EXHIBIT 99.1
RIGHTS AGREEMENT
dated as of
July 30, 2004
between
UTAH MEDICAL PRODUCTS, INC.
and
REGISTRAR AND TRANSFER COMPANY,
as Rights Agent
TABLE OF CONTENTS
ARTICLE I CERTAIN DEFINITIONS.................................................1
1.1 Certain Definitions......................................................1
1.2 Determinations...........................................................7
ARTICLE II THE RIGHTS.........................................................7
2.1 Legend on Common Share Certificates......................................7
2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights.........7
2.3 Adjustments to Exercise Price; Number of Rights..........................9
2.4 Date on Which Exercise is Effective.....................................11
2.5 Execution, Authentication, Delivery, and Dating of Rights Certificates..12
2.6 Registration, Registration of Transfer and Exchange.....................12
2.7 Mutilated, Destroyed, Lost, and Stolen Rights Certificates..............12
2.8 Persons Deemed Owners...................................................13
2.9 Delivery and Cancellation of Certificates...............................13
2.10 Agreement of Rights Holders............................................13
ARTICLE III ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN
TRANSACTIONS..................................................................14
3.1 Flip-over Transaction or Event..........................................14
3.2 Flip-in Event...........................................................15
3.3 Obligations of the Company..............................................16
ARTICLE IV THE RIGHTS AGENT..................................................16
4.1 General.................................................................16
4.2 Merger or Consolidation or Change of Name of Rights Agent...............17
4.3 Duties of Rights Agent..................................................17
4.4 Change of Rights Agent..................................................18
ARTICLE V REDEMPTION........................................................ 19
5.1 Redemption..............................................................19
5.2 By the Board of Directors...............................................19
5.3 Rights Termination......................................................19
ARTICLE VI MISCELLANEOUS.....................................................19
6.1 Expiration..............................................................19
6.2 Issuance of New Rights Certificate......................................20
6.3 Supplements and Amendments..............................................20
6.4 Fractional Rights.......................................................20
6.5 Fractional Shares.......................................................20
6.6 Rights of Action........................................................21
6.7 Holder of Rights Not Deemed a Stockholder...............................21
6.8 Notice of Proposed Actions..............................................21
6.9 Notices.................................................................21
6.10 Costs of Enforcement...................................................22
6.11 Successors.............................................................22
6.12 Benefits of this Agreement.............................................22
6.13 Descriptive Headings...................................................22
6.14 Governing Law..........................................................22
6.15 Counterparts...........................................................22
6.16 Severability...........................................................23
6.17 Effective Date.........................................................23
6.18 Determinations and Actions by the Board of Directors...................23
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT (this "Agreement"), dated as of the 30th day of July,
2004, is entered into by and between UTAH MEDICAL PRODUCTS, INC., a Utah
corporation (the "Company"), and REGISTRAR AND TRANSFER COMPANY, a New Jersey
corporation (the "Rights Agent").
WHEREAS, in order to preserve stockholder value, the Company's Board of
Directors has determined that it is advisable for the Company to adopt a new
stockholder rights plan (the "Rights Plan") to protect the Company and its
stockholders from abusive acquisition tactics;
WHEREAS, the rights to purchase additional securities upon certain terms
and conditions pursuant to the Company's Rights Agreement dated October 28,
1994, between the Company and Atlas Stock Transfer Company, and subsequently
assigned to Registrar and Transfer Company, expire on October 28, 2004;
WHEREAS, in order to implement the Rights Plan, the Company's Board of
Directors has authorized and declared a dividend distribution of one right
("Right") effective 5:00 p.m. (Mountain time) on October 28, 2004 (the "Record
Date") for each Common Share (as hereinafter defined) outstanding at the Close
of Business (as hereinafter defined) on the Record Date; and has authorized the
issuance of one Right in respect of each Common Share issued after the Record
Date and until the earliest to occur of the Separation Date, the Expiration
Date, or the Redemption Date (as such terms are hereinafter defined);
WHEREAS, each Right entitles the holder thereof, after the Separation Date,
to purchase securities of the Company (or in certain cases, of certain other
entities) pursuant to the terms and subject to the conditions set forth herein;
and
WHEREAS, the Company desires to appoint the Rights Agent to act on the
Company's behalf, and the Rights Agent is willing to so act, in connection with
the issuance, transfer, exchange, and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights, and other matters referred to
herein.
NOW,THEREFORE, in consideration of the premises and respective agreements
set forth herein, the parties hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions.
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For purposes of this Agreement, the following terms have the following
meanings:
(a) "Acquiring Person" shall mean any Person that, together with all
Affiliates and Associates of such Person, will be the Beneficial Owner of
twenty percent (20%) or more of the Voting Shares of the Company then
outstanding, but shall not include the Company, any Company Subsidiary, any
employee benefit plan of the Company or any Company Subsidiary, or any
Person or entity organized, appointed, or established by the Company or
such Company Subsidiary for or pursuant to the terms of any such employee
benefit plan. Notwithstanding the foregoing, no Person shall become an
Acquiring Person solely as the result of a reduction in the number of
Voting Shares outstanding due to an acquisition of Voting Shares by the
Company that increases the proportionate number of such Voting Shares
Beneficially Owned by such Person to twenty percent (20%) or more unless
and until that Person shall purchase or otherwise become (as a result of
actions by such Person or its Affiliates or Associates) the Beneficial
Owner of any additional Voting Shares of the Company.
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(b) "Affiliate" of, or a Person "affiliated" with, a specified Person
shall mean a Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with
such specified Person.
(c) "Associate" used to indicate a relationship with a specified
Person, shall mean:
(i) any corporation, partnership, or other organization of which
such specified Person is an officer, member, or partner;
(ii) any trust or other estate in which such specified Person has
a substantial beneficial interest or as to which such specified Person
serves as trustee or in a similar fiduciary capacity;
(iii) any relative or spouse of such specified Person or any
Person with whom such specified Person is living in a conjugal
relationship outside marriage, or any relative of such spouse or other
Person who has the same home as such specified Person or a director or
officer of the Company or an Affiliate of the Company;
(iv) any Person who is a director, officer, member, partner, or
trustee of such specified Person or of any corporation, partnership,
or other organization (other than the Company or any wholly-owned
Company Subsidiary) that is an Affiliate or Associate of such
specified Person; and
(v) any corporation of which such specified Person beneficially
owns, directly or indirectly, voting securities carrying more than ten
percent (10%) of the rights attaching to all voting securities of such
corporation for the time being outstanding.
(d) A Person shall be deemed the "Beneficial Owner," to have
"Beneficial Ownership" of, and to "Beneficially Own" any securities:
(i) as to which such Person or any of such Person's Affiliates or
Associates is or may be deemed to be the beneficial owner pursuant to
Rule 13d-3 or 13d-5 under the Exchange Act (or pursuant to any
comparable or successor laws or regulations or, if such rules shall be
rescinded and there shall be no comparable or successor laws or
regulations, pursuant to Rule 13d-3 or 13d-5 as in effect on the date
of this Agreement); and
(ii) as to which such Person or any of such Person's Affiliates
or Associates has the right to become Beneficial Owner (whether such
right is exercisable immediately or only after the passage of time or
the occurrence of changes in Market Prices) pursuant to any contract,
agreement, arrangement, or understanding, or upon the exercise of any
rights (other than the Rights), whether conversion rights, exchange
rights, warrants, options, or otherwise;
provided, however, that a Person shall not be deemed the "Beneficial
Owner," to have "Beneficial Ownership" of, or to "Beneficially Own" any
security:
(x) tendered pursuant to a tender or exchange offer or Take-over
Bid made by such Person or any of such Person's Affiliates or
Associates until the earliest of such tendered security being accepted
for payment or exchange or being taken up and paid for; or
(xi) as to which such Person's Affiliates or Associates have or
share the voting power or have the power to direct the voting pursuant
to a revocable proxy given in response to a public proxy solicitation
made pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act, except if such power (or the
arrangement relating thereto) is then reportable under Item 6 of
Schedule 13D under the Exchange Act (or any similar provision of a
comparable or successor report).
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For purposes of this Agreement, in determining the percentage of the
outstanding Voting Shares with respect to which a Person is the Beneficial
Owner, all Voting Shares as to which such Person is deemed the Beneficial
Owner shall be deemed outstanding.
(e) "Board of Directors" shall mean, as applicable, the Board of
Directors of the Company and/or any of its Subsidiaries.
(f) "Business Day" shall mean any day other than Saturday, Sunday, or
a day on which banking institutions in the state of Utah are authorized or
obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean the time on such
date (or, if such date is not a Business Day, the time on the next
succeeding Business Day) at which the office of the transfer agent for the
Common Shares of the Company in Salt Lake City, Utah (or, after the
Separation Date, the offices of the Rights Agent, if different from such
transfer agent) is closed to the public.
(h) "Common Shares," when used with reference to the Company, shall
mean the shares of common stock, par value $0.01 per share (as such par
value may be changed from time to time), of the Company. "Common Shares,"
when used with reference to any Person other than the Company, shall mean
the shares of capital stock (or equity interest) with the most significant
voting or decision-making power with respect to management or control of
such other Person or, if such other Person is a Subsidiary of another
Person, the Person or Persons that ultimately control such first-mentioned
Person.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(j) "Exercise Price" shall mean, as of any date, the price at which a
holder may purchase the securities issuable upon exercise of one whole
Right. Until adjustment thereof in accordance with the terms hereof, the
Exercise Price shall equal One Hundred Dollars ($100.00), payable in lawful
money of the United States of America.
(k) "Expiration Date" shall mean the Close of Business on October 28,
2014.
(l) "Flip-in Event" shall mean a transaction in which any Person shall
become an Acquiring Person; provided, however, that the term "Flip-in
Event" shall not include any transaction or event that constitutes a
"Flip-over Transaction or Event."
(m) "Flip-over Entity" shall mean:
(i) in the case of any transaction described in clause (i) of the
first sentence of Section 1.1(n) hereof: (1) the Person that is the
issuer of the securities into which Common Shares of the Company are
converted in such merger or consolidation, or, if there is more than
one such issuer, that issuer the Common Shares of which have the
greatest Market Price, or (2) if no securities are so issued, (A) the
Person that is the other party to the merger or consolidation and that
survives such merger or consolidation, or, if there is more than one
such Person, that Person the Common Shares of which have the greatest
Market Price, or (B) if the Person that is the other party to the
merger or consolidation does not survive the merger or consolidation,
the Person that does survive the merger or consolidation (including
the Company if it survives); and
(ii) in the case of any transaction described in clause (ii) of
the first sentence of Section 1.1(n) hereof, the Person that is the
party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives
the same portion of the assets or earning power so transferred or if
the Person receiving the greatest portion of the assets or earning
power cannot be determined, whichever of such Persons as is the issuer
of Common Shares having the greatest Market Price of shares
outstanding; provided, however, that, in any such case, if the Common
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Shares of such Person are not at such time and have not been
continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act and such Person is a direct or indirect
Subsidiary of another Person the Common Shares of which are and have
been so registered, the term "Flip-over Entity" shall refer to such
other Person, or if such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of all of which
are and have been so registered, the term "Flip-over Entity" shall
refer to whichever of such Persons is the issuer of the Common Shares
having the greatest Market Price of the shares outstanding.
(n) "Flip-over Transaction or Event" shall mean (i) a transaction in
which, directly or indirectly, the Company shall consolidate with, merge
with or into, or enter into an arrangement with, any other Person (other
than a wholly-owned Subsidiary of the Company), or any other Person (other
than a wholly-owned Subsidiary of the Company) shall consolidate with,
merge with or into, or enter into an arrangement with the Company, and in
connection therewith, all or part of the outstanding Common Shares of the
Company shall be changed in any way, reclassified or converted into or
exchanged for shares or other securities or cash or any other property, or
(ii) a transaction or series of transactions in which, directly or
indirectly, the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer) assets:
(1) aggregating more than fifty percent (50%) of the assets
(measured by either book value or Market Price, whichever results in
the greater percentage); or
(2) that generated during the Company's last completed fiscal
year or are expected to generate in the Company's then-current fiscal
year more than fifty percent (50%) of the operating income or cash
flow of the Company and its Subsidiaries (taken as a whole) to any
other Person (other than the Company or one or more of its
wholly-owned Subsidiaries) or to two or more such Persons that are
affiliated or otherwise acting jointly or in concert.
(o) "Market Price" of any securities (including the Rights) on any
date of determination shall mean the average of the daily closing prices
per share (or Right) of such securities (determined as described below) on
each of the 20 consecutive Trading Days through and including the Trading
Day immediately preceding such date; provided, however, that if an event of
a type analogous to any of the events described in Section 2.3 hereof shall
have caused the closing prices used to determine the Market Price on any
Trading Day not to be fully comparable with the closing price on such date
of determination, each such closing price so used shall be appropriately
adjusted in a manner analogous to the applicable adjustment provided for in
Section 2.3 hereof in order to make it fully comparable with the closing
price on such date of determination. The closing price per share of any
securities on any date shall be (i) the last sale price, regular way, or,
in case no such sale takes place on such date, the average of the closing
bid and asked prices, regular way, for each share of such securities as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on any national
securities exchange, (ii) if the securities are not listed or admitted to
trading on any national securities exchange, the closing board lot sale
price, (iii) if for any reason none of such prices is available on such day
or the securities are not listed or admitted to trading on any national
securities exchange, the average of the high bid and low asked prices for
each share of such securities in the over-the-counter market, as reported
by the Nasdaq Stock Market of the National Association of Securities
Dealers, Inc. ("Nasdaq"), or such other system then in use, or (iv) if on
any such date the securities are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the securities selected in good faith by
the Board of Directors of the Company; provided, however, that if on any
such date the securities are not traded in the over-the-counter market, the
closing price per share of such securities on such date shall mean the fair
value per share of securities on such date as determined in good faith by
the Board of Directors of the Company after consultation with a nationally
recognized investment banking firm with respect to the fair value per share
of such securities.
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(p) "Offer" shall mean a written proposal delivered to the Company by
any Person or Persons that (i) Beneficially Own in the aggregate one
percent (1%) or less of the outstanding Common Shares of the Company and
have not within the 12-month period preceding the delivery of such written
proposal Beneficially Owned in the aggregate in excess of one percent (1%)
of the outstanding Common Shares of the Company, and (ii) within said
12-month period have not disclosed, or caused the disclosure of, any
intention that would result in the acquisition or influence of control of
the Company (any such Persons meeting the conditions specified in clauses
(i) and (ii), an "Offeror"), and which proposal:
(1) provides for acquisition of all of the outstanding Voting
Shares held by any Person other than the Offeror and its Affiliates
for cash at the same specified price;
(2) is, in the opinion of a nationally recognized investment
banking firm retained by the Offeror, fair to the holders of Voting
Shares other than the Offeror and its Affiliates and is at a price
that is not less than the book value;
(3) states that such offer shall remain open for at least 90 days
and shall include all Voting Shares outstanding as of the date of the
proposal or issued thereafter pursuant to contracts in effect at the
date of the proposal and that the Offeror has obtained written
financing commitments from recognized financing sources and/or has on
hand, cash or cash equivalents, for the full amount of all financing
necessary to consummate the offer; and
(4) requests the Company to call a special meeting of the holders
of Voting Shares for the purpose of voting on a resolution requesting
the Board of Directors to accept such offer and contains a written
agreement of the Offeror to pay (or share with any other Offeror) at
least one-half of the Company's costs of preparing and mailing proxy
material for its own solicitation.
(q) "Offer To Acquire" shall include:
(i) an offer to purchase or a solicitation of an offer to sell
Voting Shares; and
(ii) an acceptance of an offer to sell Voting Shares, whether or
not such offer to sell has been solicited; or
(iii) any combination thereof, and
the Person accepting an offer to sell shall be deemed to be making an offer
to acquire to the Person that made the offer to sell.
(r) "Offeror's Securities" means Voting Shares Beneficially Owned on
the date of an Offer To Acquire by any Person that makes a Take-over Bid or
by any Person acting jointly or in concert with such Person.
(s) "Person" shall mean any individual, firm, partnership,
association, group (as such term is used in Rule 13d-3 under the Exchange
Act as in effect on the date of this Agreement), corporation, trust,
business trust, or other entity and shall include any successor (by merger
or otherwise) of such entity.
(t) "Preferred Shares" shall mean the currently authorized but
unissued shares of Series A Preferred Stock, par value $0.01 per share, of
the Company, having the rights and preferences set forth in the form of
Designation of Rights, Privileges, and Preferences attached hereto as
Exhibit A.
(u) "Redemption Date" means the date of the action of the Company's
Board of Directors ordering the redemption of the Rights pursuant to
Section 5.2 hereof.
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(v) "Redemption Price" means a price of $0.01 per Right, subject to
adjustment as set forth in Article V hereof.
(w) "Right" means the right to purchase 1/100 of a Preferred Share at
the Exercise Price, subject to adjustment, or the right to purchase,
exchange, or receive other securities or assets of the Company or another
issuer as set forth herein.
(x) "Right Certificate" means a certificate evidencing a Right or
Rights, substantially in the form of Exhibit B hereto.
(y) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(z) "Separation Date" shall mean the Close of Business on the earliest
of (i) the tenth day (or such later day as is determined by unanimous vote
of the Board of Directors and publicly announced) after the Stock
Acquisition Date (provided, however, that if prior to the date that would
otherwise be the Separation Date, the Acquiring Person, whose becoming such
shall have caused the Stock Acquisition Date to occur, shall cease to be an
Acquiring Person and shall be the Beneficial Owner of not more than five
percent (5%) of the Common Shares of the Company, as indicated in a public
announcement or public filing by such Person, then for purposes of this
Section 1.1(z), the Stock Acquisition Date shall be deemed not to have
occurred), or (ii) the tenth day after the date of the commencement of, or
first public announcement of, the intent of any Person (other than the
Company, any Company Subsidiary, or any Person or entity organized,
appointed, or established by the Company or such Company Subsidiary for or
pursuant to any tender or exchange offer plan) to commence a tender or
exchange offer or Take-over Bid to acquire (when added to any Voting Shares
as to which such Person is the Beneficial Owner immediately prior to such
tender or exchange offer or Take-over Bid) Beneficial Ownership of twenty
percent (20%) or more of the outstanding Voting Shares (provided that, if
the foregoing results in the Separation Date being prior to the Record
Date, the Separation Date shall be the Record Date, and provided further
that, if any tender or exchange offer or Take-over Bid referred to in
clause (ii) of this Section 1.1(z) expires or is canceled, terminated, or
otherwise withdrawn prior to the date that would otherwise be the
Separation Date, such offer shall be deemed, for purposes of this Section
1.1(z), never to have been made), or (iii) such later date as may be fixed
by the Board of Directors from time to time by notice to the Rights Agent
and publicly announced by the Company.
(aa) "Stock Acquisition Date" shall mean the first date of public
announcement or filing by the Company or an Acquiring Person that an
Acquiring Person has become such, whether or not the term "Acquiring
Person" is used in fact in such announcement.
(bb) "Subsidiary" of any specified Person shall mean any corporation
or other entity of which a majority of the voting power of the voting
equity securities or a majority of the equity interest is Beneficially
Owned, directly or indirectly, by such Person.
(cc) "Take-over Bid" means an Offer To Acquire Voting Shares when the
Voting Shares subject to the Offer To Acquire, together with the Offeror's
Securities, constitute in the aggregate twenty percent (20%) or more of the
outstanding Voting Shares at the date of the Offer To Acquire.
(dd) "Trading Day," when used with respect to any securities, shall
mean a day on which the principal securities exchange on which such
securities are listed or admitted to trading is open for the transaction of
business or, if the securities are not listed or admitted to trading on any
securities exchange, a Business Day.
(ee) "Voting Shares" shall mean only the Common Shares of the Company
and any other shares of capital stock of the Company entitled to vote
generally in the election of directors.
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1.2 Determinations.
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Any determination required to be made by the Company's Board of Directors
for purposes of applying the definitions contained in this Article 1 shall be
made by the Board of Directors in its good faith judgment, which determination
shall be conclusive and binding on the Rights Agent and the holders of the
Rights.
ARTICLE II
THE RIGHTS
2.1 Legend on Common Share Certificates.
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Certificates for the Common Shares issued after the Record Date, but prior
to the Close of Business on the Separation Date, shall evidence one Right for
each Common Share represented thereby and shall have impressed on, printed on,
written on, or otherwise affixed to them, the following legend:
Until the Separation Date (as defined in the Rights Agreement referred to
below), this certificate also evidences and entitles the holder thereof to
certain Rights as set forth in a Rights Agreement, dated July 30, 2004 (the
"Rights Agreement"), between Utah Medical Products, Inc. (the "Company")
and Registrar and Transfer Company, as Rights Agent, the terms of which are
hereby incorporated by reference and a copy of which is on file at the
principal executive office of the Company. Under certain circumstances, as
set forth in the Rights Agreement, such Rights may be redeemed by the
Company, may expire, may become void (if, in certain cases, they are
"Beneficially Owned" by an "Acquiring Person," as such terms are defined in
the Rights Agreement, or a transferee thereof), or may be evidenced by
separate certificates and may no longer be evidenced by this certificate.
The Company will mail or arrange for the mailing of a copy of the Rights
Agreement to the holder of this certificate without charge within five days
after the receipt of a written request therefor.
Certificates representing Common Shares of the Company that are issued and
outstanding at the Record Date shall evidence one Right for each Common Share
evidenced thereby notwithstanding the absence of the foregoing legend.
2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights.
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(a) Subject to adjustment as herein set forth, each Right will entitle
the holder thereof, after the Separation Date, to purchase, subject to
adjustment from time to time as provided herein, 1/100 of a Preferred Share
at the Exercise Price.
(b) Until the Separation Date:
(i) no Right may be exercised; and
(ii) each Right will be evidenced by the certificate for the
associated Common Share and will be transferable only together with,
and will be transferred by a transfer of, such associated Common
Share. Notwithstanding any other provision of this Agreement, any
Rights held by the Company or any of its Subsidiaries shall be void.
(c) After the Separation Date and prior to the Expiration Date, the
Rights, unless earlier redeemed in accordance with the provisions of
Article V hereof, may be exercised and will be transferable independent of
Common Shares. Promptly following the Separation Date, the Rights Agent
will mail to each holder of record of Common Shares as of the Separation
Date, at such holder's address as shown by the records of the transfer
agent and registrar of the Company's Common Shares (the Company hereby
agreeing to cause such transfer agent and registrar, if different from the
Rights Agent, to furnish copies of such records to the Rights Agent for
this purpose): (i) a Rights Certificate appropriately completed,
representing the number of Rights
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held by such holder at the Separation Date and having such marks of
identification or designation and such legends, summaries, or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required
to comply with any law or with any rule or regulation made pursuant thereto
or with any rule or regulation of any stock exchange or quotation system on
which the Rights may from time to time be listed or traded. or to conform
to usage, and (ii) a disclosure statement describing the Rights.
(d) Rights may be exercised on any Business Day after the Separation
Date and prior to the Expiration Date by submitting to the Rights Agent the
Rights Certificate evidencing such Rights with an Election to Exercise (an
"Election to Exercise"), substantially in the form attached to the Rights
Certificate duly completed, accompanied by payment in cash or by certified
check or money order payable to the order of the Company, of a sum equal to
the Exercise Price multiplied by the number of Rights being exercised and a
sum sufficient to cover any transfer tax or charge that may be payable in
respect of any transfer involved in the transfer or delivery of Rights
Certificates or the issuance or delivery of certificates for whole or
fractional Preferred Shares in a name other than that of the holder of the
Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to Exercise
accompanied by payment as set forth in Section 2.2(d) above, the Rights
Agent will thereupon promptly:
(i) requisition from any transfer agent of the capital stock of
the Company certificates for the number of whole or fractional
Preferred Shares to be purchased (the Company hereby irrevocably
authorizing and directing such transfer agent to comply with all such
requisitions);
(ii) as provided in Section 6.5(b) hereof, at the election of the
Company, cause depository receipts to be issued in lieu of fractional
shares;
(iii) when appropriate, requisition from the Company the amount
of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 6.5(b) hereof;
(iv) when appropriate, requisition from the Company the amount of
cash or other consideration to be paid in lieu of capital stock as
determined pursuant to the terms hereof; and
(v) after receipt of such certificates, depository receipts,
and/or cash or other consideration, deliver the same to or upon the
order of the registered holder of such Rights Certificate, registered
(in the case of certificates or depository receipts) in such name or
names as may be designated by such holder.
(f) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by
the Rights Agent to such holder or to such holder's duly authorized
assigns.
(g) The Company covenants and agrees that it will:
(i) cause to be reserved and kept available out of its authorized
and unissued shares of preferred stock and common stock, respectively,
or out of authorized and issued shares of preferred stock and common
stock, respectively, held in its treasury, such number of Preferred
Shares and Common Shares, respectively, as will from time to time be
sufficient to permit the exercise in full of all outstanding Rights;
(ii) not effect any amendment to the designation of rights,
privileges, and preferences for the Preferred Shares or any amendment
to the articles of incorporation of the Company that would materially
and adversely affect the rights, privileges, or powers of the
Preferred Shares (regardless of whether there are then any holders of
Preferred Shares), without the prior approval
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of the holders of two-thirds or more of the then-outstanding Preferred
Shares and the prior written consent of the holders of two-thirds or
more of the then-outstanding Rights that are not Beneficially Owned by
any Acquiring Person. (For purposes of the taking of any action by the
holders of Rights, the Company's Board of Directors may establish a
record date and may call and hold a meeting of such holders or seek
their consent to action by the requisite number thereof in writing
substantially in accordance with the procedure applicable to action to
be taken by the holders of Preferred Shares and in accordance with
applicable law);
(iii) take all such action as may be necessary and within its
power to ensure that all Preferred Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such
Preferred Shares (subject to payment of the Exercise Price), be duly
and validly authorized, executed, issued, delivered, fully paid, and
nonassessable;
(iv) take all such action as may be necessary and within its
power to comply with any applicable requirements of the Securities Act
or the Exchange Act, or the rules and regulations thereunder and any
other applicable law, rule, or regulation, in connection with the
issuance and delivery of the Rights Certificates and the issuance of
any Preferred Shares upon exercise of Rights;
(v) use its best efforts to cause all Preferred Shares issued
upon exercise of Rights to be listed on a national securities exchange
upon issuance; and
(vi) pay when due and payable any and all federal and state
transfer taxes (but not any income taxes of the holder or exercising
holder or any liability of the Company to withhold tax) and charges
that may be payable in respect of the original issuance or delivery of
the Rights Certificates; provided that, the Company shall not be
required to pay any transfer tax or charge which may be payable in
respect of any transfer involved in the transfer or delivery of Rights
Certificates or the issuance or delivery of certificates for shares in
a name other than that of the holder of the Rights being transferred
or exercised.
2.3 Adjustments to Exercise Price; Number of Rights.
-----------------------------------------------
(a) In the event the Company shall at any time after the Record Date
and prior to the Expiration Date:
(i) declare or pay a dividend on the Common Shares payable in
Common Shares (or other capital stock or securities exchangeable for
or convertible into or giving a right to acquire Common Shares or
other capital stock) other than pursuant to any optional stock
dividend program;
(ii) subdivide or split the then-outstanding Common Shares into a
greater number of Common Shares;
(iii) combine or consolidate the then-outstanding Common Shares
into a smaller number of Common Shares or effect a reverse split of
the outstanding Common Shares; or
(iv) issue any Common Shares (or other capital stock or
securities exchangeable for or convertible into or giving a right to
acquire Common Shares or other capital stock) in respect of, in lieu
of, or in exchange for existing Common Shares in a reclassification or
recapitalization;
then, and in each such event, the Exercise Price and the number of Rights
outstanding, or, if the payment or effective date therefor shall occur
after the Separation Date, the Preferred Shares purchasable upon exercise
of Rights, shall be adjusted in the manner set forth below. If the Exercise
Price and number of Rights outstanding are to be adjusted, (x) the Exercise
Price in effect after such adjustment will be equal to
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the Exercise Price in effect immediately prior to such adjustment divided
by the number of Common Shares (or other capital stock) (the "Expansion
Factor") that a holder of one Common Share immediately prior to such
dividend, subdivision, combination, or issuance would hold thereafter as a
result thereof, and (xi) each Right held prior to such adjustment will
become that number of Rights equal to the Expansion Factor, and the
adjusted number of Rights will be deemed to be distributed among the Common
Shares with respect to which the original Rights were associated (if they
remain outstanding) and the shares issued in respect of such dividend,
subdivision, combination, or issuance, so that each such Common Share (or
other capital stock) will have exactly one Right associated with it. If the
Preferred Shares purchasable upon exercise of Rights are split, subdivided,
or combined, or if any dividend (whether of cash or securities) is declared
with respect thereto, the Preferred Shares purchasable upon exercise of
each Right after such event will be automatically adjusted to be that
number of the Preferred Shares that a holder of the Preferred Shares
purchasable upon exercise of one Right (regardless of whether a Right shall
then be exercisable) immediately prior to such split, subdivision,
combination, or dividend would hold thereafter as a result thereof. If
after the Record Date and prior to the Expiration Date, the Company shall
issue any shares of capital stock other than Common Shares in a transaction
of a type described in the first sentence of this Section 2.3(a), shares of
such capital stock shall be treated herein as nearly equivalent to Common
Shares as may be practicable and appropriate under the circumstances, and
the Company and the Rights Agent agree to amend this Agreement in order to
effect such treatment, and the Company will not consolidate with, merge
with or into, or enter into an arrangement with any other Person unless
such Person agrees to be bound by the terms of an amendment effecting such
treatment.
In the event the Company shall at any time after the Record Date and
prior to the Separation Date issue any Common Shares otherwise than in a
transaction referred to in the preceding paragraph, each such Common Share
so issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such Share.
(b) In the event the Company shall at any time after the Record Date
and prior to the Separation Date fix a record date for the making of a
distribution to all holders of Common Shares of rights or warrants
entitling them to subscribe for or purchase Common Shares (or securities
convertible into or exchangeable for or carrying a right to purchase or
subscribe for Common Shares) at a price per Common Share (or, if a security
convertible into or exchangeable for or carrying a right to purchase or
subscribe for Common Shares), having a conversion, exchange, or exercise
price (including the price required to be paid to purchase such convertible
or exchangeable security or right per share) less than the Market Price per
Common Share on such record date, the Exercise Price shall be adjusted. The
Exercise Price in effect after such record date will equal the Exercise
Price in effect immediately prior to such record date multiplied by a
fraction, of which the numerator shall be the number of Common Shares
outstanding on such record date plus the number of Common Shares that the
aggregate offering price of the total number of Common Shares so to be
offered (and/or the aggregate initial conversion, exchange, or exercise
price of the convertible or exchangeable securities or rights so to be
offered (including the price required to be paid to purchase such
convertible or exchangeable securities or rights)) would purchase at such
Market Price, and of which the denominator shall be the number of Common
Shares outstanding on such record date plus the number of additional Common
Shares to be offered for subscription or purchase (or into which the
convertible or exchangeable securities or rights so to be offered are
initially convertible, exchangeable, or exercisable). In case such
subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Company's Board of Directors. For
purposes of this Agreement, the granting of the right to purchase Common
Shares (whether from treasury shares or otherwise) pursuant to any dividend
or interest reinvestment plan and/or any Common Share purchase plan
providing for the reinvestment of dividends or interest payable on
securities of the Company and/or the investment of periodic optional
payments and/or employee benefit or similar plans (so long as such right to
purchase is in no case evidenced by the delivery of rights or warrants)
shall not be deemed to constitute an issue of rights or warrants by the
Company; provided, however, that, in the case of any dividend or interest
reinvestment plan, the right to purchase Common Shares is at a price per
share of not less than ninety percent (90%) of the current market price per
share (determined as provided in such plans) of the Common Shares.
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(c) In the event the Company shall at any time after the Record Date
and prior to the Separation Date fix a record date for the making of a
distribution to all holders of Common Shares of evidences of indebtedness
or assets (other than a regular periodic cash dividend or a dividend paid
in Common Shares) or rights or warrants (excluding those referred to in
Section 2.3(b)), the Exercise Price shall be adjusted. The Exercise Price
in effect after such record date will equal the Exercise Price in effect
immediately prior to such record date less the fair market value (as
determined in good faith by the Company's Board of Directors) of the
portion of the assets, evidences of indebtedness, rights, or warrants so to
be distributed applicable to the securities purchasable upon exercise of
one Right.
(d) Each adjustment made pursuant to this Section 2.3 shall be made as
of:
(i) the record date for the applicable dividend or distribution,
in the case of an adjustment made pursuant to subsection (b) or (c)
above; and
(ii) the payment or effective date for the applicable dividend,
subdivision, change, combination, or issuance, in the case of an
adjustment made pursuant to subsection (a) above.
(e) In the event the Company shall at any time after the Record Date
and prior to the Separation Date issue any shares of capital stock (other
than Common Shares), or rights or warrants to subscribe for or purchase any
such capital stock or securities convertible into or exchangeable for any
such capital stock, in a transaction referred to in clause (a)(i) or
(a)(iv) above, if the Board of Directors acting in good faith determines
that the adjustments contemplated by clauses (a), (b), and (c) above in
connection with such transaction will not appropriately protect the
interests of the holders of Rights, the Company may determine what other
adjustments to the Exercise Price, number of Rights, and/or Preferred
Shares purchasable upon exercise of Rights would be appropriate and,
notwithstanding clauses (a), (b), and (c) above, such adjustments, rather
than the adjustments contemplated by clauses (a), (b), and (c) above, shall
be made. The Company and the Rights Agent shall amend this Agreement as
appropriate to provide for such adjustments.
(f) Each adjustment to the Exercise Price made pursuant to this
Section 2.3 shall be calculated to the nearest cent. Whenever an adjustment
to the Exercise Price is made pursuant to this Section 2.3, the Company
shall:
(i) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment;
(ii) promptly file with the Rights Agent and with each transfer
agent for the Common Shares a copy of such certificate; and
(iii) mail a brief summary thereof to each holder of Rights.
(g) Irrespective of any adjustment or change in the securities
purchasable upon exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the securities so
purchasable that were expressed in the initial Rights Certificates issued
hereunder.
2.4 Date on Which Exercise is Effective.
-----------------------------------
Each Person in whose name any certificate for Preferred Shares is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such Preferred Shares represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered for exercise and payment of the
Exercise Price for such Rights (and any applicable transfer taxes and other
governmental charges payable by the exercising holder hereunder) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Share transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such Preferred Shares on,
and such certificate shall be dated,
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the next succeeding Business Day on which the Preferred Share transfer books of
the Company are open.
2.5 Execution, Authentication, Delivery, and Dating of Rights
----------------------------------------------------------------------
Certificates.
-------------
(a) The Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or one of its Executive Vice
Presidents, attested by its Secretary or one of its Assistant Secretaries.
The signature of any of these officers on the Rights Certificate may be
manual or facsimile. Rights Certificates bearing the manual or facsimile
signatures of individuals that were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the countersignature
and delivery of such Rights Certificates.
(b) Promptly after the Company learns of the Separation Date, the
Company will notify the Rights Agent of such Separation Date and will
deliver Rights Certificates executed by the Company to the Rights Agent for
countersignature, and the Rights Agent shall countersign (manually or by
facsimile signature in a manner satisfactory to the Company) and deliver
such Rights Certificates to the holders of the Rights pursuant to Section
2.2(c) hereof. No Rights Certificate shall be valid for any purpose until
countersigned by the Rights Agent as aforesaid.
(c) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.6 Registration, Registration of Transfer and Exchange.
---------------------------------------------------
(a) The Company will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may
prescribe, the Company will provide for the registration and transfer of
Rights. The Rights Agent is hereby appointed "Rights Registrar" for the
purpose of maintaining the Rights Register for the Company and registering
Rights and transfers of Rights as herein provided. In the event that the
Rights Agent shall cease to be the Rights Registrar, the Rights Agent will
have the right to examine the Rights Register at all reasonable times.
(b) After the Separation Date and prior to the Expiration Date, upon
surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Section 2.6(d) below, the
Company will execute, and the Rights Agent will countersign and deliver, in
the name of the holder or the designated transferee or transferees, as
required pursuant to the holder's instructions, one or more new Rights
Certificates evidencing the same aggregate number of Rights as did the
Rights Certificates so surrendered.
(c) All Rights issued upon any registration of transfer or exchange of
Rights Certificates shall be the valid obligations of the Company, and such
Rights shall be entitled to the same benefits under this Agreement as the
Rights surrendered upon such registration of transfer or exchange.
(d) Every Rights Certificate surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights
Agent, as the case may be, duly executed by the holder thereof or such
holder's attorney duly authorized in writing. As a condition to the
issuance of any new Rights Certificate under this Section 2.6, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto.
2.7 Mutilated, Destroyed, Lost, and Stolen Rights Certificates.
----------------------------------------------------------
(a) If any mutilated Rights Certificates is surrendered to the Rights
Agent prior to the Expiration Date, the Company shall execute and the
Rights Agent shall countersign and deliver in exchange therefor a new
Rights Certificate evidencing the same number of Rights as did the Rights
Certificate so surrendered.
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(b) If there shall be delivered to the Company and the Rights Agent
prior to the Expiration Date (i) evidence to their satisfaction of the
destruction, loss, or theft of any Rights Certificate, and (ii) such
security or indemnity as may be required by them to save each of them and
any of their agents harmless, then, in the absence of notice to the Company
or the Rights Agent that such Rights Certificate has been acquired by a
bona fide purchaser, the Company shall execute and upon its request the
Rights Agent shall countersign and deliver, in lieu of any such destroyed,
lost, or stolen Rights Certificate, a new Rights Certificate evidencing the
same number of Rights as did the Rights Certificate so destroyed, lost, or
stolen .
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.7, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of
the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.7
in lieu of any destroyed, lost, or stolen Rights Certificate shall evidence
an original additional contractual obligation of the Company, whether or
not the destroyed, lost, or stolen Rights Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all other Rights duly
issued hereunder.
2.8 Persons Deemed Owners.
---------------------
Prior to due presentment of a Rights Certificate (or, prior to the
Separation Date, the associated Common Share certificate) for registration of
transfer, the Company, the Rights Agent, and any agent of the Company or the
Rights Agent may deem and treat the Person in whose name such Rights Certificate
(or, prior to the Separation Date, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever. As used in this Agreement, unless the context otherwise
requires, the term "holder" of any Rights shall mean the registered holder of
such Rights (or, prior to the Separation Date, the associated Common Shares).
2.9 Delivery and Cancellation of Certificates.
-----------------------------------------
All Rights Certificates surrendered upon exercise or for redemption,
registration of transfer, or exchange shall, if surrendered to any Person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, shall
be promptly canceled by the Rights Agent. The Company may at any time deliver to
the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder that the Company may have acquired in any
manner whatsoever, and all Rights Certificates so delivered shall be promptly
canceled by the Rights Agent. No Rights Certificate shall be countersigned in
lieu of or in exchange for any Rights Certificates canceled as provided in this
Section 2.9, except as expressly permitted by this Agreement. The Rights Agent
shall destroy all canceled Rights Certificates and deliver a certificate of
destruction to the Company.
2.10 Agreement of Rights Holders.
---------------------------
Every holder of Rights by accepting the same consents and agrees with the
Company and the Rights Agent and with every other holder of Rights that:
(a) prior to the Separation Date, each Right will be transferable only
together with, and will be transferred by a transfer of, the associated
Common Share;
(b) after the Separation Date, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to the
Separation Date, the associated Common Share certificate) for registration
of transfer, the Company, the Rights Agent, and any agent
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of the Company or the Rights Agent may deem and treat the Person in whose
name the Rights Certificate (or, prior to the Separation Date, the
associated Common Share certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on such Rights Certificate or the associated Common
Share 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) without the approval of any holder of Rights and upon the sole
authority of the Company's Board of Directors acting in good faith, this
Agreement may be supplemented or amended from time to time pursuant to
Section 6.3, Section 2.3(e), or the last sentence of the first paragraph of
Section 2.3(a) hereof.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT
OF CERTAIN TRANSACTIONS
3.1 Flip-over Transaction or Event.
------------------------------
(a) Subject to Section 3.3 hereof, in the event that prior to the
Expiration Date the Company enters into, consummates, or permits to occur
any Flip-over Transaction or Event, the Company shall take such action as
shall be necessary to ensure, and shall not enter into, consummate, or
permit to occur such Flip-over Transaction or Event until it shall have
entered into a supplemental agreement with the principal Person engaging in
such Flip-over Transaction or Event (the "Flip-over Entity," as such term
is more specifically defined in Section 1.1(m) hereof) for the benefit of
the holders of the Rights, providing that upon consummation of the
Flip-over Transaction or Event:
(i) each Right shall thereafter constitute the right to purchase
from the Flip-over Entity, upon exercise thereof in accordance with
the terms hereof, that number of Common Shares of such Flip-over
Entity having an aggregate Market Price on the date of consummation or
occurrence of such Flip-over Transaction or Event equal to twice the
Exercise Price for an amount in cash equal to the Exercise Price (such
right to be appropriately adjusted in a manner analogous to the
applicable adjustment to the Rights provided for in Section 2.3 in the
event that after such date of consummation or occurrence an event of a
type analogous to any of the events described in Section 2.3 shall
have occurred with respect to such Common Shares);
(ii) the Flip-over Entity shall thereafter be liable for, and
shall assume, by virtue of such Flip-over Transaction or Event and
such supplemental agreement, all the obligations and duties of the
Company pursuant to this Agreement;
(iii) the term "Company" for all purposes of this Rights
Agreement shall thereafter be deemed to refer to such Flip-over
Entity;
(iv) such Flip-over Entity shall take such steps (including the
reservation of a sufficient number of its Common Shares, in the same
manner applicable to the reservation of Preferred Shares provided by
Section 2.2(g)(i) hereof) in connection with the consummation of such
Flip-over Transaction or Event as may be necessary to assure that the
provisions hereof shall thereafter be applicable;
(v) confirming that all rights of first refusal or preemptive
rights in respect of the issuance of Common Shares of the Flip-over
Entity upon exercise of outstanding Rights have been waived and that
such transaction shall not result in a default by the Flip-over Entity
under this Rights Agreement; and
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(vi) providing that, as soon as practicable after the date of
such Flip-over Transaction or Event, the Flip-over Entity will:
(1) prepare and file, as required by law, 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 (with a prospectus at all times
meeting the requirements of the Securities Act), until the date
of expiration of the Rights, and similarly comply with applicable
state securities laws;
(2) 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 Stock
Market; and
(3) deliver to holders of the Rights historical financial
statements for the Flip-over Entity that comply in all respects
with the requirements for registration on Form 10 (or any
successor form) under the Exchange Act.
3.2 Flip-in Event.
-------------
(a) Subject to Section 3.3, in the event that prior to the Expiration
Date a Flip-in Event shall occur, the Company shall take such action as
shall be necessary to ensure and provide, within five Business Days or such
longer period as may be required to satisfy the requirements of the
Securities Act and the Exchange Act that, except as provided below, such
Right shall thereafter constitute the right to purchase from the Company,
upon exercise thereof in accordance with the terms hereof, that number of
Common Shares of the Company having an aggregate Market Price on the date
of consummation or occurrence of such Flip-in Event equal to the Exercise
Price for an amount in cash equal to one-half the Exercise Price (such
right to be appropriately adjusted in a manner analogous to the applicable
adjustment provided for in Section 2.3 in the event that after such date of
consummation or occurrence an event of a type analogous to any of the
events described in Section 2.3 shall have occurred with respect to such
Common Shares).
(b) Notwithstanding the foregoing, upon the occurrence of any Flip-in
Event, any Rights that are or were Beneficially Owned on or after the
earlier of the Separation Date or the Stock Acquisition Date by (i) an
Acquiring Person or (ii) a transferee, direct or indirect, of an Acquiring
Person (or any Affiliate or Associate of an Acquiring Person) in a
transfer, whether or not for consideration, that the Company's Board of
Directors acting in good faith has determined is part of a plan,
arrangement, or scheme of an Acquiring Person (or any Affiliate or
Associate of an Acquiring Person) that has the purpose or effect of
avoiding clause (i) of this Section 3.2(b), shall become void and any
holder of such Rights (including transferees) shall thereafter have no
right to exercise such Rights under any provision of this Agreement.
(c) Any Rights Certificate issued pursuant to Section 2.2 that
represents Rights Beneficially Owned by an Acquiring Person and any Rights
Certificate issued at any time upon the transfer of any Rights to an
Acquiring Person or any Affiliate or Associate thereof or to any nominee of
any such Acquiring Person, Affiliate, or Associate, and any Rights
Certificate issued upon transfer, exchange, replacement, or adjustment of
any other Rights Certificate referred to in this sentence, shall contain
the following legend:
The Rights represented by this Rights Certificate were issued to
a Person that was an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement). This Rights Certificate and the Rights
represented hereby may become void in the circumstances specified
in Section 3.2(b) of the Rights Agreement.
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Provided that, the Rights Agent shall not be under any responsibility to
ascertain the existence of facts that would require the imposition of such
legend but shall be required to impose such legend only if instructed to do
so by the Company, or if a holder fails to certify upon transfer or
exchange in the space provided on the Rights Certificate that such holder
is not an Acquiring Person or an Affiliate or Associate thereof; provided
further, however, that the absence of such legend on any Rights Certificate
shall not be deemed dispositive of whether the holder thereof is an
Acquiring Person.
3.3 Obligations of the Company.
--------------------------
(a) The Company shall not enter into or engage in any transaction of
the kind referred to in this Article III if at the time of such transaction
there are any rights, warrants, or securities outstanding or any other
arrangements, agreements, or instruments that would eliminate or otherwise
diminish in any respect the benefits intended to be afforded by this Rights
Agreement to the holders of Rights upon consummation of such transaction.
The provisions of this Article III shall apply to successive mergers or
consolidations, sales, or other transfers.
(b) In the event that there shall not be sufficient Common Shares
authorized to permit the exercise in full of the Rights in accordance with
Section 3.2(a), holders of Rights will receive upon exercise Common Shares
of the Company to the extent available and then cash, property, or other
securities of the Company (which may be accompanied by a reduction in the
Exercise Price), in proportions determined by the Company, so that the
aggregate value received is equal to the Exercise Price.
ARTICLE IV
THE RIGHTS AGENT
4.1 General.
-------
(a) The Company hereby appoints the Rights Agent to act as agent for
the Company and the holders of Rights 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 such
Co-Rights Agents, the respective duties of the Rights Agents and Co-Rights
Agents shall be as the Company may determine. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without negligence, bad faith, or willful misconduct
on the part of the Rights Agent, for anything done or omitted by the Rights
Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim
of liability, which right to indemnification will survive 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
certificate for Common Shares, Rights Certificate, certificate for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, when necessary, verified or
acknowledged, by the proper Person or Persons.
-16-
4.2 Merger or Consolidation or Change of Name of Rights Agent.
---------------------------------------------------------
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or amalgamated 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 is a party, or any
corporation succeeding to the stockholder services business of the Rights
Agent or any successor Rights Agent, will 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 4.4 hereof. In case at the time such
successor Rights Agent succeeds to the agency created by this Agreement,
any of the Rights Certificates have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates have
not been countersigned, any successor Rights Agent may countersign such
Rights Certificate either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases, such Rights
Certificate will have full force provided in the Rights Certificates and in
this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificate shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificate so countersigned; and in case at
that time any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either in its
prior name or in its changed name; and in all such cases, such Rights
Certificates shall have the full force provided in the Rights Certificates
and in this Agreement.
4.3 Duties of Rights Agent.
----------------------
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel will be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent deems it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by a Person believed by the
Rights Agent to be the Chairman of the Board, the President or any
Executive Vice President or Vice President, and by the Treasurer or any
Assistant Treasurer or the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate will be
full authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith, or willful misconduct.
(d) The Rights Agent will not be liable for, or by reason of, any of
the statements of fact or recitals contained in this Agreement or in the
certificates for Common Shares or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but all such
statements and recitals are and will be deemed to have been made by the
Company only.
(e) The Rights Agent will not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution, and delivery hereof by the Rights
Agent) or in respect of the validity or execution
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of any Common Share certificate, Preferred Share certificate, or Rights
Certificate (except its countersignature thereof); nor will it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor will it be
responsible for any change in the exercisability of the Rights (including
the Rights becoming void pursuant to Section 3.2(b) hereof or any
adjustment required under the provisions of Section 2.3 hereof) or
responsible for the manner, method, or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustments (except with respect to the exercise of Rights after receipt of
the certificate contemplated by Section 2.3 describing any such
adjustment); nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization of any Preferred Shares
or Common Shares to be issued pursuant to this Agreement or any Rights or
as to whether any Preferred Shares or Common Shares will, when issued, be
duly and validly authorized, executed, issued, delivered, fully paid, and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge, and
deliver, or cause to be performed, executed, acknowledged, and delivered,
all such further and other acts, instruments, and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any Person believed by the Rights Agent to be the Chairman of the Board,
the President, any Executive Vice President or Vice President or the
Secretary or any Assistant Secretary, or the Treasurer or any Assistant
Treasurer of the Company, and to apply to such Persons for advice or
instructions in connection with its duties and it shall not be liable for
any action taken or suffered by it in good faith in accordance with
instructions of any such Person.
(h) The Rights Agent and any stockholder, director, officer, or
employee of the Rights Agent may buy, sell, or deal in Preferred Shares,
Common Shares, Rights, or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act
as fully and freely as though it were not the Rights Agent under this
Agreement, subject to the terms, covenants, conditions, and restrictions of
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 will not be
answerable or accountable for any act, default, neglect, or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect, or misconduct provided reasonable care was
exercised in the selection and continued employment thereof.
4.4 Change of Rights Agent.
----------------------
The Rights Agent may resign and be discharged from its duties under this
Agreement upon 90 days' notice (or such lesser notice as is acceptable to the
Company) in writing mailed to the Company and to each transfer agent of Common
Shares, by registered or certified mail, and to the holders of the Rights in
accordance with Section 6.9. The Company may remove the Rights Agent upon 30
days' notice in writing, mailed to the Rights Agent and to each transfer agent
of the Common Shares, by registered or certified mail, and to the holders of the
Rights in accordance with Section 6.9. If the Rights Agent should resign or be
removed or otherwise become incapable of acting, the Company will appoint a
successor to the Rights Agent. If the Company fails to make such appointment
within a period of 30 days after such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of any Rights (which holder shall, with such
notice, submit such holder's Rights Certificate for inspection by the Company),
then the holder of any Rights may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation authorized
to conduct business in the state of Utah. After appointment, the successor
Rights Agent will be vested with the same powers, rights, duties, and
responsibilities as if it had been originally named as Rights Agent without
further act or deed, but the predecessor Rights Agent shall deliver and transfer
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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 will file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares and mail a notice thereof in
writing to the holders of the Rights. Failure to give any notice provided for in
this Section 4.4 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.
ARTICLE V
REDEMPTION
5.1 Redemption.
----------
The Rights may be redeemed solely by action of the Board of Directors
pursuant to Section 5.2 hereof and in no other manner.
5.2 By the Board of Directors.
-------------------------
The Company's Board of Directors may, at its option, at any time prior to
the earlier of (a) the Expiration Date or (b) the Close of Business on the tenth
day after the Stock Acquisition Date (or such later date as may be determined by
the majority vote of the Board of Directors from time to time), by notice to the
Rights Agent and public announcement by the Company, redeem all, but not less
than all, of the then-outstanding Rights at the Redemption Price, appropriately
adjusted to reflect any stock split, stock dividend, or similar transaction
occurring after the date hereof, and the Company may, at its option, pay the
Redemption Price in Common Shares (based on the current Market Price of the
Common Shares at the time of redemption), cash, or any other form of
consideration deemed appropriate by the Board of Directors.
5.3 Rights Termination.
------------------
Immediately upon the action of the Company's Board of Directors ordering
the redemption of the Rights pursuant to Section 5.2 hereof, 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. The Company shall promptly give public notice of
any such redemption; provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of such redemption. Within 10
days after such action of the Board of Directors ordering the redemption of the
Rights pursuant to Section 5.2 hereof, the Company shall mail a notice of
redemption to all the holders of the then-outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Separation Date, on the registry books of the transfer agent for the
Common Shares of the Company, if different. Any notice that 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 any Rights at any time in any manner other
than that specifically set forth in this Article V, and other than in connection
with the purchase of Common Shares of the Company prior to the Separation Date.
ARTICLE VI
MISCELLANEOUS
6.1 Expiration.
----------
No Person shall have any right pursuant to this Agreement or in respect of
any Right after the Expiration Date, except the Rights Agent as specified in
Section 4.1(a) of this Agreement.
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6.2 Issuance of New Rights Certificate.
----------------------------------
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the number or kind or class of shares
purchasable upon exercise of Rights made in accordance with the provisions of
this Agreement.
6.3 Supplements and Amendments.
--------------------------
The Company may from time to time supplement or amend this Agreement
without the approval of any holders of Rights:
(a) to make any changes, except for a supplement or amendment that
would establish an earlier Expiration Date or change the Exercise Price
that the Board of Directors acting in good faith may deem necessary or
desirable; provided that, no such supplement or amendment made on or after
the Stock Acquisition Date shall materially adversely affect the interests
of the holders of Rights generally; and provided further that, no such
supplement or amendment shall be made to the provisions of Article IV
except with the written concurrence of the Rights Agent to such supplement
or amendment; or
(b) in order to cure any ambiguity or to correct or supplement any
provision contained herein that may be inconsistent with any other
provisions herein or otherwise defective.
6.4 Fractional Rights.
-----------------
(a) The Company shall not be required to issue fractions of Rights or
Right Certificates evidencing fractional Rights.
(b) In lieu of fractional Rights, the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable shall be paid in cash an amount equal to the same fraction of the
current Market Price of a whole Right. For the purposes of this Section
6.4, the current Market Price of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing
price of the Rights for any day shall be determined in the same manner set
forth in Section 1.1(o).
6.5 Fractional Shares.
-----------------
(a) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions that are integral multiples of 1/100 of a
share) or fractions of a share of Common Shares upon exercise of the Rights
or to distribute certificates that evidence fractional shares of Preferred
Shares (other than fractions that are integral multiples of 1/100 of a
share) or fractional shares of Common Shares. Nothing contained herein,
however, shall be deemed to prevent any holder of Rights from aggregating
the number of Rights exercised in any single transaction in such a manner
that the aggregate number of Rights exercised in a single transaction may
be convertible into an integral number of shares (or, in the case of
Preferred Shares, an integral multiple of 1/100 of a share). A holder of
fractional share certificates of Preferred Shares shall have all such
rights, privileges, and preferences as it may be entitled to pursuant to
the Utah Revised Business Corporation Act.
(b) In lieu of issuing fractions (other than fractions that are
integral multiples of 1/100 of a share) of Preferred Shares, the Company
may, at its election, issue depository receipts evidencing fractions of
Preferred Shares pursuant to an appropriate agreement between the Company
and a depository selected by it; provided that, such agreement shall
provide that the holders of such depository receipts shall have all of the
rights, privileges, and preferences to which they would be entitled as
owners of Preferred Shares pursuant to the Utah Revised Business
Corporation Act. With respect to fractional Preferred Shares that are not
integral multiples of 1/100 of a Preferred Share, if the Company does not
issue such fractional Preferred Shares or depository receipts in lieu
thereof, there shall be paid to the holders of record of Right Certificates
at the time such
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Right Certificates are exercised as herein provided an amount in cash equal
to the same fraction of the Market Price of a Preferred Share.
(c) The holder of a Right by the acceptance of a Right expressly
waives its right to receive any fractional Preferred Shares (other than
fractions that are integral multiples of 1/100 of a Preferred Share) upon
exercise of a Right.
6.6 Rights of Action.
----------------
Subject to the terms of this Agreement, rights of action in respect of this
Agreement, other than rights of action vested solely in the Rights Agent, are
vested in the respective holders of the Rights, and any holder of any Rights,
without the consent of the Rights Agent or of the holder of any other Rights,
may, on such holder's own behalf and for such holder's own benefit and the
benefit of other holders of Rights, enforce, institute, and maintain any suit,
action, or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise such holder's Rights in the manner
provided in such holder's Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
6.7 Holder of Rights Not Deemed a Stockholder.
-----------------------------------------
No holder, as such, of any Rights shall be entitled to vote, receive
dividends, or be deemed for any purpose the holder of Preferred Shares or any
other securities that may at any time be issuable on the exercise of such
Rights, nor shall anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights, as such, any of the rights of
a stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 6.8 hereof),
or to receive dividends or subscription rights or otherwise, until such Rights
shall have been exercised in accordance with the provisions hereof.
6.8 Notice of Proposed Actions.
--------------------------
In case the Company shall propose after the Separation Date and prior to
the Expiration Date:
(a) to effect or permit (in cases when the Company's permission is
required) any Flip-in Event or Flip-over Transaction or Event; or
(b) to effect the liquidation, dissolution, or winding up of the
Company or the sale of all or substantially all of the Company's assets;
then, in each such case, the Company shall give to each holder of a Right, in
accordance with Section 6.9 hereof, a notice of such proposed action, which
shall specify the date on which such Flip-in Event or Flip-over Transaction or
Event, liquidation, dissolution, or winding up is to take place, and such notice
shall be so given at least 20 Business Days prior to the date of the taking of
such proposed action.
6.9 Notices.
-------
Notices or demands authorized or required by this Agreement to be given or
made by the Rights Agent or by the holder of any Rights to the Company shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
Utah Medical Products, Inc.
0000 Xxxxx 000 Xxxx
Xxxxxxx, Xxxx 00000
Attention: Secretary
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Any notice or demand authorized or required by this Agreement to be given
or made by the Company or by the holder of any Rights to the Rights Agent shall
be sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Company)
as follows:
Registrar and Transfer Company
00 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Attention: President
Notices or demands authorized or required by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or prior to the Separation Date, on
the registry books of the transfer agent and registrar of the Company's capital
stock, if different from the Rights Agent. Any notice that is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice.
6.10 Costs of Enforcement.
--------------------
The Company agrees that if the Company or any other Person the securities
of which are purchasable upon exercise of Rights fails to fulfill any of its
obligations pursuant to this Agreement, then the Company or such Person will
reimburse the holder of any Rights for the costs and expenses (including legal
fees) incurred by such holder in actions to enforce its rights pursuant to any
Rights or this Agreement.
6.11 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.
6.12 Benefits of this Agreement.
--------------------------
Nothing in this Agreement shall be construed to give any Person other than
the Company, the Rights Agent, and the holders of the Rights 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
holders of the Rights.
6.13 Descriptive Headings.
--------------------
Descriptive headings appear herein for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
6.14 Governing Law.
-------------
This Agreement and each Right issued hereunder shall be deemed to be a
contract made under the internal laws of the state of Utah and for all purposes
shall be governed by and construed in accordance with the internal laws,
including the corporate laws, of such state applicable to contracts to be made
and performed entirely within such state without giving effect to conflicts of
laws principles thereof.
6.15 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.
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6.16 Severability.
------------
If any term or provision hereof or the application thereof to any
circumstance shall, in any jurisdiction and to any extent, be invalid or
enforceable, such term or provision shall be ineffective as to such jurisdiction
to the extent of such invalidity or unenforceability without invalidating or
rendering unenforceable the remaining terms and provisions hereof or the
application of such term or provision to circumstances other than those as to
which it is held invalid or unenforceable.
6.17 Effective Date.
--------------
This Agreement shall become effective at 5:00 p.m., Mountain time, on
October 28, 2004.
6.18 Determinations and Actions by the Board of Directors.
----------------------------------------------------
The Board shall have the exclusive power and authority to administer and
amend this Agreement and to exercise all rights and powers specifically granted
to the Board or the Company, or as may be necessary or advisable in the
administration of this Agreement, including the right and power to interpret the
provisions of this Agreement and make all determinations deemed necessary or
advisable for the administration of this Agreement (including a determination to
redeem or not to redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations, and determinations (including for purposes of
clause (b) below, all omissions with respect to the foregoing) that are done or
made by the Board, in good faith, shall (a) be final, conclusive, and binding on
the Company, the Rights Agent, the holders of the Rights Certificates and all
other parties, and (b) not subject the Board to any liability to the holders of
the Rights Certificates.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
UTAH MEDICAL PRODUCTS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Xxxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
REGISTRAR AND TRANSFER COMPANY
By: /s/ Xxxxxxx X. Tatler
-----------------------
Xxxxxxx X. Tatler
VP and Chief of Staff
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