Exhibit 1.1
-----------------------------------------------------------
LUMENIS LTD.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
Rights Agent
Bonus Rights Agreement
Dated as of April 11, 2003
-----------------------------------------------------------
TABLE OF CONTENTS
Page
----
Section 1. Certain Definitions................................................................ 4
Section 2 Appointment of Rights Agent........................................................ 9
Section 3. Issue of Right Certificates........................................................ 9
Section 4. Form of Right certificates.........................................................11
Section 5. Countersignature and Registration..................................................12
Section 6. Transfer, Split-up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates............................12
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights......................13
Section 8. Cancellation and Destruction of Right Certificates.................................15
Section 9. Reservation and Availability of Ordinary Shares....................................16
Section 10. Ordinary Shares Record Date........................................................17
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights ................17
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.........................28
Section 13. Consolidation, Merger or Sale or Transfer of assets or Earning Power...............28
Section 14. Fractional Rights and Fractional Shares............................................31
Section 15. Rights of Action...................................................................32
Section 16. Agreement of Right Holders.........................................................33
Section 17. Right Certificate holder Not Deemed a Shareholder..................................33
Section 18. Concerning the Rights Agent........................................................34
Section 19. Merger or Consolidation or Change of Name of Rights Agent..........................34
Section 20. Duties of Rights Agent.............................................................35
Section 21. Change of Right Agent..............................................................38
Section 22. Issuance of New Right Certificates.................................................39
Section 23. Redemption and Exchange............................................................39
Section 24. Notice of Certain Events...........................................................42
Section 25. Notices............................................................................43
Section 26. Supplements and Amendments.........................................................44
Section 27. Successors.........................................................................45
Section 28. Benefits of this Agreement.........................................................45
Section 29. Severability.......................................................................45
Section 30. Governing Law......................................................................45
Section 31. Counterparts.......................................................................46
Section 32. Descriptive Headings...............................................................46
Section 33. Determination and Actions by the Board of Directors................................46
- ii -
BONUS RIGHTS AGREEMENT
Bonus Rights Agreement, dated as of April 11, 2003, (the "Rights
Agreement") between Lumenis Ltd., an Israeli corporation (the "Company"), and
American Stock Transfer & Trust Company, as Rights Agent (the "Rights Agent").
The Board of Directors of the Company (the "Board of Directors") has
authorized the distribution of one bonus right (a "Right") for each Ordinary
Share (as defined in Section 1(i) hereof) of the Company outstanding on April
11, 2003 (the "Record Date"), and has authorized the issuance of one Right (as
such number may be hereinafter adjusted pursuant to the terms hereof) with
respect to each Ordinary Share that shall be issued (whether originally issued
or delivered from the Company's treasury) between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date (as such terms are defined in Sections 3 and 7 hereof) and, in certain
circumstances provided in Section 22 hereof, after the Distribution Date, each
Right initially representing the right to purchase one Ordinary Share.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Rights Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 15% or more of the Ordinary Shares of the
Company then outstanding but shall not include (i) the Company, in pursuance to
Section 308 of the Companies Law (as defined hereunder), (ii) any wholly-owned
Subsidiary of the Company, in pursuance to Section 309 of the Companies Law, or
otherwise, (iii) any employee benefit plan of the Company or of any subsidiary
or Affiliate of the Company, (iv) any entity holding shares of share capital of
the Company for or pursuant to the terms of any such plan, (v) Coherent, Inc., a
Delaware corporation ("Coherent"), so long as Coherent shall not purchase or
otherwise become (as a result of the actions of Coherent or its Affiliates or
Associates) the Beneficial Owner of more than 23% of the Ordinary Shares then
outstanding or, if applicable, such greater percentage as may be contemplated by
Section 5.18 of the Asset Purchase Agreement by and among the
Company, Energy Systems Holdings Inc. and Coherent dated as of February 25,
2001, (vi) any Person who, along with such Person's Affiliates and Associates,
becomes an Acquiring Person (as defined in the preceding clauses of this Section
1(a)) as a result of a Qualified Offer (as defined in Section 11(a)(ii) hereof),
(vii) any Person who becomes an Acquiring Person (as defined in the preceding
clauses of this Section 1(a)) by virtue of acquiring Ordinary Shares as a result
of participation by such Person and such Person's Affiliates and Associates in
any dividend reinvestment plan, stock option plan or other similar plan or
arrangement of the Company or its Subsidiaries or Affiliates; provided that such
Person, including such Person's Affiliates and Associates, does not acquire
thereafter any additional Ordinary Shares, exclusive of (x) Ordinary Shares
acquired by such Person and such Person's Affiliates and Associates as a result
of stock dividends, stock splits, recapitalizations or similar transaction in
which the Company did not receive any consideration for issuing the Ordinary
Shares; (y) Ordinary Shares acquired by such Person and such Person's Affiliates
and Associates as a result of devises, bequests and intestate succession; and
(z) Ordinary Shares acquired by such Person and such Person's Affiliates and
Associates as a result of participation by such Person and such Person's
Affiliates and Associates in any dividend reinvestment plan, stock option plan
or other similar plan or arrangement of the Company or its Subsidiaries or
Affiliates or (viii) any Person who becomes an Acquiring Person (as defined in
the preceding clauses of this Section 1(a)) inadvertently or without knowledge
of the terms of the Rights and who or which, together with all Affiliates and
Associates, thereafter does not acquire additional Ordinary Shares while the
Beneficial Owner of 15% or more of the Ordinary Shares then outstanding;
provided that if so requested by the Company, (x) such Person shall certify
within 10 Business Days of being so requested, that such Person had acquired the
Ordinary Shares inadvertently or without knowledge of the terms of the Rights
and (y) such Person shall promptly sell any shares acquired in excess of the
applicable threshold that would have otherwise caused such Person to be an
Acquiring Person. Notwithstanding the foregoing, no Person shall become an
Acquiring Person as the result of an acquisition of Ordinary Shares by the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or more
of the Ordinary Shares of the Company then outstanding; provided, however, that
if a Person who becomes the Beneficial Owner of 15% or more of the Ordinary
Shares of the Company then outstanding by reason of share purchases by the
Company shall, after such share purchases by the Company, become the Beneficial
Owner of any additional Ordinary Shares of the Company constituting 1.5% or more
of the Ordinary Shares then outstanding,
- 2 -
then such Person shall be deemed to be an Acquiring Person.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations, as in
effect on the date of this Rights Agreement, under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(c) "Audit Committee" shall mean the Audit Committee of the Board of
Directors or, if there is then no such Audit Committee, all of the Company's
outside directors (as such terms is used in the Companies Law), then serving on
the Board of Directors or, if there are then no outside directors serving on the
Board of Directors, the Board of Directors.
(d) A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or has
"Beneficial Ownership" of (as determined pursuant to Rule 13d-3 under the
Exchange Act), including pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulation of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor report);
(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 conversion rights, exchange rights, rights (other than the Rights), warrants
or options, or otherwise; provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own, securities tendered pursuant to
a tender or exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own,
- 3 -
any security if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations of the Exchange Act
and (2) is not also then reportable on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person or
any of such Person's Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to Section 1(d)(ii)(B))
or disposing of any securities of the Company;
provided, however, that nothing in this paragraph (d) shall cause a Person
engaged in business as an underwriter of securities to be the Beneficial Owner
of, or to "beneficially own", any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition; and provided
further, however, that any shareholder of the Company, with Affiliates(s),
Associate(s) or other Person(s) who may be deemed representatives of it serving
as director(s) of the Company, shall not be deemed to "beneficially own"
securities held by other Persons as a result of (i) Affiliates or Associates of
such shareholder serving as directors or taking any action in connection
therewith, (ii) discussing the status of its Ordinary Shares with the Company or
other shareholders of the Company similarly situated or (iii) voting or acting
in a manner similar to other shareholders similarly situated, absent a finding
by the Board of Directors of an agreement among such shareholder to act in
concert with one another as shareholders so as to cause, in the good faith
judgment of the Board of Directors, each such shareholder to be the Beneficial
Owner of the Ordinary Shares held by the other shareholder(s).
(e) "Business Day" shall mean any day other than a, Saturday, Sunday, or
U.S. federal holiday.
(f) "Companies Law" shall mean the Israeli Companies Law, 5759-1999, and
the regulations promulgated thereunder.
- 4 -
(g) "Close of Business" or any given date shall mean 5:00 P.M., New York
City time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business
Day.
(h) "Nasdaq Stock Market" The Nasdaq Stock Market, Inc.
(i) "Ordinary Shares" when used with reference to the Company shall mean
the Ordinary Shares, par value NIS 0.10 per share, of the Company. "Ordinary
Shares" when used with reference to any Person other than the Company shall mean
the share capital (or equity interest) with the greatest voting power of such
other Person or, if such Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.
(j) "Person" shall mean any individual, partnership, firm, corporation or
other entity, and shall include any successor (by merger or otherwise) of such
entity.
(k) "Section 11 Event" shall mean any event described in Section 11(a)(ii)
hereof.
(l) "Shares Acquisition Date" shall mean the date of the public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person indicating that an Acquiring Person has become
such.
(m) "Subsidiary" of any Person shall mean any corporation or other entity
of which a majority of the voting power of the voting equity securities or
equity interests is owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Ordinary Shares) in accordance with the terms and
conditions thereof, and the Rights Agent hereby accepts, such appointment. The
Company may from time to time appoint such Co-Rights Agent, as it may deem
necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier of (i)
the Shares Acquisition Date or (ii) the Close of Business on the tenth Business
Day (or such later date as the Board of Directors, with the concurrence of the
Audit Committee, shall determine) after
- 5 -
the date of the commencement of (within the meaning of Rule 14d-2 under the
Exchange Act), a tender or exchange offer the consummation of which would result
in any Person's becoming an Acquiring Person (including any such date which is
after the date of this Rights Agreement and prior to the issuance of the Rights;
the earlier of such dates referred to in clauses (i) and (ii) of this Section
3(a) being herein referred to as the "Distribution Date"), (x) the Rights will
be evidenced (subject to the provisions of paragraph (b) of this Section 3) by
the certificates for Ordinary Shares registered in the names of the holders
thereof (which certificates for Ordinary Shares shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of Ordinary Shares. The Board of Directors may defer the date set forth
in clause (ii) of the preceding sentence to a specified later date or to an
unspecified later date, each to be determined by action of the Board of
Directors, with the concurrence of the Audit Committee. As soon as practicable
after the Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, insured, postage-prepaid
mail, to each record holder of Ordinary Shares as of the Close of Business on
the Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit A hereto,
evidencing one Right for each Ordinary Share so held. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) At the request of any holder of Ordinary Shares, the Company will send
or cause to be sent a copy of a Summary of Rights to Purchase Ordinary Shares,
in substantially the form attached hereto as Exhibit B (the "Summary of
Rights"), by first-class, postage-prepaid mail, to the address of such holder
shown on the records of the Company. With respect to certificates for Ordinary
Shares outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for Ordinary Shares registered in
the names of the holders thereof. Until the Distribution Date (or the earlier
Redemption Date or Final Expiration Date), the surrender for transfer of any
certificate for Ordinary Shares outstanding on the Record Date shall also
constitute the transfer of the Rights associated with the Ordinary Shares
represented thereby.
(c) Certificates issued for Ordinary Shares (including, without
limitation, certificates issued upon transfer or exchange of Ordinary Shares)
after the Record Date but prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration
- 6 -
Date shall have impressed on, printed on, or written on or otherwise affixed to
them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Bonus Rights Agreement between Lumenis
Ltd. and the Rights Agent thereunder (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 Lumenis Ltd. 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. Lumenis Ltd. 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, Rights issued to
Acquiring Persons or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement) may become null and void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Ordinary Shares
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Ordinary Shares represented thereby.
Section 4. Form of Right Certificates. Each Right Certificate (and the
forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially the same as Exhibit 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 Rights Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Each Right Certificate
shall entitle the holder thereof to purchase such number of Ordinary Shares as
shall be set forth therein at the price per share set forth therein (such price
per whole Ordinary Share, the "Purchase Price"), but the number and kind of such
shares and the Purchase Price shall be subject to adjustment as provided herein.
In addition, the Company shall have the right to attach a certificate to any
Right Certificate providing for the holder thereof to certify
- 7 -
whether or not such Person is or was an Acquiring Person or an Affiliate or
Associate thereof or whether such Person acquired the Rights evidenced by such
Right Certificate from any such Person. In the event the Company attaches such a
certificate to any Right Certificate, proper execution of such certificate shall
be a prerequisite to the exercise of the Rights associated therewith as set
forth in the applicable provisions of this Rights Agreement.
Section 5. Countersignature and Resignation. The Right Certificates shall
be executed on behalf of the Company by its Chief Executive Officer either
manually or by facsimile signature, shall have affixed thereto the Company's
seal or a facsimile thereof and shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Right Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Right Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent, and issued and delivered by the
Company with the same force and effect as though the Person who signed such
Right Certificates had not ceased to be such officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any Person who, at
the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
execution of this Rights Agreement any such Person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its principal offices, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, any time after the Close of Business on
the Distribution Date, and at or prior to the Close of Business on the earlier
of the Redemption Date or the Final Expiration Date, any
- 8 -
Right Certificate or Right Certificates (other than Rights Certificates
representing Rights that may have been exchanged pursuant to Section 23(c)
hereof) may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase a
like number of Ordinary Shares 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 or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent. Thereupon the
Rights Agent shall countersign and deliver to the Person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment from the holder of Right Certificates 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 such Right
Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's or the Rights
Agent's request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the principal office of the Rights Agent, together with
payment of the Purchase Price for each Ordinary Share as to which the Rights are
exercised, at or prior to the earlier of (i) the Close of Business on May 31,
2005 (the "Final Expiration Date"), or (ii) the time at which the Rights are
redeemed or exchanged as provided in Section 23 hereof (the "Redemption Date").
- 9 -
(b) The Purchase Price payable pursuant to the exercise of Rights shall
initially be $18.00 shall be subject to adjustment from time to time as provided
in Sections 11 and 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof, in cash, or by certified check
or bank draft payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) requisition from any transfer agent of the Ordinary
Shares (or make available, if the Rights Agent is the transfer agent)
certificates for the number of Ordinary Shares to be purchased, and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, (ii) when appropriate, requisition from the Company the amount of
funds to be paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) promptly after receipt of such certificates, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and (iv) when appropriate, after receipt, promptly deliver such funds to
or upon the order of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11 Event on which the consideration to be delivered by the Company upon exercise
of the Rights has been determined pursuant to this Rights Agreement (including
in accordance with Section 11(a)(iii) hereof), or as soon as is required by law
following the Distribution Date, as the case may be, a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Ordinary Shares or other securities purchasable upon exercise of
the Rights on an appropriate form, (ii) cause such registration statement to
become effective
- 10 -
as soon as practicable after such filing and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such Ordinary Shares or other
securities and (B) the Final Expiration Date. The Company will also take such
actions as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states and non-U.S. jurisdictions
in connection with the exercise of the Rights. The Company may temporarily
suspend, for a period of time not to exceed one hundred twenty (120) days after
the date set forth in clause (i) of the first sentence of this Section 7(e), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective or to comply with applicable
securities law requirements of other jurisdictions. Upon any such suspension,
the Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. In addition, if the Company
shall determine that a registration statement or foreign equivalent is required
following the Distribution Date, the Company may temporarily suspend the
exercisability of the Rights until such time as a registration statement has
been declared effective and any applicable foreign requirements have been
satisfied. Notwithstanding any provision of this Rights Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained or the
exercise thereof shall not be permitted under applicable law or a registration
statement shall not have been declared effective.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate acquired by the Company otherwise
then 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.
- 11 -
Section 9. Reservation and Availability of Ordinary Shares. The Company
covenants and agrees that it will use its best efforts to cause to be reserved
and kept available out of its authorized and unissued Ordinary Shares, or any
authorized and issued Ordinary Shares held in its treasury, the number of
Ordinary Shares that will be sufficient to permit the exercise in full of all
outstanding Rights.
So long as the Ordinary Shares issuable upon the exercise of Rights may be
listed on any national securities exchange or quoted on the Nasdaq Stock Market,
the Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to be listed on
such exchange or the Nasdaq Stock Market upon official notice of issuance upon
such exercise.
The Company covenants and agrees that it will take all such action as may
be necessary to ensure that all Ordinary 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 non-assessable.
The Company further covenants and agrees that it will pay when due and
payable any and all transfer taxes and charges which may be payable by the
Company in respect of the issuance or delivery of the Right Certificates or of
any Ordinary Shares upon the exercise of Rights. The Company shall not, however,
be required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates for the Ordinary Shares in a name other
than that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or deliver any certificates for Ordinary
Shares upon the exercise of any Rights until any such tax shall have been paid
(any such tax being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company's satisfaction
that no such tax is due.
Section 10. Ordinary Shares Record Date. Each Person in whose name any
certificate for Ordinary Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Ordinary
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Ordinary Shares transfer books of the Company are closed, such Person
shall
- 12 -
be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Ordinary Shares transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Right Certificate, as such, shall
not be entitled to any rights of a shareholder 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 shall not
be entitled to receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Ordinary Shares or fraction of an
Ordinary Share covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of this
Rights Agreement (A) declare a dividend on the Ordinary Shares payable in
Ordinary Shares, (B) subdivide the outstanding Ordinary Shares, (C) combine the
outstanding Ordinary Shares into a smaller number of shares or (D) issue any
shares of its share capital in a reclassification of the Ordinary Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of share capital 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 share capital which, if such
Right had been exercised immediately prior to such date and at a time when the
Ordinary Shares transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; If an event occurs which would
require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event any Person, at any time after the date hereof,
shall become an Acquiring Person, unless the event causing such Person to become
an Acquiring Person is an acquisition of Ordinary Shares pursuant to a tender
offer or an exchange offer for all outstanding Ordinary Shares at a price and on
terms determined by the Board of Directors,
- 13 -
with the concurrence of the Audit Committee, to be (x) at a price that is fair
to shareholders (taking into account all factors which such members of the Board
of Directors deem relevant including, without limitation, prices which could
reasonably be achieved if the Company or its assets were sold on an orderly
basis designed to realize maximum value) and not inadequate and (y) otherwise in
the best interests of the Company and its shareholders (a "Qualified Offer"),
then, and in each such case, proper provision shall be made so that each holder
of a Right, except as provided below, shall thereafter have a right to receive,
upon exercise thereof in accordance with the terms of this Rights Agreement,
such number of Ordinary Shares as shall equal the result obtained by (x)
multiplying the then-current Purchase Price by the number of Ordinary Shares for
which a Right is then exercisable and (y) dividing that product by 50% of the
Current Market Price per share (as defined in Section 11(d) hereof) of the
Ordinary Shares (such number of Ordinary Shares is herein called the "Adjustment
Shares"); provided, however, that if the transaction that would otherwise give
rise to the foregoing adjustment is also subject to the provisions of Section 13
hereof, then only the provisions of Section 13 hereof shall apply and no
adjustment shall be made pursuant to this Section 11(a)(ii). (To illustrate the
adjustment in the immediately proceeding sentence: If (i) the "then-current
Purchase Price" is $18.00, (ii) the "number of Ordinary Shares for which a Right
is then exercisable" is one and (iii) the "Current Market Price per share of the
Ordinary Shares" is $10.00, then the Adjustment Shares per Right equals 3.6
Ordinary Shares.) Notwithstanding the foregoing, upona Person, alone or together
with its Affiliates and Associates, becoming an Acquiring Person, any Rights
that are or were on or after the earlier of the Distribution Date or Shares
Acquisition Date beneficially owned by the Acquiring Person or any Associate or
Affiliate of the Acquiring Person shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Rights Agreement or
otherwise. Any Right Certificate issued pursuant to Section 3 hereof that
represents Rights beneficially owned by an Acquiring Person or any Associate or
Affiliate thereof and any Right Certificate issued at any time upon the transfer
of any Rights to an Acquiring Person or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate, and any Right
Certificate issued pursuant to Section 6, 7(d) or 22 hereof or this Section 11
upon transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain the following legend
(provided, however, that the Rights Agent shall not be responsible for affixing
such legend unless a responsible officer of
- 14 -
the Rights Agent has actual knowledge as to the foregoing circumstances or the
Company has notified the Rights Agent in writing thereof):
The Rights represented by this Right Certificate were issued to a Person
who was an Acquiring Person or an Affiliate or any Associate of an
Acquiring Person or a nominee thereof. This Right Certificate and the
Rights represented hereby may become void in the circumstances specified
in Section 11(a)(ii) of the Rights Agreement.
The term "Responsible Officer", when used with respect to the Rights Agent
herein, shall mean the chairman of the Board of Directors, the vice chairman of
the Board of Directors, the president, each vice president, the secretary, the
treasurer, each assistant vice president, each corporate trust officer or any
other officer of the Rights Agent customarily performing functions similar to
those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his
knowledge of and familiarity with the particular subject.
(iii) In the event that the number of Ordinary Shares which is
authorized by the Company's articles of association but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii), the Company shall: (A) determine the excess of (1) the value
of the Adjustment Shares issuable upon the exercise of a Right (the "Current
Value") over (2) the Purchase Price (such excess is herein called the "Spread"),
and (B) with respect to each Right and to the extent permitted by applicable
law, make adequate provision to substitute for the Adjustment Shares, upon
exercise of the Rights, (1) cash, (2) a reduction in the Purchase Price, (3)
Ordinary Shares or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock which the Board of
Directors, with the concurrence of the Audit Committee, has deemed to have the
same value as Ordinary Shares (such shares or units of shares of preferred stock
are referred to herein as "Ordinary Share equivalents"), (4) debt securities of
the Company, (5) other assets, or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate value has
been determined by the Board of Directors, with the concurrence of the Audit
Committee; provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (30) days
following the later of (x) the first occurrence of a Section 11 Event and (y)
the date on
- 15 -
which the Company's right of redemption pursuant to Section 23(a) expires (the
later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company, to the extent permitted by applicable law, shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Ordinary Shares (to the extent
available) and then, if necessary, cash, which Ordinary Shares and/or cash have
an aggregate value (to the extent of the Company's cash resources then
available) equal to the Spread. If the Board of Directors shall determine in
good faith that it is likely that sufficient additional Ordinary Shares could be
authorized for issuance upon exercise in full of the Rights, the thirty (30) day
period set forth above may be extended to the extent necessary, but not more
than one hundred twenty (120) days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek shareholder approval for the authorization of
such additional Ordinary Shares (such period, as it may be extended, the
"Substitution Period"). To the extent that the Company determines that some
action should be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii) the Company (x) shall provide (except as otherwise provided
herein), that such action shall apply uniformly to all outstanding Rights, and
(y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional securities
and/or to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Ordinary Shares shall be the
Current Market Price per share of the Ordinary Shares on the Section 11(a)(ii)
Trigger Date and the value of any "Ordinary Share equivalents" shall be deemed
to have the same value as the Ordinary Shares on such date.
(b) In case the Company shall fix a record date for the issuance of Rights
or warrants to all holders of Ordinary Shares entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or
purchase Ordinary Shares (or securities convertible into Ordinary Shares) at a
price per Ordinary Share (or having a conversion price per Ordinary Share, if a
security convertible into Ordinary Shares) less than the Current Market Price
per share of the Ordinary Shares (as defined in Section 11(d) hereof) on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction,
- 16 -
the numerator of which shall be the number of Ordinary Shares outstanding on
such record date plus the number of Ordinary Shares which the aggregate offering
price of the total number of Ordinary Shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price and the denominator of
which shall be the number of Ordinary Shares outstanding on such record date
plus the number of additional Ordinary Shares to be offered for subscription or
purchase (or into which the securities so to be offered are initially
convertible). In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors,
with the concurrence of the Audit Committee, whose determination shall be
described in a statement delivered to the Rights Agent. Ordinary Shares owned by
or held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event 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 fix a record date for the making of a
distribution to all holders of the Ordinary Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend out of the earnings or
retained earnings of the Company) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the Current Market Price per share of the Ordinary Shares (as
defined in Section 11(d) hereof) on such record date, less the fair market value
(as determined in good faith by the Board of Directors, with the concurrence of
the Audit Committee, whose determination shall be described in a statement filed
with the Rights Agent) of the portion of the assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants applicable to
one Ordinary Share and the denominator of which shall be such current per share
market price of the Ordinary Shares. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution is
not so made, 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.
- 17 -
(d) For the purpose of any computation hereunder, other than computations
made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" of the
Ordinary Shares on any date shall be deemed to be the average of the daily
closing prices per share of such Ordinary Shares for the thirty (30) consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date, and for purposes of computations made pursuant to Section 11(a)(iii)
hereof, the Current Market Price per share of the Ordinary Shares on any date
shall be deemed to be the average of the daily closing prices per share of such
Ordinary Shares for the ten (10) consecutive Trading Days immediately following
such date; provided, however, that in the event that the Current Market Price
per share of the Ordinary Shares is determined during a period following the
announcement by the issuer of the Ordinary Shares of (i) any dividend or
distribution on such Ordinary Shares, payable in shares of such Ordinary Shares
or securities convertible into shares of such Ordinary Shares (other than the
Rights), or (ii) any subdivision, combination or reclassification of such
Ordinary Shares, and the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification shall not
have occurred prior to the expiration of the requisite thirty (30) Trading Day
period or ten (10) Trading Day period, as set forth above, then, and in each
such case, the Current Market Price shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Ordinary Shares 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 Ordinary Shares are listed or admitted to trading or, if
the Ordinary Shares are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported on
the Nasdaq Stock Market or, if on any such date the Ordinary Shares are not
quoted on the Nasdaq Stock Market, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Ordinary Shares selected by the Board. If on any such date no market maker is
making a market in the Ordinary Shares, the fair value of such Ordinary Shares
on such date as determined in good faith by the Board of Directors shall be
used. The term "Trading Day" shall mean a day on which the principal stock
market on which the Ordinary Shares are listed or admitted to trading is open
for the
- 18 -
transaction of business or, if the Ordinary Shares are not listed or admitted to
trading on any stock market, a Business Day. If the Ordinary Shares are not
publicly held or not so listed or traded, "Current Market Price" per share shall
mean the fair value per share as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a), the
holder of any Right thereafter exercised shall become entitled to receive any
shares of share capital of the Company other than Ordinary Shares, thereafter
the number of such other shares so receivable upon exercise of any Right shall
be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Ordinary Shares
contained in Section 11(a) through (c), inclusive, and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Ordinary Shares shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Ordinary Shares or
fraction of an Ordinary Share purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of Ordinary Shares or
fraction of an Ordinary Share (calculated to the nearest ten-thousandth)
obtained by (i) multiplying (x) the number of Ordinary Shares or fraction of an
Ordinary
- 19 -
Share covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Ordinary Shares or fraction of an Ordinary Share
issuable upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of
Ordinary Shares 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
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
that number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of Ordinary Shares issuable upon the exercise of the Rights, the Right
Certificates theretofore
- 20 -
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) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the Ordinary Shares issuable
upon exercise of the Rights, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable Ordinary Shares at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date the Ordinary
Shares and other share capital or securities of the Company, if any, issuable
upon such exercise over and above the Ordinary Shares and other share capital or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Ordinary Shares, issuance
wholly for cash of any of the Ordinary Shares at less than the current market
price, issuance wholly for cash of Ordinary Shares or securities which by their
terms are convertible into or exchangeable for Ordinary Shares, stock dividends
or issuance of rights, options or warrants referred to hereinabove in this
Section 11, hereafter made by the Company to holders of its Ordinary Shares
shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any time after
the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, assets or earning power
- 21 -
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Section 23 or Section 26 hereof, take (or
permit any Subsidiary to take) any action if at the time such action is taken it
is reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Ordinary Shares
a copy of such certificate and (c) if after the Distribution Date, mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section
25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event that, following the Shares Acquisition Date, directly or
indirectly, (i) the Company shall consolidate with, or merge with and into, any
other Person, (ii) any Person shall consolidate with the Company, or merge with
and into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part of
the Ordinary Shares of the Company shall be changed into or exchanged for stock
or other securities of any other Person (or the Company) or cash or any other
property, or (iii) the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning
- 22 -
power aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person, then, and in each
such case, and except as contemplated by Section 13(d), proper provision shall
be made so that (A) each holder of a Right (except as otherwise provided herein)
shall thereafter have the right to receive, upon the exercise thereof in
accordance with the terms of this Rights Agreement, such number of validly
authorized and fully paid, non-assessable and freely tradable Ordinary Shares of
the Principal Party (as such term is hereinafter defined) as shall be equal to
the result obtained by (x) multiplying the then-current Purchase Price by the
number of Ordinary Shares for which a Right is then exercisable (without taking
into account any adjustment previously made pursuant to Section 11(a)(ii)) and
(y) dividing that product by 50% of the Current Market Price per share of the
Ordinary Shares of such Principal Party (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; (B) such 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 Rights Agreement; (C) the
term "Company" shall thereafter be deemed to refer to such Principal Party; and
(D) such Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of its Ordinary Shares in accordance with
Section 9 hereof) 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 its Ordinary Shares thereafter deliverable
upon the exercise of the Rights.
(b) "Principal Party" shall mean (i) in the case of any transaction
described in Section 13(a)(i) or (ii), the Person that is the issuer of any
securities into which Ordinary Shares are converted in such merger or
consolidation, and if no securities are so issued, the Person that is the other
party to such merger or consolidation, and (ii) in the case of any transaction
described in Section 13(a)(iii) the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions; provided, however, that in any such case, (A) if
the Ordinary Shares of such Person are not at such time and have not been
continuously over the preceding 12-month period registered under Section 12 of
the Exchange Act and such Person is a direct or indirect Subsidiary of another
Person the Ordinary Shares of which are and have been so registered, "Principal
Party" shall refer to such other Person and (B) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Ordinary Shares
of two or more of which are and have been so
- 23 -
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Ordinary Shares having the greatest aggregate market value.
(c)(i) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized Ordinary Shares which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in Section 13(a) and (b) and further providing that, as
soon as practicable after the date of any consolidation, merger, sale or
transfer of assets mentioned in Section 13(a), such Principal Party will (A)
prepare and file a registration statement under the Securities Act, with respect
to the Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such registration
statement to (1) become effective as soon as practicable after such filing and
(2) remain effective (with a prospectus at all times meeting the requirements of
the Securities Act) until the earlier of the Expiration Date or the Redemption
Date, and (B) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates that comply in all
respects with the requirements for registration on Form 10 under the Exchange
Act. The Company shall not enter into any transaction of the kind referred to in
this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
(ii) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that an event described in Section 13(a) shall occur at any time after the
occurrence of an event described in Section 11(a)(ii), the Rights which have not
theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a).
(c) Notwithstanding anything in this Rights Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in Section
13(a)(i) or (ii) if (i) such transaction is consummated with a Person or Persons
(or a Subsidiary of any such Person or Persons) who acquired Ordinary Shares
pursuant to a Qualified Offer (as defined in Section 11(a)(ii)), (ii) the price
per Ordinary Share offered in such transaction is not less that the price
- 24 -
per Ordinary Share paid to all holders of Ordinary Shares whose shares were
purchased pursuant to such tender offer or exchange offer, and (iii) the form of
consideration being offered to the remaining holders of Ordinary Shares pursuant
to such transaction is the same as the form of consideration paid pursuant to
such tender offer or exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares. (a) The Company shall
not be required to issue fractions of Rights or to distribute or cause the
Rights Agent to distribute Right Certificates which evidence fractional Rights.
In lieu of such fractional Rights, to the extent permitted by applicable law,
the Company may, at its option, pay 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 respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported on the Nasdaq Stock Market or
such other system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights selected
by the Board of Directors. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors shall be used.
(b) The Company shall not be required to issue fractions of Ordinary
Shares upon exercise of the Rights or to distribute certificates which evidence
fractional Ordinary Shares. In lieu of fractional Ordinary Shares, to the extent
permitted by applicable law, the Company
- 25 -
may, at its option, pay to the registered holders of Right Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one Ordinary Share. Prior to the
Shares Acquisition Date, a number of Rights must be exercised so that only whole
Ordinary Shares will be issued. For purposes of this Section 14(b), the current
market value of an Ordinary Share shall be the closing price of an Ordinary
Share (as determined pursuant to the second sentence of Section 11(d) hereof)
for the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights expressly waives
his right to receive any fractional Rights or any fractional Ordinary Shares
upon exercise or redemption of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Rights Agreement, except the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Ordinary Shares); and any registered holder of any Right Certificate (or, prior
to the Distribution Date, of any Ordinary Shares), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of any Ordinary Shares), may, in his own behalf and for his
own benefit, enforce this Rights Agreement, and may institute and maintain any
suit, action or proceeding against the Company to enforce this Rights Agreement,
or otherwise enforce or 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 Rights 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 Rights 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 (including, without limitation, the
Company) subject to this Rights Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) Prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of the Ordinary Shares;
- 26 -
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer; and
(c) the Company may, and, upon appropriate instruction by the Company, the
Rights Agent shall, deem and treat the Person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Ordinary Shares
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Ordinary Shares certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any notice to the
contrary.
Section 17. Rights Certificate Holder Not Deemed a Shareholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Ordinary Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
in accordance with a fee schedule to be mutually agreed upon and, from time to
time, its reasonable expenses and reasonable counsel fees and other reasonable
and customary disbursements incurred in the administration and execution of this
Rights Agreement and the exercise and performance of its duties hereunder,
provided that the incurrence of any such expenses shall be subject to the prior
written approval of the Company, which approval shall not be unreasonably
withheld. 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 Rights Agreement, including the costs and
- 27 -
expenses (including reasonable attorney's fees) of defending against any claim
of liability in the premises, provided that the Company shall be entitled to
control the defense of any such claim and shall not be liable for any settlement
entered into without its prior written consent.
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 Rights Agreement in reliance upon any Right Certificate
or certificate for Ordinary Shares or other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, instruction, direction, consent, certificate, statement, or
other paper or document believed by it to be genuine and to be signed, executed
and, where necessary, verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Rights 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 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Rights 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 Rights
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 Rights Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign much Right Certificates either in its prior name or in its changed
- 28 -
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates in this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes only the
duties and obligations imposed by this Rights 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 (excepting negligence,
bad faith or willful misconduct of 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 Rights Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) shall be deemed to be conclusively proved and
established by a certificate signed by any one of the chief executive officer,
chief operating officer or chief financial officer 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 in conformity
with such certificate under the provisions of this Rights Agreement.
(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 Rights Agreement or in the
Right Certificates (except as to 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 Rights 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
- 29 -
any covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Sections 11 or 13 hereof 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 Ordinary Shares to be issued
pursuant to this Rights Agreement or any Right Certificate or as to whether any
Ordinary Shares will, when so issued, be validly authorized and issued, fully
paid and non-assessable.
(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 Right Agent for the carrying out or performing by the Rights Agent of the
provisions of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chief Executive Officer of the Company, and to apply to any such officers for
advice or instructions in connection with its duties under this Rights
Agreement, 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
Rights Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
- 30 -
(j) At any time and from time to time after the Distribution Date, upon
the request of the Company, the Rights Agent shall promptly deliver to the
Company a list, as of the most recent practicable date (or as of such earlier
date as may be specified by the Company), of the holders of record of Rights.
(k) Except as otherwise provided herein, the Rights Agent shall not be
required to expend or risk its own funds in the performance of its duties or in
the exercise of its rights hereunder.
Section 21. Change of Rights Agent The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Rights
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Ordinary Shares by registered or certified mail. The
Company shall promptly notify the holders of the Right Certificates by first
class mail of any such resignation. The Company may remove the Rights Agent or
any successor Rights Agent upon 30 days' notice in writing to the Rights Agent
or successor Rights Agent, as the case may be, and to each transfer agent of the
Ordinary Shares and to the holders of the Right Certificates. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to such Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the Rights Agent or 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 New York (or of
any other state of the United States so long as such corporation is authorized
to do business in the State of New York), in good standing, which is authorized
under applicable laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority. 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
- 31 -
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Ordinary Shares, and mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Rights Agreement. In addition, in
connection with the issuance or sale of Ordinary Shares following the
Distribution Date and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to Ordinary Shares so issued or sold pursuant to
the exercise of stock options or under any employee plan or arrangement of the
Company or a Subsidiary or Affiliate thereof, granted or awarded as of the
Distribution Date, or other securities hereinafter issued by the Company, and
(b) may, in any other case, if deemed necessary or appropriate by the Board,
issue Right Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) no such
Rights Certificate shall be issued if, and to the extent that, the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Right Certificate would be issued, and (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption and Exchange. (a) The Board of Directors, with the
concurrence of the Audit Committee, may, at its option, at any time prior to the
Close of Business on the earlier of (x) the tenth Business Day following the
Shares Acquisition Date (or such later date as the Board of Directors, with the
concurrence of the Audit Committee, shall determine, which determination to be
made prior to the Close of Business on the tenth Business Day following the
Shares Acquisition Date) and (y) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of $.001 per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price per
Right being hereinafter referred to
- 32 -
as the "Redemption Price"). Notwithstanding anything contained in this Rights
Agreement to the contrary, the Rights shall not be exercisable after the first
occurrence of an event described in Section 11(a)(ii) until such time as the
Company's right of redemption hereunder has expired. The Company may, at its
option, pay the Redemption Price in cash, Ordinary Shares of the Company (based
on the Current Market Price of such Ordinary Shares at the time of redemption,
provided, however, that, unless permitted by applicable law, the effective
consideration per Ordinary Share paid to the Company shall not be less than the
par value thereof) or any other form of consideration deemed appropriate by the
Board of Directors.
(b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights, and without any further action and without any notice,
the right to exercise the Rights will terminate and the holders of Rights shall
have no further rights other than the right to receive the Redemption Price.
Promptly after the action of the Board of Directors ordering the redemption of
the Rights, the Company shall give notice of such redemption to the Rights Agent
and the holders of the then outstanding Rights by mailing such notice to all
such holders at their last addresses as they appear upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent for the Ordinary Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
(c) The Board of Directors may, at its option, at any time after any
Person becomes an Acquiring Person, exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for Ordinary Shares at
an exchange ratio of one Ordinary Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person (other
than the Company, any Subsidiary, any employee benefit plan of the Company or
any such Subsidiary, or any entity holding Ordinary Shares for or pursuant to
the terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Ordinary Shares then
outstanding.
- 33 -
(d) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to subsection (c) of this Section 23 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 Ordinary Shares equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall promptly
give public notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange to all
of the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Ordinary Shares for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.
(e) In the event that there shall not be sufficient shares of Ordinary
Shares issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 23, the
Company shall take all such action as may be necessary to authorize additional
shares of Ordinary Shares for issuance upon exchange of the Rights.
(f) The Company shall not be required to issue fractions of Ordinary
Shares or to distribute certificates which evidence fractions of Ordinary
Shares. In lieu of such fractions Ordinary Shares, there shall be paid to the
registered holders of the Right Certificates with regard to which such
fractional shares of Ordinary Shares would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of an Ordinary
Share. For the purposes of this subsection (f), the current market value of an
Ordinary Share shall be the closing price of an Ordinary Share (as determined
pursuant to the second sentence of Section 11(d) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 23.
Section 24. Notice of Certain Events. In case the Company shall propose at
any time after the Distribution Date (a) to pay any dividend payable in share
capital of any class to the holders of Ordinary Shares or to make any other
distribution to the holders of Ordinary
- 34 -
Shares (other than a regularly quarterly cash dividend out of the earnings or
retained earnings of the Company), or (b) to offer to the holders of Ordinary
Shares rights or warrants to subscribe for or to purchase any additional
Ordinary Shares or shares of share capital of any class or any other securities,
rights or options, or (c) to effect any reclassification of its Ordinary Shares
other than a reclassification involving only the subdivision of outstanding
Ordinary Shares, or (d) to effect any consolidation or merger into or with, or
to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person, or (e) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to the Rights Agent and to each holder of a Right
Certificate, in accordance with Section 25 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Ordinary 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
(a) or (b) above at least 10 days prior to the record date for determining
holders of the Ordinary Shares for purposes of such action, and in the case of
any such other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Ordinary Shares whichever shall be the earlier.
In case any of the events set forth in Section 11(a)(ii) of this Rights
Agreement shall occur, then, in any such case, the Company shall as soon as
practicable thereafter give to the Rights Agent and to each holder of a Right
Certificate, in accordance with Section 25 hereof, a notice of the occurrence of
such event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof.
Section 25. Notices. Notices or demands authorized by this Rights
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
hand delivery, courier, first-class mail, postage prepaid, or facsimile
transmission addressed (until another address is delivered in writing to the
Rights Agent) as follows:
- 35 -
Lumenis Ltd.
Industrial Park, Yokneam
X.X. Xxx 000
Xxxxxxx, 00000
Israel
Attention: Chief Executive Officer
Fax no.: x000-0-000-0000
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Rights 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 hand delivery, courier, facsimile transmission,
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
American Stock Transfer & Trust Company
0 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Fax no.: x0-000-000-0000
Notices or demands authorized by this Rights Agreement to be given or made
by the Company or the Rights Agent to the holder of any Right Certificate (or,
prior to the Distribution Date, to holders of Ordinary Shares) 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. (a) Prior to the Distribution Date
subject to the provisions of Section 26(b), the Company and the Rights Agent
shall, if the Company (upon approval of the Board of Directors and the Audit
Committee) so directs, supplement or amend any provision of this Rights
Agreement in any manner without the approval of any holders of certificates
representing Ordinary Shares and the Rights; provided, however, that if the
effect of such supplement or amendment would be to alter, amend or enlarge the
scope or extent of the Rights Agent's duties, liabilities or obligations under
Section 18, 19, 20, 21 or this provision of this Section 26 hereof, such
supplement or amendment shall only become effective with the prior written
consent of the Rights Agent. From and after the Distribution Date and subject to
the provisions of Section 26(b), the Company and the Rights Agent shall, if the
Company (upon approval of the Board of
- 36 -
Directors and the Audit Committee) so directs, supplement or amend this Rights
Agreement without the approval of any holders of Rights Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder, or (iv) to change or
supplement the provisions hereunder in any manner which the Company may deem
desirable but which does not adversely affect the interests of holders of Rights
(other than an Acquiring Person). Upon the delivery of a certificate from an
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of the
holders of Ordinary Shares,
(b) Notwithstanding anything herein to the contrary, no supplement or
amendment shall be made to this Rights Agreement at a time when the Rights are
not redeemable, except as contemplated by clause (i) or (ii) of the second
sentence of Section 26(a) hereof.
Section 27. Successors. All the covenants and provisions of this Rights
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. Benefits of this Rights Agreement. Nothing in this Rights
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 Ordinary Shares) any legal or equitable right, remedy
or claim under this Rights Agreement; but this Rights 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
Ordinary Shares).
Section 29. Severability. If any term, provision, covenant or restriction
of this Rights Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Rights Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidate;
provided, however, that notwithstanding anything in this Rights Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors determines in its good faith judgment that severing the invalid
language from this Rights Agreement
- 37 -
would adversely affect the purpose or effect of this Rights Agreement, the right
of redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth Business Day following the date
of such determination by the Board of Directors.
Section 30. Governing Law. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Israel and for all purposes shall be governed by and
construed exclusively in accordance with the laws of such State. The courts of
Tel Aviv, Israel shall have exclusive jurisdiction for any disputes arising out
of or in connection with this Rights Agreement.
Section 31. Counterparts. This Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 32. Descriptive Headings. Descriptive headings of the several
Sections of this Rights Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 33. Determination and Actions by the Board of Directors. The Board
of Directors (where specifically provided herein, with the concurrence of the
Audit Committee) shall have the exclusive power and authority to administer this
Rights Agreement and to exercise all rights and powers specifically granted to
the Board of Directors or to the Company, or as may be necessary or advisable in
the administration of this Rights Agreement, including, without limitation, the
right and power to (a) interpret the provisions of this Rights Agreement, and
(b) make all calculations and determinations deemed necessary or advisable for
the administration of this Rights Agreement (including a determination to redeem
or not redeem the Rights or to amend the Rights Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (ii) below, all omissions with respect to the foregoing) which are done,
taken or made by the Board of Directors (where specifically provided for herein,
with the concurrence of the Audit Committee) in good faith, shall (i) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (ii) not subject the members of the Board of
Directors or Audit Committee to any liability to the holders of the Rights.
- 38 -
IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement
to be duly executed, all as of the day and year first above written.
LUMENIS LTD.
By: ___________________________________
Name:
Title:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: ___________________________________
Name:
Title:
- 39 -
Exhibit A
[Form of Bonus Right
Certificate]
Certificate No. R- ______ Bonus Rights
NOT EXERCISABLE AFTER May 31, 2005 OR EARLIER IF NOTICE OF REDEMPTION OR
EXCHANGE IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, AT $.001 PER RIGHT, ON THE TERMS SET FORTH IN THE BONUS
RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE WERE ISSUED
TO A PERSON WHO WAS AN "ACQUIRING PERSON" OR AN ASSOCIATE OR AFFILIATE OF
AN "ACQUIRING PERSON" OR A NOMINEE THEREOF. THIS RIGHT CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 11(a)(ii) OF THE RIGHTS AGREEMENT.]
Bonus Right Certificate
LUMENIS LTD.
This certifies that _________, or registered assigns, is the
registered owner of the number of bonus rights (the "Rights") set forth above,
each of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Bonus Rights Agreement dated as of April 11, 2003 (the "Rights
Agreement") between Lumenis Ltd., an Israeli corporation (the "Company"), and
American Stock Transfer & Trust Company, as Rights Agent (the "Rights Agent"),
to purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M. (New York City
time) May 31, 2005, at the principal office of the Rights Agent, or its
successors as Rights Agent, one fully paid, non-assessable Ordinary Share, par
value NIS 0.10 per share (the "Ordinary Shares"), of the Company, at a purchase
price of $18.00 per share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Right Certificate (and the
number of shares which may be purchased upon exercise thereof) set forth above,
and the
- 40 -
Purchase Price set forth above, are the number and Purchase Price as of
________________, based on the Ordinary Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the
number of Ordinary 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.
----------
* The portion of the legend in brackets shall be inserted only if
applicable as provided under the Rights Agreement.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal offices of the Company and of
the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Ordinary 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 $.001 per Right. In addition, under certain circumstances at
any time after any Person becomes an Acquiring Person, the Board of Directors
may exchange the Rights, in whole or in part, for Ordinary Shares. Immediately
upon the action of the Board of Directors of the Company authorizing any such
exchange, and without any further action or any notice, the Rights
- 41 -
(other than Rights which are not subject to such exchange) will terminate and
the Rights will only enable holders to receive the Ordinary Shares issuable upon
such exchange.
The Company shall not be required to issue fractional Ordinary
Shares upon the exercise of any Right or Rights evidenced hereby.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Ordinary
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of _____________
ATTEST: LUMENIS LTD.
By: _______________________________
Name:
Title:
Countersigned:
AMERICAN STOCK TRANSFER
& TRUST COMPANY
By: ________________________
Authorized Signature
Date: ______________________
- 42 -
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
[To be executed by the registered holder if such holder desires to
transfer the Right Certificates.]
FOR VALUE RECEIVED ________________________________ hereby sells, assigns
and transfers unto _____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
[Please print name and address of transferee]
this Right Certificate and the Rights evidenced thereby, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint ________________ Attorney, to transfer the within Right Certificate on
the books of the within-named Company, with full power of substitution.
Dated: _____________________
________________________________
Signature
Signature Guaranteed:
______________________________
- 43 -
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
beneficially owned by an "Acquiring Person" or an Affiliate or an Associate
thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any person who is or was an "Acquiring Person" or an Affiliate
or Associate thereof
Dated: ____________________
________________________
Signature
- 44 -
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: LUMENIS LTD.
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the Ordinary 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 he registered.
in the name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: ___________________
________________________
Signature
- 45 -
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not beneficially owned by an "Acquiring Person" or an Affiliate or an Associate
thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any person who is or was an "Acquiring Person" or an Affiliate
or Associate thereof.
Dated: ___________________
________________________
Signature
_______________________________
- 46 -
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Forms of
Assignment and Election is not completed, the Company will deem the "Beneficial
Owner" of the Rights evidenced by this Right Certificate to be an "Acquiring
Person" or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and, in the case of an Assignment, will affix a legend to that effect
on any Right Certificates issued in exchange for this Right Certificate.
- 47 -
Exhibit B
SUMMARY OF BONUS RIGHTS
TO PURCHASE ORDINARY SHARES OF LUMENIS LTD.
On April 4, 2003, the Board of Directors of Lumenis Ltd. (the
"Company") declared a distribution of one bonus right (a "Right") for each
outstanding Ordinary Share, par value NIS 0.10 per share (the "Ordinary
Shares"), of the Company. The distribution is payable on April 11, 2003 (the
"Record Date") to shareholders of record on that date. Each Right entitles the
registered holder to purchase from the Company one Ordinary Share at a price of
$18.00 per share (the "Purchase Price"), subject to adjustment. The description
and terms of the Rights are set forth in a Bonus Rights Agreement (the "Rights
Agreement") between the Company and American Stock Transfer & Trust Company, as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) a public announcement that a
person or group of affiliated or associated persons acquired, or obtained the
right to acquire, "Beneficial Ownership" of 15% or more of the Ordinary Shares
(an "Acquiring Person"; the date of such public announcement being the "Shares
Acquisition Date") or (ii) ten business days following the commencement of a
tender offer or exchange offer the consummation of which would result in any
person's becoming an Acquiring Person (the earlier of such dates being called
the "Distribution Date"), the Rights will be evidenced, with respect to any of
the Ordinary Share certificates outstanding as of the Record Date by such
Ordinary Share certificate. A person who becomes the Beneficial Owner of 15% or
more of the Ordinary Shares as a result of repurchases of Ordinary Shares by the
Company will not become an Acquiring Person unless and until such person
thereafter acquires additional Ordinary Shares representing 1.5% or more of the
Ordinary Shares of the Company then outstanding. Additionally, Coherent, Inc.
("Coherent"), a shareholder of the Company, is exempted from the definition of
an Acquiring Person so long as Coherent shall not purchase or otherwise become
(as a result of the actions of Coherent or its affiliates or associates) the
Beneficial Owner of more than 23% of the Ordinary Shares then outstanding or, if
applicable, such greater percentage as may be contemplated by Section 5.18 of
the Asset Purchase Agreement by and among the Company, Energy Systems Holdings
Inc. and Coherent dated as of February 25, 2001. The Rights Agreement also
provides certain other exemptions from the definition of Acquiring Person.
- 48 -
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Ordinary Shares. Until the
Distribution Date (or earlier redemption, exchange or expiration of the Rights),
new Ordinary Share certificates issued after the Record Date upon transfer or
new issuance of the Ordinary Shares will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption, exchange or expiration of the Rights), the surrender for transfer of
any certificates for Ordinary Shares will also constitute the transfer of the
Rights associated with the Ordinary Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Ordinary Shares as of the Close of Business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on May 31, 2005, unless earlier redeemed or exchanged by the
Company as described below.
The Purchase Price payable, and the number of Ordinary Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Ordinary
Shares, (ii) upon the grant to all holders of the Ordinary Shares of certain
rights or warrants to subscribe for Ordinary Shares or convertible securities at
less than the current market price of the Ordinary Shares or (iii) upon the
distribution to holders of the Ordinary Shares of evidences of indebtedness or
assets (excluding regular quarterly cash dividends out of earnings or retained
earnings or dividends payable in Ordinary Shares) or of subscription rights or
warrants (other than those referred to above).
In the event that a Person becomes an Acquiring Person, except
pursuant to an offer for all outstanding Ordinary Shares which the Board of
Directors, with the concurrence of the Audit Committee, determines to be fair
and not inadequate and to otherwise be in the best interests of the Company and
its shareholders, proper provision shall be made so that each holder of a Right,
other than Rights that were beneficially owned by the Acquiring Person (or any
Associate or Affiliate thereof) on the earlier of the Distribution Date or the
Shares Acquisition Date (which Rights will thereafter be void), shall thereafter
have the right
- 49 -
to receive, upon the exercise thereof at the then current exercise price of the
Right, that number of Ordinary Shares having a market value of two times the
exercise price of the Right. If the Company does not have sufficient Ordinary
Shares for this purpose, the Company may, to the extent permitted by applicable
law, substitute cash, a reduction in the exercise price, other equity securities
of the Company, debt securities of the Company, other assets, or any combination
of the foregoing, having an aggregate value equal to the value which would have
been realized if the Company had sufficient Ordinary Shares. In addition, in the
event that, at any time following the Shares Acquisition Date, (i) the Company
engages in a merger or other business combination transaction in which the
Company is not the surviving corporation (other than with an entity which
acquired the shares pursuant to a Qualified Offer), (ii) the Company engages in
a merger or other business combination transaction in which the Company is the
surviving corporation and the Ordinary Shares are changed or exchanged, or (iii)
50% or more of the Company's assets or earning power is sold or transferred,
proper provision shall be made so that each holder of a Right (except Rights
which have previously been voided as set forth above) shall thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price,
that number of shares of the acquiring company which at the time of such
transaction would have a market value of two times the Purchase Price of the
Right. For example, at a Purchase Price of $18.00 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an event
set forth in this paragraph would entitle its holder to purchase $36.00 worth of
shares. Assuming that the shares had a per share value of $10.00 at such time,
the holder of each valid Right would be entitled to purchase 3.6 shares for
$18.00.
At any time until ten business days following the Shares Acquisition Date,
the Company may redeem the Rights in whole, but not in part, at a price of $.001
per Right. Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.001 redemption price. In addition, at
any time after a person becomes an Acquiring Person and prior to the acquisition
by such person or group of fifty percent (50%) or more of the outstanding
Ordinary Shares, the Board may exchange the Rights (other than Rights owned by
such person or group which have become void), in whole or in part, at an
exchange ratio of one Ordinary Share per Right (subject to adjustment).
\Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive
- 50 -
dividends. While the distribution of the Rights will not be taxable to
shareholders or to the Company, shareholders may, depending upon the
circumstances, recognize taxable income in the event that the rights become
exercisable for Ordinary Shares (or other consideration) of the Company or for
shares of the acquiring company or in the event of the redemption of the Rights
as set forth above.
Any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, to correct or supplement any provision
which may be defective or inconsistent with any other provision therein, to
shorten or lengthen any time period thereunder, or to make changes which do not
adversely affect the interests of holders of Rights (other than an Acquiring
Person). The foregoing notwithstanding, no amendment may be made to the Rights
Agreement when the Rights are not redeemable, except to cure any ambiguity or
correct or supplement any provision contained in the Rights Agreement which may
be defective or inconsistent with any other provision therein.
A copy of the Rights Agreement is being filed with the Securities and
Exchange Commission. A copy of the Rights Agreement is available free of charge
from the Rights Agent. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.
- 51 -
