INTERNATIONAL RECTIFIER CORPORATION
and
ChaseMellon Shareholder Services, L.L.C.
Rights Agent
----------------------
AMENDED AND RESTATED RIGHTS AGREEMENT
Dated as of December 15, 1998
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 4
Section 3. Issuance of Right Certificates 4
Section 4. Form of Right Certificates 5
Section 5. Countersignature and Registration 6
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates 7
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights 7
Section 8. Cancellation and Destruction of Right Certificates 9
Section 9. Reservation and Availability of Shares; Registration 10
Section 10. Record Date 10
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights 11
Section 12. Certification of Adjusted Purchase Price or Number of Shares 17
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power 17
Section 14. Fractional Rights and Fractional Shares 20
Section 15. Rights of Action 20
Section 16. Agreement of Right Holders 21
Section 17. Right Certificate Holder Not Deemed a Stockholder 21
Section 18. Concerning the Rights Agent 21
Section 19. Merger or Consolidation or Change of Name of Rights Agent 22
Section 20. Duties of Rights Agent 22
Section 21. Change of Rights Agent 24
Section 22. Issuance of New Right Certificates 25
Section 23. Redemption 25
Section 24. Notice of Proposed Actions 25
Section 25. Notices 26
Section 26. Supplements and Amendments 26
Section 27. Exchange 27
Section 28. Successors 28
Section 29. DeterminationS and Actions Taken by the Board of Directors 28
Section 30. Benefits of this Agreement 28
Section 31. Governing Law 28
Section 32. Counterparts 28
Section 33. Section Headings 28
Section 34. Severability 29
RIGHTS AGREEMENT
AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of December 15, 1998, between
International Rectifier Corporation, a Delaware corporation (the "Company"), and
ChaseMellon Shareholder Services, L.L.C. as Rights Agent.
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has authorized and
declared the distribution of one right for (i) each share of Common Stock of
the Company ("Common Stock") outstanding at the Close of Business (as
hereinafter defined) on August 14, 1996 (the "Rights Record Date"), each
right representing the right to purchase one Unit consisting, initially, of
one one-thousandth of a share of Junior Participating Preferred Stock, and
(ii) each additional share of Common Stock which shall become outstanding
between the Rights Record Date and the earliest of the Distribution Date, the
Expiration Date (as such terms are hereinafter defined) and the date, if any,
on which such rights may be redeemed, all upon the terms and subject to the
conditions hereinafter set forth (each such right being hereinafter referred
to as a "Right");
WHEREAS, the Board of Directors of the Company authorized the Company to
enter into an Amended and Restated Rights Agreement to eliminate the concept
of, and all references to, "Continuing Director";
NOW, THEREFORE, the parties agree as follows:
Section 1. Certain Definitions.
(a) For purposes of this Agreement, the following terms have the
meanings indicated: "Acquiring Person" shall mean any Person who or which,
alone or together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner (within the meaning of Section 1(b)) of a Substantial
Block of Voting Stock, but shall not include (i) an Exempt Person or (ii) any
Person who or which acquires a Substantial Block of Voting Stock in
connection with a transaction or series of transactions approved prior to
such transaction or transactions by the Board of Directors of the Company;
provided that no person shall become an Acquiring Person solely as a result
of a reduction in the number of shares of Voting Stock outstanding, unless
and until such Person shall thereafter become the Beneficial Owner of
additional shares constituting 1% or more of the general voting power of the
Company.
"Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect as of the date hereof.
"Business Day" shall mean any day other than a Saturday, Sunday or day
on which banking institutions in the State of California are authorized or
obligated by law or executive order to close.
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"Close of Business" on any given date shall mean 5:00 p.m., Los Angeles
time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 p.m., Los Angeles time, on the next succeeding
Business Day.
"Common Stock" shall have the meaning assigned to it in the preamble;
and common stock when used with reference to Persons other than the Company
shall mean: (i) in the case of Persons organized in corporate form, the
capital stock or equity security with the greatest voting power of such
Person or, if such Person is a Subsidiary of another Person, of the Person or
Persons which ultimately control such first-mentioned Person; and (ii) in the
case of Persons not organized in corporate form, the units of beneficial
interest which (A) represent the right to participate generally in the
profits and losses of such Person (including without limitation any
flow-through tax benefits resulting from an ownership interest in such
Person) and (B) are entitled to exercise the greatest voting power of such
Person or, in the case of a limited partnership, shall have the power to
remove the general partner or partners.
"Distribution Date" shall have the meaning assigned to it in Section 3(a).
"Equivalent Stock" shall have the meaning assigned to it in Section 7(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Exempt Person" shall mean the Company, any Subsidiary of the Company and
any employee benefit plan or employee stock plan of the Company or of any
Subsidiary of the Company, or any trust or other entity organized,
established or holding shares of Common Stock by, for or pursuant to, the
terms of any such plan.
"Expiration Date" shall have the meaning assigned to it in Section 7(a).
"Offer Date" shall have the meaning assigned to it in Section 3(a).
"Person" shall mean any individual, firm, corporation, partnership,
trust or other entity and shall include any successor by merger (or
otherwise) of any of the foregoing.
"Principal Party" shall have the meaning assigned to it in Section 13(b).
"Purchase Price" shall mean the price payable for one Unit upon exercise
of a Right.
"Qualified Offer" shall mean a tender or exchange offer for all
outstanding Common Stock at a price and on terms determined to be adequate
and otherwise in the best interests of the Company and its shareholders
(other than the Person or an Affiliate or Associate thereof on whose behalf
the offer is made) by at least a majority of the Directors who are not
representatives of or affiliated with the Person making such offer or any
Affiliate or Associate of such Person.
"Redemption Price" shall have the meaning assigned to it in Section 23(a).
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"Right" shall have the meaning assigned to it in the preamble.
"Rights Record Date" shall have the meaning assigned to it in the preamble.
"Subject Shares" shall mean the class or series of shares then issuable on
exercise of the Rights.
"Stock Acquisition Date" shall mean the date of the first public
announcement by the Company or an Acquiring Person (which, for purposes of
this definition, shall include, without limitation, a report filed pursuant
to Section 13(d) under the Exchange Act) that an Acquiring Person has become
such.
"Subsidiary" shall mean, with respect to any Person, a corporation or
other entity the securities or other ownership interests of which having
ordinary voting power sufficient to elect a majority of the board of
directors or other persons performing similar functions are at the time
directly or indirectly owned by such Person and any Affiliate of such Person.
"Substantial Block" shall mean a number of shares of Voting Stock having
in the aggregate 20 percent or more of the general voting power.
"Trading Day" shall have the meaning assigned to it in Section 11(d).
"Unit" shall mean the shares or other securities issuable upon exercise of
one Right, initially one one-thousandth of a share of Junior Participating
Preferred Stock of the Company having the rights and preferences set forth in
Exhibit C, before any adjustment pursuant to Section 11(a)(ii) or Section 13.
"Voting Stock" shall mean shares of the Company's capital stock the
holders of which have general voting power.
(b) For purposes of this Agreement, a Person shall be deemed the
"Beneficial Owner" of 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 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 any conversion, exchange or purchase rights (other than the
Rights), warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the Beneficial Owner of 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 payment or exchange; or (B) the right to vote or to direct the voting of,
pursuant to any agreement, arrangement or understanding (whether or not in
writing); or (C) the right to dispose or to direct the disposition of,
pursuant to any agreement, arrangement or understanding (whether or not in
writing); or
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(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 for the purpose of
acquiring, holding, voting or disposing of any securities of the Company;
provided, however, that a Person shall not be deemed the Beneficial Owner of,
or to Beneficially Own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from the grant of a
revocable proxy or consent given to such Person in connection with a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange Act, and (2) is not also
then reportable on Schedule 13D (or any comparable or successor report) under
the Exchange Act; provided, further, that a Person engaged in business as an
underwriter of securities shall not be deemed the Beneficial Owner of
securities acquired through such person's participation in good faith in a
firm commitment underwriting until the expiration of the 40-day period
immediately following the date of such acquisition.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agent or Agents as it
may deem necessary or desirable and determine the respective duties of the
Rights Agent and the Co-Rights Agents.
Section 3. Issuance of Right Certificates.
(a) Until the Close of Business on the earlier of (i) the tenth
Business Day after a Stock Acquisition Date or (ii) the tenth Business Day
(or such later date as the Company's Board of Directors shall determine)
after the date of the commencement by any Person (other than an Exempt
Person) of, or the date of the first public announcement (such commencement
date or announcement date being herein referred to as the "Offer Date") of
the intent of any Person (other than an Exempt Person) to commence, a tender
or exchange offer upon the successful consummation of which such Person,
together with its Affiliates and Associates, would be the Beneficial Owner of
20 percent or more of the then outstanding Voting Stock (irrespective of
whether any shares are actually purchased pursuant to such offer) (the tenth
Business Day after the first to occur of a Stock Acquisition Date or an Offer
Date being herein referred to as the "Distribution Date"),
(i) the Rights will automatically attach to, and be evidenced
by, the certificates for Common Stock registered in the names of the holders
of Common Stock (which certificates for Common Stock shall be deemed also to
be Right Certificates) and not by separate Right Certificates, and
(ii) each Right will be transferable
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only in connection with the transfer of the underlying shares of Common
Stock. As soon as practicable after the Distribution Date, the Rights Agent
will mail, by first-class, insured, postage prepaid mail, to each record
holder of Common Stock as of the Close of Business on the Distribution Date,
as shown by the records of the Company at the Close of Business on the
Distribution Date, at the address of such holder shown on such records, a
Right Certificate, in substantially the form of Exhibit A hereto, evidencing
one Right for each share of Common Stock so held.
(b) As soon as practicable after the Rights Record Date, the Company
will send a copy of a Summary of Rights, in substantially the form attached
hereto as Exhibit B, by first-class mail, postage prepaid, to each record
holder of Common Stock as of the Close of Business on the Rights Record Date,
at the address of such holder shown on the records of the Company.
(c) The Company will cause certificates for Common Stock issued
after the Rights Record Date (including replacement certificates for shares
of Common Stock outstanding on or prior to the Rights Record Date), but prior
to the earliest of (i) the Distribution Date, (ii) the Expiration Date and
(iii) the date, if any, on which the Rights may be redeemed, to have
impressed on, printed on, written on or otherwise affixed to them the
following legend:
"This certificate also entitles the holder hereof to certain Rights as set
forth in the Amended and Restated Rights Agreement between the Company and
ChaseMellon Shareholder Services, L.L.C. as Rights Agent as the same shall be
amended from time to time (the Rights Agreement ), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. The Company
will mail to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request thereof. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or held
by, any Person who is, was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement) or
certain transferees of any thereof, whether currently held by or on behalf of
such Person or by any subsequent holder, may be limited as provided in
Section 7(f) of the Rights Agreement."
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate.
(d) Until the Distribution Date, the surrender for transfer of any
of the certificates for Common Stock outstanding on or after the Rights
Record Date, with or without a copy of the Summary of Rights attached thereto
and with or without the legend set forth in subsection (c) above, shall also
constitute the transfer of the Rights associated with such Common Stock.
After the Distribution Date, the Rights will be evidenced solely by the Right
Certificates.
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Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of assignment and
certification and of election to purchase shares to be printed on the reverse
thereof) shall be in substantially the form of Exhibit A 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 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.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section
22 that represents Rights Beneficially Owned by: (i) an Acquiring Person or
any Associate or Affiliate of any 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 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 has determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect avoidance of Section 7(f), 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 (to the extent feasible and reasonably
identifiable as such) the following legend:
"The Rights represented by this Right Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement) or certain transferees thereof. Accordingly, under certain
circumstances as provided in the Rights Agreement, this Right Certificate and
the Rights represented hereby may be limited as provided in Section 7(f) of
such Agreement."
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any of its Vice
Presidents, either manually or by facsimile signature, and have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned
by the Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any
of the Right Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery by the
Company, such Right
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Certificates, nevertheless, may be countersigned by the Rights Agent, 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 (as specified above) of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement
any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses
of the respective holders of the Right Certificates, the number of Rights
evidenced on its face by each Right Certificate, the date of each Right
Certificate and the number of each Right Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(f) and
Section 14, at any time after the Close of Business on the Distribution Date,
and prior to the Close of Business on the Expiration Date or the day prior to
the day, if any, on which the Rights are to be redeemed pursuant to Section
23, any Right Certificate or Certificates may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase such number of Units as the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate(s) to be
transferred, split up, combined or exchanged, with the form of assignment on
the reverse side(s) thereof duly completed and executed, at the stock
transfer office of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the persons entitled thereto the Right
Certificate(s) 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. Notwithstanding the
foregoing, neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate unless and until the registered holder shall
have completed and signed the certificate contained in the form of assignment
on the reverse side of such Right Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and 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 execute 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.
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Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(f), and unless earlier redeemed as provided
in Section 23, the registered holder of any Right Certificate may exercise
the Rights evidenced thereby in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly completed and executed,
to the Rights Agent at the stock transfer office of the Rights Agent,
together with payment of the Purchase Price for each Unit as to which the
Rights are exercised, at or prior to the Close of Business on the tenth
anniversary of the Rights Record Date or such other date to which the Rights
may be extended as provided in this Agreement (the latest of such dates being
herein referred to as the "Expiration Date"). If at any time after the
Distribution Date but prior to the Expiration Date the Company is unable,
under its Certificate of Incorporation, to issue the number and class of
shares required to be issued upon the exercise of all of the outstanding
Rights, the Company may issue upon exercise of any of the Rights shares of
capital stock or other securities of the Company of equivalent value to the
shares so required to be issued ("Equivalent Stock"), as determined by the
Board of Directors.
(b) The Purchase Price for each Unit pursuant to the exercise of a
Right shall initially be $135, shall be subject to adjustment from time to
time as provided in Sections 11 and 13 and shall be payable in lawful money
of the United States of America.
(c) Upon receipt of a Right Certificate, with the form of election
to purchase duly executed, accompanied by payment of the Purchase Price for
the Units to be purchased and an amount equal to any applicable transfer tax
in cash, or by certified check, bank draft or money order payable to the
order of the Company, the Rights Agent shall thereupon promptly (i)
requisition from the Company or any transfer agent of the Company a
certificate for the number of shares to be purchased and the Company will
comply, and hereby irrevocably authorizes its transfer agent to comply, with
all such requests, (ii) requisition from the Company the amount of cash to be
paid in lieu of issuance of a fractional share, when appropriate, in
accordance with Section 14, and (iii) promptly after receipt of such
certificate from any such transfer agent, 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,
when appropriate, after receipt promptly deliver such cash in lieu of a
fractional share to or upon the order of the registered holder of such Right
Certificate; provided, however, that in the case of the purchase, in
connection with the exercise of a Right, of securities other than shares of
stock, the Rights Agent shall promptly take the appropriate actions with
respect thereto as shall as nearly as practicable correspond to the actions
described in the foregoing clauses (i) through (iii).
(d) The Company shall not be required 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
in a name other than that of the registered holder of the Right Certificate
evidencing Rights surrendered for exercise, or to issue or deliver any
certificates 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.
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(e) 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.
(f) Notwithstanding any provision of this Agreement to the contrary,
upon the occurrence of any of the events described in any of clauses (A),
(B), (C) or (D) of Section 11(a)(ii), the adjustment provided for under
Section 11(a)(ii) shall not apply with respect to any Rights that are at the
time of the occurrence of such event Beneficially Owned by (i)an Acquiring
Person or by any Associate or Affiliate of such Acquiring Person (which
Acquiring Person or Affiliate or Associate engages in, or realizes the
benefit of, one or more of the transactions described in clause (A) or clause
(B) of Section 11(a)(ii), realizes the benefits set forth in clause (C) of
Section 11(a)(ii) or, alone or together, become the Beneficial Owner(s) of a
number of shares of Voting Stock which equals or exceeds the percentage of
the general voting power as provided in clause (D) of Section 11(a)(ii), as
the case may be), or (ii) a transferee of an Acquiring Person or of any
Associate or Affiliate of such Acquiring Person (which Acquiring Person or
Associate or Affiliate engages in, or realizes the benefit of, one or more of
the transactions described in clause (A) or clause (B) of Section 11(a)(ii),
realizes the benefits set forth in clause (C) of Section 11(a)(ii) or, alone
or together with such Acquiring Person or any such Associate or Affiliate,
become the Beneficial Owner(s) of a number of shares of Voting Stock which
equals or exceeds the percentage of the general voting power as provided in
clause (D) of Section 11(a)(ii), as the case may be) (A)who becomes a
transferee after the Acquiring Person becomes such, or (B)who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such
and receives such Rights pursuant to either (1)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 (2)a transfer which the Board of Directors of the
Company has determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section 7(f). Upon
the exercise of such Rights, the holders thereof shall be entitled to
receive, upon payment of the Purchase Price, the number of Units issuable
upon exercise of such Rights without giving effect to the adjustment provided
for under Section 11(a)(ii). The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(f) and Section 4(b) are complied
with, but shall have no liability to any holder of Right Certificates or
other Person as a result of its making or failing to make any determinations
with respect to an Acquiring Person or its Affiliates, Associates or
transferees hereunder.
(g) 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 Right
Certificate surrendered for such exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably request.
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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 this Agreement. The Company shall deliver to the Rights Agent
for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares; Registration.
(a) The Company covenants and agrees that it shall (i) on or prior
to the Rights Record Date, take all such action as shall be necessary to
cause to be reserved and kept available out of its authorized and unissued
capital stock, the number, class and series of shares that will be sufficient
to permit the exercise in full of all Rights to be outstanding as of the
Rights Record Date, (ii) no later than promptly following the Distribution
Date, take all such action as shall be necessary to cause to be reserved and
kept available out of its authorized and unissued capital stock, or its
authorized and issued shares held in its treasury, the number of additional
shares that will, from time to time, be sufficient to permit the exercise in
full of all Rights from time to time outstanding, (iii) take all such action
as may be necessary to insure that all shares 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, and (iv) 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 shares upon the exercise of Rights (except as otherwise provided in
Section 7(d)).
(b) The Company agrees to take all such action, from and after the
Distribution Date, as may be necessary or appropriate to permit the issuance
of shares in connection with the exercise of the Rights, including any
required registration under (i) the Securities Act of 1933, as amended from
time to time (the Securities Act ), and (ii) the securities or blue sky laws
of the various states. The Company may temporarily suspend, for a period of
time not to exceed 90 days, the exercisability of the Rights in order to
prepare and file a registration statement or statements for the purpose of
effecting any such registration and permit such statement(s) to become
effective. At the commencement and termination of any such suspension, the
Company shall issue a public announcement and shall provide written notice to
the Rights Agent, stating that the exercisability of the Rights has been
temporarily suspended, or that such suspension has terminated, as the case
may be.
(c) If and so long as the stock issuable upon the exercise of Rights
is listed on any national securities exchange, the Company shall use its
reasonable efforts to cause all shares
11
reserved for issuance upon exercise of Rights to be listed on such exchange
upon official notice of issuance upon such exercise.
Section 10. Record Date. Each Person in whose name any stock
certificate is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the shares represented thereby
on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a stockholder of the Company with
respect to shares for which the Rights shall be exercisable, including
without limitation the right to vote or to receive dividends or other
distributions, and such holder 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 and kind of shares or other securities
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) If the Company shall at any time after the date of this
Agreement (A) declare and pay a dividend on the shares which are subject to
the Rights ("Subject Shares") payable in shares of stock of the Company, (B)
subdivide or split the Subject Shares, (C) combine or consolidate the Subject
Shares into a smaller number of shares or effect a reverse stock split of the
Subject Shares or (D) issue any shares of its capital stock in a
reclassification of the Subject Shares (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), then, and in each such event, except as
otherwise provided in this Section 11(a), the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, split, reverse split, combination, consolidation or
reclassification, and the number and kind of shares of capital stock issuable
on such date, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive the aggregate
number and kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the transfer
books of the Company were open, he would have received upon such exercise and
been entitled to receive by virtue of such dividend, subdivision, split,
reverse split, combination, consolidation or reclassification. If an event
occurs which would require an adjustment under both this 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) If at any time after the date of this Agreement
(A) any Acquiring Person, or any Associate or Affiliate of any
Acquiring Person, directly or indirectly (1) shall merge into the Company or
any of its Subsidiaries or otherwise combine with the Company or any of its
Subsidiaries and the Company or such Subsidiary shall be the continuing or
surviving corporation of such merger or
12
combination and the Common Stock shall remain outstanding and the outstanding
shares thereof shall not be changed into or exchanged for stock or other
securities of the Company or of any other Person or cash or any other
property, or (2) shall sell or otherwise transfer in one or more transactions,
assets to the Company or any of its Subsidiaries in exchange for 20 percent
or more of the shares of any class of capital stock of the Company or any of
its Subsidiaries, and the Common Stock shall remain outstanding and
unchanged, or
(B) directly or indirectly, any Acquiring Person, or any Associate or
Affiliate of any Acquiring Person, shall (1) 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 any class of capital stock of the Company or
any of its Subsidiaries or for securities exercisable for or convertible into
shares of any class of capital stock of the Company or any of its
Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries,
with or without consideration, any additional shares of any class of capital
stock of the Company or any of its Subsidiaries or other securities
exercisable for or convertible into shares of any class of capital stock of
the Company or any of its Subsidiaries (other than as part of a pro rata
distribution by the Company or such Subsidiary to all holders of Common
Stock), (2) sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise dispose (in one or more transactions), to, from or with, as the
case may be, the Company or any of its Subsidiaries, assets on terms and
conditions less favorable to the Company or such Subsidiary than the Company
or such Subsidiary would be able to obtain in arm's-length negotiation with
an unaffiliated third party, (3) receive any compensation from the Company or
any of the Company s Subsidiaries other than compensation for full-time
employment as a regular employee, or fees for serving as director, at rates
in accordance with the Company's (or its Subsidiaries') past practices, or
(4) receive the benefit, directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or other financial
assistance provided by the Company or any of its Subsidiaries, on terms and
conditions less favorable to the Company or such Subsidiary than the Company
or such Subsidiary would be able to obtain in arm's-length negotiation with
an unaffiliated third party, or
(C) during any such time as there is an Acquiring Person, 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 similar transaction or
series of transactions involving the Company or any of its Subsidiaries
(whether or not with or into or otherwise involving an Acquiring Person or
any Affiliate or Associate of such Acquiring Person) which has the effect,
directly or indirectly, of increasing by more than one percent the
proportionate share of the outstanding shares of any class of equity
securities, or of securities exercisable for or convertible into equity
securities, of the Company or any of its Subsidiaries which is directly or
indirectly owned by any Acquiring Person or any Associate or Affiliate of any
Acquiring Person, or
(D) any Person shall become an Acquiring Person otherwise than
pursuant to a Qualified Offer, then, and in each such case, but subject to
the provisions of Section 27, proper provision shall be made so that each
holder of a Right, except as provided below and in Section 7(f), shall, on
and after the later of (I) the date of the occurrence of an event
13
described in clause (A), (B), (C) or (D) of this Section 11(a)(ii), or (II)
the date of the expiration of the period within which the Rights may be
redeemed pursuant to Section 23 (as the same may have been amended as
provided in Section 26), have the right to receive, upon exercise thereof at
the then current Purchase Price, such number of shares of Common Stock as
shall equal the result obtained by (x) multiplying the then current Purchase
Price by the then number of Units for which a Right is then exercisable and
dividing that product by (y) 50 percent of the current market price per share
of Common Stock (determined in accordance with Section 11(d)) on the date of
the occurrence of the relevant event listed above in clause (A), (B), (C) or
(D) of this subparagraph (ii); provided, however, that if the transaction
that would otherwise give rise to the foregoing adjustment is also subject to
the provisions of Section 13, then only the provisions of Section 13 shall
apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The
Company shall not consummate any such merger, combination, transfer or
transaction referred to in any of such clauses (A), (B) and (C) unless prior
thereto there shall be sufficient authorized but unissued Common Stock to
permit the exercise in full of the Rights in accordance with the foregoing
sentence, unless the Board of Directors has determined to issue Equivalent
Stock in accordance with Section 7(a); provided, however, that in no case may
the Company consummate any such merger, combination, transfer or transaction
if at the time of or immediately after such transaction 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.
If the Company issues Equivalent Stock upon the exercise of any Rights
pursuant to the immediately preceding paragraph, then, upon any such
exercise, proper provision shall be made so that the holder of a Right
(except as provided in Section 7(f)) shall have the right to receive, upon
such exercise at the then current Purchase Price, such number of shares or
other units of Equivalent Stock of the Company as shall equal the result
obtained by (x)multiplying the then current Purchase Price by the number of
Units for which a Right is then exercisable and dividing that product by
(y)50 percent of the current market price per share or other unit of the
Equivalent Stock of the Company (determined on substantially the same basis
as is prescribed by Section 11(d) with respect to the valuation of Common
Stock) on the date of occurrence of the relevant event listed above in clause
(A), (B), (C) or (D) of this subparagraph (ii). If at any time the Company
should be prohibited by law, by any provision of its Certificate of
Incorporation, or by any instrument or agreement to which the Company is a
party or by which it is bound, from issuing, or should be unable under its
Certificate of Incorporation to issue, sufficient Equivalent Stock to permit
the exercise of all outstanding Rights in accordance with the foregoing
sentence, then, in lieu of issuing such Equivalent Stock upon such exercise,
the Company shall pay to each holder of a Right (except as provided in
Section 7(f)) upon surrender of the Right as provided herein but without
payment of the Purchase Price, an amount in cash for each Right equal to the
Purchase Price.
(b) In case the Company shall at any time after the Rights Record
Date fix a record date for the issuance of rights or warrants to all holders
of Common Stock or Subject Shares entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe for or purchase
Common Stock or Subject Shares or securities convertible into Common Stock or
Subject Shares at a price per share (or having a conversion price per share,
if a
14
security convertible into Common Stock) less than the current market price
per share (determined in accordance with Section 11(d)) on such record date,
the Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, of which the numerator shall be the total number of
shares of Common Stock and Subject Shares outstanding on such record date
plus the number of shares of Common Stock which the aggregate offering price
of the total number of shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such current market price and of which the denominator shall be
the total number of shares of Common Stock and Subject Shares outstanding on
such record date plus the number of additional shares to be offered for
subscription or purchase (or into which the convertible securities to be
offered are initially convertible). In case such subscription or purchase
price may be paid, in whole or in part, in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and if 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 had not been fixed.
(c) In case the Company shall at any time after the Rights Record
Date fix a record date for the making of a distribution on the shares of
Common Stock or the Subject Shares, whether by way of a dividend,
distribution, reclassification of stock, recapitalization, reorganization or
partial liquidation of the Company or otherwise (and including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation), of subscription rights or warrants
(excluding those referred to in Section 11(b)), evidences of indebtedness or
other assets (other than (i) regular periodic cash dividends, (ii) a dividend
payable in Common Stock or (iii) a distribution which is part of or is made
in connection with a transaction to which Section 11(a)(ii) or Section 13
applies), 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 per share of Common Stock (determined in accordance with Section
11(d)) on such record date, less the fair market value applicable to one
share of Common Stock (as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement filed
with the Rights Agent) of such assets or evidences of indebtedness or of such
subscription rights or warrants so to be distributed, and of which the
denominator shall be such current market price per share of Common Stock.
Such adjustments shall be made successively whenever such a record date is
fixed; and if 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) For the purpose of any computation hereunder, the "current market
price" per 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 the 30
consecutive Trading Days immediately prior to such date; provided, however,
that if the current market price per share of Common Stock is
15
determined during a period following the announcement by the issuer of such
Common Stock of a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of Common
Stock (other than the Rights), and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or distribution, then, and in
each such case, the current market price shall be appropriately adjusted to
reflect the current market price per share of Common Stock in connection with
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 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 Common
Stock are listed or admitted to trading or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, 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"). If on any such date the shares of
Common Stock are not quoted by any such organization, the fair market value
of such shares on such date as determined in good faith by the Board of
Directors of the issuer of such Common Stock shall be used. Any such
determination of current market price shall be described in a statement filed
with the Rights Agent.
For the purpose of any computation hereunder, the "current market price"
of a Unit shall be deemed to be equal to the current market price per share
of Common Stock, and the "current market price" of a Subject Share shall be
deemed to be equal to the current market price per share of Common Stock
divided by the number of Subject Shares which comprise a Unit.
For purposes of this Agreement, the term "Trading Day" shall mean a day on
which 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 Common Stock are not listed or admitted to
trading on any national securities exchange, a Business Day.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least one percent
in such Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one-thousandth
of a share, as the case may be. Notwithstanding the proviso to 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 gives rise to such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) If at any time, as a result of an adjustment made pursuant to
Section 11(a), the holder of any Right thereafter exercised shall become
16
entitled to receive any shares of capital stock of the Company other than
shares of Common 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 such shares, contained in Sections 11(a)
through (c), inclusive, and the provisions of Sections 7, 9, 10, 13 and 14
with respect to the shares of Common 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 represent the right to
purchase, at the adjusted Purchase Price, the number of shares 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 Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of shares
(calculated to the nearest one-thousandth) obtained by (i) multiplying (x)
the number of shares covered by a Right immediately prior to such adjustment
by (y) the Purchase Price in effect immediately prior to such adjustment of
the Purchase Price and (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 shares purchasable upon the exercise of each
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of Units for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been
issued, 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 record 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.
17
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) In any case in which this Section 11 requires that an adjustment
in the Purchase Price be made effective as of the record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the
additional shares or securities of the Company, if any, issuable as a
consequence of 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 or securities upon the
occurrence of such event.
(l) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such adjustments in the number of shares
which may be acquired upon exercise of the Rights, and such adjustments in
the Purchase Price, in addition to those adjustments expressly required by
the other subsections of this Section 11, as and to the extent that the
Company, in its sole discretion, shall determine to be advisable, in order
that, if (i) any reclassification, consolidation or subdivision of the Common
Stock, (ii) any reorganization or partial liquidation of the Company or
similar transaction, (iii) any issuance wholly for cash of any Common Stock
at less than the current market price, (iv) any issuance wholly for cash of
Common Stock or securities which by their terms are convertible into or
exchangeable for Common Stock, (v) any stock dividends or (vi) any issuance of
rights, options or warrants, hereafter made by the Company to holders of its
Common Stock as provided herein-above in this Section 11, (x) the holders of
the Rights in any such event shall be treated equitably and in accordance
with the purpose and intent of this Agreement, and (y) to the extent
reasonably possible, such event shall not, in the opinion of counsel for the
Company, result in the stockholders of the Company being subject to any
United States federal income tax liability by reason thereof.
Section 12. Certification of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or 13, the
Company shall (i) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such
adjustment, (ii) promptly file with the Rights Agent and with each transfer
agent for the Common Stock a copy of such certificate, and (iii) mail a brief
summary thereof to each holder of a Right Certificate in accordance with
Section 25. Notwithstanding the foregoing sentence, the failure of the
Company to give such notice shall not affect the validity of, or the force or
effect of, the requirement for such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) If, at any time after an Acquiring Person has become such,
18
(i) the Company shall consolidate with, or merge with and into,
any other Person and the Company shall not be the continuing or surviving
corporation of such consolidation or merger,
(ii) any other Person(s) shall consolidate or merge with and
into the Company, the Company shall be the continuing or surviving
corporation of such merger and, in connection with such consolidation or
merger, all or part of the Common Stock shall be changed into or exchanged
for stock or other securities of the Company or of any other Person or cash
or any other property, or
(iii) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating more than 50 percent of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person, (other than a pro rata distribution by the
Company of assets (including securities) of the Company or any of its
Subsidiaries to all holders of the Company s Common Stock), then, on and
after the later of (I) the date of the occurrence of an event described in
clause (i), (ii) or (iii) of this Section 13(a), or (II) the date of the
expiration of the period within which the Rights may be redeemed pursuant to
Section 23 (as the same may have been amended as provided in Section 26):
(A) proper provision shall be made so that each holder of a Right
shall thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price, such number of shares of common stock of the
Principal Party as shall be equal to the result obtained by (x) multiplying
the then current Purchase Price by the number of Units for which a Right is
then exercisable and dividing that product by (y) 50 percent of the current
market price per share of the common stock of the Principal Party (determined
in the same manner as the current market price of Common Stock is determined
under 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, and proper
provision shall be made for the foregoing, provided that the Principal Party
shall, prior to the first occurrence of an event described in clause (i),
(ii) or (iii) of this Section 13(a), have caused to be reserved out of its
authorized and unissued shares of common stock (or its authorized and issued
shares of common stock held in its treasury), for issuance pursuant to this
Agreement, the number of shares of common stock that will be sufficient to
permit the exercise in full of the Rights after the occurrence of such event;
(C) the term "Company" wherever used in this Agreement shall
thereafter be deemed to refer to such Principal Party; and
(D) the Principal Party shall, in addition to the reservation of
shares of its common stock as provided in the proviso to clause (B) above,
take such steps (including without limitation compliance with the Company's
other obligations as set forth in 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
19
Rights; provided, however, that, upon the subsequent occurrence of any
merger, consolidation, sale of all or substantially all assets,
recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each holder of
a Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the Purchase Price, such cash, shares, rights, warrants and other
property which such holder would have been entitled to receive had such
holder, at the time of such transaction, owned the shares of common stock of
the Principal Party purchasable upon the exercise of a Right, and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property.
(b) For purposes of this Agreement, "Principal Party" shall mean
(i) in the case of any transaction described in clause (i) or
(ii) of Section 13(a), (A) the Person that is the issuer of the securities
into which shares of Common Stock are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer the
common stock of which has the greatest market value, or (B) if no securities
are so issued, (x) the Person that is the other party to the merger or
consolidation and that survives said merger or consolidation, or, if there is
more than one such Person, the Person the common stock of which has the
greatest market value or (y) if the Person that is the other party to the
merger or consolidation does not survive the merger or consolidation, the
Person that does so survive (including the Company if it survives); and
(ii) in the case of any transaction described in clause (iii)
of Section 13(a), the Person that is the party receiving the greatest portion
of the assets or earning power transferred pursuant to such transaction or
transactions, 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, whichever of such Persons is the issuer
of common stock having the greatest market value of shares outstanding;
provided, however, that in any such case, (1) if the common stock of such
Person is not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another corporation the common
stock of which is and has been so registered, Principal Party shall refer to
such other corporation; (2) if the common stock of such Person is not and has
not been so registered and such Person is not a direct or indirect Subsidiary
of another corporation the common stock of which is and has been so
registered, "Principal Party" shall refer to the corporation which ultimately
controls such Person; (3) in case such Person is a Subsidiary, directly or
indirectly, of more than one corporation, the common stocks of all of which
are and have been so registered, "Principal Party" shall refer to whichever
of such corporations is the issuer of common stock having the greatest market
value of shares held by the public; and (4) if the common stock of such
Person is not and has not been so registered and 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 clauses (1), (2) and (3) above shall apply to each of the chains of
ownership having an interest in such joint venture as
20
if such Person were a "Subsidiary" of both or all of such joint venturers and
the Principal Party in each such chain shall bear the obligations set forth
in this Section 13 in the same ratio as its direct or indirect interests in
such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless prior thereto the Company and the Principal Party
shall have executed and delivered to the Rights Agent a supplemental
agreement making valid provision for the results described in clause (A) of
Section 13(a) and confirming that the Principal Party will perform its
obligations under this Section 13(a); provided, however, that in no case may
the Company consummate any such consolidation, merger, sale or transfer if
(i) at the time of or immediately after such transaction 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 (ii) prior to,
simultaneously with or immediately after such transaction, the shareholders
of the Person which constitutes, or would constitute, the Principal Party for
purposes of this Section 13 shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
(d) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. This
Section 13 shall not be applicable to a transaction described in
Subparagraphs (i), (ii) or (iii) of Subsection (a) of this Section if (i)
such transaction is consummated with a Person or Persons who acquired Common
Stock pursuant to a Qualified Offer (or a wholly owned subsidiary of any such
Person or Persons), (ii) the price per share of Common Stock offered in such
transaction or distributable to shareholders upon conclusion of such
transaction is not less than the price per share of Common Stock paid to all
holders of Common Stock whose shares were purchased pursuant to such
Qualified Offer and (iii) the form of consideration being offered to the
remaining holders of Common Stock pursuant to such transaction or
distributable to shareholders upon conclusion of such transaction is the same
as the form of consideration paid pursuant to such Qualified Offer. Upon
conclusion of any transaction described in the foregoing sentence, all Rights
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. If the
Company shall elect not to issue such 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, as reported in the principal consolidated
transaction reporting system with
21
respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the
average of the high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ. If on any such date the Rights are not quoted by any
such organization, the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used. Any such
determination of current market value shall be described in a statement filed
with the Rights Agent.
(b) The Company shall not be required to issue fractions of shares
upon exercise of a Right or to distribute certificates which evidence
fractional shares. In lieu of fractional shares, the Company shall 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 a share of Common Stock. For purposes of this
Section 14, the current market value of a share of Common Stock shall be the
closing price of a share of Common Stock (as determined pursuant to the
second sentence of Section 11(d)) for the Trading Day immediately prior to
the date of such exercise.
(c) The holder of a Right by the acceptance thereof expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Agreement 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, any registered holder 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, any other registered holder
of the Common Stock), may, on his own behalf and for his own benefit,
enforce, and may institute and maintain, any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting
the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will be entitled
to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of the obligations of any Person
subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) on and after the Distribution Date, the Right Certificates will
be transferable only on the registry books
22
of the Rights Agent and then if surrendered at the stock transfer office of
the Rights Agent, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common 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 shall
be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Common 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 stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 24), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense 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.
Anything to the contrary notwithstanding, in no event shall the Rights Agent
be liable for special, punitive, indirect, consequential or incidental loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if the Rights Agent has been advised of the likelihood of such loss or
damage.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
Right Certificate or Certificate for 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, acting with reasonable
care, to be genuine and to be signed, executed and, where necessary, verified
or acknowledged, by the proper person or persons.
If and for so long as the Rights are listed on the New York Stock
Exchange or the American Stock Exchange, the Rights Agent, if its principal
offices are located outside New
23
York City, shall maintain in the New York City area facilities for the
servicing of the Rights in the area of Manhattan located south of Xxxxxxxx
Street. Such facilities may consist of either an office or agency where
transactions in the Rights are serviced directly or a "drop" where Common
Stock certificates, Right Certificates, and other instruments relating to
transactions in Rights may be received for redelivery to an office or agency
outside New York City, all in accordance with the applicable rules of the
stock exchange on which the Rights are listed.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto, provided 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 Rights Agent and deliver
such Right Certificates so countersigned, and in case at that time any of the
Right Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent and in
all such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned, and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name, and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right
Certificates, 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
24
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by
the Chairman of the Board, the President, any Vice President, 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.
(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 adjustment required
under the provisions of Section 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 adjustment), nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares of stock to be issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of 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 performance 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 the
Chairman of the Board, the President, any Vice President or the Secretary 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.
25
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) 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 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without first obtaining the Company s
approval.
Section 21. Change of Rights Agent. Unless the Company and the Rights
Agent agree to a shorter time period, the Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this
Agreement upon 15 days notice in writing mailed to the Company and to each
transfer agent of Common Stock by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. Unless the Company and
the Rights Agent agree to a shorter time period, the Company may remove the
Rights Agent or any successor Rights Agent upon 15 days notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of 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 15 days after
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 the State of
California (or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the
State of California) in good standing, having a stock transfer office in the
State of California, which is authorized under such laws to exercise stock
transfer powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50,000,000. After appointment,
the successor Rights Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed, but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time
held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of
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
26
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 Expiration Date, the Purchase Price per share or
the number or kind or class of shares of stock or other securities or
property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option and as
provided herein, and notwithstanding the provisions of Sections 11 and 13 of
this Agreement, elect to redeem all but not less than all of the then
outstanding Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend, reclassification or
similar transaction occurring after the date hereof (such redemption price
being herein referred to as the "Redemption Price") at any time up to the
Close of Business on a Stock Acquisition Date.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Company shall make a public
announcement thereof, and from and after the date of such announcement,
without any further action and without any further notice, the right to
exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. As soon as
practicable after the election of the Board of Directors to redeem 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. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of redemption will state the method by which the payment of the Redemption
Price will be made.
Section 24. Notice of Proposed Actions. In case the Company, after the
Rights become exercisable, shall propose (i) to pay any dividend payable in
stock of any class to the holders of its Common Stock or the Subject Shares
or to make any other distribution to the holders of its Common Stock or
Subject Shares (other than a regular periodic cash dividend), or (ii) to
offer to the holders of its Common Stock or Subject Shares rights or warrants
to subscribe for or to purchase any additional shares of Common Stock or
shares of stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Common Stock or Subject Shares
(other than a reclassification involving only the subdivision of outstanding
shares of Common Stock) or any recapitalization or reorganization of the
Company, or (iv) to effect any consolidation or merger into or with, or to
effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50 percent of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person, or (v)
to effect the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Right, in
27
accordance with Section 25, a notice of such proposed action, which shall
specify the record date for the purposes of such dividend, distribution of
rights or warrants, or the date on which such reclassification,
recapitalization, reorganization, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of Common Stock and/or Subject Shares,
if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least twenty days
prior to the record date for determining holders of the Common Stock and/or
Subject Shares 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 Common Stock
and/or Subject Shares, whichever shall be the earlier. The failure to give
notice required by this Section 24 or any defect thereon shall not affect the
legality or validity of the action taken by the Company or the vote upon any
such action.
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:
International Rectifier Corporation
000 Xxxxxx Xxxxxx
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxx, Chairman of the Board
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 sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:
ChaseMellon Shareholder Services, L.L.C.
000 Xxxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to or on 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 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 and the Rights Agent shall, if the Company so directs, supplement
or amend this Agreement without the approval of any holders of Right
Certificates in order (i) to cure any ambiguity, (ii) to
28
correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, (iii) to shorten or
lengthen any time period, or (iv) to change or supplement the provisions
hereof in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Right
Certificates; provided, however, this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable, or (B) any other time period, unless such
lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights. Upon the delivery
of a certificate from an appropriate officer of the Company which states that
the proposed supplement or amendment is in compliance with the terms of this
Section 26, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary: (1) no
supplement or amendment shall be made which changes the Redemption Price, the
Purchase Price or the number of shares or Units for which a Right is
exercisable; and (2) the duration of the Rights may not be shortened without
the written consent of the registered holders thereof (other than by a
redemption of the Rights pursuant to Section 23). 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 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 subject to the provisions of Section 7(f) hereof) for 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").
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 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
29
the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the 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 subject to the
provisions of Section 7(f) hereof) held by each holder of Rights.
(c) If there shall not be sufficient authorized Common Stock to
permit an exchange of Rights as contemplated in accordance with this Section,
the Company shall take all such action as may be necessary to authorize
additional Common Stock or Equivalent Stock for issuance upon exchange of the
Rights.
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. Determination and Actions Taken by the Board of Directors.
For all purposes of this Agreement, any calculation of the number of shares
of Common Stock (or other applicable securities hereunder) outstanding at any
particular time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock (or other securities)
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) (as in effect on the date of this
Agreement) of the General Rules and Regulations under the Exchange Act. The
Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to such Board or to the Company, or as may be necessary
or advisable in the administration of this Agreement, including without
limitation the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or
not redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (B) below, all omissions with respect to the foregoing) which are done
or made by the Board in good faith, shall (A) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (B) not subject the Board to any liability to the holders
of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent
and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the holders of Common Stock) any legal or equitable right,
remedy or claim under this Agreement. This Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
holders of Common Stock).
Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware 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. The rights and obligations of the
Rights Agent under this Agreement shall be governed by and construed in
accordance with the laws in effect in the State of Delaware.
Section 32. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
30
Section 33. Section 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.
Section 34. 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, illegal, or unenforceable, (i) such invalid,
illegal or unenforceable term, provision, covenant or restriction shall
nevertheless be valid, legal and enforceable to the extent, if any, provided
by such court or authority, and (ii) 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
INTERNATIONAL RECTIFIER CORPORATION:
By: /s/ L. Xxxxxxx Xxxxxxx
Title: Secretary
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.:
By: /s/ Xxxxx Xxxxxxxx
Title: Assistant Vice President
31
Exhibit A
[Form of Right Certificate]
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER PUBLIC ANNOUNCEMENT OF REDEMPTION IS MADE. THE RIGHTS
ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON
THE TERMS SET FORTH IN THE AGREEMENT. IF THE RIGHTS REPRESENTED BY THIS
CERTIFICATE ARE ISSUED TO A PERSON WHO IS AN ACQUIRING PERSON OR AN ASSOCIATE
OR AFFILIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR
CERTAIN TRANSFEREES THEREOF, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BE SUBJECT TO CERTAIN LIMITATIONS IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7 OF THE RIGHTS AGREEMENT.
RIGHT CERTIFICATE
This certifies that _______________, or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the
owner thereof, subject to the terms, provisions and conditions of the Amended
and Restated Rights Agreement, dated as of December __ , 1998 (the "Rights
Agreement"), between International Rectifier Corporation, (the "Company"),
and ChaseMellon Shareholder Services, L.L.C. (the "Rights Agent"), to
purchase from the Company, unless the Rights have been previously redeemed,
at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to the Expiration Date (as such term is defined
in the Rights Agreement), or the date, if any, on which the Rights evidenced
by this Certificate may be redeemed, at the stock transfer office of the
Rights Agent, or its successors as Rights Agent, one one-thousandth of a
fully paid and nonassessable share of Junior Participating Preferred Stock
("Preferred Shares"), at a purchase price of $135 (the "Purchase Price"),
upon presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly completed and executed. The number of Rights
evidenced by this Right Certificate as set forth above (and the number of
shares which may be purchased upon exercise thereof), and the Purchase Price
set forth above, are the number and Purchase Price as of the date of the
Rights Agreement based on the shares of Common Stock of the Company as
constituted at such date.
Upon the occurrence of an event described in clause (A), (B), (C) or
(D) of Section 11(a)(ii) of the Rights Agreement, the holder of any Rights that
are, or were, beneficially owned by an Acquiring Person or an Associate or
Affiliate thereof (as such terms are defined in the Rights Agreement) or certain
transferees thereof which engaged in, or realized the benefit of, an event or
transaction or transactions described in clause (A), (B), (C) or (D) of such
Section 11(a)(ii), shall not be entitled to the benefit of the adjustment
described in such Section 11(a)(ii). As provided in the Rights Agreement, the
Purchase Price and the number and class of shares 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, which limitations of rights include the temporary
suspension of the exercisability of such Rights under specific circumstances
set forth in the Rights Agreement. Copies of the Rights Agreement are on file
at the above-mentioned office of the Rights Agent and at the principal office
of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the stock transfer office of the Rights Agent set forth above,
may be exchanged for another Right Certificate or Right Certificates of like
tenor and date evidencing Rights entitling the holder to purchase such number
of shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of $.01 per Right.
No fractional shares will be issued upon the exercise of any Rights
evidenced hereby, but in lieu thereof a cash payment may be made, as provided in
the Rights Agreement. No holder of this Right Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares or
of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signatures of the proper officers of the Company.
Dated as of ____________, ____.
Attest:
By:
Title: Secretary
Countersigned:
By:
Authorized Signature
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED hereby
sells, assigns and transfers unto
(Please print name and address of
transferee) this Right Certificate, together with all right,
title and interest therein, and does hereby irrevocably
constitute and appoint Attorney to
transfer the within Right Certificate on the books of the within-
named Corporation, with full power of substitution.
Dated: ____________,
____Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best knowledge
of the undersigned) by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is 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 an Acquiring Person (as such terms are defined
in the Rights Agreement);
(2) the undersigned [ ] 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
Signature Guaranteed:
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.
1
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Right
Certificate.)
To the Company and the Rights Agent: The undersigned hereby irrevocably elects
to exercise _________________ Rights represented by this Right Certificate and
to purchase the shares issuable 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:
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best
knowledge of the undersigned) 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 an Acquiring Person (as such terms are defined
in the Rights Agreement);
(2)the undersigned [ ] 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
Signature Guaranteed:
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.
