ii) is not also
then reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(3) which are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of such Person's Affiliates or Associates
has any agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a bona
fide public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to Section l(c)(ii)(B))
or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, the phrase "then outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number of such
securities not then actually issued and outstanding which such Person would be
deemed to beneficially own hereunder.
"Board" has the meaning set forth in Recital B hereof.
"Business Day" means any day other than a Saturday, a Sunday, or a day on
which banking institutions in the City of New York are authorized or obligated
by law or executive order to close.
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"Close of Business", on any given date, means 5:00 P.M., New York time, on
such date; provided, however, that if such date is not a Business Day, "Close of
Business" means 5:00 P.M., New York time, on the next succeeding Business Day.
"Common Shares", when used with reference to the Company, means the shares
of common stock, par value $.01 per share, of the Company. "Common Shares", when
used with reference to any Person other than the Company, means the capital
stock (or equity interest) with the greatest voting power of such other Person
or, if such other Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.
"Continuing Director" means (i) any member of the Board, while such Person
is a member of the Board, who is not an Acquiring Person, or an Affiliate or
Associate of an Acquiring person, or a representative or nominee of an Acquiring
Person or of any such Affiliate or Associate, and was a member of the Board
prior to the time any Person becomes an Acquiring Person, or (ii) any Person who
subsequently becomes a member of the Board, while such Person is a member of the
Board, who is not an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, or a representative or nominee of an Acquiring Person or of
any such Affiliate or Associate, if such Person's nomination for election or
election to the Board is recommended or approved by a majority of the Continuing
Directors.
"Distribution Date" has the meaning set forth in Section 3 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended and in
effect on the date hereof.
"Exchange Ratio" has the meaning set forth in Section 24(a).
"Expiration Date" has the meaning set forth in Section 7(a) hereof.
"Final Expiration Date" means the Close of Business on December 22, 2008.
"New Rights" has the meaning set forth in Recital B hereof.
"Old Record Date" has the meaning set forth in Recital A hereof.
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"Old Rights" has the meaning set forth in Recital A hereof.
"Original Agreement has the meaning set forth in Recital A hereof.
"Permitted Transaction" means an action or transaction or series of related
actions or transactions, including, but not limited to, a purchase or series of
related purchases of Common Shares, which prior to the consummation thereof, and
based upon the good faith consideration by the Board of all factors which the
Board deems to be relevant (including, but not limited to, the long-term value
of the Company and prices that could reasonably be expected if the Company or
its assets were sold on an orderly basis designed to realize maximum value), the
Board determines to be fair to and otherwise in the best interests of the
holders of the Common Shares.
"Person" means any individual, firm, corporation or other entity, and shall
include any successor (by merger or otherwise) of such entity.
"Preferred Shares" means shares of Series A Junior Participating Preferred
Stock, par value $.01 per share, of the Company having the rights and
preferences set forth in the form of Articles of Amendment attached to this
Agreement as Exhibit A.
"Record Date" has the meaning set forth in Recital B hereof.
"Redemption Date" has the meaning set forth in Section 7 hereof.
"Right Certificates" has the meaning set forth in Section 3(a) hereof.
"Section 13 Event" means any event described in clauses (x), (y) or (z) of
Section 13(a) hereof.
"Securities Act" means the Securities Act of 1933, as amended and in effect
on the date hereof.
"Shares Acquisition Date" means the first date of public announcement
which, for purposes of this definition, shall include, without limitation, a
report or Schedule filed pursuant to Section 13(d) under the Exchange Act or
pursuant to a comparable successor statute) by the Company or an Acquiring
Person that an Acquiring Person has become such.
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"Subsidiary" of any Person means any corporation or other entity of which a
majority of the voting power of the voting equity securities or equity interest
is Beneficially Owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the New Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable on 10 days' prior written notice to the Rights Agent. The
Rights Agent shall have no duty to supervise and shall in no event be liable for
acts or omissions of any such Co-Rights Agents. In the event the Company
appoints one or more Co-Rights Agents, the respective duties of the Rights Agent
and Co-Rights Agents shall be as the Company shall determine.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the Close of Business on the 10th day after
the Shares Acquisition Date and (ii) the Close of Business on the 10th Business
Day after the date of the commencement by any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such plan) of, or of the first public announcement
of the intention of any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding Common Shares for or pursuant to the terms of any
such plan) to commence, a tender or exchange offer the consummation of which
would result in any Person becoming the Beneficial Owner of Common Shares
aggregating 30% or more of their outstanding Common Shares (including any such
date which is after the date of this Agreement and prior to the issuance of the
New Rights, the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the New Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates for Common
Shares shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class, insured,
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postage-prepaid mail, to each record holder of Common Shares as of the close of
business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the form of
Exhibit B hereto (a "Right Certificate"), evidencing one New Right for each
Common Share so held. As of the Distribution Date, the New Rights will be
evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the Company
will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as of
the close of business on the Record Date, at the address of such holder shown on
the records of the Company. With respect to certificates for Common Shares
outstanding as of the Record Date, until the Distribution Date, the New Rights
will be evidenced by such certificates registered in the names of the holders
thereof and the registered holders of Common Shares shall also be the registered
holders of the associated New Rights. Until the earlier of the Distribution Date
or the Expiration Date, the surrender for transfer of any certificate for Common
Shares outstanding on the Record Date shall also constitute the transfer of the
New Rights associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last sentence of
this paragraph (c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend, provided, however, that in the event that the name of the Company
changes, the name of the Company may be inserted in such legend in the place of
"Artesyn Technologies, Inc.":
This certificate also evidences and entitles the holder hereof to certain
rights ("New Rights") as set forth in an Amended and Restated Rights
Agreement between Artesyn Technologies, Inc. (the "Company") and The Bank
of New York, as Rights Agent, dated as of November 21, 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 executive office of the Company. Under certain circumstances, as
set forth in the Rights Agreement, such New Rights will be evidenced by
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separate certificates and will no longer be evidenced by this certificate.
The Company will mail to the holder of this certificate, a copy of the
Rights Agreement without charge after receipt of a written request
therefor. Under certain circumstances, as set forth in the Rights
Agreement, New Rights issued to any Person who is, was or becomes an
Acquiring Person or any Affiliates or Associates thereof (as such terms are
defined in the Rights Agreement), whether currently held by or on behalf of
such Person or any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the New Rights associated with the Common Shares represented
by such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the New Rights associated with the Common Shares represented
thereby. In the event that the Company purchases or acquires any Common Shares
after the Record Date, but prior to the Distribution Date, any New Rights
associated with such Common Shares shall be deemed cancelled and retired so that
the Company shall not be entitled to exercise any New Rights associated with the
Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the form of election to purchase Preferred
Shares, form of assignment and forms of certificate to be printed on the reverse
thereof) shall be substantially the same as Exhibit B hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the New
Rights, may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of one one-hundredths of a Preferred
Share as shall be set forth therein at the price per one one-hundredth of a
Preferred Share set forth therein (the "Purchase Price"), but the number of such
one one-hundredths of a Preferred Share and the Purchase Price shall be subject
to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22
hereof that represents New Rights beneficially owned by: (i) an Acquiring Person
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or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such New Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any person with whom such Acquiring Person has an
agreement, arrangement or understanding regarding the transferred New Rights or
(B) a transfer which a majority of the Continuing Directors has determined is
part of a plan, arrangement or understanding which has a primary purpose or
effect avoidance of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement
or adjustment of any other Rights Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend:
The rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Amended and Restated Rights Agreement dated as of
November 21, 1998 between Artesyn Technologies, Inc. and The Bank of
New York, as Rights Agent). Accordingly, this Right Certificate and the
rights represented hereby may become null and void in the circumstances
specified in Section 7(e) of such Amended and Restated Rights
Agreement.
The provisions of Section 7(e) of this Rights Agreement shall be operative
whether or not the foregoing legend is set forth on any such Rights Certificate.
The Company shall instruct the Rights Agent in writing of the New Rights which
should be so legended, and shall supply the Rights Agent with such legended
Right Certificates. The Rights Agent shall endeavor to comply with this Section
4(b) to the extent that it has actual knowledge that the New Rights involved are
beneficially owned by an Acquiring Person, Affiliate or Associate, or transferee
thereof, as applicable.
Section 5. Countersignature and Registration. The Right Certificates shall
be executed on behalf of the Company by its Chairman of the Board, its
President, any Vice President or its Treasurer either manually or by facsimile
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signature, shall have affixed thereto the Company's seal or a facsimile thereof,
and shall be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Right Certificates shall be
manually countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates had not ceased to
be such officer of the Company; and any Right Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its designated office, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of New Rights
evidenced on its face by each of the Right Certificates and the date of each of
the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 14 hereof, at any time after the
close of business on the Distribution Date, and at or prior to the close of
business on the earlier of the Redemption Date or the Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
New Rights that have become void pursuant to Section 7(e) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a Preferred Share as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent, along with a signature guarantee and such other documentation as
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the Rights Agent may reasonably request. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any surrendered Right Certificate or Certificates until the
registered holder shall have completed and signed the form of certificate
appearing below the form of assignment set forth on the reverse side of each
Right Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company may reasonably request. Thereupon, the Rights
Agent shall countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment by the holder of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate, if
mutilated, along with a signature guaranty and such other and further
documentation as the Rights Agent may reasonably request, the Company will
execute and deliver a new Right Certificate of like tenor to the Rights Agent
for countersignature and delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of New Rights; Purchase Price; Expiration Date of New
Rights.
(a) The registered holder of any Right Certificate may exercise the New
Rights evidenced thereby (except as otherwise provided in Sections 7(e) and 24
hereof), in whole or in part at any time after the Distribution Date upon
surrender of the Right Certificate, with the form of election to purchase on the
reverse side thereof and the certificate appearing below such form of election
to purchase completed and duly executed, along with a signature guaranty and
such other and further documentation as the Rights Agent may reasonably request,
to the Rights Agent at the designated office of the Rights Agent, together with
payment of the Purchase Price for each one one-hundredth of a Preferred Share as
to which the New Rights are exercised, at or prior to the earliest of (i) the
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close of business on the Final Expiration Date, (ii) the time at which the New
Rights are redeemed or declared to be null and void as provided in Section 23
hereof (the "Redemption Date"), and (iii) the time at which such New Rights are
exchanged as provided in Section 24 hereof (the earliest of (i), (ii) and (iii)
being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a Preferred Share
purchasable pursuant to the exercise of a New Right shall initially be $95, and
shall be subject to adjustment from time to time as provided in Section 11 or 13
hereof and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable New
Rights, with the form of election to purchase and the form of certificate set
forth on the reverse side duly completed and duly executed, along with a
signature guarantee and such other and further documentation as the Rights Agent
may reasonably request, accompanied by payment of the Purchase Price for the
shares to be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in accordance with
Section 9 hereof by certified check, cashier's check or money order payable to
the order of the Company, the Rights Agent shall thereupon, subject to Section
20(k) hereof, promptly (i) (A) requisition from any transfer agent of the
Preferred Shares (or make available if the Rights Agent is also the transfer
agent for the Preferred Shares) certificates for the total number of Preferred
Shares to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B) requisition from the
depositary agent, depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional Preferred Shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates for Preferred Shares or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder, and (iv) when appropriate, after receipt thereof,
deliver such cash to or upon the order of the registered holder of such Right
Certificate. Notwithstanding anything in this Agreement to the contrary, the
Company shall not be obligated to take any action upon the exercise of New
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Rights which is prohibited by the terms of any agreement for borrowed money to
which the Company became a party or otherwise bound prior to the time that any
Person became an Acquiring Person; and provided further, that the Company shall
not be obligated to issue any Common Shares of Common Stock upon the exercise of
New Rights which are in excess of those which are available for such issuance
under the Company's Articles of Incorporation (in which case the Company shall
take the same actions as are set forth in Section 11(a)(iii) hereof).
(d) In case the registered holder of any Right Certificate shall exercise
less than all the New Rights evidenced thereby, a new Right Certificate
evidencing New Rights equivalent to the New Rights remaining unexercised shall
be issued by the Rights Agent to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14
hereof.
(e) Anything in this Agreement contained to the contrary notwithstanding,
from and after the time that a Person first becomes an Acquiring Person, any New
Rights beneficially owned by (i) the Acquiring Person or an Affiliate or
Associate of the Acquiring Person, (ii) a transferee of the Acquiring Person (or
of any Affiliate or Associate thereof) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of the Acquiring Person (or
of any Affiliate or Associate thereof) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such New
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom the Acquiring Person has a continuing agreement,
arrangement or understanding regarding the transferred New Rights or (B) a
transfer which a majority of the Continuing Directors has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of this Section 7(e), shall become null and void without any
further action and no holder of such New Rights shall have any rights whatsoever
with respect to such New Rights, whether under any provision of this Agreement
or otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Right Certificates or other Person as a
result of its failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
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respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the form of certificate appearing below the form of
election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
(g) In the event that any Person shall become an Acquiring Person and the
New Rights shall then be outstanding, the Company shall not take any action
which would diminish or eliminate the benefits intended to be afforded by the
New Rights (except as permitted by Section 23 hereof).
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof, except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall, at the
written request of the Company, either deliver all cancelled Right Certificates
to the Company, or destroy such cancelled Right Certificates, and in the case of
destruction, the Rights Agent shall deliver a certificate of destruction thereof
to the Company.
Section 9. Availability of Preferred Shares. The Company covenants and
agrees that it will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, such number of Preferred Shares as will be sufficient to permit the
exercise in full of all outstanding New Rights in accordance with Section 7. The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of New
Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
14
The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of New Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing New Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for Preferred Shares upon the
exercise of any New Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's reasonable satisfaction that
no such tax is due.
Section 10. Preferred Shares Record Date. Each Person in whose name any
certificate for Preferred Shares is issued upon the exercise of New Rights shall
for all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such New Rights was duly surrendered
and payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Shares transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares transfer books of the Company are open. Prior to the exercise
of the New Rights evidenced thereby, the holder of a Right Certificate shall not
be entitled to any rights of a holder of Preferred Shares for which the New
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 of Preferred Shares or
Number of New Rights. The Purchase Price, the number of Preferred Shares covered
by each New Right and the number of New Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Shares payable in Preferred
15
Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of Preferred Shares or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any New Right exercised after
such time shall be entitled to receive, upon payment of the Purchase Price then
in effect, the aggregate number and kind of shares of capital stock which, if
such New Right had been exercised immediately prior to such date and at a time
when the Preferred Shares transfer books of the Company were open, he 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 New
Right be less than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one New Right.
(ii) Subject to Sections 7(e) and 24 of this Agreement, in the event any
Person becomes an Acquiring Person, each holder of a New Right shall thereafter
have a right to receive, upon exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one one-hundredths of a
Preferred Share for which a New Right is then exercisable, in accordance with
the terms of this Agreement and in lieu of Preferred Shares, such number of
Common Shares of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of one one-hundredths
of a Preferred Share for which a New Right is then exercisable and dividing that
product by (y) 50% of the then current per share market price of the Company's
Common Shares (determined pursuant to Section 11(d) hereof) on the date of the
occurrence of such event; provided, however, that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only the provisions of Section 13 hereof
shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that the number of Common Shares authorized by the
Company's Articles of Incorporation but not outstanding or reserved for issuance
for purposes other than exercise of the New Rights is not sufficient to permit
16
the exercise in full of the New Rights in accordance with Section 11(a)(ii) and
the New Rights shall become so exercisable, the Company shall take all such
action as may be necessary to authorize additional Common Shares for issuance
upon exercise of the New Rights. In the event the Company shall, after good
faith effort, be unable to take all such action as may be necessary to authorize
such additional Common Shares, the Company shall substitute, for each Common
Share that would otherwise be issuable upon exercise of a New Right, a number of
Preferred Shares or fraction thereof such that the current per share market
price of one Preferred Share (as defined in Section 11(d)) multiplied by such
number or fraction is equal to the current per share market price of one Common
Share as of the date of issuance of such Preferred Shares or fraction thereof.
(b) In case the Company shall fix a record date for the issuance of rights
(other than the New Rights), options or warrants to all holders of Preferred
Shares entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Preferred Shares (or shares having the
same rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than the
then current per share market price of the Preferred Shares (as defined in
Section 11(d)) on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of Preferred Shares outstanding on such record date plus the
number of Preferred Shares which the aggregate offering price of the total
number of Preferred Shares and/or equivalent preferred shares so to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current market price, and the denominator
of which shall be the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however, that
in no event shall the consideration to be paid upon the exercise of one New
Right be less than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one New Right. In case such subscription price
may be paid in a consideration, part or all of which shall be in a form other
than cash, the value of such consideration shall be as determined in good faith
17
by the Board, whose determination shall be described in a statement filed with
the Rights Agent. Preferred Shares owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is fixed;
and in the event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend out of the earnings or
retained earnings of the Company or a dividend payable in Preferred Shares) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the then current per
share market price of the Preferred Shares on such record date, less the fair
market value (as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent) of the portion of
the assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred Share, and the
denominator of which shall be such current per share market price of the
Preferred Shares; provided, however, that in no event shall the consideration to
be paid upon the exercise of one New Right be less than the aggregate par value
of the shares of capital stock of the Company to be issued upon exercise of one
New Right. Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder, except as provided in
Section 11(d)(ii), the "current per share market price" of any security (a
"Security" for the purpose of this Section 11(d)(i)) on any date shall be deemed
to be the average of the daily closing prices per share of such Security for the
30 consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date; provided, however, that in the event that the current per
18
share market price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or distribution on
such Security payable in shares of such Security or securities convertible into
such shares of capital stock, or (B) any subdivision, combination or
reclassification of such Security, and prior to the expiration of 30 Trading
Days after the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then, and in each
such case, the current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Security is not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Security is
listed or admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or such other system then in use, or, if
on any such date the Security is 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 Security selected by the Board. If on any
such date, no market maker is making a market in the Security, "current per
share market price" of any Security shall be deemed to be the fair market value
of such Security as determined in good faith by the Board. The term "Trading
Day" means a day on which the principal national securities exchange on which
the Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the "current per share
market price" of the Preferred Shares shall be determined in accordance with the
method set forth in Section 11(d)(i). If the Preferred Shares are not publicly
traded, the "current per share market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market price of the Common
Shares as determined pursuant to Section 11(d)(i) (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
19
the date hereof), multiplied by one thousand. If neither the Common Shares nor
the Preferred Shares are publicly held or so listed or traded, "current per
share market price" shall mean the fair value per share as determined in good
faith by the Board, whose determination shall be reported in a statement filed
with the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one one-millionth of a Preferred Share or one
ten-thousandth of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any New Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any New Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
New Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10 and 13 with respect to the Preferred Shares
shall apply on like terms to any such other shares.
(g) All New Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the New
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 New Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
20
right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a Preferred Share (calculated to the nearest one one-millionth
of a Preferred Share) obtained by (i) multiplying (x) the number of one
one-hundredths of a share covered by a New 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 New Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a New Right. Each of the New Rights outstanding after such
adjustment of the number of New Rights shall be exercisable for the number of
one one-hundredths of a Preferred Share for which a New Right was exercisable
immediately prior to such adjustment. Each New Right held of record prior to
such adjustment of the number of New Rights shall become that number of New
Rights (calculated to the nearest one ten-thousandth) obtained by dividing (i)
the Purchase Price in effect immediately prior to adjustment of the Purchase
Price, by (ii) the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement, and give
simultaneous written notice to the Rights Agent, of its election to adjust the
number of New Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of New Rights pursuant to this Section 11(i),
the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional New Rights to which
such holders shall be entitled as a result of such adjustment, or, at the option
of the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the New Rights to which such
holders shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein, may bear, at the option of the Company, the adjusted Purchase Price
and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
21
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of one one-hundredths of a Preferred Share issuable upon the exercise of
the New Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-hundredths of a
Preferred Share which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the New Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any New Right exercised after such record date of the
Preferred Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(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, in its sole discretion, the Board shall determine to be advisable in
order that (i) any consolidation or subdivision of the Preferred Shares, (ii)
issuance wholly for cash of any Preferred Shares at less than the current market
price, (iii) issuance wholly for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Preferred Shares, (iv)
dividends on Preferred Shares payable in Preferred Shares or issuance of rights,
options or warrants referred to hereinabove in Section 11(b), hereafter made by
the Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
22
(n) Anything in this Agreement to the contrary notwithstanding, in the
event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the
Common Shares payable in Common Shares or (ii) effect a subdivision, combination
or consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares) into a greater or lesser number of Common
Shares, then, in any such case, (A) the number of one one-hundredths of a
Preferred Share purchasable after such event upon proper exercise of each New
Right shall be determined by multiplying the number of one one-hundredths of a
Preferred Share so purchasable immediately prior to such event by a fraction,
the numerator of which is the total number of Common Shares outstanding
immediately before such event, and the denominator of which is the total number
of Common Shares outstanding immediately after such event, and (B) each Common
Share outstanding immediately after such event shall have issued with respect to
it that number of New Rights which each Common Share outstanding immediately
prior to such event had issued with respect to it. The adjustments provided for
in this Section 11(n) shall be made successively whenever such a dividend is
declared or paid or such a subdivision, combination or consolidation is
effected.
(o) From and after a Shares Acquisition Date, the Company shall not take
(or permit any Subsidiary to take) any action, the purpose of which is to, or if
at the time such action is taken, it is reasonably foreseeable that the effect
of such action is to, materially diminish or otherwise eliminate the benefits
intended to be afforded by the New Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common Shares or the
Preferred Shares, a copy of such certificate, and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25
hereof. In addition, the Company shall notify the Rights Agent of all record
dates provided for in this Agreement. 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 receive such certificate.
23
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event that, on or following the time that a Person becomes an
Acquiring Person, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person, (y) any Person 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 Common Shares shall be changed
into or exchanged for stock or other securities of any other Person (or the
Company) or cash or other property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person (other than the Company or
one of its wholly-owned Subsidiaries in one or more transactions each of which
does not violate Section 11(o) hereof), then, and in each such case, except as
part of a Permitted Transaction, proper provision shall be made so that (i) each
holder of a New Right, except as provided in Sections 7(e) and 24 hereof, shall
thereafter have the right to receive, upon the exercise thereof at a price equal
to the then current Purchase Price, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of validly authorized and
issued, fully paid, nonassessable and freely tradeable Common Shares of the
Principal Party (as hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall equal
the result obtained by (A) multiplying the then current Purchase Price by the
number of one one-hundredths of a Preferred Share for which a New Right is then
exercisable (without taking into account any adjustment previously made pursuant
to Section 11(a)(ii)) and dividing that product by, (B) 50% of the then current
per share market price of the Common Shares of such Principal Party (determined
pursuant to Section 11 (d) hereof) on the date of consummation of such Section
13 Event; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all of the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event; and (iv)
such Principal Party shall take such steps (including, but not limited to, the
24
reservation of a sufficient number of its Common Shares) in connection with the
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the Common Shares thereafter deliverable upon the exercise of
the New Rights.
(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), the
Person that is the issuer of any securities into which Common Shares of the
Company are converted in such merger or consolidation, and if no securities are
so issued, the Person that is the other party to such merger or consolidation
(including, if applicable, the Company if it is the surviving corporation); and
(ii) in the case of any transaction described in clause (z) of the first
sentence of Section 13(a), the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such transaction
or transactions; provided, however, that in any case, (1) if the Common Shares
of such Person are not at such time and have not been continuously over the
preceding 12-month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal Party" shall refer
to such other Person; (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the greatest aggregate
market value; and (3) in case such Person is owned, directly or indirectly, by a
joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in (1) and (2) above shall
apply to each of the chains of ownership having an interest in such joint
venture as if such party were a "Subsidiary" of both or all of such joint
venturers and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their direct or
indirect interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless the Principal Party shall have a sufficient number of its
authorized Common Shares which have not been issued or reserved for issuance to
permit the exercise in full of the New 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 which is
25
reasonably satisfactory to the Right Agent, providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation merger, sale or transfer
mentioned in Section 13(a), the Principal Party at its own expense shall:
(i) prepare and file a registration statement under the Securities Act with
respect to the New Rights and the securities purchasable upon exercise of the
New Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after such
filing and (B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the New Rights and the
securities purchasable upon exercise of the New Rights under the blue sky laws
of such jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the New Rights historical financial statements
for the Principal Party which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. The rights under this
Section 13 shall be in addition to the rights to exercise New Rights and
adjustments under Section 11(a)(ii) and shall survive any exercise thereof.
Section 14. Fractional New Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of New Rights or
to distribute Right Certificates which evidence fractional New Rights. In lieu
of such fractional New Rights, there shall be paid to the registered holders of
the Right Certificates with regard to which such fractional New Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole New Right. For the purposes of this Section
14(a), the current market value of a whole New Right shall be the closing price
of the New Rights for the Trading Day immediately prior to the date on which
such fractional New Rights would have been otherwise issuable. The closing price
for any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
26
trading on the principal national securities exchange on which the New Rights
are listed or admitted to trading or, if the New 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 New 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 New Rights selected by the Board. If on any
such date no such market maker is making a market in the New Rights, the fair
value of the New Rights on such date as determined in good faith by the Board
shall be used and be binding on the Rights Agent.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the New Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-hundredth of a Preferred Share).
Fractions of Preferred Shares in integral multiples of one one-hundredth of a
Preferred Share may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it; provided that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred
Shares represented by such depositary receipts. In lieu of fractional Preferred
Shares that are not integral multiples of one one-hundredth of a Preferred
Share, the Company shall pay to the registered holders of Right Certificates at
the time such New Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one Preferred Share.
For the purposes of this Section 14(b), the current market value of a Preferred
Share shall be the closing price of a Preferred Share (as determined pursuant to
the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) The holder of a New Right by the acceptance of the New Right expressly
waives his right to receive any fractional New Rights or any fractional shares
upon exercise of a New Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
27
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, on his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the New Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of New Rights, it is
specifically acknowledged that the holders of New Rights would not have an
adequate remedy at law for any breach of this Agreement and will be entitled to
specific performance of the obligations under, and injunctive relief against
actual or threatened violations of the obligations of any Person subject to,
this Agreement.
Section 16. Agreement of New Right Holders. Every holder of a New Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a New Right that:
(a) prior to the Distribution Date, the New Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the designated
office of the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer, with the forms of assignment and certificate set forth on the
reverse side thereof duly completed and executed, along with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably request;
(c) the Company and the Rights Agent may deem and treat the person in whose
name the Right Certificate (or, prior to the Distribution Date, the associated
Common Shares certificate) is registered as the absolute owner thereof and of
the New Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common Shares certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary; and
28
(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 New
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or order promulgated or enacted by
any governmental authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, that the Company shall use its reasonable
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the New Rights represented thereby, nor shall anything contained herein or in
any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the New Right or New Rights
evidenced by such Right Certificate shall have been exercised in accordance with
the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable compensation,
as set forth in the fee schedule of the Rights Agent or as otherwise agreed in
writing by the Company and Rights Agent from time to time, for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company agrees to indemnify the Rights Agent for,
and to 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 costs
and expenses of defending against any claim of liability in the premises and
29
reasonable attorneys' fees and expenses.
(b) The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
certificate for Preferred Shares or Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
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 stockholder services business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided, however, that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
30
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel of its selection (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 an "Acquiring Person" or the
determination of "current per share market price") be proved or established by
the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the President, any
Vice President or the Treasurer of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any other
Person only for its own 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 Right
Certificates (except as to its countersignature on such Right Certificates) or
be required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
31
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the New Rights (including
the New Rights becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the New Rights (including the manner, method or
amount thereof) provided for in Section 3, 11, 13, 23 or 24, or responsible for
the manner, method or amount of such adjustment or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of New Rights evidenced by Right Certificates after the
actual receipt by the Rights Agent of a certificate describing any such
adjustment furnished in accordance with 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 Preferred Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable; nor shall the Rights Agent be responsible for the legality of the
terms hereof in its capacity as an administrative agent.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President or the
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 by it in good faith in accordance with instructions of
any such officer. In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action taken
or omitted by it in connection with its administration of this Agreement in
reliance upon (i) the proper execution of the forms of certificate concerning
beneficial ownership appearing below the form of assignment and the form of
election to purchase on the reverse side of the form of Right Certificate
attached hereto as Exhibit B (the "Certificate"), unless the Rights Agent shall
have actual knowledge that, as executed, the Certificate is untrue or (ii) the
non-execution or failure to complete the Certificate, including, without
32
limitation, any refusal to honor any otherwise permissible assignment or
election by reason of such non-execution or failure.
(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the New Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the form of Certificate has either not been
completed or indicates an affirmative response to clause 1 and/or 2 thereof, the
Rights Agent shall not take any further action with respect to such requested
exercise or transfer without first consulting with and obtaining a signed
written direction from the Company, upon which written direction the Rights
Agent may conclusively rely.
(l) As provided in Section 20(a), the Rights Agent is also authorized to
apply for instructions to the executive officers of the Company specified
therein. An application by the Rights Agent for instructions may set forth in
writing any action proposed to be taken or omitted by the Rights Agent with
respect to its duties and obligations under this Agreement and the date on or
after which such action shall be taken, the Rights Agent shall not be liable for
any action taken or omitted in accordance with a proposal included in any such
33
application on or after the date specified therein (which date shall not be less
than three Business Days after the Company receives such application) without
the consent of the Company, unless prior to taking or omitting such action, the
Rights Agent has received written instructions in response to such application
specifying the actions to be taken or omitted.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares or Preferred Shares, by registered or certified mail, and
to the holders of the Right Certificates, by first-class mail, at the expense of
the Company. The Company may remove the Rights Agent or any successor Rights
Agent upon 30 days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common
Shares or Preferred Shares by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company, if Right Certificates have been issued at such time), the Company shall
become the Rights Agent and then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be (a) a corporation organized and doing business under the
laws of the United States or any state of the United States, in good standing,
which is authorized under such laws to exercise corporate trust powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million or (b) an affiliate of the corporation described
in Clause (a) of this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
34
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Shares or Preferred Shares, and mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the New Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing New Rights in such
form as may be approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 23. Redemption; Voiding, Termination.
(a) The Board may, at its option, at any time prior to the earlier of (i)
the Close of Business on the 10th day following the Shares Acquisition Date (or
such later date as the Board (only with the concurrence of a majority of the
Continuing Directors) may determine, provided that such determination is made
when the New Rights are redeemable) and (ii) the Final Expiration Date, redeem
all, but not less than all, the then outstanding New Rights at a redemption
price of $.01 per New Right, as such amount may be appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter referred to as the
"Redemption Price").
(b) The Company may, at its option, pay the Redemption Price either in
Common Shares (based on the "current per share market price", as defined in
Section 11(d) hereof, of the Common Shares at the time of redemption) or cash or
any other form of consideration deemed appropriate by the Board; provided,
however, that if the Company elects to pay the Redemption Price in Common
Shares, the Company shall not be required to issue any fractional Common Shares,
and the number of Common Shares issuable to each holder of New Rights shall be
rounded down to the next whole share.
(c) During the period commencing at the close of business on the 10th day
following the Shares Acquisition Date and terminating on the earlier of (i) the
35
occurrence of a Section 13 Event and (ii) the Final Expiration Date, the Board
may, at its option, redeem all, but not less than all, the then outstanding New
Rights at the Redemption Price, provided that (A) such redemption is effected in
connection with the approval by the Board (only with the concurrence of a
majority of the Continuing Directors), and the execution and delivery by the
Company of, an agreement providing for a merger, consolidation, sale or transfer
of all or substantially all of the assets of the Company or other business
combination, in each case which involves the Company, but does not involve an
Acquiring Person or an Affiliate or Associate of an Acquiring Person or any
other Person acting, directly or indirectly, on behalf of or in association with
any such Acquiring Person, Affiliate or Associate; and (B) such redemption is
approved the Board (only with the concurrence of a majority of the Continuing
Directors).
(d) If the redemption of the New Rights pursuant hereto is at the time
prohibited by the terms of any agreement for borrowed money to which the Company
is a party or otherwise bound and which was entered into before any Person
became an Acquiring person, then, in such event, the Board (with the concurrence
of a majority of the Continuing Directors) may, in lieu of redeeming the New
Rights as permitted by Section 23(a), declare them to be null and void, without
any payment or other obligation on the part of the Company to the holders of the
New Rights.
(e) Immediately upon the action of the Board ordering the redemption of the
New Rights or declaring them void, and without any further action and without
any notice, the right to exercise the New Rights will terminate and the only
right thereafter of the holders of New Rights shall be, in the case of
redemption, to receive the Redemption Price for each New 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. Within 10 days after such action of the
Board ordering the redemption of the New Rights or declaring them void, the
Company shall give notice of redemption or declaration to the Rights Agent and
all the holders of the then outstanding New Rights by mailing such notice to the
Rights Agent and all such holders at their last addresses as they appear upon
the registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Common Shares. 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 which relates to a redemption
36
will state the method by which the payment of the Redemption Price will be made.
Neither the Company nor any of its Affiliates or Associates may redeem, acquire
or purchase for value any New Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof, and other
than in connection with the purchase of Common Shares prior to the Distribution
Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any time
after any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable New Rights (which shall not include New Rights that
have become void pursuant to the provisions of Section 11(a)(ii) hereof) into
Common Shares at an exchange ratio of one Common Share per New Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Shares for or pursuant to the terms of
any such plan), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding, other than pursuant to a Permitted Transaction.
(b) Immediately upon the action of the Board ordering the exchange of any
New Rights pursuant to Section 24(a) and without any further action and without
any notice, the right to exercise such New Rights shall terminate and the only
right thereafter of a holder of such New Rights shall be to receive that number
of Common Shares equal to the number of such New 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
New Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of Common Shares for New
Rights will be effected and, in the event of any partial exchange, the number of
New Rights which will be exchanged. Any partial exchange shall be effected pro
rata based on the number of New Rights (other than New Rights which have become
void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder
of New Rights.
37
(c) In the event that the number of Common Shares which are authorized but
not outstanding or reserved for purposes other than the exercise of New Rights
is not sufficient to permit any exchange of New Rights as contemplated in
accordance with this Section 24, the Company shall take all such action as may
be necessary to authorize additional Common Shares for issuance upon exchange of
the New Rights. In the event the Company shall, after good faith effort, be
unable to take all such action as may be necessary to authorize such additional
Common Shares, the Company shall substitute, for each Common Share that would
otherwise be issuable upon exchange of a New Right, a number of Preferred Shares
or fraction thereof such that the current per share market price of one
Preferred Share multiplied by such number or fraction is equal to the current
per share market price of one Common Share as of the date of issuance of such
Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue fractions of Common Shares
or to distribute certificates which evidence fractional Common Shares. In lieu
of such fractional Common Shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
paragraph (d), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of its Preferred Shares or to make any other
distribution to the holders of its Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of its Preferred Shares
rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
38
effect any sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares), then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, or distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof shall occur,
then the Company shall as soon as practicable thereafter give to each holder of
a Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of New Rights under Section 11 (a)(ii)
hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by facsimile
transmission, confirmed by first-class mail, postage prepaid, or by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Artesyn Technologies, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: President
39
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by facsimile transmission, confirmed by first-class mail, postage
prepaid, or by first-class mail, postage-prepaid, addressed (until another
address is filed in writing with the Company) as follows:
The Bank of New York
000 Xxxxxxx Xxxxxx, 00 Xxxx
Xxxxx Transfer & Administration
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Vice President
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company may from time to time
supplement or amend this Agreement without the approval of any holders of Right
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein, which may be defective or inconsistent with any
other provisions herein, or (iii) or to make any other provisions with respect
to the New Rights which the Company may deem necessary or desirable, any such
supplement or amendment to be evidenced by a writing signed by the Company and
the Rights Agent; provided, however, that from and after such time as any Person
becomes an Acquiring Person, this Agreement may not be amended in any manner
which would adversely affect the interests of the holders of New Rights (other
than an Acquiring Person or an Affiliate or Associate thereof). Without limiting
the foregoing, the Company may at any time prior to such time as any Person
becomes an Acquiring Person amend this Agreement to lower the thresholds set
forth in the definition of "Acquiring Person" in Section l and the thresholds
set forth in Section 3(a) to not less than the greater of (A) the sum of .001%
and the largest percentage of the outstanding Common Shares then known by the
Company to be beneficially owned by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any entity holding Common Shares for or pursuant
to the terms of any such plan) and (B) 10%. Upon the delivery of a certificate
from an executive officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27, the
40
Rights Agent shall execute such supplement or amendment, provided that such
supplement or amendment does not adversely affect the rights or obligations of
the Rights Agent under Section 18 or Section 20 of this Agreement. Prior to the
Distribution Date, the interests of the holders of New Rights shall be deemed
coincident with the interests of the holders of Common Shares.
Section 28. Determinations, and Actions by the Board of Directors. The
Board (with, where specifically provided for herein, the concurrence of a
majority of the Continuing Directors) shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board, (with, where specifically provided for
herein, the concurrence of a majority of the Continuing Directors) or the
Company, or as may be necessary or advisable in connection with the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including, without limitation, a determination to redeem or not
redeem the New Rights or to amend the Agreement and whether any proposed
amendment adversely affects the interests of the holders of Right Certificates).
For all purposes of this Agreement, any calculation of the number of Common
Shares or other securities outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding Common
Shares or any other securities of which any Person is the Beneficial Owner,
shall be made in accordance with the provisions of the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding upon the Company, the
Rights Agent, the holders of the Right Certificates and all other parties, and
(y) not subject the Board or the Continuing Directors to any liability to the
holders of the Right Certificates.
Section 29. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall be binding upon
and inure to the benefit of such parties and their respective successors and
assigns.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
41
Date, registered holders of the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date,
registered holders of the Common Shares).
Section 31. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board
determines, in its good faith judgment, that severing the invalid language from
this Agreement would materially and adversely affect the purpose or effect of
this Agreement, the right of redemption (and of voiding) set forth in Section 23
hereof shall be reinstated and shall not expire until the close of business on
the 10th day following the date of such determination by the Board.
Section 32. Governing Law. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Florida and for all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made and performed
entirely within such State; provided, however, that with respect to the rights
and duties of the Rights Agent, the governing law shall be that of the State of
New York.
Section 33. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall for all purposes be deemed to be an original,
and all of which shall together constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only, and shall not
control or affect the meaning or interpretation of any of the provisions hereof.
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
ARTESYN TECHNOLOGIES, INC.
Attest:
By Xxxxxxx X. Xxxxxxxxxx By Xxxxxx X. X'Xxxxxxx
------------------------------ -------------------------------
Title: Assistant Secretary Title: President
Attest: THE BANK OF NEW YORK,
as Rights Agent
By Xxxxxxx Munnari By Xxxxx Xxxxxxxx
------------------------------ -------------------------------
Title: Assistant Vice President Title: Vice President
43
Exhibit A
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
ARTESYN TECHNOLOGIES, INC.
Pursuant to the provisions of the Florida Business Corporation
Act, Artesyn Technologies, Inc.
(the "Corporation") does hereby amend its
Articles of Incorporation
---------------------
1. The name of the Corporation is Artesyn Technologies, Inc.
2. Article III of the Articles of Incorporation of the Corporation, as
heretofore amended, relating to the authorized shares of the Corporation,
provides, that the authorized preferred stock, par value $.01 per share
("Preferred Stock"), of the Corporation may be issued from time to time in one
or more series with such distinctive designations as may be stated in a
resolution providing for the issue of such stock adopted by the Board of
Directors of the Corporation (the "Board"). The Board, on October 22, 1998
adopted the following resolution creating a Series A Junior Participating
Preferred Stock:
"RESOLVED, that pursuant to authority conferred upon the Board
of Directors (the "Board) of the Corporation by its Articles of
Incorporation, a series of preferred stock, par value $.01 per share
("Preferred Stock"), of the Corporation is hereby created, and the
designation and amount thereof and the voting powers, preferences and
relative, participating, optional or other special rights of the shares
of such series, and the qualifications, limitations or restrictions
thereof, are as follows:
Section 1. Designation and Number of Shares. The shares of such
series shall be designated as "Series A Junior Participating Preferred
Stock" ("Series A Preferred Stock"). The number of shares initially
constituting the Series A Stock shall be 451,376; provided, however,
A-1
that, if more than a total of 451,376 shares of Series A Preferred
Stock shall be at any time issuable upon the exercise of the preferred
share purchase rights (the "Rights") issued pursuant to the Amended and
Restated Rights Agreement, dated as of November 21, 1998, between the
Corporation and The Bank of New York, as Rights Agent, as amended from
time to time (the "Rights Agreement"), the Board, by resolution, shall
direct that articles of amendment be properly executed on behalf of the
Corporation and filed with the Florida Department of State to provide
for the total number of shares of Series A Preferred Stock authorized
to be issued to be increased (to the extent that the Articles of
Incorporation then permits) to the largest number of whole shares
(rounded up to the nearest whole number) then issuable upon exercise of
such Rights; and provided further that such number of shares may be
decreased by resolution of the Board (which decrease shall be effected
by articles of amendment properly executed and filed with the Florida
Department of State), but no such decrease shall reduce the number of
shares of Series A Preferred Stock to a number of shares less than the
number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by
the Corporation convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(a) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and
superior to the Series A Preferred Stock with respect to dividends, the
holders of shares of Series A Preferred Stock, in preference to the
holders of Common Stock and of any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends
payable in cash on the first day of March, June, September and December
in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share
of Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (i) $1.00 or (ii) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate
per share amount of all cash dividends, and 100 times the aggregate per
share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by
A-2
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Preferred Stock. In the
event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then, in each such case, the amount to which
holders of shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (ii) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event, and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (a) of this
Section 2 immediately after it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1.00 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date for
the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but
A-3
unpaid dividends shall not bear interest. Dividends paid on the shares
of Series A Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon,
which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event, and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(b) Except as otherwise provided herein or in any other articles
of amendment creating a series of Preferred Stock or any similar stock
or by law, the holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one
class on all matters submitted to a vote of stockholders of the
Corporation.
(c) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
A-4
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Series
A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock ranking
on a parity with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board) to all holders of such shares upon such terms as the
Board, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
A-5
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
this Section 4(a), purchase or otherwise acquire such shares at such
time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall, be retired and cancelled promptly after the
acquisition thereof. All such shares shall, upon their cancellation,
become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth herein, in the
Articles of Incorporation or in any other articles of amendment
creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Preferred Stock unless, prior thereto,
the holders of shares of Series A Preferred Stock shall have received
an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment, plus an
amount equal to the greater of $100 per share or an aggregate amount
per share equal to 100 times the aggregate amount to be distributed per
share to holders of shares of Common Stock, or (2) to the holders of
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred
Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up; provided, however, that in the
event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then, in each such case, the aggregate amount
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
A-6
amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event, and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property,
then, in any such case, each share of Series A Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per
share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into
which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event, and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock
shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, junior to all other series of the
Corporation's Preferred Stock.
Section 10. The Articles of Incorporation of the Corporation, as
amended hereby, shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of
the Series A Preferred Stock so as to affect them adversely without the
A-7
affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series A Preferred Stock, voting together as a
single class."
3. The amendment was duly adopted by the Board on October 22, 1998 without
shareholder action and shareholder action was not required for the adoption of
such amendment.
Executed on December 22, 1998
ARTESYN TECHNOLOGIES, INC.
By _______________________
Xxxxxxx X. Xxxxxxxx
Vice President-Finance
and Secretary
A-8
Exhibit B
Form of Right Certificate
Certificate No. R- Rights
NOT EXERCISABLE AFTER NOVEMBER 21, 2008 OR EARLIER IF REDEEMED OR
VOIDED BY THE COMPANY OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT THE OPTION OF THE COMPANY AT $.01 PER RIGHT, TO EXCHANGE
AND MAYBE DECLARED BY THE COMPANY TO BE VOID UPON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN
THE RIGHTS AGREEMENT, RIGHTS ISSUED TO ANY PERSON WHO BECOMES AN
"ACQUIRING PERSON" (AS DEFINED IN THE RIGHTS AGREEMENT) MAY BECOME
NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE
OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS PRESENTED HEREBY MAY BECOME NULL AND VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(E) OF THE RIGHTS
AGREEMENT.]*
Right Certificate
This certifies that __________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Amended and Restated Rights Agreement dated as of November 21, 1998 (as amended
from time to time, the "Rights Agreement") between Artesyn Technologies, Inc. a
Florida corporation (the "Company"), and The Bank of New York, as rights agent
(the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
the earlier of (i) 5:00 P.M., New York, New York time, on December 22, 2008, and
(ii) the time at which the Rights are redeemed or exchanged (as defined below)
or declared void by the Company, at the principal office of the Rights Agent, or
at the office of its successor as Rights Agent, one one-hundredth of a fully
paid nonassessable share of Series A Junior Participating Preferred Stock, par
value $.01 per share (the "Preferred Shares"), of the Company, at a purchase
price of $95 per one one-hundredth of a Preferred Share (the "Purchase Price"),
upon presentation and surrender of this Right Certificate with the Form of
Election to Purchase and the form of Certificate set forth on the reverse side
duly executed. The number of Rights evidenced by this Right Certificate (and the
--------
* This portion of the legend in brackets shall be inserted only if
applicable, and shall replace the preceding sentence.
B-1
number of one one-hundredths of a Preferred Share which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of November 21, 1998, based upon the Preferred
Shares as constituted at such date. As provided in the Rights Agreement, the
Purchase Price and the number of one one-hundredths of a Preferred Share which
may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events. The Purchase Price shall be paid in cash or by certified check
or bank draft payable to the order of the Company.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, duly executed and
completed along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right, payable in cash or the Company's Common Stock, par value $.001
per share (the "Common Stock"), or (ii) may be exchanged in whole or in part for
Common Stock. No fractional Preferred Shares will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredths of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
B-2
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of , .
ATTEST: ARTESYN TECHNOLOGIES, INC.
By By _____________________
Title:
Countersigned (dated )
THE BANK OF NEW YORK
as Rights Agent
By __________________________
Authorized Signatory
B-3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED, __________________________________________________
hereby sells, assigns and transfers unto ______________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________________ Attorney,
to transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _____________, _____ _________________________
Signature
Signature Guaranteed (by a
firm of The New York Stock
Exchange or a commercial bank
or trust company having an office
or correspondent in New York City):
Certificate
The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate [ ] are [ ] are not being sold, assigned or transferred by or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement) and (2)
after due inquiry and to the best knowledge of the undersigned, the undersigned
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is or was an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement).
Dated ______________, _____ _________________________
Signature
Signature Guaranteed
(by a member firm of
The New York Stock Exchange
or a commercial bank or trust
company having an office or
correspondent in New York City):
B-4
Form of Reverse Side of Right Certificate (continued)
FORM OF ELECTION TO PURCHASE
(To be executed if bolder desires to exercise
Rights represented by the Right Certificate.)
To: Artesyn Technologies, Inc.
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Please insert social security or other identifying number:
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Please insert social security or other identifying number:
--------------------------------------------------------------------------------
Dated: ______________, _____ _________________________
Signature
Signature Guaranteed (by member
firm of The New York Stock
Exchange or a commercial or
trust company having an
office or correspondent
in New York City):
B-5
Certificate
The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate [ ] are [ ] are not being sold, assigned or transferred by or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement) and (2)
after due inquiry and to the best knowledge of the undersigned, the undersigned
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is or was an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement).
Dated: ______________, _____ _________________________
Signature
Signature Guaranteed (by a
member firm of The New York
Stock Exchange or a commercial
bank or trust company having
an office or correspondent
in New York City):
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the form of Certificate set forth below the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement), and such
Assignment or Election to Purchase will not be honored.
B-6
Exhibit C
ARTESYN TECHNOLOGIES, INC.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
In November 1988, to preserve the long term value for the stockholders
of Artesyn Technologies, Inc. (the "Company") in case of a proposed takeover of
the Company, the Company distributed to holders of its common stock, par value
$.01 per share, ("Common Shares"), one common stock purchase right
(collectively, the "Old Rights") for each Common Share of the Company
outstanding on November 21, 1988 (the "Old Record Date") and in respect of each
Common Share issued after the Old Record Date and prior to close of business on
November 21, 1998, entitling the registered holder thereof to purchase one
Common Share of the Company.
Considering that the Old Rights expire at the close of business on
November 21, 1998, and desiring to continue to preserve long term value for the
Company's stockholders in case of an attempted takeover of the Company, the
Board of Directors (the "Board") of the Company has declared a dividend of one
preferred share purchase right (each a "New Right" and collectively, the "New
Rights") for each outstanding Common Share, of the Company. The dividend is
payable to holders of record of Common Shares as of the close of business on
December 22, 1998 (the "Record Date"). Each New Right entitles the registered
holder to purchase from the Company one one-hundredth of a share of Series A
Junior Participating Preferred Stock, par value $.01 per share (the "Preferred
Shares"), of the Company at a price of $95 per one one-hundredth of a Preferred
Share (the "Purchase Price"), subject to adjustment in certain circumstances.
Each Preferred Share is designed to be the economic equivalent of 100 Common
Shares. The description and terms of the New Rights are set forth in an Amended
and Restated Rights Agreement (the "Rights Agreement") between the Company and
The Bank of New York (the "Rights Agent"), which Rights Agreement amends and
restates in its entirety the original Rights Agreement between the Company and
the Rights Agent dated as of November 9, 1988 pertaining to the Old Rights.
Detachment and Transfer of New Rights
Until the earlier to occur of (i) 10 days following the first date of
public announcement ("Shares Acquisition Date") that a person or group of
affiliated or associated persons have acquired beneficial ownership of 20% or
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more of the outstanding Common Shares (an "Acquiring Person") or (ii) 10
business days (or such later date as the Board may determine prior to such time
as any person or group of affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a tender
offer or exchange offer which would result in the beneficial ownership by a
person or group of 30% or more of the outstanding Common Shares (the earlier of
such dates being called the "Distribution Date"), the New Rights will be
evidenced, with respect to any of the Common Share certificates outstanding as
of the Record Date, by such Common Share certificates.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption, voiding, exchange or expiration of the New Rights), the New
Rights will be transferable with, and only with, the Common Shares. Until the
Distribution Date (or earlier redemption, voiding or expiration of the New
Rights), new Common Share certificates issued after the Record Date upon
transfer or new issuance of Common Shares will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
redemption, voiding or expiration of the New Rights), the surrender for transfer
of any certificates for Common Shares outstanding as of the Record Date (even
without such notation or a copy of this Summary of Rights being attached
thereto) will also constitute the transfer of the New Rights associated with the
Common Shares represented by such certificate for Common Shares. As soon as
practicable following the Distribution Date, separate certificates evidencing
the New Rights ("Right Certificates") will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the New Rights.
Exercisability of New Rights
The New Rights are not exercisable until the Distribution Date. The New
Rights will expire on December 22, 2008 (the "Final Expiration Date"), unless
the Final Expiration Date is extended or unless the New Rights are earlier
redeemed, voided or exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the New Rights are subject to
adjustment from time to time to prevent dilution. The number of outstanding New
Rights and the number of one-hundredths of a Preferred Share issuable upon
exercise of each New Right are also subject to adjustment in the event of a
stock split of the Common Shares or a stock dividend on the Common Shares
payable in Common Shares or combinations of the Common Shares occurring, in any
such case, prior to the Distribution Date. With certain exceptions, no
adjustment of the Purchase Price will be required until cumulative adjustments
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require an adjustment of at least 1% in such Purchase Price. No fractional
Preferred Shares will be issued (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Shares on the last trading day prior to the date of exercise. Until a New Right
is exercised, the holder thereof, as such, will have no rights as a stockholder
of the Company, including, without limitation, the right to vote or to receive
dividends.
Terms of Preferred Shares
Preferred Shares purchasable upon exercise of the New Rights will not
be redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each Preferred
Share will have 100 votes, voting together with the Common Shares. Finally, in
the event of any merger, consolidation or other transaction in which Common
Shares are exchanged, each Preferred Share will be entitled to receive 100 times
the amount received per Common Share. Because of the nature of the Preferred
Shares' dividend, liquidation and voting rights, the value of the one-hundredth
interest in a Preferred Share purchasable upon exercise of each Right should
approximate the value of one Common Share. The Preferred Shares would rank
junior to any other series of the Company's preferred stock.
Certain Triggering Events
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision shall be made so that each
holder of a New Right (other than New Rights beneficially owned by the Acquiring
Person or its affiliate, associate or transferee, which will thereafter be void)
will thereafter have the right to receive upon exercise, that number of Common
Shares having a market value of two times the exercise price of the New Right.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after a person or group has become an Acquiring Person in a
transaction with such Acquiring Person or group, proper provision will be made
so that each holder of a New Right will thereafter have the right to receive,
upon the exercise thereof at the then current exercise price of the New Right,
C-3
that number of shares of common stock of the acquiring company which at the time
of such transaction will have a market value of two times the exercise price of
the Right. In each case, there are exceptions for transactions that have
received the prior approval of the Board of Directors.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board may exchange the New Rights (other than New
Rights owned by the Acquiring Person, which will have become void), in whole or
in part, at an exchange ratio of one Common Share, or one one-hundredth of a
Preferred Share (or of a share of a class or series of the Company's preferred
stock having equivalent rights, preferences and privileges), per New Right
(subject to adjustment).
Redemption and Exchange of New Rights
At any time until 10 days following the Shares Acquisition Date (or
such later date as the Board, only with the concurrence of a majority of the
Continuing Directors, may determine), the Company may redeem the New Rights in
whole, but not in part, at a price of $.01 per Right. In addition, in the event
that such redemption is then prohibited by an agreement for borrowed money to
which the Company is a party and which was entered into before any Person became
an Acquiring Person, the Board, only with the concurrence of a majority of the
Continuing Directors, may declare the New Rights to be null and void, without
any payment to holders of New Rights. The New Rights may also be redeemed,
subject to certain conditions, in connection with the approval by the Board
(only with the concurrence of a majority of the Continuing Directors) of an
agreement providing for any merger, consolidation or sale or transfer of all or
substantially all of the assets of the Company, or other business combination,
in each case which involves the Company, but does not involve an Acquiring
Person or any Affiliate or Associate of an Acquiring Person. Immediately upon
such action of the Board with, where required, the concurrence of a majority of
the Continuing Directors, the New Rights will terminate and the only right of
the holders of New Rights will be to receive $.01 per Right, if the New Rights
are redeemed (rather than declared to be null and void). The Company may, at its
option, pay the redemption price in cash, Common Shares or any other appropriate
form of consideration.
The term "Continuing Director" means any member of the Board who was a
member prior to the date of the Rights Agreement, and any person who is
subsequently elected to the Board if such person is recommended or approved by a
majority of the Continuing Directors, but shall not include an Acquiring Person,
or an Affiliate or Associate of any Acquiring Person, or any representative or
nominee of any of the foregoing entities.
C-4
At any time after any person or group of affiliated or associated
persons becomes an Acquiring Person and prior to the acquisition by such person
or group of 50% or more of the outstanding Common Shares, the Board may exchange
the New Rights (other than New Rights owned by such person or group which will
have become void), in whole or in part, at an exchange ratio of one Common
Share, or, under circumstances set forth in the Rights Agreement, cash, property
or other securities of the Company, including fractions of a Preferred Share (or
of a share of a class or series of the Company's preferred stock having
equivalent designations and the powers, preferences and rights, and the
qualifications, limitations and restrictions), per New Right (with value equal
to such Common Shares).
Amendment of New Rights
The terms of the New Rights may be amended by the Board without the
consent of the holders of the New Rights, including an amendment to lower
certain thresholds described above to not less than the greater of (i) the sum
of.001% and the largest percentage of the outstanding Common Shares then known
to the Company to be beneficially owned by any person or group of affiliated or
associated persons and (ii) 10%, except that from and after such time as any
person or group of affiliated or associated persons becomes an Acquiring Person
no such amendment may adversely affect the interests of the holders of the New
Rights.
Additional Information
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the New Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, as further
amended from time to time, which is hereby incorporated herein by reference.
C-5
