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12/2/96
SHAREHOLDER RIGHTS AGREEMENT
between
ALPHA INDUSTRIES, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
Dated: December 5, 1996
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TABLE OF CONTENTS
Page
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SECTION 1. CERTAIN DEFINITIONS..................................................... 3
SECTION 2. APPOINTMENT OF RIGHTS AGENT............................................. 7
SECTION 3. ISSUE OF RIGHT CERTIFICATES............................................. 7
SECTION 4. FORM OF RIGHT CERTIFICATES.............................................. 8
SECTION 5. COUNTERSIGNATURE AND REGISTRATION....................................... 9
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES............................ 10
SECTION 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE OF RIGHTS........... 11
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES...................... 13
SECTION 9. RESERVATION AND AVAILABILITY OF COMMON STOCK............................ 13
SECTION 10. COMMON STOCK RECORD DATE............................................... 14
SECTION 11. ADJUSTMENT OF EXERCISE PRICE, NUMBER AND KIND OF SHARES OR NUMBER
OF RIGHTS.......................................................................... 14
SECTION 12. CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES............. 21
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.............................................................................. 21
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES................................ 23
SECTION 15. RIGHTS OF ACTION...................................................... 23
SECTION 16. AGREEMENT OF RIGHT HOLDERS............................................. 24
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER...................... 25
SECTION 18. CONCERNING THE RIGHTS AGENT............................................ 25
SECTION 19. MERGER OR CONSOLIDATION OF OR CHANGE OF NAME OF RIGHTS AGENT........... 25
SECTION 20. DUTIES OF RIGHTS AGENT................................................. 26
SECTION 21. CHANGE OF RIGHTS AGENT................................................. 28
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.................................... 29
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SECTION 23. REDEMPTION AND TERMINATION............................................. 29
SECTION 24. EXCHANGE............................................................... 30
SECTION 25. NOTICE OF CERTAIN EVENTS............................................... 31
SECTION 26. NOTICES................................................................ 32
SECTION 27. SUPPLEMENTS AND AMENDMENTS............................................. 32
SECTION 28. SUCCESSORS............................................................. 33
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS................... 33
SECTION 30. BENEFITS OF THIS AGREEMENT............................................. 34
SECTION 31. SEVERABILITY........................................................... 34
SECTION 32. GOVERNING LAW.......................................................... 34
SECTION 33. COUNTERPARTS........................................................... 34
SECTION 34. DESCRIPTIVE HEADINGS................................................... 34
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SHAREHOLDER RIGHTS AGREEMENT
Agreement, dated as of December 5, 1996, between Alpha Industries, Inc., a
Delaware corporation (the "Company"), and American Stock Transfer & Trust
Company, a New York trust company (the "Rights Agent").
WITNESSETH
WHEREAS, the Board of Directors of the Company desires to provide
shareholders of the Company with the opportunity to benefit from the long-term
prospects and value of the Company and to ensure that shareholders of the
Company receive fair and equal treatment in the event of any proposed takeover
of the Company; and
WHEREAS, on December ___, 1996, the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as hereafter
defined) for each outstanding share of Common Stock, par value $.25 per share of
the Company (the "Common Stock") outstanding as of the close of business on
December 5, 1996 (the "Record Date"), and contemplates the issuance of one Right
for each share of Common Stock of the Company issued (whether originally issued
or sold from the Company's treasury) between the Record Date and the earlier of
the Distribution Date or the Expiration Date (as hereafter defined), each Right
initially representing the right to purchase one share of Common Stock of the
Company upon the terms and subject to the conditions hereinafter set forth (the
"Rights");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the indicated meanings:
"Acquiring Person" means any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 10%
or more of the shares of Common Stock then outstanding, but shall not include
any Exempt Person.
Notwithstanding the foregoing, no Person shall become an "Acquiring Person"
(i) as the result of an acquisition of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to 10% or more of the shares of Common
Stock then outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 10% or more of the shares of Common Stock of the Company
then outstanding by reason of share purchases by the Company and shall, after
such share purchases by the Company, become the Beneficial Owner of any
additional shares (other than pursuant to a stock split, stock dividend or
similar transaction) of Common Stock of the Company and immediately thereafter
be the Beneficial Owner of 10% or more of the shares of Common Stock then
outstanding, then such Person shall be deemed to be an "Acquiring Person," or
(ii) if the Board of Directors of the Company determines that a Person who would
otherwise be an "Acquiring Person" has become such inadvertently, and such
Person
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divests as promptly as practicable a sufficient number of shares of Common Stock
so that such Person would no longer be an "Acquiring Person," as defined
pursuant to the foregoing provisions.
"Affiliate" and "Associate" have the respective meanings ascribed to such
terms in Rule 12b-2 under the Exchange Act, as in effect on the date of this
Agreement; provided, however, that no Person who is a director or officer of the
Company shall be deemed an Affiliate or an Associate of any other director or
officer of the Company solely as a result of his or her position as director or
officer of the Company.
"Beneficial Owner" means a person who is deemed to "beneficially own," any
securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, beneficially owns (as determined
pursuant to Rule 13d-3 under the Exchange Act, as in effect on the date of
this Agreement);
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has:
(A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time or upon the satisfaction of
any conditions or both) pursuant to any agreement, arrangement or
understanding (whether or not in writing) (other than customary agreements
with and between underwriters and selling group members with respect to a
bona fide public offering of securities) or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or
options, or otherwise; provided, however, that a Person shall not be deemed
the "Beneficial Owner" of (1) securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
purchase or exchange; (2) securities issuable upon exercise of these Rights
at any time prior to the occurrence of a Triggering Event; or (3)
securities issuable upon exercise of Rights from and after the occurrence
of a Triggering Event, which Rights were acquired by such Person or any of
such Person's Affiliates or Associates prior to the Distribution Date or
pursuant to Sections 3(a), 11 (i) or 22 hereof; or
(B) the right to vote pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a Person
shall not be deemed the "Beneficial Owner" of any security under this
clause (B) if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy given in response to a
public proxy or consent solicitation made pursuant to, and in accordance
with, the rules of the Exchange Act and (2) is not also then reportable by
such person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(C) the right to dispose of pursuant to any agreement,
arrangement or understanding (whether or not in writing) (other than
customary arrangements with and
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between underwriters and selling group members with respect to a bona fide
public offering of securities); 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) (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except, pursuant to a revocable
proxy as described in clause (B) hereof) or disposing of any securities of
the Company;
PROVIDED, however, that (1) no Person engaged in business as an underwriter of
securities shall be deemed the Beneficial Owner of any securities acquired
through such Person's participation as an underwriter in good faith in a firm
commitment underwriting until the expiration of 40 days after the date of such
acquisition, and (2) no Person who is a director or an officer of the Company
shall be deemed, as a result of his or her position as director or officer of
the Company, the Beneficial Owner of any securities of the Company that are
beneficially owned by any other director or officer of the Company.
"Business Day" means any day other than a Saturday, Sunday, or a day on
which banking institutions in the Commonwealth of Massachusetts are authorized
or obligated by law or executive order to close.
"Close of business" on any given date means 5:00 p.m., Boston,
Massachusetts time, on such date; PROVIDED, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Boston, Massachusetts time, on the next
succeeding Business Day.
"Common Stock" means the Common Stock, par value $.25 per share, of the
Company, except that "Common Stock" when used with reference to any Person other
than the Company shall mean the capital stock with the greatest voting power, or
the equity securities or other equity interests having power to control or
direct the management, of such Person or, if such Person is a Subsidiary of
another Person, the Person which ultimately controls such first-mentioned Person
and which has issued and outstanding such capital stock, equity securities or
equity interests.
"Distribution Date" has the meaning defined in Section 3(a) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Person" means (i) the Company, (ii) any Subsidiary of the Company,
(iii) any employee benefit plan or compensation arrangement of the Company or
any Subsidiary of the Company, or (iv) any Person holding shares of Common Stock
organized, appointed or established by the Company or any Subsidiary of the
Company for or pursuant to the terms of any such employee benefit plan or
compensation arrangement.
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"Exercise Price" has the meaning defined in Section 7(b) hereof.
"Expiration Date" means the earlier of (i) the date of the next annual
meeting of stockholders of the Company, unless at that meeting the stockholders
of the Company approve the continuation of this Agreement by vote of not less
than a majority of the stockholders present in person or by proxy at that
meeting, (ii) the close of business on December 5, 2006 (the "Final Expiration
Date"), (iii) the time at which the Rights are redeemed as provided in Section
23 hereof, or (iv) the time at which such Rights are exchanged as provided in
Section 24 hereof.
"Exchange Ratio" has the meaning defined in Section 24.
"Fair Market Value" of any securities or other property shall be as
determined in accordance with Section 11(d) hereof.
"Person" means an individual, a corporation, a partnership, an association,
a joint stock company, a trust, a business trust, a government or political
subdivision, any unincorporated organization, or any other association or
entity.
"Principal Party" has the meaning defined in Section 13(b) hereof.
"Redemption Price" has the meaning defined in Section 23 hereof.
"Rights Certificate" means a certificate evidencing the Rights
substantially in the form of Exhibit B hereto.
"Section 11 (a) (ii) Event" means any event described in Section 11(a)(ii)
hereof.
"Section 13 Event" means any event described in clauses (x), (y) or (z) of
Section 13(a) hereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Stock Acquisition Date" means the date of the first public announcement
(which for purposes of this definition shall include, without limitation, the
issuance of a press release or the filing of a publicly-available report or
other document with the Securities and Exchange Commission or any other
governmental agency) by the Company or an Acquiring Person that an Acquiring
Person has become such.
"Subsidiary" means with respect to any Person, any other Person of which a
majority of the voting power of the voting equity securities or voting interests
is owned, directly or indirectly, by such Person, or which is otherwise
controlled by such Person.
"Trading Day" means a day on which the principal national securities
exchange on which such security is listed or admitted to trading is open for the
transaction of business or, if such security is not listed or admitted to
trading on any national securities exchange, a Business Day.
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"Triggering Event" means any Section 11(a)(ii) Event or any Section 13
Event.
SECTION 2. APPOINTMENT OF RIGHTS AGENT.
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The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the Common Stock) in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable. In the event the Company
appoints one or more Co-Rights Agents, the respective duties of the Rights Agent
and any Co-Rights Agents shall be as the Company shall determine.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
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(a) From the date hereof until the EARLIER of (i) the close of business on
the tenth Business Day after the Stock Acquisition Date, or (ii) the close of
business on the tenth Business Day (or such other Business Day, if any, as the
Board of Directors may determine in its sole discretion) after the date of the
commencement by any Person, other than an Exempt Person, of a tender or exchange
offer if, upon consummation thereof, such Person would be the beneficial Owner
of 10% or more of the shares of Common Stock then outstanding, (the earliest of
such dates being herein referred to as the "Distribution Date"), (x) the Rights
will be evidenced (subject to the provisions of Section 3 (b) hereof) by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock. As soon as practicable after the Company has notified
the Rights Agent of the occurrence of the Distribution Date, the Rights Agent
will, at the Company's expense, send by first-class, insured, postage prepaid
mail, to each record holder of the Common Stock as of the close of business on
the Distribution Date, at the address of such holder shown on the records of the
Company, one or more certificates, in substantially the form of Exhibit A hereto
(the "Right Certificates"), evidencing one Right for each share of Common Stock
so held. In the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(o) hereof, the Company shall
make the necessary and appropriate rounding adjustments (in accordance with
Section 14(a) hereof) at the time of distribution of the Right Certificates, so
that Right Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after
the close of business on the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) With respect to certificates for the Common Stock issued prior to the
close of business on the Record Date, the Rights will be evidenced by such
certificates for the Common Stock on or until the Distribution Date (or the
earlier redemption, expiration or termination of the Rights), and the registered
holders of the Common Stock also shall be the registered holders of the
associated Rights. Until the Distribution Date (or the earlier redemption,
expiration or termination of the Rights), the transfer of any of the
certificates for the Common Stock
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outstanding prior to the date of this Agreement shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate.
(c) Certificates for the Common Stock issued after the Record Date, but
prior to the Distribution Date (or the earlier redemption, expiration or
termination of the Rights), shall be deemed also to be certificates for Rights,
and shall bear a legend, substantially in the form set forth below:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Shareholder Rights Agreement between
Alpha Industries, Inc. and American Stock Transfer & Trust Company as
Rights Agent, dated as of December 5, 1996 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference and a
copy of which is on file at the principal offices of Alpha Industries,
Inc. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. Alpha Industries,
Inc. may redeem the Rights at a redemption price of $0.01 per Right,
subject to adjustment, under the terms of the Rights Agreement. Alpha
Industries, Inc. will mail to the holder of this certificate a copy of
the Rights Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request therefor. Under
certain circumstances, Rights issued to or held by Acquiring Persons
or any Affiliates or Associates thereof (as defined in the Rights
Agreement), and any subsequent holder of such Rights, may become null
and void.
(d) The Rights associated with the Common Stock represented by certificates
containing the legend in paragraph (c) above shall be evidenced by the Common
Stock certificates alone until the Distribution Date (or the earlier redemption,
expiration or termination of the Rights), and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates. In the event that the Company
purchases or acquires any shares of Common Stock after the Record Date but prior
to the Distribution Date, any Rights associated with such Common Stock shall be
deemed canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Shares of Common Stock which are no
longer outstanding. The failure to print the foregoing legend on any such Common
Stock certificate or any defect therein shall not affect in any manner
whatsoever the application or interpretation of the provisions of Section 7(e)
hereof.
SECTION 4. FORM OF RIGHT CERTIFICATES.
-------------------------------------
(a) The Right Certificates (and the forms of election to purchase shares
and of assignment and certificate to be printed on the reverse thereof) shall
each be substantially in the form of Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law, rule or regulation 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
customary usage. The Rights
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Certificates shall be in a machine printable format and in a form reasonably
satisfactory to the Rights Agent. Subject to the provisions of Section 11 and
Section 22 hereof, the Right Certificates, whenever distributed, shall be dated
as of the Record Date, shall show the date of countersignature, and on their
face shall entitle the holders thereof to purchase such number of shares of
Common Stock as shall be set forth therein at the price set forth therein (the
"Exercise Price"), but the number of such shares and the Exercise Price shall be
subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section 22
hereof that represents Rights beneficially owned by (i) an Acquiring Person, or
any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any Associate or Affiliate of an Acquiring Person) who
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any Associate or Affiliate of the
Acquiring Person) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person to holders
of equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights, or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of Section 7(e) hereof, and any Right Certificate issued pursuant to
Section 6, Section 11 or Section 22 upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall
have deleted therefrom the second sentence of the existing legend on such Right
Certificate and in substitution therefor shall contain the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person,
or an Affiliate or an Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). This Right Certificate and the
Rights represented hereby may become null and void under certain
circumstances as specified in Section 7(e) of the Rights Agreement.
(c) The Company shall give notice to the Rights Agent promptly after it
becomes aware of the existence and identity of any Acquiring Person or any
Associate or Affiliate thereof. The Company shall instruct the Rights Agent in
writing of the Rights which should be so legended. The failure to print the
foregoing legend on any such Right Certificate or any defect therein shall not
affect in any manner whatsoever the application or interpretation of the
provisions of Section 7(e) hereof.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
--------------------------------------------
(a) The Right Certificates shall be executed on behalf of the Company by
its Chairman of the Board, or its President or any Vice President and by its
Treasurer or any Assistant Treasurer, or by its Secretary or any Assistant
Secretary, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested to by
the Secretary or any Assistant Secretary of the Company, either manually or by
facsimile signature.
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The Right Certificates shall be manually countersigned by an authorized
signatory of 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 an authorized
signatory of 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 Certificates may
be signed on behalf of the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the Company to
sign such Right Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at one of its offices designated as the appropriate place for surrender
of Right Certificates upon exercise or transfer, 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 RIGHT
----------------------------------------------------------------
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
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(a) Subject to the provisions of Section 4(b), Section 7(e) and Section 14,
at any time after the close of business on the Distribution Date, and at or
prior to the close of business on the Expiration Date, any Right Certificate or
Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Certificates, entitling the registered holder to purchase a
like number of shares of Common Stock (or following a Triggering Event, Common
Stock, cash, property, debt securities, common stock or any combination thereof)
as the Right Certificate or Certificates surrendered then entitled such holder
to purchase at the same Exercise Price. 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 Certificates to be transferred, split up, combined or exchanged,
with the form of assignment and certificate duly executed, at the office or
offices of the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate and shall
have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Right Certificate or Certificates, as the case may be, as so
requested. The Company may require payment by the registered holder of a Right
Certificate, of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
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(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them, and reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate, if mutilated, the
Company will execute and deliver a new Right Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered owner in lieu
of the Right Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE OF RIGHTS.
------------------------------------------------------------------------
(a) Subject to Section 7(e), 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 and the certificate
on the reverse side thereof duly executed, to the Rights Agent at the office or
offices of the Rights Agent designated for such purpose, together with payment
of the aggregate Exercise Price for the total number of shares of Common Stock
(or other securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercised, at or prior to the Expiration Date.
Except as set forth in Section 7(e) hereof and notwithstanding any other
provision of this Agreement, any Person who prior to the Distribution Date
becomes a record holder of shares of Common Stock may exercise all of the rights
of a registered holder of a Right Certificate with respect to the Rights
associated with such shares of Common Stock in accordance with the provisions of
this Agreement, as of the date such Person becomes a record holder of shares of
Common Stock.
(b) The Exercise Price for each share of Common Stock pursuant to the
exercise of a Right shall initially be $40.00, shall be subject to adjustment
from time to time as provided in Section 11 and Section 13 hereof, and shall be
payable in lawful money of the United States of America in accordance with
Section 7(c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase and the certificate on the reverse side
thereof duly executed, accompanied by payment of the Exercise Price for the
shares to be purchased and an amount equal to any applicable transfer tax (as
determined by the Rights Agent) in cash, or by certified check or bank draft
payable to the order of the Company, the Rights Agent shall, subject to Section
20(k) hereof, thereupon promptly (i) (A) requisition from any transfer agent of
Common Stock (or make available, if the Rights Agent is the transfer agent
therefor) certificates for the number of shares of Common Stock to be purchased
and the Company hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) if the Company shall have elected to deposit the total
number of shares of Common Stock issuable upon exercise of the Rights hereunder
with a depository agent, requisition from the depository agent depositary
receipts representing such number of shares of Common Stock as are to be
purchased (in which case certificates for the shares of Common Stock represented
by such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company will direct the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of
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cash, if any, to be paid in lieu of issuance of fractional shares in accordance
with Section 14 hereof, (iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder and (iv) when appropriate, after receipt
promptly deliver such cash to or upon the order of the registered holder of such
Right Certificate. In the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay cash or distribute other
property pursuant to Section 11 (a) hereof, the Company will make all
arrangements necessary so that such other securities, cash or other property are
available for distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person, or any Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any Associate or
Affiliate of an Acquiring Person) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
Associate or Affiliate of an Acquiring Person) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights, or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action; and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Right Certificates or other Person as a
result of its failure to make any determinations with respect to an Acquiring
Person or any Affiliates or Associates of an Acquiring Person or any transferee
of any of them hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of Rights upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
14
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 any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF COMMON STOCK.
-------------------------------------------------------
(a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of Common Stock or any
authorized and issued shares of Common Stock held in its treasury, the number of
shares of Common Stock that will be sufficient to permit the exercise in full of
all outstanding and exercisable Rights.
(b) So long as the Common Stock (or following a Triggering Event, other
securities) issuable or deliverable upon exercise of Rights may be listed on any
national securities exchange or automated quotation system, the Company shall
use its best efforts to cause, from and after such time as the Rights become
exercisable, all shares of Common Stock issued or reserved for issuance to be so
listed, upon official notice of issuance, upon the principal national securities
exchange, if any, upon which the Common Stock is otherwise listed or, if the
principal market for the Common Stock is not on any national securities
exchange, to be eligible for quotation on the Nasdaq National Market or any
successor thereto or other comparable quotation system.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)(iii)
hereof, or as soon as required by law following the Distribution Date, as the
case may be, a registration statement under the Securities Act with respect to
the securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus that at all times meets the requirements of
the Securities Act) until the earlier of (A) the date as of which the Rights are
no longer exercisable for such securities or (B) the Expiration Date. The
Company will also take such action as may be appropriate under, and which will
ensure compliance with, the securities or "blue sky" laws of the various states
in connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days after the date
determined in accordance with the provisions of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon 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 each case with prompt
15
written notice to the Rights Agent. Notwithstanding any such provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all shares of Common Stock delivered upon the
exercise of the Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Exercise Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) From and after the Distribution Date, the Company further covenants and
agrees that it will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any certificates for shares of Common
Stock 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 in respect of the
issuance or delivery of securities in a name other than that of, the registered
holder of the Right Certificates evidencing Rights surrendered for exercise or
to issue or deliver any certificates for securities in a name other than that of
the registered holder upon the exercise of any Rights until 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. COMMON STOCK RECORD DATE.
------------------------------------
Each Person in whose name any certificate for Common Stock is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the shares of Common Stock 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 Exercise 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 Common Stock transfer books of
the Company are closed, such person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Common Stock transfer books of the Company
are open. Prior to the exercise of the Right evidenced thereby, the holder of a
Right Certificate shall not be entitled to any rights of a shareholder of the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF EXERCISE PRICE, NUMBER AND KIND OF SHARES OR
----------------------------------------------------------------------
NUMBER OF RIGHTS.
----------------
The Exercise Price, the number and kind of shares covered by each Right and
the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
16
(a) (i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Common Stock payable in shares of Common
Stock, (B) subdivide the outstanding Common Stock, (C) combine the outstanding
Common Stock into a smaller number of shares, or (D) issue any shares of its
capital stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11 (a) and Section 7 (e) hereof, the Exercise Price in
effect at the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
Common Stock transfer books of the Company were open, he would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of a Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of a Right. If an event occurs which would require an
adjustment under both Section 11 (a) (i) and Section 11 (a) (ii) hereof, the
adjustment provided for in this Section 11 (a) (i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11 (a) (ii)
hereof.
(ii) Subject to the provisions of Sections 23 and 24 hereof, in the
event that any Person (other than an Exempt Person), alone or together with its
Affiliates and Associates, shall become an Acquiring Person then, in such case,
promptly following any such occurrence, proper provision shall be made so that
each holder of a Right, except as provided in Section 7 (e) hereof, shall
thereafter have a right to receive, upon exercise thereof at the then current
Exercise Price in accordance with the terms of this Agreement, such number of
shares of Common Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Exercise Price by the then number of shares of
Common Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event and dividing that product by (y) 50% of
the Fair Market Value per share of the Common Stock (determined pursuant to
Section 11(d)) on the date of the occurrence of any one of the events listed
above in this Section 11(a)(ii).
(iii) In the event that there shall not be sufficient authorized but
unissued shares of Common Stock to permit the exercise in full of the Rights in
accordance with the foregoing Section 11(a)(ii), the Company shall take all
action as may be necessary to authorize and reserve for issuance such number of
additional shares of Common Stock as may from time to time be required to be
issued upon the exercise in full of all Rights outstanding and, if necessary,
shall use its best efforts to obtain shareholder approval thereof.
Notwithstanding the foregoing provisions of this Section 11(a)(iii), in lieu of
issuing shares of Common Stock in accordance with Section 11(a)(ii) hereof, (A)
if a majority of the Directors then in office determines that such action is
necessary or appropriate and is not contrary to the interests of the holders of
the Rights, they may elect to cause the Company to pay, /or (B) if sufficient
shares of Common Stock cannot be issued for such purpose in accordance with the
provisions hereof, then the Company shall issue or pay, upon the exercise of the
Rights, cash, property, debt securities, shares of Common
17
stock or other capital stock, or any combination thereof, having an aggregate
Fair Market Value equal to the Fair Market Value of the shares of Common Stock
which otherwise would have been issuable pursuant to Section 11(a)(ii). Any such
election by a majority of the Directors of the Company must be made and publicly
announced within 30 days after the date on which any Section 11(a)(ii) Event
first occurs following the Stock Acquisition Date.
(b) If the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Common Stock entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or
purchase Common Stock (or securities having the same or more favorable rights,
privileges and preferences as the shares of Common Stock ("Common stock
equivalents")) or securities convertible into Common Stock or Common stock
equivalents at a price per share of Common Stock or per share of Common stock
equivalents (or having a conversion price per share, if a security convertible
into Common Stock or Common stock equivalents) less than the Fair Market Value
(as determined pursuant to Section 11 (d) hereof) per share of Common Stock on
such record date, the Exercise Price to be in effect after such record date
shall be determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding on such record date, plus the
number of shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock to be offered (and the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such Fair Market Value and the denominator of which shall be the number of
shares of Common Stock outstanding on such record date, plus the number of
additional shares of Common Stock and Common stock equivalents to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); PROVIDED, however, that in no event shall
the consideration to be paid upon the exercise of a Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of a Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be the Fair Market Value thereof determined in
accordance with Section 11(d) hereof. Shares of Common Stock 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 that such rights or warrants are
not so issued, the Exercise Price shall be adjusted to be the Exercise Price
which would then be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for the making of a distribution
to all holders of Common Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash (other than a
regular periodic cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Common Stock, but including
any dividend payable in stock other than Common Stock) or convertible
securities, subscription rights or warrants (excluding those referred to in
Section 11(b)), the Exercise Price to be in effect after such record date shall
be determined by multiplying the Exercise Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the Fair Market
Value (as determined pursuant to Section 11 (d) hereof) per share of Common
Stock on such record date, less the Fair Market Value (as determined pursuant to
Section 11(d) hereof) of
18
the portion of the cash, assets or evidences of indebtedness so to be
distributed or of such convertible securities, subscription rights or warrants
applicable to each share of Common Stock and the denominator of which shall be
the Fair Market Value (as determined pursuant to Section 11(d) hereof) per share
of Common Stock; PROVIDED, however, that in no event shall the consideration to
be paid upon the exercise of a Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of a Right. Such
adjustments shall be made successively whenever such a record date is fixed, and
in the event that such distribution is not so made, the Exercise Price shall
again be adjusted to be the Exercise Price which would be in effect if such
record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share
of Common Stock, Common Stock or any other stock or any Right or other security
or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair
Market Value on any date shall be deemed to be the average of the daily closing
prices per share of such stock or per unit of such other security for the 30
consecutive Trading Days immediately prior to such date; provided, however, that
in the event that the Fair Market Value per share of any share of stock is
determined during a period following the announcement by the issuer of such
stock of (x) a dividend or distribution on such stock payable in shares of such
stock or securities convertible into shares of such stock or (y) any
subdivision, combination or reclassification of such stock, and prior to the
expiration of the 30 Trading Day period after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the Fair Market Value 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 American Stock Exchange or, if the securities are not listed or
admitted to trading on the American Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which such security is listed or
admitted to trading; or, if not listed or admitted to trading on any national
securities exchange, the last quoted price (or, if not so quoted, the average of
the last quoted high bid and low asked prices) in the over-the-counter market,
as reported by NASDAQ or such other system then in use; or, if on any such date
no bids for such security are quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in such security selected by the Board of Directors of the
Company. If on any such date no market maker is making a market in such
security, the Fair Market Value of such security on such date shall be
determined reasonably and with utmost good faith to the holders of the Rights by
the Board of Directors of the Company; PROVIDED, however, that if at the time of
such determination there is an Acquiring Person, the Fair Market Value of such
security on such date shall be determined by a nationally recognized investment
banking firm selected by the Board of Directors, which determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights.
19
(ii) If the Common Stock is not publicly held or not so listed or
traded, "Fair Market Value" shall mean the fair value per share of stock or per
other unit of such security, determined reasonably and with utmost good faith to
the holders of the Rights by the Board of Directors of the Company; PROVIDED,
however, that if at the time of such determination there is an Acquiring Person,
the Fair Market Value of such security on such date shall be determined by a
nationally recognized investment banking firm selected by the Board of
Directors, which determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights.
(iii) In the case of property other than securities, the Fair Market
Value thereof shall be determined reasonably and with utmost good faith to the
holders of Rights by the Board of Directors of the Company; PROVIDED, however,
that if at the time of such determination there is an Acquiring Person. the Fair
Market Value of such property on such date shall be determined by a nationally
recognized investment banking firm selected by the Board of Directors, which
determination shall be described in a statement filed with the Rights Agent and
shall be binding upon the Rights Agent and the holders of the Rights.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Exercise 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 [TENTH] of a share of Common Stock, as the case may be,
or to such other figure as the Board of Directors may deem appropriate.
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
(3) years from the date of the transaction which mandates such adjustment or
(ii) the Expiration Date.
(f) If as a result of any provision of Section 11(a) hereof, the holder of
any Right thereafter exercised shall become entitled to receive any shares of
capital stock of the Company other than Common Stock, thereafter the number of
such other shares so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock contained in
Section 11(a), (b), (c), and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Common Stock shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of shares of Common Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Exercise 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 Exercise Price, that number of shares of
20
Common Stock (calculated to the nearest one tenth) obtained by (i) multiplying
(x) the number of shares of Common Stock for which a Right may be exercisable
immediately prior to this adjustment by (y) the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price and (ii) dividing the
product so obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price.
(i) The Company may elect on or after the date of any adjustment of the
Exercise Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Common Stock purchasable upon the exercise
of a Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one tenth) obtained by dividing the
Exercise Price in effect immediately prior to adjustment of the Exercise Price
by the Exercise Price in effect immediately after adjustment of the Exercise
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 Exercise Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 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 Exercise 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 Exercise Price or the
number of shares of Common Stock issuable upon, the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may continue to express the
Exercise 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
Exercise Price below the then stated value, if any, of the number of shares of
Common Stock issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock at such adjusted Exercise Price.
(1) In any case in which this Section 11 shall require that an adjustment
in the Exercise Price be made effective as of a record date for a specified
event, the Company may elect to defer
21
until the occurrence of such event the issuing to the holder of any Right
exercised after such record date the number of shares of Common Stock or other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the number of shares of Common Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Exercise 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 Exercise 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 (i) consolidation or subdivision of the Common Stock, (ii)
issuance wholly for cash of any shares of Common Stock at less than the Fair
Market Value, (iii) issuance wholly for cash of shares of Common Stock or
securities which by their terms are convertible into or exchangeable for shares
of Common Stock, (iv) stock dividends, or (v) issuance of rights, options or
warrants referred to hereinabove in this Section 11 hereafter made by the
Company to holders of its Common Stock shall not be taxable to such
shareholders.
(n) The Company covenants and agrees that it shall not, at any time after
the Distribution Date and so long as the Rights have not been redeemed pursuant
to Section 23 hereof or exchanged pursuant to Section 24 hereof, (i) consolidate
with any other Person, (ii) merge with or into any other Person, 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 aggregating 50% or
more of the assets or earning power of the Company and its Subsidiaries taken as
a whole, to any other Person if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments outstanding or agreements or arrangements 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 a person who
constitutes, or would constitute, the "Principal Party" for the purposes of
Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates. The Company
further covenants and agrees that after the Distribution Date it will not,
except as permitted by Section 23 or Section 27 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 substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
(o) The exercise of Rights under Section 11(a)(ii) shall only result in the
loss of rights under Section 11(a)(ii) to the extent so exercised and shall not
otherwise affect the rights of holders of Right Certificates under this Rights
Agreement, including rights to purchase securities of the Principal Party
following a Section 13 Event which has occurred or may thereafter occur, as set
forth in Section 13 hereof. Upon exercise of a Right Certificate under Section
11(a)(ii), the Rights Agent shall return such Right Certificate duly marked to
indicate that such exercise has occurred.
22
SECTION 12. CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES.
----------------------------------------------------------------------
Whenever an adjustment is made as provided in Section 11 or Section 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Stock a copy of such certificate, and (c) mail a brief summary thereof to
each holder of a Right Certificate in accordance with Section 26 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment contained therein and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have' received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
--------------------------------------------------------------------------
POWER.
-----
(a) In the event that, following the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction which is
not prohibited by Section 11(n) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any
Person (other than a Subsidiary of the Company in a transaction which is not
prohibited by Section 11(n) hereof) 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 shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) the Company
shall sell, mortgage or otherwise transfer (or one or more of its Subsidiaries
shall sell, mortgage or otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company or any Subsidiary of the
Company in one or more transactions, each of which is not prohibited by Section
11(n) hereof), then, and in each such case, proper provision shall be made so
that: (i) each holder of a Right, except as provided in Section 7(e) hereof,
shall have the right to receive, upon the exercise thereof at the then current
Exercise Price in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid and nonassessable shares of freely
tradeable common stock of the Principal Party, free and clear of rights of call
or first refusal, liens, encumbrances or other adverse claims, as shall be equal
to the result obtained by (1) multiplying the then current Exercise Price by the
number of shares of Common Stock for which a Right is exercisable immediately
prior to the first occurrence of a Section 13 Event, and dividing that product
by (2) 50% of the Fair Market Value (determined pursuant to Section 11(d)
hereof) per share of the common stock of such Principal Party on the date of
consummation of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale, mortgage or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply to such Principal
Party; and (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its common stock
to permit exercise of all outstanding Rights in accordance with this
23
Section 13(a) and the making of payments in cash and/or other securities in
accordance with Section 11(a)(iii) 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 shares of common
stock thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted in
such merger or consolidation, and if no securities are so issued, the Person
that is the other party to the merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions;
PROVIDED, however, that in any such case, (x) if the common stock of such Person
is not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary or Affiliate of another Person the common stock of
which is and has been so registered, "Principal Party" shall refer to such other
Person; (y) in case such Person is a direct or indirect Subsidiary or Affiliate
of more than one Person, the common stock of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of such Persons
is the issuer of the common stock having the greatest aggregate market value of
shares outstanding; and (z) in case such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not owned,
directly or indirectly, by the same Person, the rules set forth in (x) and (y)
above shall apply to each of the chains of ownership having an interest in such
joint venture as if such party were a "Subsidiary" of both or all of such joint
ventures and the Principal Parties in each such chain shall bear the obligations
set forth in this Section 13 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless prior thereto (x) the Principal Party shall have a sufficient
number of authorized shares of its common stock issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with this Section 13,
and (y) the Company and each Principal Party and each other Person who may
become a Principal Party as a result of such consolidations merger, sale or
transfer 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), the Principal
Party at its own expense will:
(i) 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, use its best efforts to cause such
registration statement to become effective as soon as practicable after such
filing and use its best efforts to cause such registration statement to remain
effective
24
(with a prospectus that at all times meets the requirements of the Securities
Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the Rights under the blue sky laws of
such jurisdictions as may be necessary or appropriate;
(iii) use its best efforts to list (or continue the listing of) the
Rights and the securities purchasable upon exercise of the Rights on a national
securities exchange or to meet the eligibility requirements for quotation on the
NASDAQ National Market; and
(iv) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates which comply in all material
respects with the requirements for registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
---------------------------------------------------
(a) The Company shall not be required to issue fractions of Rights, except
prior to the Distribution Date as provided in Section 11(o) hereof, or to
distribute Right Certificates which evidence fractional Rights. If the Company
elects not to issue such fractional Rights, the Company shall pay, in lieu of
such fractional Rights, 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 Fair Market Value of a whole Right, as
determined pursuant to Section 11(d) hereof.
(b) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the Fair Market Value of one share of
Common Stock. For purposes of this Section 14 (b), the Fair Market Value of one
share of Common Stock shall be determined pursuant to 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 shares upon
exercise of a Right, except as permitted by this Section 14.
SECTION 15. RIGHTS OF ACTION.
----------------------------
All rights of action in respect of this Agreement, other than rights of
action vested in the Rights Agent pursuant to Sections 18 and 20 hereof, are
vested in the respective registered
25
holders of the Right Certificates (or, prior to the Distribution Date, the
registered holders of the Common Stock). Any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Stock), without
the consent of the Right Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Stock), may, on his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Right evidenced by such Right Certificate
in the manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this
Agreement. Holders of Rights shall be entitled to recover the reasonable costs
and expenses, including attorneys' fees, incurred by them in any action to
enforce the provisions of this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS.
--------------------------------------
Every holder of a Right, by accepting the same, consents and agrees with
the Company and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, each Right will be transferable only
simultaneously and together with the transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office or
offices of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person in whose
name a Right Certificate (or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificates or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any notice to
the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as the result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority prohibiting or otherwise restraining performance of such
obligations; PROVIDED, however, that the Company must use its best efforts to
have any such order, decree or ruling lifted or otherwise overturned as soon as
possible.
26
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER.
-------------------------------------------------------------
No holder of any Right Certificate, as such, shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of
Common Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a 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 25 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.
---------------------------------------
(a) The Company agrees to pay to the Rights Agent such compensation as
shall be agreed to in writing between the Company and the Rights Agent for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and disbursements and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability arising therefrom, directly or indirectly. The provisions of this
Section 18(a) shall survive the expiration of the Rights and the termination of
this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate for Common Stock or other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed and executed by the proper Person
or Persons.
(c) The Rights Agent shall not be liable for consequential damages under
any provision of this Agreement or for any consequential damages arising out, of
any act or failure to act hereunder.
SECTION 19. MERGER OR CONSOLIDATION OF OR CHANGE OF NAME OF RIGHTS AGENT.
------------------------------------------------------------------------
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or shareholder services business of the Rights
27
Agent or any successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any Successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT.
----------------------------------
The Rights Agent undertakes the duties and obligations expressly imposed by
this Agreement upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel selected by it (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such open on.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of Fair Market Value) 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 shall be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by a
person believed by the Rights Agent to be the Chairman of the Board, a Vice
Chairman of the Board, the President, a Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or Assistant Secretary of the Company and
delivered to the Rights Agent, and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
28
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 7(e) hereof) or any adjustment required
under the provisions of Sections 11, 13 or 23(c) hereof, nor shall it be
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 receipt of a certificate describing any such adjustment furnished in
accordance with Section 12 hereof), nor shall it be responsible for any
determination by the Board of Directors of the Company of the Fair Market Value
of the Rights or Common Stock pursuant to the provisions of Section 14 hereof;
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock to
be issued pursuant to this Agreement or any Right Certificate or as to whether
any shares of Common Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from any person believed
by the Rights Agent to be the Chairman of the Board, any Vice Chairman of the
Board, the President, a Vice President, the Secretary, an Assistant Secretary,
the Treasurer or an Assistant Treasurer of the Company, and is authorized to
apply to such officers for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer. Any application
by the Rights Agent for written instructions from the Company may, at the option
of the Rights Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent under this Agreement and the date on or after which
such action shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any officer of the Company actually receives such
application, unless any
29
such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(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 peculiarly 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 the Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company or to the holders of the
Rights resulting from any such act, omission, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued employment
thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause (1) or clause (2)
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
SECTION 21. CHANGE OF RIGHTS AGENT.
----------------------------------
The Rights Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon thirty (30) days' notice in writing
mailed to the Company by first class mail. The Company may remove the Rights
Agent or any successor Rights Agent (with or without cause) upon thirty (30)
days' notice in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to the transfer agent of the Common Stock by registered
or certified mails and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of thirty
(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
30
Certificate for inspection by the Company), then the incumbent 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)
a corporation organized and doing business under the laws of the United States
or of the Commonwealth of Massachusetts or the State of New York (or of any
other state of the United States so long as such corporation is authorized to do
business as a banking institution in the Commonwealth of Massachusetts or the
State of New York), in good standing, which is authorized under such laws to
exercise stock transfer or corporate trust powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$10,000,000 or (b) an Affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall delete and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and the transfer agent of the Common Stock,
and mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
----------------------------------------------
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or Change in the Exercise Price per share and the number
or kind or class of shares of stock or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities hereafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board of Directors of the
Company, issue Right Certificates representing the appropriate number of Rights
in connection with such issuance or sale; PROVIDED, however, that (i) no such
Right 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 adjustments shall otherwise have
been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION AND TERMINATION.
--------------------------------------
31
(a) The Board of Directors of the Company may, at its option, redeem all
but not less than all of the then outstanding Rights at a redemption price of
$0.01 per Right, appropriately adjusted to reflect any dividend declared or paid
on the Common Stock in shares of Common Stock or any subdivision or combination
of the outstanding shares of Common Stock or similar event occurring after the
date of this Agreement (such redemption price, as adjusted from time to time,
being hereinafter referred to as the "Redemption Price"). The Rights may be
redeemed only until the EARLIEST to occur of (i) 5:00 P.M., Boston,
Massachusetts time, on the tenth Business Day after the Stock Acquisition Date,
or (ii) the Final Expiration Date.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price for each Right so held. 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 the Rights Agent and to all such holders at
their last addresses as they appear upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the transfer agent
for the Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23 or Section
24 hereof or in connection with the purchase of shares of Common Stock prior to
the Distribution Date.
(c) The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the Fair Market Value of the Common Stock as of
the time of redemption) or any other form of consideration deemed appropriate by
the Board of Directors.
SECTION 24. EXCHANGE.
--------------------
(a) The Board of Directors of the Company may, at its option, at any time
on or after the occurrence of a Section 11(a)(ii) Event, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof) for shares
of Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Stock of the Company.
(b) Immediately upon the action of the Company ordering the exchange of any
Rights pursuant to subsection (a) of this Section 24 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
32
such Rights shall be to receive that number of shares of Common Stock equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give notice of any such exchange in accordance with
Section 26 hereof; PROVIDED, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. Each such notice
of exchange will state the method by which the exchange of the shares of Common
Stock for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In the event that there shall not be sufficient shares of Common Stock
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of Common Stock or
to distribute certificates which evidence fractional shares of Common Stock. If
the Company elects not to issue such fractional shares of Common Stock, the
Company shall pay, in lieu of such fractional shares of Common Stock, to the
registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable, an amount in cash
equal to the same fraction of the Fair Market Value of a whole share of Common
Stock. For the purposes of this paragraph (e), the Fair Market Value of a whole
share of Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to the second sentence of section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of exchange pursuant to this Section
24.
SECTION 25. NOTICE OF CERTAIN EVENTS.
------------------------------------
(a) In case the Company shall propose, at any time after the Distribution
Date, (i) to pay any dividend payable in stock of any class to the holders of
Common Stock or to make any other distribution to the holders of Common Stock
(other than a regular periodic cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of Common Stock rights
or warrants to subscribe for or to purchase any additional shares of Common
Stock or shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Common Stock (other than
a reclassification involving only the subdivision of outstanding shares of
Common Stock), or (iv) to effect any consolidation or merger into or with, or to
effect any sale, mortgage or other transfer (or to permit one or more of its
Subsidiaries to effect any sale, mortgage or other transfer), in one transaction
or a series of related transactions, of 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to, any other
Person (other than a Subsidiary of the Company in one or more transactions each
of which is not prohibited by Section 11 (n) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, (vi) to declare or pay
any dividend on the Common Stock payable in Common Stock or to effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock) then
in each such case, the Company shall give to each holder of a
33
Right Certificate and to the Rights Agent, in accordance with Section 26 hereof,
a notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Common Stock, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least twenty (20) days prior to the
record date for determining holders of the shares of Common Stock for purposes
of such action, and in the case of any such other action, at least twenty (20)
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Common Stock, whichever
shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to each
registered holder of a Right Certificate and to the Rights Agent, in accordance
with Section 26 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 26. NOTICES.
-------------------
Notices or demands authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Right Certificate to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
Alpha Industries, Inc.
00 Xxxxxx Xxxx
Xxxxxx, XX 00000
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, prior to
the Distribution Date, to the holder of any certificate representing shares of
Common Stock) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS.
--------------------------------------
34
Prior to the Distribution Date, the Company and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of this Agreement as
the Company may deem necessary or desirable without the approval of any holders
of certificates representing shares of Common Stock. From and after the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holder
of Right Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen any time period
hereunder, or (iv) to change or supplement the provisions hereof in any manner
which the Company may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Right Certificates (other than an
Acquiring Person or any Affiliate or Associate thereof); PROVIDED, however, that
from and after the Distribution Date this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and the
benefits to, the holders of Rights. Upon the delivery of such certificate from
an appropriate officer of the Company which states that the proposed supplement
or amendment is in compliance with the terms of this Section 27, the Rights
Agent shall execute such supplement or amendment. Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock. Notwithstanding any other provision
hereof, the Rights Agent's consent must be obtained regarding any amendment or
supplement pursuant to this Section 27 which alters the Rights Agent's rights or
duties.
SECTION 28. SUCCESSORS.
----------------------
All the covenants and provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.
----------------------------------------------------------------
For all purposes of this Agreement, any calculation of the number of shares
of Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the rules under the Exchange Act as
in effect on the date hereof. The Board of Directors of the Company shall have
the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board or to the Company, or as
may be necessary or advisable in the administration of this Agreement, including
without limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors in good faith
35
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject any member of
the Board of Directors to any liability to the holders of the Rights or to any
other person.
SECTION 30. BENEFITS OF THIS AGREEMENT.
--------------------------------------
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the Common
Stock) any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, registered holders of the Common Stock).
SECTION 31. SEVERABILITY.
------------------------
If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
the Agreement would adversely affect the purpose or effect of the 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 day following the date of
such determination by the Board of Directors.
SECTION 32. GOVERNING LAW.
-------------------------
This Agreement, each Right and each Right Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts to be made and to be performed
entirely within such State.
SECTION 33. COUNTERPARTS.
------------------------
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS.
--------------------------------
Descriptive headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ATTEST: ALPHA INDUSTRIES, INC.
By: By:
-----------------------------------
Name:
Title
ATTEST: AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Rights Agent
By: By:
-----------------------------------
Name:
Title
37
EXHIBITS TO
SHAREHOLDER RIGHTS AGREEMENT
Exhibit A - Rights Certificate
Exhibit B - Summary of Rights for Dissemination to Stockholders
38
ALPHA INDUSTRIES, INC.
FORM OF RIGHT CERTIFICATE
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER DECEMBER 5, 2006 OR EARLIER IF NOTICE OF REDEMPTION IS
GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF ALPHA INDUSTRIES,
INC., AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS
AGREEMENT BETWEEN ALPHA INDUSTRIES, INC. AND AMERICAN STOCK TRANSFER & TRUST
COMPANY, AS RIGHTS AGENT, DATED AS OF DECEMBER 5, 1996 (THE "RIGHTS AGREEMENT").
UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN SECTION 7 (e) OF THE RIGHTS AGREEMENT,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON, OR AN ASSOCIATE OR AFFILIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
RIGHT CERTIFICATE
ALPHA INDUSTRIES, INC.
This certifies that _________________________ , or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Shareholder Rights Agreement dated as of December 5, 1996 (the "Rights
Agreement") between Alpha Industries, Inc. (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 the close of business on December 5, 2006 at
the office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one share of the Common Stock (the "Common Stock")
of the Company, at a purchase price of $40 per share (the "Exercise Price") upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase and the related Certificate 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 Exercise Price per
share set forth above, are the number and Exercise Price as of December 5, 1996,
based on the Common Stock as constituted at such date.
Upon the occurrence of a Section 11 (a) (ii) Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person, or an Affiliate or Associate of
any such Person (as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Associate or Affiliate, or (iii) under
certain circumstances specified in the Rights Agreement, a transferee of a
Person who, after such transfer, became an Acquiring Person or an Affiliate or
Associate of an Acquiring
39
Person, then in each such event such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights from and after
the occurrence of such Section 11 (a) (ii) Event.
As provided in the Rights Agreement, the Exercise Price and the number of
shares of Common Stock or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal office of the
Company and the designated office of the Rights Agent and are also available
upon written request to the Company or the Rights Agent.
Upon surrender at the office or offices of the Rights Agent designated for
such purpose, this Right Certificate may be exchanged for another Right
Certificate or Certificates of like tenor and date evidencing Rights entitling
the holder to purchase a like aggregate number of shares of Common Stock as the
Rights evidenced by the Right Certificate or 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 Certificates for the number of whole Rights not exercised.
If this Right Certificate shall be exercised in whole or in part pursuant to
Section 11(a) (ii) of the Rights Agreement, the holder shall be entitled to
receive this Right Certificate duly marked to indicate that such exercise has
occurred as set forth in the Rights Agreement.
Under certain circumstances, subject to the provisions of the Rights
Agreement, the Board of Directors of the Company at its option may exchange all
of any part of the Rights evidenced by this Certificate for shares of the
Company's Common Stock at an exchange ratio (subject to adjustment) of one share
of Common Stock per Right.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Board of Directors of the Company at its
option at a redemption price of $.01 per Right (payable in cash, Common Stock or
other consideration deemed appropriate by the Board of Directors).
The Company is not obligated to issue fractional shares of stock upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one tenth of a share, which may, at the election of the
Company, be evidenced by depository receipts). If the Company elects not to
issue such fractional shares, in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
40
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 shares of Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by any authorized signatory of the Rights
Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Corporate Seal ALPHA INDUSTRIES, INC.
Attested: By:
-------------------------------
Name:
Title: Chairman, Vice Chairman,
By: President or Vice President
--------------------------------
Secretary or Assistant Secretary
Countersigned:
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Rights Agent
-----------------------------------
Authorized Signatory
Date of countersignature:
41
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
the Right Certificate.)
FOR VALUE RECEIVED __________________________ hereby sells, assigns and
transfers unto ______________________(Please print name and address of
transferred) _____________________ this Right Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint _________________ Attorney, to transfer the within Right Certificate on
the books of the within-named Company, with full power of substitution.
Dated: , .
----------------- -----
---------------------------------
Signature
Signature Guaranteed:
---------------------------
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate _______ are ______ are
not being transferred by or on behalf of the Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned ___ did ___ did not directly or indirectly acquire the Rights
evidenced by the Right Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of any such Person.
Dated: , .
----------------- ----- ---------------------------------
Signature
42
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: Alpha Industries, Inc.:
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the shares of Common Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of:
Please insert social security
or other identifying taxpayer number:
--------------------
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidences by this
Right Certificate or if the Rights are being exercised pursuant to Section
11(a)(ii) of the Rights Agreement, a new Right Certificate for the balance of
such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying taxpayer number:
--------------------
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated: , .
----------------- -----
43
---------------------------------
Signature
Signature Guaranteed:
----------------------------
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate ____ are ____ are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Person (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned ___ did ___ did not directly or indirectly acquire the Rights
evidenced by this Right Certificate from any person who is, was or became an
Acquiring Person or an Affiliate or Associate of any such person.
Dated: , .
----------------- ----- ---------------------------------
Signature
NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
44
COMPANY LETTERHEAD
To Our Stockholders:
On December 5, 1996 your Board of Directors adopted a Common Stock Rights
Plan and declared a dividend distribution of Common Stock Purchase Rights. This
Plan replaces the rights plan originally adopted in 1986 which expires on
December 5, 1996. This letter describes the new Rights Plan and the Board's
reasons for adopting it. As described below, the Board of Directors will submit
the new Rights Plan to stockholders for approval.
The Rights approved today are substantially similar to the rights which
have been in place for the last ten years. These new Rights contain provisions
to protect stockholders in the event of an unsolicited attempt to acquire the
Company, including a gradual accumulation of shares in the open market, a
partial or two-tier tender offer that does not treat all stockholders equally, a
squeeze-out merger, or other abusive takeover tactics which the Board believes
are not in the best interests of stockholders. These tactics unfairly pressure
stockholders, squeeze them out of their investment without giving them any real
choice and deprive them of the full value of their shares.
Over 1,600 companies, including over 60% of the companies in the Fortune
500, have adopted rights plans in order to protect their stockholders against
these tactics. We consider the Rights to be the best available means of
protecting both your right to retain your equity investment in the Company and
the full value of that investment, while not foreclosing a fair acquisition bid
for the Company.
The Rights are not intended to prevent a takeover of the Company and will
not do so. However, they should deter any attempt to acquire the Company in a
manner or on terms not approved by the Board. They are designed to deal with the
very serious problem of another person or company using abusive tactics to
deprive the Company's Board of Directors and its stockholders of any real
opportunity to determine the destiny of the Company.
Because the Rights may be terminated or amended by the Board of Directors
at any time prior to an actual threat to the Company materializing, they should
not interfere with any merger or business combination approved by the Board of
Directors prior to that time.
Like the existing rights which are about to expire, these new Rights do not
in any way weaken the financial strength of the Company or interfere with its
business plans. The issuance of the Rights has no dilutive effect, will not
affect reported earnings per share, is not taxable to the Company or to you, and
will not change the way in which you can presently trade the Company's shares.
The Rights will only become exercisable after the "Distribution Date" described
in the attached Summary of Common Stock Purchase Rights, and will then operate
to protect you against being deprived of your right to share in the full measure
of your Company's long-term potential.
45
Your Board of Directors was aware when it acted that some commentators have
argued that rights plans deter legitimate acquisition proposals. We carefully
considered these views and concluded that, on balance, the arguments do not
justify leaving stockholders without any protection against unfair treatment by
an acquiror -- who, after all, is seeking his own advantage, not yours. However,
because the Board is sensitive to the objections which have been raised to
adoption of rights plans, it has determined to submit the Rights Plan to
stockholders for their approval at the Company's next annual meeting. If the
stockholders do not approve the Rights Plan, it will terminate as of the date of
the annual meeting. Your Board believes that these Rights represent a reasonable
and balanced means of addressing the complex issues of corporate policy created
by the current takeover environment.
The distribution of the Rights will not be taxable to you or the Company.
Stockholders may recognize taxable income upon the occurrence or certain
subsequent events. At no time will the Rights have any voting power.
You should review and retain for your records the attached Summary of
Common Stock Purchase Rights describing the Rights in more detail.
In declaring the Rights dividend, we have expressed our confidence in the
Company's future and our determination that you, our stockholders, be given
every opportunity to participate fully in that future.
On behalf of the Board of Directors
46
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On December 4, 1996, the Board of Directors of Alpha Industries, Inc. (the
"Company") declared a dividend of one common stock purchase right (a "Right")
for each outstanding share of common stock, par value $0.25 per share (the
"Common Stock"), of the Company. The dividend is payable at the close of
business on December 5, 1996 to all holders of record of Common Stock as of the
close of business on December 5, 1996 (the "Record Date"). Each Right entitles
the registered holder to purchase from the Company one share of Common Stock of
the Company at a price of $40 per share (the "Purchase Price"), subject to
adjustment. The description and terms of the rights are set forth in a
Shareholder Rights Agreement (the "Rights Agreement") between the Company and
American Stock Transfer & Trust Company, New York, New York, as Rights Agent
(the "Rights Agent").
The Rights are not exercisable until the Distribution Date. The
Distribution Date is defined as the earlier to occur of (i) 10 days following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired beneficial ownership of 10% or more of the
outstanding Common Stock, or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any person
or group of affiliated persons becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 10% or more of the outstanding Common Stock.
Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced by the certificates representing Common
Stock with a copy of this Summary of Rights attached thereto, (ii) the Rights
will be transferred with and only with the Common Stock, (iii) new Common Stock
certificates issued after the Record Date upon transfer or new issuance of
Common Stock will contain a notation incorporating the Rights Agreement by
reference, and (iv) the surrender for transfer of any certificates for Common
Stock outstanding as of the Record Date, even without such notation or a copy of
this Summary of Rights being attached thereto, will also constitute the transfer
of the Rights associated with the Common Stock represented by the stock
certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date, and thereafter the separate Right Certificates alone will
evidence the Rights.
In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provision must be made so that after the
Distribution Date each holder of a Right (other than Rights beneficially owned
by the Acquiring Person or the affiliates and associates of such Acquiring
Persons, which will thereafter be void) will have the right to acquire that
number of shares of Common Stock at the then current Purchase Price of the Right
which at
47
that time have a market value of two times the Purchase Price of the Right.
(This is sometimes referred to as a "flip-in".) For example, at a Purchase Price
of $40, each Right would entitle its holder to purchase for $40 the number of
shares of Common Stock as equals $40 divided by one half the market price of the
Company's Common Stock. If the Common Stock were trading at $10 share, each
Right would entitle the holder to purchase 8 shares.
In the event that after the Distribution Date the Company is acquired in a
merger or other business combination transaction or 50% or more of its
consolidated assets or earning power are sold after a person or group has become
an Acquiring Person, proper provision will be made so that each holder of a
Right (other than an Acquiring Person and the affiliates and associates or such
Acquiring Person, whose Rights will have become void) will thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price
of the Right, that number of shares of common stock of the acquiring company
which at the time of that transaction will have a market value of two times the
Purchase Price of the Right. (This is sometimes referred to as a "flip-over".)
For example, at a Purchase Price of $40, each Right (other than those owned by
an Acquiring Person or its affiliates or associates, which will be void) will
entitle its holder to purchase for $40 that number of shares of stock of the
acquiring company having a market value of $80.
The Rights will expire on December 5, 2006 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case, as described below;
provided, however, the Rights and the Rights Agreement will terminate on the
date of the next annual meeting of stockholders of the Company following the
date of the Rights Agreement if at that meeting the stockholders do not approve
the Rights Agreement.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by the Acquiring Person of 50% or more of the outstanding
Common Stock, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by the Acquiring Person and affiliates and associates
of the Acquiring Person, which will have become void) in whole or in part, at an
exchange ratio of one share of Common Stock per Right (subject to adjustment).
At any time prior to or within 10 business days following the acquisition
by an Acquiring Person of beneficial ownership of 10% or more of the outstanding
Common Stock, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price").
The redemption of the Rights may be made effective at such time on such basis
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
The Purchase Price payable, and the number of Common Stock or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Stock, (ii) upon the grant to holders of the Common Stock of certain rights or
warrants to subscribe for or purchase Common Stock at a price, or securities
convertible into Common Stock with a conversion price, less than the
then-current market price of the Common Stock, or (iii) upon the distribution to
holders of the Common Stock of
48
evidences of indebtedness or assets (excluding regular periodic cash dividends
paid out of earnings or retained earnings or dividends payable in Common Stock)
or of subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of shares of Common Stock
issuable upon exercise of each Right are also subject to adjustment in the event
of a stock split of the Common Stock, a stock dividend on the Common Stock
payable in Common Stock or a subdivision, consolidation or combination of the
Common Stock occurring prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Common Stock will be issued (other than
fractions which are integral multiples of one one-tenth of a share, which may,
at the election of the Company, be evidenced by depository receipts) and in lieu
thereof, an adjustment in cash will be made based on the market price of the
Common Stock on the last trading day prior to the date of exercise.
Pursuant to the Rights Agreement, certain actions (e.g. redeeming
outstanding Rights, amending the Rights Agreement, etc.) may only be made with
the approval of the Board of Directors of the Company.
