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EXHIBIT 2
RIGHTS AGREEMENT
This Agreement, dated as of March 24, 1998, is between PERCEPTRON,
INC., a Michigan corporation (the "Company"), and AMERICAN STOCK TRANSFER &
TRUST COMPANY (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend distribution (the "Distribution") of one Right for each
outstanding share of the Common Stock, $0.01 par value, of the Company
outstanding on April 6, 1998 (the "Record Date") and has authorized the issuance
of one Right in respect of each share of Common Stock of the Company issued
between April 6, 1998 and the earlier of the Distribution Date, the Expiration
Date or the Final Expiration Date (as such terms are hereinafter defined), and
under certain other circumstances, each Right initially representing the right
to purchase one one-hundredth of a share of Series A Preferred Stock of the
Company having the rights, powers and preferences set forth in the Articles of
Amendment attached hereto as Exhibit A, upon the terms and subject to the
conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as
such term is hereinafter defined) and Associates (as such term is
hereinafter defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of securities of the Company
constituting a Substantial Block (as such term is hereinafter defined),
but shall not include the Company or any subsidiary of the Company, or
any employee benefit plan of the Company or of any subsidiary of the
Company, or any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan; provided,
further, if the Board of Directors (with the concurrence of a majority
of the Continuing Directors) determines in good faith that a Person who
would otherwise be an "Acquiring Person" has become such inadvertently
(including, without limitation, because (i) such Person was unaware
that he or it beneficially owned a percentage of Common Stock that
would otherwise cause such Person to be an "Acquiring Person" or (ii)
such Person was aware of the extent of his or its Beneficial Ownership
but had no actual knowledge of the consequences of such Beneficial
Ownership under this Agreement) and without any intention of changing
or influencing control of the Company, and if such Person as promptly
as practicable has divested or divests himself or itself of Beneficial
Ownership of a sufficient number of shares of Common Stock so that such
Person would no longer be an "Acquiring Person," then such Person shall
not be deemed to be or to have become an "Acquiring Person" for any
purposes of this
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Agreement; and provided, further, that no Person shall be deemed to be
an "Acquiring Person" on account of Common Stock of the Company
beneficially owned by such Person as of the time the adoption of this
Agreement is first publicly announced unless after such announcement
such Person shall become the Beneficial Owner of any additional shares
of Common Stock. Notwithstanding the foregoing, no Person shall become
an "Acquiring Person" as the result of an acquisition of Common Stock
by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such
Person to 15% or more of the Common Stock then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of 15% or
more of the Common Stock 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 shares of Common Stock,
then such Person shall be deemed to be an "Acquiring Person."
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, shall
have "Beneficial Ownership" of and shall be deemed to "beneficially
own" any securities:
(i) which such Person, or any of such Person's Affiliates
or Associates, beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (A) the right to
acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or
upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the "Beneficial Owner" of,
to have "Beneficial Ownership" of, or to "beneficially own,"
(1) 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 (2) securities issuable
upon exercise of Rights at any time prior to the occurrence of
a Triggering Event or (3) securities issuable upon exercise of
Rights from and after the occurrence of a Triggering Event,
which Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the Distribution
Date or pursuant to Section 3(a) hereof ("Original Rights") or
pursuant to Section 11(i) or Section 22 hereof in connection
with an adjustment made with respect to Original Rights; or
(B) the right to vote or dispose of, pursuant to any
agreement, arrangement or understanding (whether or not in
writing); provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, to have "Beneficial Ownership" of,
or to "beneficially own," any security under this clause
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(B) if the agreement, arrangement or understanding to vote
such security (1) arises solely from a revocable proxy given
in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not then reportable
by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) 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 (whether or not in writing) for
the purpose of acquiring, holding, voting (except pursuant to
a revocable proxy as described in clause (B) of subparagraph
(ii) of this paragraph (c)) or disposing of any securities of
the Company; provided, however, that nothing in this paragraph
(c) shall cause a person engaged in business as an underwriter
of securities to be the "Beneficial Owner" of, to have
"Beneficial Ownership" of, or to "beneficially own," any
securities acquired through such person's participation in
good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
Notwithstanding anything in this definition to the contrary,
the phrase "then outstanding," when used with reference
hereto, shall mean the number of such securi ties then issued
and outstanding together with the number of such securities
not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of Michigan
or the State of New York are authorized or obligated by law or
executive order to close.
(e) "Close of business" on any given date shall mean 5:00
P.M., Detroit, Michigan time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., Detroit,
Michigan time, on the next succeeding Business Day.
(f) "Common Stock" when used with reference to the Company
shall mean the Common Stock, $0.01 par value, of the Company, and when
used with reference to any Person other than the Company shall mean the
capital stock (or equity interest) with the greatest voting power, or
the equity securities or other equity interest having power to control
or direct the management, of such Person or, if such other Person is a
subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person.
(g) "Continuing Director" shall mean any member of the Board
of Directors of the Company, 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 director, officer, representative or nominee
of an Acquiring Person or of any such Affiliate or Associate and who
either (i) was
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a member of the Board prior to the Shares Acquisition Date, or (ii)
subsequently became a member of the Board and whose nomination for
election or election thereto was recommended or approved by a majority
of the Continuing Directors then on the Board.
(h) "Continuing Directors" shall mean two or more Continuing
Directors. All approvals or concurrences by the Continuing Directors
shall require the approval or concurrence of two or more Continuing
Directors.
(i) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(j) "Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(k) "Final Expiration Date" shall have the meaning set forth
in Section 7 hereof.
(l) "Nasdaq Stock Market" shall mean the stock market operated
by The Nasdaq Stock Market, Inc.
(m) "Permitted Offer" shall have the meaning set forth in
Section 11(a)(ii)(B)(2) hereof.
(n) "Person" shall mean any individual, firm, corporation or
other entity and shall include any successor (by merger or otherwise)
of such entity.
(o) "Preferred Stock" shall mean shares of Series A Preferred
Stock, no par value, of the Company.
(p) "Shares Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such.
(q) "Subsidiary" or "subsidiary" of any Person shall mean any
corporation or other entity of which a majority of the voting power of
the voting equity securities or equity interest is owned, directly or
indirectly, by such Person.
(r) "Substantial Block" shall mean a number of shares of the
Common Stock which equals or exceeds 15% of the number of shares of the
Common Stock then outstanding.
(s) "Triggering Event" shall mean any event described in
Section 11(a)(ii)(A), (B) or (C) or Section 13(a).
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof shall prior to the Distribution Date
also be the holders of the Common Stock) in
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accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the earlier of (i)
the tenth business day after the Shares Acquisition Date (or, if the tenth day
after the Shares Acquisition Date occurs before the Record Date, the close of
business on the Record Date) (or, if such Shares Acquisition Date results from
the consummation of a Permitted Offer, such later date as may be determined
before the Distribution Date by action of the Board of Directors, with the
concurrence of a majority of the Continuing Directors, as provided in the next
sentence) or (ii) the tenth business day (or such later date as may be
determined by action of the Board of Directors, with the concurrence of a
majority of the Continuing Directors, prior to such time as any Person becomes
an Acquiring Person) after the date of the commencement of, or first public
announcement of the intent to commence, by any Person (other than the Company,
any subsidiary of the Company, or any employee benefit plan of the Company or of
any subsidiary of the Company or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan), a
tender or exchange offer if, upon consummation thereof, such Person would be an
Acquiring Person, other than a tender or exchange offer that is determined
before the Distribution Date to be a Permitted Offer, (including any such date
which is after the date of this Agreement and prior to the issuance of the
Rights; the earlier of the dates in subsections (i) and (ii) hereof being herein
referred to as the "Distribution Date"), (A) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for the Common Stock shall be deemed also to be
Right Certificates) and not by separate Right Certificates, and (B) the right to
receive Right Certificates will be transferable only in connection with the
transfer of the Common Stock. The Board of Directors of the Company may, to the
extent set forth in the preceding sentence, defer the date set forth in clause
(i) or (ii) of the preceding sentence to a specified later date or to an
unspecified later date to be determined by a subsequent action or event (but in
no event to a date later than the close of business on the tenth day after the
first occurrence of a Triggering Event). As soon as practicable after the
Distribution Date, the Rights Agent will send, by first-class, insured, postage
prepaid mail, to each record holder of the Common Stock as of the close of
business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the form of
Exhibit B hereto, evidencing one Right for each share of the Common Stock so
held. As of the Distribution Date, the Rights will be evidenced solely by such
Right Certificates. The Company will notify the Rights Agent promptly of the
Distribution Date.
(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 Stock, in
substantially the form attached hereto as Exhibit C (the "Summary of Rights"),
by first-class, postage prepaid mail, to each record holder of the Common Stock
as of the close of business on the Record Date, at the address of such holder
shown on the records of the Company. With respect to certificates for the Common
Stock outstanding as of the Record Date, until the Distribution Date, the Rights
will be evidenced by such certificates for the Common Stock registered in the
names of the holders of the Common Stock.
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Until the Distribution Date (or earlier redemption, exchange or expiration of
the Rights), the surrender for transfer of any of the certificates for the
Common Stock outstanding on the Record Date, shall also constitute the transfer
of the Rights associated with the Common Stock represented by such certificate.
(c) Rights shall be issued in respect of all shares of Common Stock
issued after the Record Date but prior to the earlier of the Distribution Date,
the Expiration Date or the Final Expiration Date (as such terms are defined in
Section 7). Certificates representing such shares of Common Stock shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Perceptron,
Inc. and American Stock Transfer & Trust Company, Rights Agent, dated
as of March 24, 1998 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of Perceptron, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
by this certificate. Perceptron, Inc. will mail to the holder of this
certifi cate a copy of the Rights Agreement (as in effect on the date
of mailing) without charge promptly after receipt of a written request
therefor. Under certain circumstances, Rights which are or were
beneficially owned by Acquiring Persons or their Affiliates or
Associates (as such terms are defined in the Rights Agreement) and any
subsequent holder of such Rights may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate. In the event that the Company purchases or acquires any shares of
the Common Stock after the Record Date but prior to the Distribution Date, any
Rights associated with such shares of the Common Stock shall be deemed cancelled
and retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Stock which is no longer outstanding.
SECTION 4. FORM OF RIGHT CERTIFICATES. (a) The Right Certificates (and
the forms of election to purchase shares and of assignment 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 Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 22 hereof, the Right Certificates, whenever issued, shall
be dated as of the Record Date, and on their face shall entitle the holders
thereof to purchase such number of one one-hundredths of a share of the
Preferred Stock as shall be set forth
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therein at the price per share set forth therein (the "Purchase Price"), but the
amount and type of securities and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Notwithstanding any other provision of this Agreement, any Right
Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents
Rights beneficially owned by (i) an Acquiring Person or any Associate or
Affiliate thereof, (ii) on or after the Distribution Date by any Person who
subsequently becomes an Acquiring Person (or an Affiliate or Associate of an
Acquiring Person), (iii) by a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iv) by 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 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 any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company (with the concurrence of a majority of the Continuing Directors)
has determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(e) hereof, any Right
Certificate issued at any time to any nominee of such Acquiring Person,
Associate or Affiliate, and any Right Certificate issued pursuant to Section 6
or Section 11 upon transfer, exchange, replacement or adjustment of any other
Right Certificate referred to in this sentence, shall contain 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 an Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Right Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of the Rights Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. The Right Certificates
shall be executed on behalf of the Company in the manner provided in the By-Laws
of the Company for Common Stock Certificates. 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 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 principal 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
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number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES, MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. Subject
to the provisions of Section 4(b), Section 7(e), Section 14 and Section 27
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 Expiration Date or the
Final Expiration Date, any Right Certificate or Certificates (other than Rights
Certificates representing Rights that have become void pursuant to Section 7(e)
hereof or that have been exchanged pursuant to Section 27 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 share of Preferred Stock (or, following a Triggering
Event, Common Stock, other securities, cash or other assets, as the case may be)
as the Right Certificate or Right Certificates surrendered then entitled such
holder (or former holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right Certificate
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Right Certificate or Right Certificates to be transferred, split
up, combined or exchanged at the principal office of the Rights Agent for such
purpose. Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights 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 shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e), Section 14 and Section 27
hereof, countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment 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.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) Subject to Section 7(e) and Section 27 hereof, the registered holder
of any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at the principal office of the Rights Agent, together with payment of the
aggregate Purchase Price with
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respect to the total number of one one-hundredths of a share of Preferred Stock
(or other securities or property, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the close of business on
the earlier of (i) March 23, 2008 (the "Final Expiration Date"), (ii) the date
on which the Rights are redeemed as provided in Section 23, (iii) the time at
which such Rights are exchanged as provided in Section 27 hereof or (iv) the
time at which the Rights expire pursuant to Section 13(d) hereof (the earliest
of (ii), (iii) or (iv) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $135.00,
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment of the Purchase Price per one one-hundredth of a share of
Preferred Stock (or other shares, securities or property, as the case may be) to
be purchased and an amount equal to any applicable transfer tax in cash, or by
certified check or bank draft payable to the order of the Company, the Rights
Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) requisition
from any transfer agent of the Preferred Stock of the Company certificates for
the total number of one one-hundredths of a share of Preferred Stock to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, (ii) if the Company shall have elected to deposit
the total number of shares of Preferred Stock issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a share of
Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will direct the
depositary agent to comply with such request, (iii) when appropriate,
requisition from any transfer agent of the Common Stock of the Company
certificates for the total number of shares of Common Stock to be paid in
accordance with Section 11(a)(ii), 11(a)(iii) and Section 27, (iv) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14, (v) promptly
after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (vi) when appropriate, after receipt, promptly deliver such cash to
or upon the order of the registered holder of such Right Certificate. In the
event that the Company is obligated to issue securities, distribute property or
pay cash pursuant to Section 11(a)(iii) hereof, the Company will make all
arrangements necessary so that cash, property or securities are available for
issuance, distribution or payment by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14 hereof.
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(e) Notwithstanding anything in this Agreement to the contrary, any
Rights that are or were at any time on or after the earlier of the Distribution
Date or the Shares Acquisition Date beneficially owned by (i) an Acquiring
Person 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 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 any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company (with the
concurrence of 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 upon the
occurrence of a Triggering Event and no holder of such Rights shall have any
right with respect to such Rights under any provision of this Agreement from and
after the occurrence of a Triggering Event. No Rights Certificate shall be
issued pursuant to Section 3 that represents Rights beneficially owned by an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
or any Associate, Affiliate or transferee thereof whose Rights would be void
pursuant to the preceding sentence; no Rights Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person whose Rights would
be void pursuant to the preceding sentence or any Associate, Affiliate or
transferee thereof whose Rights would be void pursuant to the preceding sentence
or to any nominee of such Acquiring Person, Associate, Affiliate or transferee;
and any Rights Certificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
shall be cancelled. 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 Rights 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
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 certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in 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 Agreement. The Company shall deliver to the Rights
Agent for cancellation
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and retirement, and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF SHARES OF CAPITAL
STOCK. (a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred Stock
(and will use its best efforts, following the occurrence of a Triggering Event,
out of its authorized and unissued shares of Common Stock or its authorized and
issued Common Stock held in its treasury and/or other securities), the number of
shares of Preferred Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) that, as provided in this Agreement, will
be sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities) issuable
and deliverable upon the exercise of Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the first occurrence of a Triggering Event, a registration
statement under the Securities Act of 1933 (the "Act"), with respect to the
Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the date of the expiration of the Rights. The
Company will also take such action as may be appropriate under the blue sky laws
of the various states. The Company, by resolution of its Board of Directors
(which resolution shall be effective only with the concurrence of a majority of
the Continuing Directors), may temporarily suspend, for a period of time not to
exceed ninety (90) days, the exercisability of the Rights in order to prepare
and file such registration statement. Upon any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement and notice to
the Rights Agent at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all one one-hundredths of a share of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.
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(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any one one-hundredths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) upon the exercise of Rights. The Company
shall not, however, be required (i) to pay any transfer tax which may be payable
in respect of any transfer involved in the transfer or delivery of Right
Certificates or the issuance or delivery of certificates for the one
one-hundredths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered
holder of the Right Certificate evidencing Rights surrendered for exercise or
(ii) to issue or deliver any certificates for a number of one one-hundredths of
a share of Preferred Stock upon the exercise of any Rights until any such tax
shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
SECTION 10. PREFERRED STOCK RECORD DATE. Each person in whose name any
certificate for a number of one one-hundredths of a share of Preferred Stock (or
shares of Common Stock and/or other securities, as the case may be) is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such fractional shares of Preferred Stock (or shares of
Common Stock and/or other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a shareholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number of shares covered by each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a)(i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of the Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares or (D) issue any shares of its capital stock
in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), except as otherwise
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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 Preferred Stock
or capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive the aggregate number and
kind of shares of Preferred Stock or capital stock, as the case may be,
which, if such Right had been exercised immediately prior to such date
and at a time when the Preferred Stock 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
reclassifi cation. If an event occurs which would require an adjustment
under both Section 11(a)(i) and Section 11(a)(ii), the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to any adjustment required pursuant to Section
11(a)(ii).
(ii) Subject to Section 27 of this Agreement, in the event:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date
of this Agreement, directly or indirectly, (1) shall merge
into the Company or otherwise combine with the Company, the
Company shall be the continuing or surviving corporation of
such merger or combination, and the Common Stock of the
Company shall remain outstanding, (2) shall merge, consolidate
or otherwise combine with any Subsidiary of the Company
(except in a transaction complying with the conditions of
Section 13(d) of this Agreement), (3) shall, in one or more
transactions, transfer any assets to the Company or any of its
Subsidiaries in exchange (in whole or in part) for shares of
the capital stock of the Company or any of its Subsidiaries or
for securities exercisable for or convertible into shares of
the capital stock of the Company or any of its Subsidiaries or
otherwise obtain from the Company or any of its Subsidiaries,
with or without consideration, any additional shares of the
capital stock of the Company or any of its Subsidiaries or
securities exercisable for or convertible into shares of the
capital stock of the Company or any of its Subsidiaries (other
than as part of a pro rata distribution to all holders of the
Common Stock of the Company or any of its Subsidiaries), (4)
shall sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise dispose (in one transaction or a series
of transactions), to, from or with the Company or any of the
Company's Subsidiaries, assets on terms and conditions less
favorable to the Company than the Company would be able to
obtain through arm's-length negotiation with an unaffiliated
third party, other than a transaction set forth in Section
13(a) hereof, (5) shall receive any compensation from the
Company or any of the Company's Subsidiaries other than
compensation for full-time employment as a regular employee at
rates in accordance with the Company's (or its subsidiaries')
past practices, or (6) shall receive a direct or indirect
benefit (except proportionately as a stockholder), of any
loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantage provided
by the Company or any of its Subsidiaries, or
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(B) 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 Person or
entity organized, appointed or established by the Company for
or pursuant to the terms of any such plan), alone or together
with its Affiliates and Associates, shall become the
Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding, unless the event causing the 15% threshold
to be crossed (1) is a transaction set forth in Section 13(a)
hereof, or (2) is an acquisition of shares of Common Stock
pursuant to a tender offer or an exchange offer for all
outstanding shares of Common Stock at a price and on terms
determined by a majority of the Continuing Directors, after
receiving advice from one or more investment banking firms
selected by a majority of the Continuing Directors, to be (x)
at a price that is fair to shareholders (taking into account
all factors that the Continuing Directors deem relevant
including, without limitation, prices that could reasonably be
achieved if the Company or its assets were sold on an orderly
basis designed to realize maximum value) and (y) otherwise in
the best interests of the Company and its shareholders (other
than the Person or any Affiliate or Associate thereof on whose
behalf the offer is being made), (such tender offer or
exchange offer being referred to herein as a "Permitted
Offer") (provided that this clause (2) shall cease to apply if
such Acquiring Person thereafter becomes the Beneficial Owner
of any additional shares of Common Stock other than pursuant
to such Permitted Offer or a transaction set forth in Section
13(a) or 13(d) hereof), or
(C) during such time as there is an Acquiring Person,
(1) there shall be any failure to declare and pay at the
regular date therefor any dividends (whether or not
cumulative) on any outstanding Preferred Stock of the Company
(except to the extent such declaration or payment would be
prohibited under the laws of the Company's jurisdiction of
incorporation), (2) there shall be any reduction in the annual
rate of dividends paid on the Common Stock (except to reflect
any subdivision of the Common Stock or as required under the
laws of the Company's jurisdiction of incorporation or as
approved by a majority of the Continuing Directors and the
Continuing Directors constitute a majority of the Board of
Directors or by the holders of 66-2/3% percent or more of the
then outstanding shares of Common Stock beneficially owned by
Persons other than the Acquiring Person or its Affiliates or
Associates), (3) there shall be a failure to increase the
annual rate of dividends as necessary to reflect any
reclassification (including any reverse stock split),
recapitali zation, reorganization or any similar transaction
which has the effect of reducing the number of outstanding
shares of the Common Stock (except to the extent such increase
in the rate of dividends would be prohibited under the laws of
the Company's jurisdiction of incorporation), or (4) there
shall be any reclassification of securities (including any
reverse stock split), or recapitalization of the Company, or
any merger or consolidation of the Company with any of its
Subsidiaries or any other transaction or series of
transactions to which the Company or any of its Subsidiaries
is a party, other than a transaction or transactions to which
the provisions of Section
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13(a) apply, (whether or not with or into or otherwise
involving an Acquiring Person) which has the effect, directly
or indirectly, of increasing by more than 1% the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Company or any of its
Subsidiaries which is directly or indirectly owned by any
Acquiring Person or any Associate or Affiliate of any
Acquiring Person,
then, within five (5) days after the date of the occurrence of an event
described in Section 11(a)(ii)(B) hereof and promptly following the
occurrence of any event described in Section 11(a)(ii)(A) or (C)
hereof, proper provision shall be made so that each holder of a Right
(except as provided in Section 7(e) hereof) shall thereafter have a
right to receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of a
number of one one-hundredths of a share of Preferred Stock, such number
of shares of the Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then
number of one one-hundredths of a share of Preferred Stock for which a
Right is then exercisable and dividing that product by (y) 50% of the
current market price per share of the Common Stock of the Company
(determined pursuant to Section 11(d)) on the date on which the first
of the events listed above in this subparagraph (ii) occurs (such
number of shares are hereinafter referred to as the "Adjustment
Shares").
(iii) In the event that there shall not be sufficient
authorized but unissued Common Stock to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii), the
Company shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exercise of the
Rights; provided, however, if the Company is unable to cause the
authorization of a sufficient number of additional shares of Common
Stock, then, in the event the Rights become so exercisable, the
Company, with respect to each Right and to the extent necessary and
permitted by applicable law and any agreements or instruments in effect
on the date hereof to which it is a party, shall, upon the exercise of
such Rights, (A) pay cash in an amount equal to the Purchase Price, in
lieu of issuing shares of Common Stock and requiring payment therefor,
or (B) issue debt or equity securities, or a combination thereof,
having a value equal to the Current Value (as defined hereinafter) of
the Common Stock (including, without limitation, shares, or units of
shares, of preferred stock, which may include the Preferred Stock),
where the value of such securities shall be determined by a nationally
recognized investment banking firm selected by the Board of Directors
of the Company (with the concurrence of a majority of the Continuing
Directors), and require the payment of the Purchase Price, or (C)
deliver any combination of cash, property, Common Stock and/or other
securities having a value equal to the Current Value, and require
payment of all or any requisite portions of the Purchase Price. The
Current Value shall be the product of the current market price per
share of Common Stock (determined pursuant to Section 11(d) on the date
of the occurrence of any of the events listed above in subparagraph
(ii)) multiplied by the number of shares of Common Stock for which the
Right otherwise would be exercisable if there were sufficient
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shares available. To the extent that the Company determines that some
action need be taken pursuant to clauses (A), (B) or (C) of the proviso
of this Section 11(a)(iii), a majority of the Continuing Directors may
suspend the exercisability of the Rights for a period of up to 45 days
following the date on which the first of the events listed in Section
11(a)(ii)(A), (B) or (C) shall have occurred, in order to decide the
appropriate form of distribution to be made pursuant to the above
proviso and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no
longer in effect.
(b) In the case the Company shall fix a record date for the issuance of
rights or warrants to all holders of Preferred Stock entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Preferred Stock (or shares having the same rights, privileges and
preferences as the shares of Preferred Stock ("equivalent preferred stock") or
securities convertible into Preferred Stock or equivalent preferred stock) at a
price per share of Preferred Stock or per share of equivalent preferred stock
(or having a conversion price per share, if a security convertible into
Preferred Stock or equivalent preferred stock) less than the current market
price (as defined in Section 11(d)) per share of Preferred Stock on such record
date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, of which the numerator shall be the number of shares
of Preferred Stock outstanding on such record date plus the number of shares of
Preferred Stock which the aggregate offering price of the total number of shares
of Preferred Stock and/or equivalent preferred stock so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and of which the
denominator shall be the number of shares of Preferred Stock outstanding on such
record date plus the number of additional shares of Preferred Stock and/or
equivalent preferred stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one 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 by the Board of Directors of the Company (with the
concurrence of a majority of the Continuing Directors), whose determination
shall be described in a statement filed with the Rights Agent. Shares of
Preferred Stock 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 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 has not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness or assets (other than a
regular periodic cash dividend at a rate not in excess of 125% of the rate of
the
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last cash dividend theretofore paid or a dividend payable in Preferred Stock,
but including any divi dend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)),
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, of which the numerator shall be the current market price (as
defined in Section 11(d)) per share of Preferred Stock on such record date, less
the fair market value (as determined in good faith by the Board of Directors of
the Company (with the concurrence of a majority of the Continuing Directors),
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 share
of Preferred Stock and of which the denominator shall be such current market
price per share of Preferred Stock; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one 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 under Section 11(b) or (c)
hereof, the "current market price" per, or "value" of a, share of the
Common Stock on any date of determination shall be deemed to be the
average of the daily closing prices per share of such Common Stock for
the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for the purpose of any computation
in Section 11(a)(ii) and Section 13, the "current market price" per, or
"value" of a, share of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such Common Stock
for 20 consecutive Trading Days immediately following such date;
provided, however, that in the event that the current market price (or
value) per share of the Common Stock is determined during the period
following the announcement by the issuer of such Common Stock of (A) a
dividend or distribution on such Common Stock payable in shares of such
Common Stock or securities convertible into shares of such Common
Stock, or (B) any subdivision, combination or reclassification of such
Common Stock, and prior to the expiration of 30 Trading Days or 20
Trading Days, as the case may be, after the ex-dividend date for such
dividend or distribution, or the record date for such sub-division,
combination or reclassification, then, and in each such case, the
"current market price" or "value" shall be appropriately adjusted to
take into account ex-dividend trading. 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
shares of the Common Stock are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the shares of the
Common Stock are listed or admitted to trading or, if the shares of the
Common Stock are not listed or admitted to trading on any national
securities exchange, as reported in the principal consolidated
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transaction reporting system with respect to securities listed on the
Nasdaq Stock Market, or if the shares of Common Stock are not listed or
admitted on the Nasdaq Stock Market, 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 Quotation System ("NASDAQ") or such
other system then in use, or, if on any such date the shares of the
Common Stock are not quoted by such organization, the average of the
closing bid and asked prices as furnished by a professional market
maker making a market in the Common Stock selected by the Board of
Directors of the Company (with the concurrence of a majority of the
Continuing Directors). If on any such date no market maker is making a
market in the Common Stock, the fair value of such shares on such date
shall be as determined in good faith by the Board of Directors, with
the concurrence of a majority of the Continuing Directors, if the
Continuing Directors constitute a majority of the Board of Directors,
or, in the event the Continuing Directors do not constitute a majority
of the Board of Directors, by an independent investment banking firm
selected by the Board of Directors. The term "Trading Day" shall mean a
day on which the Nasdaq Stock Market or, if the shares of Common Stock
are not listed or admitted to trading on the Nasdaq Stock Market, the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading, is open for the transaction of
business or, if the shares of the Common Stock are not listed or
admitted to trading on the Nasdaq Stock Market or any national
securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday
on which banking institutions in the State of Michigan are not
authorized or obligated by law or executive order to close. If the
Common Stock is not publicly held or not so listed or traded, "current
market price" per share shall mean the fair value per share as
determined in good faith by the Board of Directors, with the
concurrence of a majority of the Continuing Directors, if the
Continuing Directors constitute a majority of the Board of Directors,
or, in the event the Continuing Directors do not constitute a majority
of the Board of Directors, by an independent investment banking firm
selected by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined
in the same manner as set forth above for the Common Stock in clause
(i) of this Section 11(d) (other than the last sentence thereof). If
the current market price per share of Preferred Stock cannot be
determined in the manner provided above or if the Preferred Stock is
not publicly held or listed or traded in a manner described in clause
(i) of this Section 11(d), the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an amount equal to
100 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to the
Common Stock occurring after the date of this Agreement) multiplied by
the current market price per share of the Common Stock. If neither the
Common Stock nor the Preferred Stock is publicly held or so listed or
traded, "current market price" per share of the Preferred Stock shall
mean the fair value per share as determined in good faith by the Board
of Directors of the Company (with the concurrence of a majority of the
Continuing
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Directors), whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the "current market price" of one
one-hundredth of a share of Preferred Stock shall mean the "current
market price" per share of Preferred Stock divided by 100.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Section 11(a) through (p), inclusive, and the
provisions of Section 7, Section 9, Section 10, Section 13, Section 14 and
Section 27 with respect to the Preferred Stock shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths of a
share of Preferred Stock (calculated to the nearest one-millionth) obtained by
(i) multiplying (A) the number of one one-hundredths of a share covered by a
Right immediately prior to such adjustment by (B) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately
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prior to such adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to the
nearest ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after the adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment 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 Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
Right Certificates on such record date Right Certificates evidencing, subject to
Section 14, the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price per one one-hundredth of a share and
the number of one one-hundredths of a 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 a
share of Preferred Stock issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
nonassessable one one-hundredths of a share of such Preferred Stock 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 Right exercised after such record date
the number of one one-hundredths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of one one-hundredths of a share of Preferred Stock 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.
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(m) Anything in this Section 11 to the contrary notwithstanding, the
Company, acting by resolution of its Board of Directors (which resolution shall
be effective only with the concurrence of a majority of the Continuing
Directors), shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of Preferred Stock, issuance wholly
for cash of any of the shares of Preferred Stock at less than the current market
price, issuance wholly for cash of the Preferred Stock or securities which by
their terms are convertible into or exchangeable for Preferred Stock, stock
dividends or issuance of rights, options or warrants referred to hereinabove in
this Section 11, hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such shareholders.
(n) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Sections 23, 26 and 27 hereof, take (nor
will it permit any of its subsidiaries to take) any action if at the time such
is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights, unless such action is approved by a majority of the Continuing Directors
and the Continuing Directors constitute a majority of the Board of Directors.
(o) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(n)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(n) hereof), or (iii)
sell or transfer (or permit any of its subsidiaries to sell or transfer), in one
or more 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 and/or any of its Subsidiaries in
one or more transactions each of which complies with Section 11(n) hereof), if
(x) at the time of or immediately after such consolidation, merger or sale there
are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
shareholders of the Person who constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) hereof shall have received a distribution
of Rights previously owned by such Person or any of its Affiliates and
Associates. The Company shall not consummate any such consolidation, merger,
sale or transfer unless prior thereto the Company and such other Person shall
have executed and delivered to the Rights Agent a supplemental agreement
evidencing compliance with this Section 11(o).
(p) Anything in this Agreement to the contrary notwithstanding, in the
event the Company shall at any time after the date of this Agreement and prior
to the Distribution Date (i) declare or pay any dividend on the Common Stock of
the Company payable in such Common Stock or (ii) subdivide the outstanding
Common Stock of the Company into a greater number of shares (by reclassification
or otherwise than by payment of dividends in such Common Stock) or (iii) combine
or consolidate the outstanding Common Stock of the Company into a smaller number
of shares, then in any such case, (A) the number of one one-hundredths of a
share of Preferred Stock purchasable
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after such event upon proper exercise of each Right shall be determined by
multiplying the number of one one-hundredths of a share of Preferred Stock so
purchasable immediately prior to such event by a fraction, the numerator of
which is the number of shares of Common Stock of the Company outstanding
immediately before such event and the denominator of which is the number of
shares of such Common Stock outstanding immediately after such event and (B)
action shall be taken such that each share of Common Stock of the Company
outstanding immediately after such event shall have issued with respect to it
that number of Rights which each share of such Common Stock outstanding
immediately prior to such event had issued with respect to it. The Company may
elect on or after the date of any adjustment of the number of one one-hundredths
of a share of Preferred Stock purchasable upon proper exercise of each Right
pursuant to this Section 11(p), to adjust the Purchase Price as provided in
Section 11(a)(i). The adjustments provided for in this Section 11(p) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected. If an event occurs which
would require an adjustment under Section 11(a)(ii) and this Section 11(p), the
adjustments provided for in this Section 11(p) shall be in addition and prior to
any adjustment required pursuant to Section 11(a)(ii).
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13, the Company
shall (a) promptly prepare a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for the Preferred Stock and
the Common Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate (or, if prior to the Distribution Date, to
each holder of a certificate representing shares of Common Stock) in accordance
with Section 25. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained. Notwithstanding the
foregoing sentence, the failure of the Company to make such certificate or give
such notice shall not affect the validity or the force or effect of the
requirement for such adjustment. Any adjustment to be made pursuant to Sections
11 and 13 shall be effective as of the date of the event giving rise to such
adjustment.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. (a) In the event that, following the Distribution Date, directly
or indirectly, (i) the Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(n) hereof) and the Company shall not be the continuing
or surviving corporation of such consolidation or merger, or the Company shall
effect a statutory share exchange with the outstanding shares of Common Stock of
the Company being exchanged for stock or other securities of any Person, cash or
property, (ii) any Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(n) hereof) shall consolidate, merge
with and into the Company, the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part of
the Common Stock shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other property,
or (iii) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of
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the Company and its Subsidiaries (taken as a whole) to any other Person (other
than the Company or any Subsidiary of the Company in one or more transactions
each of which complies with Section 11(n) hereof), then, and in each such case,
proper provision shall be made so that (A) each holder of a Right, except as
provided in Section 7(e) hereof, shall thereafter have the right to receive, in
lieu of Preferred Stock, upon the exercise thereof at the then-current Purchase
Price in accordance with the terms of this Agreement, such number of shares of
validly issued, fully paid, non-assessable and freely tradable Common Stock of
the Principal Party (as hereinafter defined), not subject to any rights of call
or first refusal, as shall be equal to the result obtained by (1) multiplying
the then current Purchase Price by the then number of one one-hundredths of a
share of Preferred Stock for which a Right is then exercisable (or, if a
Triggering Event has occurred prior to the first occurrence of an event set
forth in this Section 13(a), multiplying the number of such one one-thousandths
of a share for which a Right was exercisable immediately prior to the first
occurrence of a Triggering Event by the Purchase Price in effect immediately
prior to such first occurrence), and dividing that product by (2) 50% of the
current market price per share of the Common Stock of such Principal Party
(determined in the manner described in Section 11(d)) on the date of
consummation of such consolidation, merger, sale or transfer; (B) the Principal
Party shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (C) the term "Company" shall thereafter be
deemed to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply to such Principal Party; (D) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock in accordance
with Section 9) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the shares of its Common Stock thereafter
deliverable upon the exercise of the Rights; and (E) the provisions of Section
11(a)(ii) hereof shall be of no effect following the first occurrence of any of
the transactions described in Section 13(a) hereof.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (i) or
(ii) of the first sentence of Section 13(a), (A) the Person that is the
issuer of any securities into which shares of Common Stock of the
Company are converted in such merger, consolidation or share exchange,
or, if there is more than one such issuer, the issuer the Common Stock
of which has the greatest aggregate market value, or (B) if no
securities are so issued, (1) the Person that survives such
consolidation or is the other party to the merger or share exchange and
sur vives such merger or share exchange, or, if there is more than one
such Person, the Person the Common Stock of which has the greatest
aggregate market value, (2) if the Person that is the other party to
the merger or share exchange does not survive the merger or share
exchange, the Person that does survive the merger or share exchange
(including the Company if it survives) or (3) the Person resulting from
the consolidation; and
(ii) in the case of any transaction described in clause (iii)
of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or
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earning power transferred pursuant to such transaction or transactions,
or, if each Person that is a party to such transaction or transactions
receives the same portion of the assets or earning power so
transferred, or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, the Person the Common
Stock of which has the greatest aggregate market value;
provided, however, that in any such case, (A) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Securities Exchange Act of 1934, and
such Person is a direct or indirect subsidiary of another Person the Common
Stock of which is and has been so registered, "Principal Party" shall refer to
such other Person; (B) in case such Person is a subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of all of which are and
have been so registered, "Principal Party" shall refer to whichever of such
Person is the issuer of the Common Stock having the greatest market value of
shares held by the public, and (C) 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 (A) and (B)
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,
exchange, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the date of
any consolidation, merger, exchange or sale of assets mentioned in paragraph (a)
of this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act of 1933, as amended (the "Act") with respect to the
Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, will use its best efforts to cause such registration
statement to become effective as soon as practicable after such filing
and will use its best efforts to cause such registration statement to
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the date of expiration of the Rights,
and similarly comply with applicable state securities laws; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates
which comply in all respects with the requirements for registration on
Form 10 under the Securities Exchange Act of 1934 (whether or not the
Principal Party would otherwise be required to file such Form); and
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(iii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the Nasdaq
Stock Market or on a national securities exchange, to list or admit to
trading (or continue the listing of) the Rights and the securities
purchasable upon exercise of the Rights on the Nasdaq Stock Market or
such securities exchange or, if the Common Stock of the Principal Party
shall not be listed or admitted to trading on the Nasdaq Stock Market
or a national securities exchange, to cause the Rights and the
securities receivable upon exercise of the Rights to be reported by
such other system then in use; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the Principal Party
subject to purchase upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that one of the
transactions described in Section 13(a) hereof shall occur at any time after the
occurrence of a transaction described in Section 11(a)(ii) hereof, the Rights
which have not theretofore been exercised shall thereafter become exercisable in
the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary, Section
13 shall not be applicable to a transaction described in subparagraphs (i) and
(ii) of Section 13(a) if (i) such transaction is consummated with a Person or
Persons who acquired shares of Common Stock pursuant to a tender or exchange
offer for all outstanding shares of Common Stock which complies with the
provisions of Section 11(a)(ii)(B)(2) hereof (or a wholly owned subsidiary of
any such Person or Persons), (ii) the price per share of Common Stock offered in
such transaction is not less than the price per share of Common Stock paid to
all holders of shares of Common Stock whose shares were purchased pursuant to
such tender or exchange offer and (iii) the form of consideration being offered
to the remaining holders of shares of Common Stock pursuant to such transaction
is the same as the form of consideration paid pursuant to such tender or
exchange offer. Upon consummation of any transaction contemplated by this
Section 13(d), all Rights hereunder shall expire.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange,
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as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, as reported
in the principal consolidated transaction reporting system with respect to
securities listed on the Nasdaq Stock Market, or if the Rights are not listed or
admitted to trading on the Nasdaq Stock Market, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company (with the concurrence of a majority of the Continuing Directors). If
on any such date no such market maker is making a market in the Rights the fair
value of the Rights on such date as determined in good faith by the Board of
Directors of the Company (with the concurrence of a majority of the Continuing
Directors) shall be used.
(b) The Company shall not be required to issue fractions of shares
(other than fractions which are integral multiples of one one-hundredths of a
share of Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock).
Fractions of shares of Preferred Stock in integral multiples of one
one-hundredth of a 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, however, 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 shares of Preferred Stock represented by such depositary receipts. In lieu
of fractional shares that are not integral multiples of one one-hundredth of a
share of Preferred Stock, the Company may pay to the registered holders of Right
Certificates at the time such Right Certificates are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of one one-hundredth of a share of Preferred Stock. For purposes of this
Section 14(b), the current market value of one one-hundredth of a share of
Preferred Stock shall be one one-hundredth of the closing price of a share of
Preferred Stock (as determined pursuant to Section 11(d)(ii)) for the Trading
Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of shares of Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common Stock shall be
the closing price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right.
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SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, except for the rights of actions given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), 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 Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement and subject to the limitations
set forth in such Right Certificates and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be
evidenced by the certificates for shares of the Common Stock registered
in the name of the holders of such shares (which certificates shall
also constitute Rights Certificates) and will be transferable only in
connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed; and
(c) subject to Section 6, Section 7(e) and Section 7(f)
hereof, 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 Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to
the last sentence of Section 7(e) hereof, shall be affected by any
notice to the contrary.
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or 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
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a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation
or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use its best efforts to
have any such order, decree or ruling lifted or otherwise overturned as
soon as possible.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
one-hundredths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 24), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense (including reasonable
expenses of the Rights Agent's legal counsel), incurred without negligence, bad
faith or willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises, or by reason of or as a result
of the Rights Agent's compliance with the instructions set forth in this
Agreement or with any written or oral instructions delivered to the Rights Agent
pursuant hereto. The costs and expenses incurred in enforcing this right of
indemnification shall be paid by the Company.
The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate for the Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT. 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
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consolidation to which the Rights Agent or any successor Rights Agent shall be a
party, or any corporation, succeeding to the corporate trust business of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21. 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 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 the
Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter 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, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall
be full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
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(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Right Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except
its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for
any change in the exercisability of the Rights (including the Rights
becoming void pursuant to any provision of this Agreement); nor shall
it be responsible for any adjustment required under the provisions of
Sections 11 or 13 or responsible for the manner, method or amount of
any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after actual notice of any
such change or adjustment); nor shall it by any act hereunder be deemed
to make any representation or warranty as to the authorization or
reservation of any shares of the Common Stock to be issued pursuant to
this Agreement or any Right Certificate or as to whether any shares of
the Common Stock will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the President, any
Vice-President, the Secretary 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
to be taken by it in good faith in accordance with instructions of any
such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in
any transaction in which the Company 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
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or agents, and the Rights Agent shall not be answerable or accountable
for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act,
default, neglect or misconduct, provided reasonable care was exercised
in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may
be, has either not been completed or indicates an affirmative response
to clause l and/or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer
without first consulting with the Company.
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 Preferred Stock and Common Stock by registered or certified mail, and the
Company will mail said notice to the holders of the Right Certificates by first
class mail. The Company may remove the Rights Agent or any successor Rights
Agent upon 30 days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Preferred
Stock and Common Stock 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), 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 corporation organized and doing business under the laws of the United
States or of any state of the United States, in good standing under the laws of
its jurisdiction of incorporation, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
federal or state authority or which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $10 million. After appointment,
the successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer
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agent of the Preferred Stock and Common Stock, and mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price per share and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement outstanding,
granted or awarded as of the Distribution Date, or upon the exercise, conversion
or exchange of securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board of Directors of the
Company, issue Rights Certificates representing the appropriate number of Rights
in connection with such issuance or sale; provided, however, that (i) no such
Rights Certificate shall be issued if, and to the extent that, the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued, if and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION. (a) The Board of Directors of the Company may,
at its option, at any time prior to 5:00 P.M., Detroit, Michigan time, on the
earlier of (i) the tenth business day following the Shares Acquisition Date (or,
if such date shall have occurred prior to the Record Date, the close of business
on the tenth day following the Record Date) (or, if such Shares Acquisition Date
results from the consummation of a Permitted Offer such later date as may be
determined by action of the Board of Directors but only if Continuing Directors
constitute a majority of the Board of Directors at the time thereof and such
later date is approved by a majority of the Continuing Directors), or (ii) the
Final Expiration Date, redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.001 per Right 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"), provided, however, that if such redemption occurs on or
after the Shares Acquisition Date the Board of Directors of the Company shall be
entitled to so redeem the Rights only if Continuing Directors constitute a
majority of the Board of Directors at the time of such redemption and such
redemption is approved by a majority of the Continuing Directors; provided,
further, that if such redemption, or vote to delay the date set forth in (i)
above, occurs on or after the date of a change (resulting from a proxy or
consent solicitation effected in compliance with applicable law and the
requirements of any national securities exchange on which the Common Stock of
the Company is listed or the Nasdaq Stock Market if the Common Stock is listed
thereon) in a majority of the directors in office at the
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commencement of such solicitation if any Person who is a participant in such
solicitation has stated (or, if upon the commencement of such solicitation, a
majority of the Board of Directors has determined in good faith) that such
Person (or any of its Affiliates or Associates) intends to take, or may consider
taking, any action which would result in such Person becoming an Acquiring
Person or which would cause the occurrence of a Triggering Event, unless,
concurrent with such solicitation, such Person (or one or more of its Affiliates
or Associates) is making a tender offer or exchange offer in compliance with
Section 11(a)(ii)(B)(2), (a "Special Proxy Contest"), the Board of Directors of
the Company shall be entitled to so redeem the Rights or delay the date set
forth in (i) above only if Continuing Directors who were members of the Board of
Directors prior to the proxy or consent solicitation referred to above (or
subsequently became a member of the Board of Directors and whose nomination for
election or election thereto was recommended or approved by a majority of the
Redemption Continuing Directors) (the "Redemption Continuing Directors")
constitute a majority of the Board of Directors at the time of such redemption
or vote to delay the date set forth in (i) above and such redemption or vote to
delay the date set forth in (i) above is approved by a majority of the
Redemption Continuing Directors; provided, further, however, that if, following
the occurrence of a Shares Acquisition Date and following the expiration of the
right of redemption hereunder but prior to any Triggering Event, each of the
following shall have occurred and remain in effect: (A) a Person who is an
Acquiring Person shall have transferred or otherwise disposed of a number of
shares of Common Stock in a transaction, or series of transactions, which did
not result in the occurrence of a Triggering Event such that such Person is
thereafter a Beneficial Owner of less than 15% of the outstanding shares of
Common Stock, (B) there are no other Persons, immediately following the
occurrence of the event described in clause (A), who are Acquiring Persons, and
(C) the transfer or other disposition described in clause (A) above was other
than pursuant to a transaction, or series of transactions, which directly or
indirectly involved the Company or any of its Subsidiaries; then the right of
redemption shall be reinstated and thereafter be subject to the provisions of
this Section 23. Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable pursuant to Section 11(a)(ii)
prior to the expiration of the Company's right of redemption pursuant to this
Section 23(a) without regard to the last proviso.
(b) During the period commencing at the close of business on the tenth
business day following the Shares Acquisition Date and terminating on the
earlier of (i) the occurrence of a Triggering Event and (ii) the Final
Expiration Date, the Board of Directors of the Company may, at its option,
redeem all but not less than all of the then outstanding Rights at the
Redemption Price, provided that (A) such redemption is in connection with the
consummation of an event set forth in clause (i) or (ii) of Section 13(a), (B)
no Acquiring Person, and no Affiliate or Associate of an Acquiring Person (other
than the Company or its subsidiaries) is a constituent corporation to such
event; and (C) such redemption is approved by a majority of the Continuing
Directors as being in their judgment in the best interest of the Company and its
stockholders and the Continuing Directors constitute a majority of the Board of
Directors at the time of such redemption.
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
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Redemption Price. 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 the action of the Board of Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the holders of the
then outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the Transfer Agent for the
Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23, and other than in
connection with the repurchase of Common Stock prior to the Distribution Date.
SECTION 24. NOTICE OF CERTAIN EVENTS. In case the Company shall propose
at any time following the Distribution Date (a) to pay any dividend payable in
stock of any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular periodic
cash dividend at a rate not in excess of 125% of the rate of the last cash
dividend theretofore paid), or (b) to offer to the holders of Preferred Stock
rights or warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other securities, rights
or options, or (c) to effect any reclassification of its Preferred Stock (other
than a reclassification involving only the subdivision of outstanding Preferred
Stock), or (d) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to, any other Person, or (e) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of a Right, in accordance with Section 25, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution of rights or Rights, 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 Preferred Stock, if any such date is to be fixed,
and such notice shall be so given in the case of any action covered by clause
(a) or (b) above at least twenty days prior to the record date for determining
holders of the Preferred Stock for purposes of such action, and in the case of
any such other action, at least twenty days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of the
Preferred Stock, whichever shall be the earlier.
In case any of the events set forth in Section 11(a)(ii) of this
Agreement shall occur, then, in any such case, the Company shall as soon as
practicable thereafter give to each holder of a Right, in accordance with
Section 25, a notice of the occurrence of such event, which shall specify the
event and the consequences of the event to holders of Rights under Section
11(a)(ii).
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SECTION 25. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Perceptron, Inc.
00000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be deemed given or made upon receipt
and shall be addressed (until another address is filed in writing with the
Company) as follows:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
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 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 26, the Company may, by
resolution of its Board of Directors (which resolution, if adopted following the
Shares Acquisition Date, shall be effective only with the concurrence of a
majority of the Continuing Directors and only if the Continuing Directors
constitute a majority of the directors then in office, and which resolution, if
adopted following a Special Proxy Contest, shall be effective only with the
concurrence of a majority of the Redemption Continuing Directors and only if the
Redemption Continuing Directors constitute a majority of the directors then in
office) and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this Section 26,
the Company may, by resolution of its Board of Directors (which resolution shall
be effective only with the concurrence of the Continuing Directors and only if
the Continuing Directors constitute a majority of the directors then in office),
and the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any provisions
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder, or
(iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of any such Person); provided, however, this
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Agreement may not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) whether before or after the Distribution Date, a
time period relating to which the Rights may be redeemed at such time as the
Rights are not then redeemable, or (B) after the Distribution Date, any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights
(other than an Acquiring Person or an Affiliate or Associate of any such
Person). Upon the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 26, the Rights Agent shall execute such
supplement or amendment. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Common Stock.
SECTION 27. EXCHANGE. (a) The Board of Directors of the Company (with
the concurrence of a majority of the Continuing Directors) may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all or part
of the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 7(e) hereof) for
shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors of the Company 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 of any Subsidiary of
the Company or any Person or entity organized, appointed or established by the
Company 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 shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to subsection (a) of this Section 27 and without
any further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the shares of Common Stock for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 27, the
Company shall take all such action as may be necessary to
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authorize additional shares of Common Stock for issuance upon exchange of the
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 shares of
Common Stock, the Company shall substitute, for each share of Common Stock that
would otherwise be issuable upon exchange of a Right, a number of shares of
Preferred Stock or fraction thereof such that the current per share market price
of one share of Preferred Stock multiplied by such number or fraction is equal
to the current per share market price of one share of Common Stock as of the
date of issuance of such shares of Preferred Stock or fraction thereof.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of such fractional Common Shares, the Company shall pay to
the registered holders of the Rights Certificates with regard to which such
fractional shares of shares of Common Stock would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a whole
share of Common Stock. For the purposes of this paragraph (d), the current
market value of a whole share of Common Stock shall be the closing price of a
share of Common Stock (as determined pursuant to the third sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 27.
SECTION 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the provisions of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act. The Board of Directors of the Company (and, where specifically
provided for herein, 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, or the Company (or, as expressly provided,
the Continuing Directors), or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (a) interpret the provisions of this Agreement, and (b) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purpose of clause (ii) below, all omissions with
respect to the foregoing) which are done or made by the Board (or, as provided
for, by the Continuing Directors) in good faith, shall (i) be final, conclusive
and binding on the Company, the Rights Agent, the holders of the Right
Certificates and all other parties, and (ii) not subject the Board or the
Continuing Directors to any liability to the holders of the Rights Certificates.
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SECTION 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates.
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 of
Directors of the Company (with the concurrence of a majority of the Continuing
Directors) determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or effect of
this Agreement, the right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the close of business on the tenth
business day following the date of such determination by the Board of Directors.
Without limiting the foregoing, if any provision of this Agreement requiring
that a determination be made by a Board of Directors composed of a majority of
Continuing Directors or by the Board of Directors with the concurrence of a
majority of the Continuing Directors is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, such
determination shall then be made by the Board of Directors in accordance with
applicable law and the Company's Articles of Incorporation and Bylaws.
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 Michigan and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
SECTION 33. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly
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executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: PERCEPTRON, INC.
The Company
By /s/ Xxxxxx X. Xxxxxx By /s/ Xxxx X. Xxxxxxxxx
-------------------------------- ------------------------------------
Title: Attorney Xxxx X. Xxxxxxxxx
Vice President and Chief
Financial Officer
Attest: AMERICAN STOCK TRANSFER & TRUST
COMPANY,
Rights Agent
By /s/ Xxxxx Xxxxxx By /s/ Xxxxxxx X. Xxxxxx
--------------------------------- -------------------------------------
Title:Assistant Secretary Title: Vice President
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EXHIBIT A
FORM OF CERTIFICATE OF AMENDMENT TO
ARTICLES OF INCORPORATION DETERMINING
THE TERMS OF THE SERIES A PREFERRED STOCK
of
PERCEPTRON, INC.
It is certified that:
FIRST: That the name of the corporation is Perceptron, Inc.
(the "Corporation").
SECOND: The Corporation identification number (CID) assigned by the
Bureau is: 272-233.
THIRD: The location of its registered office is: 00000 Xxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxx 00000-0000.
FOURTH: That pursuant to the authority conferred upon the Board of
Directors by the Articles of Incorporation of said Corporation, the Board of
Directors of the Corporation on March 23, 1998, duly adopted the following
resolution creating a series of 190,000 shares of Preferred Stock, no par value,
designated as Series A Preferred Stock:
RESOLVED, That it is hereby declared to be in the best interests of the
Corporation that the Articles of Incorporation of the Corporation, as amended to
date, be further amended to create a new series of Preferred Stock to consist of
190,000 shares and to be designated as Series A Preferred Stock, no par value,
and to determine the preferences, limitations and relative rights of the Series
A Preferred Stock by adding the following to Article IV of such Articles of
Incorporation to read as follows:
SERIES A PREFERRED STOCK, NO PAR VALUE
A. Designation and Amount. The shares of such series shall be
designated as "Series A Preferred Stock, no par value," and the number of shares
constituting such series shall be 190,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors of the
Corporation; provided, that no decrease shall reduce the number of shares of
Series A Preferred Stock to a number 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.
A-1
41
B. Dividends and Distributions.
(1) Subject to any prior and superior rights of the holders of
any series of Preferred Stock ranking prior and superior to the shares of Series
A Preferred Stock with respect to dividends that may be authorized by the
Articles of Incorporation, the holders of shares of Series A Preferred Stock
shall be entitled prior to the payment of any dividends on shares ranking junior
to the Series A Preferred Stock to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the last day of January, April, July and October 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 (a) $1.00 or (b) 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 reclassification
or otherwise), declared on the Common Stock, par value $1.00 per share, of the
Corporation (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 after March 23,
1998 (the "Rights Declaration Date") (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
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 (b)
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.
(2) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (1) above 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.
(3) 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 of Series A
Preferred Stock, 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
A-2
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Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the 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
of Directors 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 no more than 30 days
prior to the date fixed for the payment thereof.
(4) Dividends in full shall not be declared or paid or set
apart for payment on the Series A Preferred Stock for a dividend period
terminating on the Quarterly Dividend Payment Date unless dividends in full have
been declared or paid or set apart for payment on the Preferred Stock of all
series (other than series with respect to which dividends are not cumulative
from a date prior to such dividend date) for the respective dividend periods
terminating on such dividend date.
C. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(1) 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 voted on at a meeting of the
shareholders of the Corporation. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, or (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, 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.
(2) Except as otherwise provided herein, in any other
Amendment to the Articles of Incorporation of the Corporation 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
voting group on all matters voted on at a meeting of shareholders of
the Corporation.
(3) Except as set forth herein or 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-3
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D. Certain Restrictions.
(1) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section B.
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:
(a) declare or pay dividends on, 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;
(b) declare or pay dividends on 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;
(c) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
A Preferred 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;
(d) 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 of Directors) to all holders of such shares and
the Series A Preferred Stock upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(2) 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 paragraph (1) of
this Section D, purchase or otherwise acquire such shares at such time and in
such manner.
E. Liquidation, Dissolution or Winding Up.
(1) Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made 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
A-4
44
holders of shares of Series A Preferred Stock shall have received $100.00 per
share, plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment (the "Series A
Liquidation Preference"). Following the payment of the full amount of the Series
A Liquidation Preference, no additional distributions shall be made to the
holders of shares of Series A Preferred Stock unless, prior thereto, the holders
of shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph (3) below to reflect such events as stocks splits, stock dividends
and recapitalizations with respect to the Common Stock) (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of the
Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Preferred Stock and Common Stock, respectively,
holders of Series A Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining assets to be
distributed, with the holders of Series A Preferred Stock entitled to receive an
aggregate per share amount equal to 100 times (as appropriately adjusted as set
forth in subparagraph (3) below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock) the aggregate
amount to be distributed per share to holders of shares of Common Stock.
(2) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of Preferred
Stock, if any, which rank on a parity with the Series A Preferred Stock, then
such remaining assets shall be distributed ratably to the holders of such parity
shares and the Series A Preferred Stock in proportion to their respective
liquidation preferences.
(3) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment 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.
F. Merger, Consolidation, etc. In case the Corporation shall enter into
any merger, consolidation, combination or other transaction in which the shares
of Common Stock are exchanged 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 in 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 after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such
A-5
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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.
G. Redemption. The shares of Series A Preferred Stock shall not be
redeemable.
H. Ranking. The Series A Preferred Stock shall rank junior to all other
series of the Corporation's Preferred Stock as to the payment of dividends and
other distribution of assets, unless, in accordance with authorization in the
Articles of Incorporation, the terms of any such series shall provide otherwise.
I. 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 Amendment to the Articles of Incorporation
creating a series of preferred stock or any similar stock or as otherwise
required by law.
J. Amendment. The Articles of Incorporation of the Corporation shall
not be further amended in any manner which would alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of a majority of the
outstanding shares of Series A Preferred Stock, voting separately as one voting
group.
K. Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
FIFTH: That this Amendment to the Articles of Incorporation of the
Corporation was duly adopted by the Board of Directors of the Corporation on
March 23, 1998, without shareholder action, which shareholder action was not
required.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the
A-6
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foregoing as true this 23rd day of March, 1998.
PERCEPTRON, INC.
By:________________________________
Attest: Xxxx X. Xxxxxxxxx
Vice President and Chief
Financial Officer
__________________________________
Secretary
A-7
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EXHIBIT B
[FORM OF RIGHTS CERTIFICATE]
Certificate No. R _________________ ______________ Rights
NOT EXERCISABLE AFTER MARCH 23, 2008 OR EARLIER IF NOTICE OF REDEMPTION
OR EXCHANGE IS GIVEN OR UPON THE CONSUMMATION OF CERTAIN OTHER
TRANSACTIONS SPECIFIED IN SECTION 13(d) OF THE RIGHTS AGREEMENT. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. [THE
RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED
BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.] * /
RIGHT CERTIFICATE
PERCEPTRON, INC.
---------------
This certifies that, or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights Agreement dated as
of March 24, 1998 (the "Rights Agreement") between Perceptron, Inc., a Michigan
corporation (the "Company"), and American Stock Transfer & Trust Company (the
"Rights Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.
(Detroit, Michigan time) on March 23, 2008 at the office of the Rights Agent, or
its successors as Rights Agent, in New York, New York, one one-hundredth of a
fully paid non-assessable share of the Series A Preferred Stock, no par value
(the "Preferred Stock"), of the Company, at a purchase price of $135.00 per one
one-hundredth of a share (the "Purchase Price"), upon presentation and surrender
of this Right Certificate with the Form of Election to Purchase duly executed.
The number
---------
* / The portion of the legend in brackets shall be inserted only if
applicable.
B-1
48
of Rights evidenced by this Right Certificate (and the number of shares which
may be purchased upon exercise thereof) set forth above, and the Purchase Price
per share set forth above, are the number and Purchase Price as of March 23,
1998 based on the Preferred Stock of the Company as constituted at such date.
Upon the occurrence of a Triggering Event (as such term is defined in
the Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii)
under certain circumstances specified in the Rights Agreement, a transferee of a
person who, after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights from and after
the occurrence of such Triggering Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities 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.
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 above-mentioned office of the Rights
Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
one one-hundredths of a share of Preferred Stock 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 may be redeemed by the Company at its option at a redemption
price of $.001 per Right or may be called for exchange for newly issued shares
of Common Stock or Preferred Stock.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock which may,
at the election of the Company, be evidenced by depository receipts), but in
lieu thereof a cash payment will be made, as provided in the Rights Agreement.
B-2
49
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 Stock
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, 19.
ATTEST: PERCEPTRON, INC.
________________________________ By_____________________________________
Secretary Title:
Countersigned:
By______________________________
Authorized Signature
B-3
50
[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 Certificates.)
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:
______________________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ____________, ___ ___________________________________
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-4
51
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Rights represented
by the Right Certificate.)
To _______________________:
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Right Certificate to purchase the shares of the one
one-hundredths of a share of Series A Preferred Stock (or, in certain
circumstances, a combination of cash, other property, Preferred Stock, Common
Stock, and/or other securities) upon the exercise of such Rights and requests
that certificates for such shares be issued in the name of:
Please insert social security
or other identifying number ___________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number ___________________________________________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Dated: _____________,____
__________________________________________
Signature
(Signature must conform in all respects to
name of holder as specified on the face
of this Right Certificate)
Signature Guaranteed:
_____________________
B-5
52
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ________________,___ __________________________________
Signature
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
B-6
53
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On March 23, 1998, the Board of Directors of Perceptron, Inc. (the
"Company") declared a dividend distribution of one Right for each outstanding
share of Common Stock, $.01 par value (the "Common Stock"), of the Company. The
distribution is payable to the Company's shareholders of record on April 6, 1998
(the "Record Date") on the second business day following the Record Date (as
defined in this Summary) or, if later, the first business day following the date
the Company's Form 8-A For Registration of Certain Classes of Securities became
effective. Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of Series A Preferred Stock, no par value
(the "Preferred Stock") at a price of $135.00 per one one-hundredth of a share
(the "Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and American Stock Transfer & Trust Company, as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) ten business days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding shares of the Common Stock (or, if
pursuant to a Permitted Offer (as defined below) such later date as fixed by the
Board of Directors with the concurrence of the Continuing Directors) or (ii) ten
business days (or such later date as may be determined by the Board of
Directors, with the concurrence of a majority of the Continuing Directors, prior
to such time as any person becomes an Acquiring Person) following the
commencement or announcement of an intention to commence a tender offer or
exchange offer by any person if, upon consummation thereof, such person would be
an Acquiring Person, other than as a result of a Permitted Offer (as defined
below), (the earlier of such dates being called the "Distribution Date"), the
Rights will be evidenced, with respect to any of the Common Stock certificates
outstanding as of April 6, 1998, by such Common Stock certificate. The Rights
Agreement provides that, until the Distribution Date, the Rights will be
transferred with and only with the Common Stock. Until the Distribution Date (or
earlier redemption, exchange or expiration of the Rights), new Common Stock
certificates issued after April 6, 1998 upon transfer or new issuance of the
Common Stock will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), the surrender for transfer of any of the Common Stock
certificates outstanding as of April 6, 1998 or issued thereafter will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights. Subject to certain adjustments as may be
required by the Rights Agreement, the Company will issue one Right with each new
share of Common Stock issued until the Distribution Date so that all shares will
have attached Rights. No person shall be deemed to be an Acquiring Person on
account of shares of Common Stock beneficially owned by such person on March 23,
1998 unless thereafter they become the beneficial owner of any additional shares
of Common Stock. A "Continuing Director" is a member of the Board of Directors
of the
54
Company who is not an Acquiring Person or an affiliated or associated person of
an Acquiring Person and who was a member of the Board prior to the Share
Acquisition Date (as defined below) or subsequently became a member of the Board
and whose nomination for election or election to the Board was recommended or
approved by a majority of the Continuing Directors then on the Board. At least
two Continuing Directors must approve of, or concur on, any action requiring the
approval or concurrence of Continuing Directors.
The Rights are not exercisable until the Distribution Date, and, if
later, the expiration of the Company's right to redeem the Rights. The Rights
will expire on March 23, 2008, unless earlier redeemed or called for exchange by
the Company as described below or their earlier expiration upon the consummation
of certain transactions as described below.
The Preferred Stock will be nonredeemable and will be junior to any
other class of preferred stock. Each share of Preferred Stock will be entitled
to receive when, as and if declared, a quarterly dividend equal to the greater
of $1.00 or 100 times the per share value of any dividend (other than stock
dividends) declared on the Common Stock since the immediately preceding
quarterly dividend payment date. In the event of liquidation, the holders of the
Preferred Stock generally will be entitled to receive a liquidation payment in
an amount equal to $100.00 per share of Preferred Stock plus all accrued and
unpaid dividends thereon, and, after the holders of Common Stock have received a
liquidation payment in an amount equal to $1.00 per share, holders of the
Preferred Stock and the Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed, with the holders
of Preferred Stock entitled to receive an aggregate per share amount equal to
100 times the aggregate amount to be distributed per share to holders of shares
of Common Stock. Each share of Preferred Stock will be entitled to 100 votes per
share voting together with the Common Stock. In the event of any merger,
consolidation or other transaction in which the Common Stock is exchanged, each
share of Preferred Stock will be entitled to receive 100 times the amount
received per share of Common Stock. The rights of the Preferred Stock as to
dividends, voting and liquidation preferences are protected by anti-dilution
provisions.
The Purchase Price payable, and the number of shares of the Preferred
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of the
Preferred Stock; (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for shares of the Preferred Stock or
convertible securities at less than the current market price of the Preferred
Stock; or (iii) upon the distribution to holders of the Preferred Stock of
evidences of indebtedness or assets (excluding regular periodic cash dividends
out of earnings or retained earnings at a rate not in excess of 125% of the rate
of the last cash dividend theretofore paid or a dividend paid in the Preferred
Stock) or of subscription rights or warrants (other than those referred to
above). With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price.
2
55
Prior to a Triggering Event, fractional shares of the Preferred Stock
will not be issued (other than fractions which are integral multiples of one
one-hundredths of a share of Preferred Stock) and, in lieu thereof, an
adjustment in cash will be made equal to the same fraction of the current market
value of one one-hundredth of a share of Preferred Stock. Following the
occurrence of a Triggering Event, the Company shall not be required to issue
fractions of shares of Common Stock and, in lieu thereof, an adjustment in cash
will be made equal to the same fraction of the current market value of one share
of Common Stock.
In the event that (i) the Company were the surviving corporation in a
merger or other combination with an Acquiring Person or affiliated or associated
persons of an Acquiring Person and its Common Stock were not changed or
exchanged; or (ii) an Acquiring Person engages in one of a number of
self-dealing transactions specified in the Rights Agreement; or (iii) in certain
circumstances, an Acquiring Person becomes the beneficial owner of 15% or more
of the outstanding shares of Common Stock (except pursuant to a tender or
exchange offer for all outstanding shares at a price and on terms determined by
a majority of the Continuing Directors, after receiving advice from an
investment banking firm selected by a majority of such Continuing Directors, to
be a price that is fair to shareholders and in the best interests of the Company
and its shareholders (a "Permitted Offer")), or (iv) during such time as there
is an Acquiring Person, there shall occur certain failures to pay, or reductions
in, dividends on outstanding common or preferred stock of the Company or a
recapitalization of the Company which has the effect of increasing the Acquiring
Person's proportionate share of the outstanding Common Stock by more than 1%,
then proper provision shall be made so that each holder of a Right, other than
Rights that were or are beneficially owned by the Acquiring Person (which will
thereafter be void), shall thereafter have the right to receive upon exercise
that number of shares of the Common Stock (or, in certain circumstances, a
combination of cash, other property, Preferred Stock, Common Stock and/or other
securities) having a market value of two times the exercise price of the Right.
Following the Distribution Date, in the event (i) that the Company were acquired
in a merger or other business combination transaction in connection with which
the Company is not the continuing or surviving corporation or in which all or a
part of the Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property (other than certain
mergers and combinations with an Acquiring Person who becomes such in a
Permitted Offer if the price per share of Common Stock offered in such
transaction is no less than the price per share of Common Stock paid to all
holders in the Permitted Offer tender or exchange offer and the form of
consideration being offered in such transaction is the same as the form of
consideration paid in the Permitted Offer tender or exchange offer (a "Permitted
Combination")); or (ii) that 50% or more of the Company's assets or earning
power were sold, then proper provision shall be made so that each holder of a
Right, other than Rights that were or are beneficially owned by the Acquiring
Person (which will thereafter be void), shall thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the Acquiring Person which at
the time of such transaction would have a market value of two times the exercise
price of the Right. Upon the consummation of a Permitted Combination, all rights
shall expire. Each of the events described in this paragraph constitutes a
"Triggering Event" under the Rights Agreement.
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At any time after any Person becomes an Acquiring Person but prior to
the time such Acquiring Person has acquired 50% or more of the outstanding
Common Stock, the Board (with the concurrence of a majority of the Continuing
Directors) may cause shareholders to exchange all or part of their Rights for
shares of Common Stock or Preferred Stock at a ratio of one share of Common
Stock or one one-hundredth of a share of Preferred Stock per Right, subject to
adjustment. As soon as the Board has determined to make such exchange, the
Rights may no longer be exercised.
At any time prior to 5:00 P.M., Detroit, Michigan time, on the tenth
business day following the public announcement that a person or group of
affiliated or associated persons has acquired beneficial ownership of 15% or
more of the outstanding shares of the Common Stock of the Company (or, if
pursuant to a Permitted Offer (as defined below) such later date as fixed by the
Board of Directors with the concurrence of the Continuing Directors) (the
"Shares Acquisition Date"), the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.001 per Right (the "Redemption
Price"); provided that, if such redemption or delay in the expiration of the
Board's right to redeem the Rights as set forth above occurs on or after the
Shares Acquisition Date, the Board shall be entitled to so redeem the Rights
only if such redemption is approved by a majority of the Continuing Directors
and the Continuing Directors constitute a majority of the Board of Directors;
provided, further, that if, such redemption occurs on or after the date of a
change (resulting from a proxy or consent solicitation effected in compliance
with applicable law and the requirements of any national securities exchange on
which the Common Stock of the Company is listed or The Nasdaq Stock Market, Inc,
if the Common Stock is listed on such stock market) in a majority of the
directors in office at the commencement of such solicitation if any person who
is a participant in such solicitation has stated (or, if upon the commencement
of such solicitation, a majority of the Board of Directors has determined in
good faith) that such person (or any affiliated or associated persons) intends
to take, or may consider taking, any action which would result in such person
becoming an Acquiring Person or which would cause the occurrence of a Triggering
Event, unless, concurrent with such solicitation, such person is making a
Permitted Offer, (a "Special Proxy Contest"), the Board shall be entitled to
redeem the Rights, or delay the expiration of its right to redeem the Rights as
set forth above, only if such redemption or delay is approved by a majority of
the Continuing Directors who were members of the Board of Directors prior to the
proxy or consent solicitation referred to above (or subsequently became a member
of the Board of Directors and whose nomination for election or election thereto
was recommended or approved by a majority of the Redemption Continuing
Directors) (the "Redemption Continuing Directors") and the Redemption Continuing
Directors constitute a majority of the Board of Directors. Thereafter, the
Company's right of redemption may be reinstated, prior to a Triggering Event,
(i) if an Acquiring Person reduces his beneficial ownership to less than 15% of
the outstanding shares of Common Stock in a transaction or series of
transactions not involving the Company; and (ii) there are no other Persons,
immediately following the event described in clause (i), who are Acquiring
Persons. Additionally, the Board of Directors may at any time prior to the
occurrence of a Triggering Event, redeem the then outstanding Rights in whole,
but not in part, at the Redemption Price, if such redemption is in connection
with the consummation of a merger or other business combination involving the
Company but not involving an Acquiring Person or its Affiliates or Associates
which is determined to be in the best interests of the Company and its
shareholders by
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a majority of the Continuing Directors. Immediately upon the action of the Board
of Directors of the Company electing to redeem the Rights, the Company shall
make announcement thereof, and upon such election, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The Rights Agreement may be amended without shareholder approval prior
to the Distribution Date at the Board of Directors' discretion (and after the
Shares Acquisition Date, only with the concurrence of a majority of the
Continuing Directors and only if the Continuing Directors constitute a majority
of the directors in their office and, after a Special Proxy Contest, only with
the concurrence of a majority of the Redemption Continuing Directors and only if
the Redemption Continuing Directors constitute a majority of the directors then
in office). After the Distribution Date, the Board of Directors (with the
concurrence of a majority of the Continuing Directors and only if the Continuing
Directors constitute a majority of the directors then in office) generally may
amend the Rights Agreement without the consent of the Rights holders to cure any
ambiguity, correct defects or inconsistencies, shorten or lengthen time periods
or supplement or change any other provision which shall not adversely affect the
Rights holders; provided that the lengthening of any time period is for the
purpose of protecting, enhancing or clarifying the rights of, and/or for the
benefit of the holders of the Rights (other than the Acquiring Person and its
affiliated and associated persons). However, if the Rights are not then
redeemable, the Board may not lengthen a time period relating to when the Rights
may be redeemed.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A, dated
March 24, 1998. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.
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