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[EXHIBIT 1]
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APPLIED MATERIALS, INC.
and
XXXXXX TRUST AND SAVINGS BANK,
Rights Agent
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Rights Agreement
Dated as of July 7, 1999
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TABLE OF CONTENTS
PAGE
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SECTION 1. CERTAIN DEFINITIONS..........................................................1
SECTION 2. APPOINTMENT OF RIGHTS AGENT..................................................4
SECTION 3. ISSUE OF RIGHT CERTIFICATES..................................................4
SECTION 4. FORM OF RIGHT CERTIFICATES...................................................6
SECTION 5. COUNTERSIGNATURE AND REGISTRATION............................................6
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES......................7
SECTION 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE OF RIGHTS................7
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES..........................10
SECTION 9. RESERVATION AND AVAILABILITY OF SHARES; REGISTRATION........................10
SECTION 10. PREFERRED STOCK RECORD DATE.................................................11
SECTION 11. ADJUSTMENT OF EXERCISE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS..........12
SECTION 12. CERTIFICATION OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES................19
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER........19
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.....................................22
SECTION 15. RIGHTS OF ACTION............................................................23
SECTION 16. AGREEMENT OF RIGHTS HOLDERS.................................................23
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER...........................24
SECTION 18. CONCERNING THE RIGHTS AGENT.................................................24
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT...................25
SECTION 20. DUTIES OF RIGHTS AGENT......................................................26
SECTION 21. CHANGE OF RIGHTS AGENT......................................................28
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES..........................................29
SECTION 23. REDEMPTION AND TERMINATION; THREE-YEAR INDEPENDENT DIRECTOR
EVALUATION..................................................................29
SECTION 24. NOTICE OF CERTAIN EVENTS....................................................30
SECTION 25. NOTICES.....................................................................31
SECTION 26. SUPPLEMENTS AND AMENDMENTS..................................................32
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TABLE OF CONTENTS
(CONTINUED)
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SECTION 27. SUCCESSORS..................................................................32
SECTION 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC...................32
SECTION 29. BENEFITS OF THIS AGREEMENT..................................................33
SECTION 30. SEVERABILITY................................................................33
SECTION 31. GOVERNING LAW...............................................................33
SECTION 32. COUNTERPARTS................................................................33
SECTION 33. DESCRIPTIVE HEADINGS........................................................33
Exhibit A -- Certificate of Designation, Preferences and Rights of the
Terms of the Series A Junior Participating Preferred Stock
Exhibit B -- Form of Right Certificate
Exhibit C -- Form of Summary of Rights to Purchase Preferred Stock
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of July 7, 1999 (as amended from time to
time, the "Agreement"), between Applied Materials, Inc., a Delaware corporation
(the "Company"), and Xxxxxx Trust and Savings Bank, an Illinois banking
corporation, as Rights Agent (the "Rights Agent," which term shall include any
successor Rights Agents hereunder).
W I T N E S S E T H
WHEREAS, on July 7, 1999, the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as hereinafter
defined) for each share of common stock, par value $.01 per share, of the
Company (the "Common Stock") outstanding at the close of business on July 18,
1999 (the "Record Date"), and has authorized the issuance of one Right for each
share of Common Stock of the Company issued (whether originally issued or
delivered from the Company's treasury) between the Record Date and the earlier
of the Distribution Date or the Expiration Date (as such terms are defined in
Sections 3 and 7 hereof), each Right representing the right to purchase one
ten-thousandth (1/10,000) of a share of Series A Junior Participating Preferred
Stock of the Company having the rights, powers and preferences set forth in the
form of Certificate of Designation, Preferences and Rights attached hereto as
Exhibit A, upon the terms and subject to the conditions hereinafter set forth
(the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated below:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 20% or more of the shares of
Common Stock then outstanding, but shall not include (i) the Company, (ii) any
Subsidiary (as such term is hereinafter defined) of the Company, (iii) any
employee benefit plan of the Company or any Subsidiary of the Company, or (iv)
any Person organized, appointed or established by the Company for or pursuant to
the terms of any such plan; provided, however, that no Person who is not an
Acquiring Person shall become an Acquiring Person solely by virtue of a
reduction in the number of shares of Common Stock outstanding unless, subsequent
to such reduction, such Person shall acquire additional shares of Common Stock.
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to this Section 1(a), has become such
inadvertently, and such Person divests, within ten (10) Business Days of
becoming an "Acquiring Person," a sufficient number of shares of Common Stock so
that such Person would no longer be an "Acquiring Person," as defined pursuant
to this Section 1(a), then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Agreement.
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(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not
in writing, but other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," (A) securities tendered pursuant to
a tender or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
purchase or exchange, or (B) securities issuable upon exercise of Rights
at any time prior to the time when Rights first become exercisable as a
result of the occurrence of a Triggering Event, or (C) securities
issuable upon exercise of Rights from and after the occurrence of a
Triggering Event which Rights were acquired by such Person or any of
such Person's Affiliates or Associates prior to the Distribution Date or
pursuant to Section 3(a) or Section 22 hereof (the "Original Rights") or
pursuant to Section 11(a)(i) hereof in connection with an adjustment
made with respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of
or has "beneficial ownership" of (as determined pursuant to Rule 13d-3
of the General Rules and Regulations under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not
in writing; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security under this
subparagraph (ii) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding: (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to, and
in accordance with, the applicable provisions of the General Rules and
Regulations under the Exchange Act, and (B) is not also then reportable
by such Person on Schedule 13D under the Exchange Act (or any comparable
or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing, but
other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (c)) or disposing of any voting
securities of the Company.
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(d) "Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in the State of California or the State
of Illinois are authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M., San
Francisco time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., San Francisco time, on the next succeeding
Business Day.
(f) "Common Stock" shall mean the common stock, par value $.01 per
share, of the Company, except that "Common Stock" when used with reference to
any Person other than the Company shall mean: (i) in the case of Persons
organized in corporate form, the capital stock or equity interest of such Person
with the greatest voting power or, the equity securities or other equity
interest having power to control or direct the management of such Person or, if
such other Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person; and (ii) in the case of Persons
not organized in corporate form, the units of beneficial interest which (A)
represent the right to participate generally in the profits and losses of such
Person (including, without limitation, any flow-through tax benefits resulting
from an ownership interest in such Person) and (B) are entitled to exercise the
greatest voting power of such Person or, in the case of a limited partnership,
shall have the power to remove the general partner or partners.
(g) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(h) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company or other entity and shall include any
successor (by merger or otherwise) of such entity.
(i) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $0.01 per share, of the Company.
(j) "Section 11(a)(ii) Event" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(k) "Section 11(a)(ii) Trigger Date" shall mean the date on which
the Company's right of redemption pursuant to Section 23(a) expires following a
Section 11(a)(ii) Event.
(l) "Section 13 Event" shall have the meaning set forth in Section
13(a) hereof.
(m) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such.
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(n) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which a majority of the voting power of the
voting equity securities or equity interest is owned, directly or indirectly, by
such Person, or otherwise controlled by such Person.
(o) "Tender Offer" shall mean a tender or exchange offer made in
accordance with the provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, the payment of applicable fees,
announcement of a tender or exchange offer and the dissemination of tender or
exchange offer materials (as those terms are defined respectively in such
regulations) which the Board of Directors of the Company or a duly authorized
committee of such Board shall not have determined to be frivolous or not made in
good faith; any such determination made promptly and in good faith to be
conclusive for the purposes of this Agreement.
(p) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
(q) "Voting Power" shall mean the voting power of all securities of
the Company then outstanding generally entitled to vote for the election of
directors of the Company.
Any determination required by the definitions contained in this Section
1 shall be made by the Board of Directors of the Company in their good faith
judgment, which determination shall be final and binding on the Rights Agent.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier of (i) the
close of business on the tenth Business Day after (or such later date as may be
determined by action of the Board of Directors of the Company followed by notice
to the Rights Agent and public announcement thereof by the Company) the Stock
Acquisition Date or (ii) the close of business on the tenth Business Day (or
such later date as may be determined by action of the Board of Directors of the
Company followed by notice to the Rights Agent and public announcement thereof
by the Company) after the date that a Tender Offer by any Person (other than (A)
the Company, (B) any Subsidiary of the Company, (C) any employee benefit plan of
the Company or any Subsidiary of the Company, or (D) any Person organized,
appointed or established by the Company for or pursuant to the terms of any such
plan) is first published or sent or given within the meaning of Rule 14d-2(a) of
the General Rules and Regulations under the Exchange Act, or the first public
announcement after the date hereof of the intent of any such Person to commence
(which intention to commence remains in effect for five business days (as
defined in Regulation 14D under the Exchange Act) after such announcement) any
such Tender Offer, if upon consummation thereof such Person would be an
Acquiring Person (the earlier of such dates, including any such date which is
after the date of this Agreement and prior to the
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issuance of the Rights, being herein referred to as the "Distribution Date"),
the Rights will be evidenced (subject to the provisions of paragraphs (b) and
(c) of this Section 3) by the certificates for the Common Stock registered in
the names of the holders of the Common Stock (which certificates for Common
Stock shall be deemed also to be certificates for Rights) and not by separate
certificates, and the Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock (including a transfer to the
Company). As soon as practicable after the Distribution Date, the Rights Agent
will send at the expense of the Company and by first-class, insured, postage
prepaid mail, to each record holder of the Common Stock as of the close of
business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more Right certificates, in substantially the
form of Exhibit B hereto (the "Right Certificates"), evidencing one Right for
each share of Common Stock so held, subject to adjustment as provided herein. In
the event that an adjustment in the number of Rights per share of Common Stock
has been made pursuant to Section 11(p) hereof, at the time of distribution, the
Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Right Certificates evidencing only
whole numbers of Rights are distributed and cash is paid in lieu of fractional
Rights. As of and after the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form attached hereto as Exhibit C (the "Summary of Rights"),
by first-class, postage prepaid mail, to each record holder of the Common Stock
as of the close of business on the Record Date, at the address of such holder
shown on the records of the Company. With respect to certificates for the Common
Stock outstanding as of the Record Date, until the Distribution Date, the Rights
will be evidenced by such certificates for the Common Stock and the registered
holders of the Common Stock shall also be the registered holders of the
associated Rights. Until the earlier of the Distribution Date or the Expiration
Date (as such term is defined in Section 7 hereof), the transfer of any
certificates representing shares of Common Stock in respect of which Rights have
been issued shall also constitute the transfer of the Rights associated with
such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common Stock
which are issued after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Until the earlier of the Distribution
Date or the Expiration Date, all Rights issued pursuant to this Section 3(c)
shall be represented by the certificates evidencing the Common Stock with
respect to which such Rights are issued and registered holders of such Common
Stock shall also be the registered holders of the associated Rights, and the
transfer of any such certificates shall also constitute the transfer of the
Rights associated with the Common Stock evidenced by such certificates. In
addition, Rights shall be issued following the Distribution Date and prior to
the redemption or expiration of the Rights as provided in Section 22 hereof.
(d) Certificates for Common Stock issued upon transfer or new
issuance after the Record Date but prior to the earlier of the Distribution Date
or the Expiration Date shall have impressed, printed, written or stamped thereon
or otherwise affixed thereto the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement between Applied
Materials, Inc. and Xxxxxx Trust and
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Savings Bank, as Rights Agent, dated as of July 7, 1999 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal office of
Applied Materials, Inc. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. Applied Materials,
Inc. will mail to the holder of this certificate a copy of the Rights
Agreement without charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the Rights Agreement,
Rights issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as such terms
are defined in the Rights Agreement) and any subsequent holder of such
Rights may become null and void.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall each be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate (including the legend set forth in Section 7(e) hereof) and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Right Certificates, whenever
distributed, shall be dated as of the Record Date and on their face shall
entitle the holders thereof to purchase such number of one ten-thousandths of a
share of Preferred Stock as shall be set forth therein at the price set forth
therein (such exercise price per one ten-thousandth of a share of Preferred
Stock being herein called the "Exercise Price"), but the amount and type of
securities purchasable upon the exercise of each Right and the Exercise Price
thereof shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. (a) The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, the
President or any Vice President, either manually or by facsimile signature, and
shall have affixed thereto the Company's seal or a facsimile thereof which shall
be attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall have signed any
of the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificates may be signed on behalf of the
Company by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office or offices designated for such purpose, books
for registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the
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respective holders of the Right Certificates, the number of Rights evidenced on
its face by each of the Right Certificates, the certificate number and the date
of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Sections 7(e) and 14 hereof, at any time after the
close of business on the Distribution Date, and at or prior to the close of
business on the Expiration Date, any Right Certificate or Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Certificates, entitling the registered holder to purchase a like number of one
ten-thousandths of a share of Preferred Stock (or, following a Triggering Event,
Common Stock, other securities or property, as the case may be) as the Right
Certificate or Certificates surrendered then entitled such holder (or former
holder in the case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office or offices of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered Right
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Right Certificate and the Company shall have been provided with such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request,
provided that the Company shall give written notice, in a timely fashion, to the
Rights Agent of any such request for additional evidence. Thereupon the Rights
Agent shall, unless it receives written notice from the Company that the Rights
are subject to Section 7(e), countersign and deliver to the Person entitled
thereto a Right Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will execute and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein, including,
without limitation, the restrictions on exercisability set forth in Section
9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part at any
time after the Distribution Date upon surrender of the Right Certificate, with
the form of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the office or offices of the Rights Agent
designated for such purpose, together with payment of the Exercise Price with
respect to each surrendered Right for the total number of one
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ten-thousandths of a share of Preferred Stock (or other securities, cash or
other assets, as the case may be) as to which such surrendered Rights are
exercisable, at or prior to the earlier of (i) the close of business on July 6,
2009 (the "Final Expiration Date"), (ii) the consummation of a transaction
contemplated by Section 13(d) hereof, or (iii) the time at which the Rights are
redeemed as provided in Section 23 hereof (such earlier time being herein
referred to as the "Expiration Date").
(b) The Exercise Price for each one ten-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $375,
shall be subject to adjustment from time to time as provided in Section 11 and
Section 13 hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right (in cash, or by certified
bank check or money order payable to the order of the Company), of the Exercise
Price for each one ten-thousandth of a share of Preferred Stock (or other
securities or property, as the case may be, as provided in this Agreement) to be
purchased and an amount equal to any applicable transfer tax, the Rights Agent
shall, subject to Section 9(e) and Section 20(k) hereof, thereupon promptly (i)
(A) requisition from any transfer agent of the shares of Preferred Stock (or
make available, if the Rights Agent is the transfer agent for such shares)
certificates for the number of one ten-thousandths of a share of Preferred Stock
to be purchased and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, or (B) if the Company shall have elected to
deposit shares of Preferred Stock issuable upon exercise of the Rights hereunder
with a depositary agent, requisition from the depositary agent depositary
receipts representing such number of one ten-thousandths of a share of Preferred
Stock as are to be purchased (in which case certificates for the shares of
Preferred Stock represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) when appropriate, requisition from the
Company the amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder, and (iv) after receipt thereof, deliver such
cash, if any, to or upon the order of the registered holder of such Right
Certificate. The payment of the Exercise Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) may be made in cash or by certified bank
check or bank draft payable to the order of the Company. In the event that the
Company is obligated to issue other securities (including Common Stock) of the
Company, pay cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or property are available for distribution by the Rights
Agent, if and when appropriate. In addition, in the case of an exercise of the
Rights by a holder pursuant to Section 11(a)(ii), the Rights Agent shall return
such Right Certificate to the registered holder thereof after imprinting,
stamping or otherwise indicating thereon that the rights represented by such
Right Certificate no longer include the rights provided by Section 11(a)(ii) of
this Agreement and if less than all the Rights represented by such Right
Certificate were so exercised, the Rights Agent shall indicate on the Right
Certificate the number of Rights represented thereby which continue to include
the rights provided by Section 11(a)(ii).
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(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Trigger Date, any Rights
beneficially owned by (i) an Acquiring Person, or an Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(e), and
subsequent transferees of the Persons referred to in clauses (ii) or (iii),
shall become null and void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement, any Right Certificate or otherwise. In
addition, any Right Certificate issued to an Acquiring Person or any other
Person whose Rights would be void pursuant to this Section 7(e), or any
Associate or Affiliate thereof, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Right Certificate are or were
issued to a Person who was or has become an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). This Right Certificate and the Rights
represented hereby may become void in the circumstances specified in
Section 7(e) of the Rights Agreement.
The Company shall notify the Rights Agent, and, if such notification is
given orally, the Company shall confirm the same in writing on or prior to the
next following Business Day, at such time as the Company has notice that any
Person constitutes an Acquiring Person, and until such written notice is given,
the Rights Agent may conclusively presume that the foregoing legend need not be
printed on any Right Certificates. The Rights Agent will, however, use its best
efforts to assist the Company in its efforts to identify any Persons
constituting an Acquiring Person or an Affiliate or Associate of an Acquiring
Person and transferees of such Persons, for the purpose of determining those
Right Certificates which should bear the foregoing legend. The Company shall use
all reasonable efforts to ensure that the provisions of this Section 7(e) are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7
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unless the certificate contained in the form of election to purchase set forth
on the reverse side of the Right Certificate surrendered for such exercise shall
have been completed and signed by the registered holder thereof and the Company
shall have been provided with such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares; Registration. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock (and,
following the occurrence of a Triggering Event, use its best efforts to be
reserved and kept available out of its authorized and unissued shares of Common
Stock and/or other securities or out of its authorized and issued shares of
Common Stock held in its treasury) the number of shares of Preferred Stock (and
following the occurrence of a Triggering Event, Common Stock and/or other
securities) that (in accordance with the terms of this Agreement, including
Section 11(a)(iii) hereof) will be sufficient to permit the exercise in full of
all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities) issuable
upon the exercise of the Rights are included in the NASDAQ/National Market
System or listed on any national securities exchange, the Company shall use its
best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be included, as the case
may be, in the NASDAQ/National Market System or listed on such exchange upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)(iii)
hereof, or as soon as is required by law following the Distribution Date, as the
case may be, a registration statement under the Securities Act of 1933, as
amended (the "Act"), with respect to the securities purchasable upon exercise of
the Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities, and (B) the date
of the expiration of the Rights. The Company will also use its best efforts to
take such action as may be
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appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states or other jurisdictions in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
of time not to exceed ninety (90) days, the exercisability of the Rights in
order to prepare and file such registration statement or in order to comply with
such blue sky laws. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the
registration of the Rights shall have been effected and the requisite
qualification in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all one ten-thousandths of a share of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (subject to payment of the
Exercise Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right Certificates
and of any certificates for a number of one ten-thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, however, be required to pay
any transfer tax which may be payable in respect of any transfer or delivery of
Right Certificates to a Person other than, or the issuance or delivery of
certificates or depositary receipts for a number of one ten-thousandths of a
share of Preferred Stock (or Common Stock and/or other securities, as the case
may be) in respect of a name other than that of, the registered holder of the
Right Certificates evidencing Rights surrendered for exercise or to issue or
deliver any certificates for a number of one ten-thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be) in
a name other than that of the registered holder upon the exercise of any Rights
until such tax shall have been paid (any such tax being payable by the holder of
such Right Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name any
certificate for a number of one ten-thousandths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such one ten-thousandths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Exercise Price
(and all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the Company
are open. Prior to the
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exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a stockholder of the Company with respect
to shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Exercise Price, Number of Shares or Number of
Rights. The Exercise Price, the number and kind of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C)
combine the outstanding Preferred Stock into a smaller number of shares, or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) and in Section 7(e) hereof, the
Exercise Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Preferred Stock, or other capital stock and/or
other securities issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of Preferred Stock, or capital
stock and/or other securities, as the case may be, which, if such Right had been
exercised immediately prior to such date and at a time when the Preferred Stock,
or capital stock and/or other securities, as the case may be, transfer books of
the Company were open, he would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for
in this Section 11(a)(i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) (A) In the event (a "Section 11(a)(ii) Event") any
Person becomes an Acquiring Person (except pursuant to a Tender Offer
for all outstanding shares of Common Stock at a price and on terms
determined by at least a majority of the members of the Board of
Directors who are not representatives, nominees, Affiliates or
Associates of such Person, after receiving advice from one or more
nationally recognized investment banking firms selected by such
directors, to be fair and adequate to the stockholders and otherwise in
the best interests of the Company and its stockholders (a "Permitted
Offer")), then, following the first occurrence of such Section 11(a)(ii)
Event, each holder of a Right (except as otherwise provided in this
Agreement) shall thereafter, for a period of ninety (90) days commencing
on the later of the Section 11(a)(ii) Trigger Date and the effective
date of the registration statement referred to in Section 9(c) hereof,
have the right to receive, upon exercise thereof and payment of the then
current Exercise Price in accordance with the terms of this Agreement,
in lieu of a number of one ten-thousandths of a share of Preferred
Stock, such number of shares of Common Stock of the Company as shall
equal the result obtained by (x) multiplying the then current Exercise
Price by the then number of one ten-thousandths of a share of Preferred
Stock for which a Right was
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exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, whether or not such Right was then exercisable, and (y)
dividing that product (which, following such first occurrence, shall
thereafter be referred to as the "Exercise Price" for each Right and for
all purposes of this Agreement) by 50% of the current market price
(determined pursuant to Section 11(d) hereof) per share of Common Stock
on the date of such first occurrence (such number of shares being
referred to herein as the "Adjustment Shares"); provided, however, that
if the transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13 hereof, then
only the provisions of Section 13 hereof shall apply and no adjustment
shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that the number of shares of Common Stock
which are authorized by the Company's certificate of incorporation but
not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in full
of the Rights in accordance with the foregoing Section 11(a)(ii), the
Company shall: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current
Value") over (2) an amount equal to the Exercise Price (such excess, the
"Spread"), and (B) with respect to each Right (other than those Rights
which have become null and void pursuant to Section 7(e) hereof), make
adequate provision to substitute for the Adjustment Shares, upon payment
of the applicable Exercise Price, (1) cash, (2) a reduction in the
Exercise Price, (3) Common Stock or other equity securities of the
Company (including, without limitation, shares of preferred stock which
the Board of Directors of the Company has deemed to have the same value
as shares of Common Stock (such shares of preferred stock being referred
to herein as "common stock equivalents")), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors of the
Company based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the Company;
provided, however, if the Company shall not have made adequate provision
to deliver value pursuant to clause (B) above within thirty (30) days
following the Section 11(a)(ii) Trigger Date, then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Exercise Price, shares of Common Stock
(to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is likely
that sufficient additional shares of Common Stock could be authorized
for issuance upon exercise in full of the Rights, the thirty (30) day
period set forth above may be extended to the extent necessary, but not
more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek stockholder approval for the
authorization of such additional shares (such period, as it may be
extended, the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value
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thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Common Stock shall be the current
market price (as determined pursuant to Section 11(d) hereof) per share
of the Common Stock on the Section 11(a)(ii) Trigger Date and the value
of any "common stock equivalent" shall be deemed to have the same value
as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within forty-five (45) calendar
days after such record date) Preferred Stock (or shares having rights,
privileges and preferences such that such shares or fractions thereof are
substantially the same as shares of Preferred Stock ("equivalent preferred
stock")) or securities convertible into Preferred Stock or equivalent preferred
stock at a price per share of Preferred Stock or per share of equivalent
preferred stock (or having a conversion price per share, if a security
convertible into Preferred Stock or equivalent preferred stock) less than the
current market price (as determined pursuant to Section 11(d) hereof) per share
of Preferred Stock on such record date, the Exercise Price to be in effect after
such record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock outstanding on such record
date, plus the number of shares of Preferred Stock which the aggregate offering
price of the total number of shares of Preferred Stock and/or equivalent
preferred stock to be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at such current
market price and the denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number of additional
shares of Preferred Stock and/or equivalent preferred stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
in a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Shares of Preferred Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights or warrants are not so
issued, the Exercise Price shall be adjusted to be the Exercise Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution
to all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)),
the Exercise Price to be in effect after such record date shall be determined by
multiplying the Exercise Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the current market price (as
determined
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pursuant to Section 11(d) hereof) per share of Preferred Stock on such record
date, less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to a share of Preferred Stock and the denominator of which shall be
such current market price (as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. Such adjustments shall be made successively whenever such
a record date is fixed; and in the event that such distribution is not so made,
the Exercise Price shall be adjusted to be the Exercise Price which would have
been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "current market
price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date, and for purposes of computations made pursuant to Section
11(a)(iii) hereof, the "current market price" per share of Common Stock on any
date shall be deemed to be the average of the daily closing prices per share of
such Common Stock for the ten (10) consecutive Trading Days immediately
following such date; provided, however, that in the event that the current
market price per share of the Common Stock is determined during a period
following the announcement by the issuer of such Common Stock of (A) a dividend
or distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the Rights),
or (B) any subdivision, combination or reclassification of such Common Stock,
and prior to the expiration of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as the case may be, after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the "current market price"
shall be properly adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of Common Stock are not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares of Common Stock
are not listed or admitted to trading on any national securities exchange, the
closing sale price for the Common Stock as reported on the NASDAQ/National
Market System or, if the shares of Common Stock are not included therein or
reported thereby, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or, if on any such date the shares
of Common Stock 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 Common Stock selected by the Board of Directors of the Company.
If on any such date no market maker is making a market in the Common Stock, the
fair value of such shares on such date as determined in good faith by the
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Board of Directors of the Company shall be used. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, a Business Day. If the
Common Stock is not publicly held or not so listed or traded, "current market
price" per share shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent, shall be conclusive for all purposes
and shall be binding on the Rights Agent and the holders of the Rights.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined in the
same manner as set forth above for the Common Stock in clause (i) of this
Section 11(d) (other than the last sentence thereof). If the current market
price per share of Preferred Stock cannot be determined in the manner provided
above or if the Preferred Stock is not so listed or traded in a manner described
in clause (i) of this Section 11(d), the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 10,000 (as
such number may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock occurring after
the date of this Agreement) multiplied by the current market price per share of
the Common Stock. If neither the Common Stock nor the Preferred Stock is so
listed or traded, "current market price" per share of the Preferred Stock shall
mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the "current market price" of one ten-thousandth of
a share of Preferred Stock shall be equal to the "current market price" of one
share of Preferred Stock divided by 10,000.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Exercise Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share of Common Stock
or other share or one-millionth of a share of Preferred Stock, as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
(3) years from the date of the transaction which mandates such adjustment, or
(ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a),
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock other than Preferred Stock, thereafter the number of
such other shares so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in
Section 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Stock shall apply on like terms to any such other shares.
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(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of one ten-thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Exercise Price as a result of the
calculations made in Section 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of one ten-thousandths of
a share of Preferred Stock (calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of one ten-thousandths of a share of Preferred
Stock covered by a Right immediately prior to this adjustment, by (y) the
Exercise Price in effect immediately prior to such adjustment of the Exercise
Price, and (ii) dividing the product so obtained by the Exercise Price in effect
immediately after such adjustment of the Exercise Price.
(i) The Company may elect on or after the date of any adjustment of
the Exercise Price to adjust the number of Rights, in substitution for any
adjustment in the number of one ten-thousandths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
the adjustment in the number of Rights shall be exercisable for the number of
shares or fractions of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the
Exercise Price in effect immediately prior to adjustment of the Exercise Price
by the Exercise Price in effect immediately after adjustment of the Exercise
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Exercise Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Exercise Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Exercise Price
or the number of shares or fractions of a share of Preferred Stock issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the
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Exercise Price per share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Exercise Price below the then stated value, if any, of the shares of
Preferred Stock issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Preferred Stock at such adjusted Exercise Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the number of one ten-thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the number of one ten-thousandths of a share of Preferred Stock
and other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Exercise Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due xxxx or
other appropriate instrument evidencing such holder's right to receive such
additional shares (fractional or otherwise) or securities upon the occurrence of
the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Exercise Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred
Stock at less than the current market price, (iii) issuance wholly for cash of
shares of capital stock or other securities which by their terms are convertible
into or exchangeable for shares of Preferred Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with, (ii) merge with or into, or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one or
more transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole),
to, any other Person if (x) at the time of or immediately after such
consolidation, merger or sale there are any charter or bylaw provisions or any
rights, warrants or other instruments or securities outstanding or agreements in
effect which would substantially diminish or eliminate the benefits intended to
be afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the date of this Agreement
and prior to the Distribution
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Date (i) declare a dividend on the outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, (iii)
combine the outstanding Common Stock into a smaller number of shares, or (iv)
issue any shares of its capital stock in a reclassification of the outstanding
Common Stock, the number of Rights associated with each share of Common Stock
then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event (including other shares of Common Stock issued after the date of such
event, but prior to the Distribution Date) shall equal the result obtained by
multiplying the number of Rights associated with each share of Common Stock
immediately prior to such event by a fraction the numerator of which shall be
the total number of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of shares of Common Stock outstanding immediately following the occurrence of
such event.
(p) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 and Section 26 hereof, take
(or permit any Subsidiary to take) any action the primary purpose or effect of
which is to diminish substantially or otherwise eliminate the benefits intended
to be afforded by the Rights.
Section 12. Certification of Adjusted Exercise Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with the transfer agent for the
Preferred Stock, a copy of such certificate, and (c) mail a brief summary
thereof to each holder of a Right Certificate (or, if prior to the Distribution
Date, to each holder of a certificate representing shares of Common Stock) in
accordance with Section 25 hereof. Notwithstanding the foregoing sentence, the
failure of the Company to give such notice shall not affect the validity of, or
the force or effect of, the requirement for such adjustment. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be obligated or responsible for
calculating any adjustment nor shall it be deemed to have knowledge of such
adjustment unless and until it shall have received such certificate. Any such
adjustment shall be binding on the Rights Agent and the holders of the Rights.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event (a "Section 13 Event") that, at any time after the
Section 11(a)(ii) Trigger Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), and the Company shall not be the continuing or surviving corporation of
such consolidation or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the Company shall be
the continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person (including the Company) or cash or
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any other property, or (z) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or in a series of related transactions, assets or earning power
aggregating more than 50% of the assets (based on fair market value) or earning
power of the Company and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof), then, and in
each such case (except as may be contemplated by Section 13(d) hereof), proper
provision shall be made so that: (i) each holder of a Right (except as otherwise
provided in this Agreement) shall thereafter have the right to receive, upon the
exercise thereof and payment of the then current Exercise Price in accordance
with the terms of this Agreement, such number of validly authorized and issued,
fully paid, non-assessable and freely tradeable shares of Common Stock of the
Principal Party (as hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be equal
to the result obtained by (1) multiplying the then current Exercise Price by the
number of one ten-thousandths of a share of Preferred Stock for which a Right is
exercisable immediately prior to the first occurrence of a Section 13 Event (or,
if a Section 11(a)(ii) Event has occurred prior to the first occurrence of a
Section 13 Event, multiplying the number of one ten-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Exercise Price in effect prior to
such first occurrence), and dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as the "Exercise Price"
for each Right and for all purposes of this Agreement) by (2) 50% of the current
market price (determined pursuant to Section 11(d)(i) hereof) per share of the
Common Stock of such Principal Party on the date of consummation of such Section
13 Event; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of Common Stock thereafter deliverable upon
the exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y)
of the first sentence of Section 13(a), the Person that is the issuer of
any securities into which shares of Common Stock of the Company are
converted in such merger or consolidation, and if no securities are so
issued, the Person that is the other party to such merger or
consolidation; and
(ii) in the case of any transaction described in clause (z)
of the first sentence in Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
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provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (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 Stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
(2) if the Common Stock of such Person is not and has not been so registered and
such Person is not a direct or indirect Subsidiary of another corporation the
Common Stock of which is and has been so registered, "Principal Party" shall
refer to the corporation which ultimately controls such Person; (3) in case such
Person is a Subsidiary, directly or indirectly, of more than one Person, the
Common Stocks of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value; and (4) in case such
Person is owned, directly or indirectly, by a joint venture formed by two or
more Persons that are not owned, directly or indirectly, by the same Person, the
rules set forth in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were a
"Subsidiary" of both or all of such joint venturers and the Principal Parties in
each such chain shall bear the obligations set forth in this Section 13 in the
same ratio as their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have sufficient Common Stock
authorized to permit the full exercise of the Rights in accordance with this
Section 13 and prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any consolidation,
merger or sale of assets mentioned in paragraph (a) of this Section 13, the
Principal Party will:
(i) prepare and file a registration statement under the Act,
with respect to the Rights and the securities purchasable upon exercise
of the Rights on an appropriate form, and will use its best efforts to
cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under the
blue sky laws of such jurisdictions as may be necessary or appropriate;
and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10
under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in clauses (x) and
(y) of Section 13(a) if: (i)
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such transaction is consummated with a Person or Persons who acquired shares of
Common Stock pursuant to a Permitted Offer (or a wholly owned Subsidiary of any
such Person or Persons); (ii) the price per share of Common Stock offered in
such transaction is not less than the price per share of Common Stock paid to
all holders of Common Stock whose shares were purchased pursuant to such
Permitted Offer; and (iii) the form of consideration being offered to the
remaining holders of Common Stock pursuant to such transaction is the same as
the form of consideration paid pursuant to such Permitted Offer. Upon
consummation of any such transaction contemplated by this subsection (d), all
Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise
issuable. The closing price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities exchange, the closing
sale price for the Common Stock as reported on the NASDAQ/National Market System
or, if the shares of Common Stock are not included therein or reported thereby,
the last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a
market in the Rights the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than fractions which are integral multiples of one
ten-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one ten-thousandth of a
share of Preferred Stock). Fractions of Preferred Stock in integral multiples of
one ten-thousandth of a share of Preferred Stock, at the election of the
Company, may be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the shares of Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one ten-thousandth of a share of Preferred Stock, the
Company may pay to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash
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equal to the same fraction of the current market value of one ten-thousandth of
a share of Preferred Stock. For purposes of this Section 14(b), the current
market value of one ten-thousandth of a share of Preferred Stock shall be one
ten-thousandth of the closing price of a share of Preferred Stock (as determined
pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately prior to
the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute certificates which evidence factional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common Stock shall be
the closing price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, except the rights of action given to the Rights Agent under Section
18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate (or, prior to the
Distribution Date, the certificate representing such Common Stock) in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent, if surrendered at
the office or offices of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer;
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(c) subject to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name a Right Certificate
(or, prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificates
or the associated Common Stock certificate made by anyone other than the Company
or the Rights Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent, subject to the last sentence of Section 7(e) hereof, shall be
required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of Preferred
Stock or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company agrees to pay
to the Rights Agent 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 disbursements and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability in the
premises. The costs and expenses of enforcing this right of indemnification
shall also be paid by the Company. The indemnification provided for hereunder
shall survive the expiration of the Rights and termination of this Agreement.
(b) The Rights Agent may conclusively rely upon and shall be
protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration of this
Agreement in reliance upon any Right Certificate or
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certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons. The Rights Agent
shall be under no duty to make any investigation or inquiry as to any statements
contained or matters referred to in any such instrument, but may accept and rely
upon the same as conclusive evidence of the truth and accuracy of such
statements. Notwithstanding any other provision in this Agreement, the Company
agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, including the costs and expenses of defending
against any claim of liability in the premises, incurred by the Rights Agent in
connection with the Rights Agent's reliance on instruments under this Section
18(b), including without limitation the Rights Agent's reliance on any
directions or notices received from the Company.
(c) Notwithstanding any other provision of this Agreement, the
Rights Agent shall have no obligation to ascertain or inquire as to (i) the
identity of any Acquiring Person or any of such Person's Affiliate(s) or
Associate(s) or transferees of such Persons or (ii) whether a Triggering Event,
Distribution Date or Stock Acquisition Date has occurred. The Rights Agent shall
not be deemed to have knowledge of the existence of an Acquiring Person or any
such Person's Affiliate(s) or Associate(s) or transferees of such Persons
(except in the case where such Person has responded affirmatively to clause 1
and/or 2 on either the form of assignment or election to purchase attached to
the Right Certificate(s) of such Person) or the occurrence of a Triggering
Event, Distribution Date or Stock Acquisition Date unless the Rights Agent
receives notice thereof by a written certificate signed by an officer of the
Company designated in Section 20(g) hereof.
(d) Notwithstanding any other provision of this Agreement, in no
event shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Rights Agent has been advised of the likelihood of such
loss or damage and regardless of the form of the action.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a)Any corporation into which the Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate
trust or stock transfer business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto; provided, however, that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time the successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
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(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations expressly set forth by this Agreement, and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent. The Rights Agent undertakes its duties and obligations hereunder upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting, the Rights
Agent may consult with legal counsel (who may be legal counsel for the Company),
and the opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") 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 one
of the Chairman of the Board, the President, any Vice President, the Treasurer,
the Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates or be required to verify the same (except as to its
countersignature on such Right Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Sections 11 or 13 hereof or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such statement); nor shall it by
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any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued pursuant
to this Agreement or any Right Certificate or as to whether any shares of Common
Stock, will, when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary or the Treasurer of the Company, and apply to such officers
for advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer. Any application by the Rights
Agent for written instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or omitted by the
Rights Agent under this Agreement and the date on or after which such action
shall be taken or such omission shall be effective. The Rights Agent shall not
be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than ten (10)
Business Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in
the case of an omission), the Rights Agent shall have received written
instructions in response to such application subject to the proposed action or
omission and/or specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
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(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall promptly notify the Company in writing and shall
not take any further action with respect to such requested exercise of transfer
without first consulting with the Company.
(l) The Rights Agent shall not be required to take notice or be
deemed to have any notice of any fact, event or determination (including,
without limitation, any dates or events defined in this Agreement or the
designation of any Person as an Acquiring Person, Affiliate or Associate) under
this Agreement unless and until the Rights Agent shall be specifically notified
in writing by the Company of such fact, event or determination.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock, by registered or certified mail, and, at the
expense of the Company, to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common
Stock, by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing business under the laws
of the United States (or of any state of the United States so long as such
corporation is authorized to do business as a banking institution in such
state), in good standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall give notice
thereof in writing to the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
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Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Exercise Price per share and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold upon the
exercise, conversion or exchange of securities issued by the Company prior to
the Distribution Date, and upon the vesting or payment of securities awarded by
the Company under any employer plan or arrangement prior to the Distribution
Date, and (b) may, in any other case, if deemed necessary or appropriate by the
Board of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Right Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
the Person or Persons to whom such Right Certificate would be issued, and (ii)
no such Right Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination; Three-Year Independent Director
Evaluation. (a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the close of business on the tenth Business Day
following the Stock Acquisition Date (or such later date as the Board of
Directors of the Company may determine), or (ii) the Final Expiration Date,
redeem all but not less than all of the then outstanding Rights at a redemption
price of $.01 per Right, as such amount may be appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "Redemption
Price"); provided, however, that the time period during which the Rights may be
redeemed shall not be extended by the Board of Directors of the Company at any
time when the Rights are not then redeemable; and provided, further, that if,
following the occurrence of a Section 11(a)(ii) Event and following expiration
of any period during which the holders of Rights may exercise Rights for shares
of Common Stock under Section 11(a)(ii) hereof, but prior to any Section 13
Event, each of the following shall have occurred and remain in effect: (i) a
Person who is an Acquiring Person shall have transferred or otherwise disposed
of a number of shares of Common Stock in a transaction, or series of
transactions, which did not result in the occurrence of a Triggering Event such
that such Person is thereafter a Beneficial Owner of 5% or less of the
outstanding shares of Common Stock, (ii) there are no other Persons, immediately
following the occurrence of the event described in clause (i), who are Acquiring
Persons, and (iii) the transfer or other disposition described in clause (i)
above was other than pursuant to a transaction, or series of transactions, which
directly or indirectly involved the Company or any of its Subsidiaries, then the
right of redemption shall be reinstated and thereafter be subject to the
provisions of this Section 23. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable pursuant to
Section 11(a)(ii) prior to the expiration of the Company's right of redemption
hereunder. The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the "current market price", as defined in
Section 11(d)(i)
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hereof, of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors of the Company.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have been
filed with the Rights Agent and in the event such redemption may be effected in
accordance with this Section 23 and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly thereafter, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the Transfer Agent for the Common Stock. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made.
(c) The Stockholder Rights Plan Committee of the Company's Board of
Directors shall review this Agreement in order to consider whether the
maintenance of this Rights Agreement continues to be in the best interests of
the Company and its stockholders. Such committee shall conduct such review
periodically when, as and in such manner as the committee deems appropriate,
after giving due regard to all relevant circumstances; provided, however, that
the committee shall take such action at least every three years. Following each
such review, such committee will report its conclusions to the full Board of
Directors, including any recommendation in light thereof as to whether this
Agreement should be modified or the Rights should be redeemed. Such committee
shall be comprised only of directors of the Company who shall have been
determined by the Company's Board of Directors to be independent. Such committee
is authorized to retain such legal counsel, financial advisors and other
advisors as the committee deems appropriate in order to assist the committee in
carrying out its foregoing responsibilities under this Agreement.
Section 24. Notice of Certain Events. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the Company), or
(ii) to offer to the holders of Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or shares of stock
of any class or any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification involving
only the subdivision of outstanding shares of Preferred Stock), or (iv) to
effect any consolidation or merger into or with any other Person (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(p) hereof), or to effect any sale or other transfer (or
to permit one or more of its Subsidiaries to effect any sale or other transfer),
in one or more transactions, of more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to, any other Person (other
than the Company and/or any of its Subsidiaries in one or more transactions each
of which complies with Section 11(p) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Right Certificate, to the extent feasible and in
accordance with Section 25 hereof, a notice of
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such proposed action, which shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Preferred Stock, if any such date is to
be fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least twenty (20) days prior to the record date for
determining holders of the shares of Preferred Stock for purposes of such
action, and in the case of any such other action, at least twenty (20) days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Preferred Stock whichever
shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii) of this
Agreement shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Right Certificate, to the extent
feasible and in accordance with Section 25 hereof, a notice of the occurrence of
such event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed thereafter to refer to
Common Stock and/or, if appropriate, other securities.
Section 25. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Applied Materials, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000-0000
Attention: Chairman
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by registered or certified mail and shall be deemed given upon receipt
addressed (until another address is filed in writing with the Company) as
follows:
Xxxxxx Trust and Savings Bank
000 X. Xxxxxx - 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, if prior
to the Distribution Date, the holder of certificates representing shares of
Common Stock) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
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Section 26. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company shall so direct and at the expense of the
Company, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common Stock.
From and after the Distribution Date and subject to the penultimate sentence of
this Section 26, the Company and the Rights Agent shall at any time and from
time to time, if the Company shall so direct and at the expense of the Company,
supplement or amend this Agreement without the approval of any holders of Right
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period hereunder
(including, without limitation, the events giving rise to the distribution of
Right Certificates), or (iv) to change or supplement the provisions hereunder in
any manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Right Certificates (other than
an Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, however, this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating
to when the Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person). Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
26, the Rights Agent shall execute such supplement or amendment, provided that
the Rights Agent may, but shall not be obligated to, enter into any such
supplement or amendment which affects its own rights, duties or immunities under
this Agreement. Notwithstanding anything in this Agreement to the contrary, no
supplement or amendment that changes the rights and duties of the Rights Agent
under this Agreement will be effective against the Rights Agent without the
execution of such supplement or amendment by the Rights Agent. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price, the Final Expiration Date, the
Exercise Price or the number of one ten-thousandths of a share of Preferred
Stock or shares of Common Stock for which a Right is exercisable. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the provisions of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act. The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board, or the Company, or as may be necessary
or advisable in the administration of this Agreement, including, without
limitation, the right and
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power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purpose of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board to
any liability to the holders of the Rights. The fact that any determination or
failure to make a determination hereunder may provide or fail to provide
benefits to stockholders, to holders of Rights or to members of the Board of
Directors of the Company shall not in itself be deemed an absence of good faith
on the part of the Board of Directors. No member of the Board of Directors of
the Company shall be personally liable for any act or omission in the making or
not making of any determination under this Agreement.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth Business Day following the date of such determination by the Board of
Directors.
Section 31. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience on1y and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
APPLIED MATERIALS, INC.
Attest:
By: /s/ Xxxxx Xxxx By: /s/ Xxxxxx X. Xxxxxxx
---------------------------- -----------------------------------
Title: Assistant Secretary Xxxxxx X. Xxxxxxx
Senior Vice President, Chief Financial
Officer and Administrative Officer
XXXXXX TRUST AND SAVINGS BANK,
as Rights Agent
Attest:
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
---------------------------- -----------------------------------
Title: Secretary Name: Xxxxx X. Xxxxxx
Title: Vice President
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EXHIBIT A
APPLIED MATERIALS, INC.
CERTIFICATE
OF DESIGNATION, PREFERENCES AND RIGHTS
OF THE TERMS OF THE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
Pursuant to Section 151 of the General Corporation Law of the State of Delaware
We, Xxxxx X. Xxxxxx, Chairman of the Board and Chief Executive Officer,
and Xxxxxx X. Xxxxxxxx, Secretary, of Applied Materials, Inc., organized and
existing under the General Corporation Law of the State of Delaware, in
accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Certificate of Incorporation of the Corporation, the Board of Directors on
July 7, 1999, adopted the following resolution creating a series of One Hundred
Ten Thousand (110,000) shares of Preferred Stock designated as Series A Junior
Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock of the Corporation be
and it hereby is created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting such series shall be One
Hundred Ten Thousand (110,000).
Section 2. Dividends and Distributions.
(A) The dividend rate on the shares of Series A Preferred Stock
shall be for each quarterly dividend (hereinafter referred to as a "quarterly
dividend period"), which quarterly dividend periods shall commence on February
1, May 1, August 1 and November 1, in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date") (or in the case of original
issuance, from the date of original issuance) and shall end on and include the
day next preceding the first date of the next quarterly dividend period, at a
rate per quarterly dividend period (rounded to the nearest cent) equal to the
greater of (a) $1.00 or (b) subject to the provisions for adjustment hereinafter
set forth, 10,000 times the aggregate per share amount of all cash dividends,
and 10,000 times the aggregate per share amount (payable in cash, based upon the
fair market value at the time the non-cash dividend or other distribution is
declared as determined in good faith by the Board of Directors) of all non-cash
dividends or other distributions other than a dividend payable in shares of
Common Stock, par value $0.01 per share, of the Corporation (the "Common
Stock"), or a subdivision of the outstanding shares of
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Common Stock (by reclassification or otherwise), declared (but not withdrawn) on
the Common Stock during the immediately preceding quarterly dividend period, or,
with respect to the first quarterly dividend period, since the first issuance of
any share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time after July 7, 1999 (the "Rights Declaration Date")
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount to
which holders of shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be adjusted
by multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 45 days prior to the date fixed
for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
10,000 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the number of votes per share to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in the Certificate of
Incorporation or by law, the holders of shares of Series A Preferred Stock and
the holders of shares of Common
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Stock shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as set forth herein, in the Certificate of Incorporation
and in the Bylaws, holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the extent they
are entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
Section 4. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
Section 5. Liquidation, Dissolution or Winding Up.
(A) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of the Series A
Preferred Stock shall be entitled to receive, prior to any distribution (either
as dividends or upon liquidation, dissolution or winding up) to the holders of
stock ranking junior to the Series A Preferred Stock, the greater of (a) $1.00
per share, plus accrued dividends to the date of distribution, whether or not
earned or declared, or (b) an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 10,000 times the aggregate amount to
be distributed per share to holders of Common Stock. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such event
pursuant to clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 6. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 10,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number
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41
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable.
Section 8. Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of Series A Preferred Stock. All payments made with respect to fractional shares
hereunder shall be rounded to the nearest whole cent.
Section 9. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are payable
or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up)
to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes shall determine in good faith will result
in fair and equitable treatment among the respective series or classes.
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(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 9, purchase or otherwise acquire such shares at such time and in
such manner.
Section 10. Ranking. The Series A Preferred Stock shall be junior to all
other Series of the Corporation's preferred stock as to the payment of dividends
and the distribution of assets, except to the extent a series is made pari passu
with the Series A Preferred Stock.
Section 11. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of
two-thirds or more of the outstanding shares of Series A Preferred Stock voting
together as a single class.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and
do affirm the foregoing as true under the penalties of perjury this 7th day of
July, 1999.
________________________________________
Chairman of the Board and
Chief Executive Officer
Attest:
_____________________________________
Secretary
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EXHIBIT B
[Form of Right Certificate]
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER JULY 6, 2009 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT
CERTIFICATE ARE OR WERE ISSUED TO A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
Right Certificate
APPLIED MATERIALS, INC.
This certifies that _______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of July 7, 1999 (the "Rights Agreement"), between Applied
Materials, Inc., a Delaware corporation (the "Company"), and Xxxxxx Trust and
Savings Bank, an Illinois banking corporation, as Rights Agent (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 p.m. (San
Francisco time) on July 6, 2009 at the designated office or offices of the
Rights Agent, or its successors as Rights Agent, one ten-thousandth (1/10,000)
of a fully paid, nonassessable share of Series A Junior Participating Preferred
Stock, par value $.01 per share (the "Preferred Stock"), of the Company, at a
purchase price of $375 per share (the "Exercise Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase and
related Certificate duly executed. The Exercise Price shall be paid, at the
election of the holder, in cash or shares of Common Stock of the Company having
an equivalent value. The number of Rights evidenced by this Right Certificate
(and the number of shares which may be purchased upon exercise thereof) set
forth above, and the Exercise Price per share set forth above, are the number
and Exercise Price as of July 7, 1999, based on the Common Stock as constituted
at such date.
______________________________
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From and after the later of the (x) occurrence of a Section 11(a)(ii)
Event (as such term is defined in the Rights Agreement) and (y) date on which
the Company's right of redemption pursuant to Section 23(a) of the Rights
Agreement expires, if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii)
under certain circumstances specified in the Rights Agreement, a transferee of a
person who, after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights.
As provided in the Rights Agreement, the Exercise Price and the number
and kind of shares of Common Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Right Certificate are subject
to modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under certain circumstances specified in such Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Company and are also available upon written request to the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purposes, may be exchanged for another Right Certificate or Right Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Common Stock as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $.01 per Right at any time prior to the earlier of the close of
business on (i) the tenth Business Day (as such term is defined in the Rights
Agreement) following the Stock Acquisition Date (as such term is defined in the
Rights Agreement) (or such later date as the Board of Directors of the Company
may determine) and (ii) the Final Expiration Date (as such term is defined in
the Rights Agreement). After the expiration of the redemption period, the
Company's right of redemption may be reinstated if, following the occurrence of
a Section 11(a)(ii) Event and following expiration of any period during which
the holders of Rights may exercise Rights for shares of Common Stock under
Section 11(a)(ii) of the Rights Agreement, but prior to any Section 13 Event (as
such term is defined in the Rights Agreement), an Acquiring Person reduces his
beneficial ownership to 5% or less of the outstanding shares of Common Stock in
a
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transaction or series of transactions not involving the Company and there are no
other Acquiring Persons.
No fractional shares of Preferred Stock will be issued upon the exercise
of any Right or Rights (other than fractions which are integral multiples of one
ten-thousandth of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts) evidenced hereby, but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of Preferred shares of Stock
or of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or, to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of___________, [19__] [20__]
ATTEST: APPLIED MATERIALS, INC.
By By:
---------------------------------- -------------------------------------
Secretary President
Countersigned:
XXXXXX TRUST AND SAVINGS BANK,
as Rights Agent
By:
---------------------------------
Authorized Officer
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVE_______________________________________________________________
hereby sells, assigns and transfers unto________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ___________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _______________, [19__] [20__] ______________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: _______________, [19__] [20__]
________________________________________
Signature
Signature Guaranteed:
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NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Right Certificate.)
To: APPLIED MATERIALS, INC.:
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the shares of Preferred
Stock issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance of such Rights shall
be registered in the name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
________________________________________________________________________________
Dated: _____________, [19__] [20__] ________________________________________
Signature
Signature Guaranteed:
B-6
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Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _____________, [19__] [20__] ________________________________________
Signature
Signature Guaranteed:
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NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On July 7, 1999, the Board of Directors of Applied Materials, Inc. (the
"Company") declared a dividend distribution of one Right for each outstanding
share of common stock, par value $.01 per share (the "Common Stock"), of the
Company to stockholders of record at the close of business on July 18, 1999 (the
"Record Date"). Each Right entitles the registered holder to purchase from the
Company one ten-thousandth (1/10,000) of a share of Series A Junior
Participating Preferred Stock, par value $.01 per share ("Preferred Stock"), at
a price of $375 per one ten-thousandth of a share of Preferred Stock (the
"Exercise Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and Xxxxxx Trust and Savings Bank, as Rights Agent.
Initially, the Rights will be evidenced by the Common Stock certificates
representing shares then outstanding and no separate Right certificates will be
distributed. The Rights will be exercisable, and transferable apart from the
shares of Common Stock, on the earlier to occur of (i) 10 business days
following a public announcement that a person or group of affiliated or
associated persons has acquired, or has obtained the right to acquire (an
"Acquiring Person"), beneficial ownership of 20% or more of the outstanding
shares of Common Stock (the "Stock Acquisition Date"), or (ii) 10 business days
following the commencement of (or a public announcement of an intention to make)
a tender offer or exchange offer if, upon consummation thereof, the person who
commenced the offer would be an Acquiring Person (the earlier of such dates
being called the "Distribution Date"). The foregoing time periods are subject to
extension as set forth in the Rights Agreement. After the occurrence of an event
set forth in clause (ii) above, Rights will become exercisable for fractions of
shares of Preferred Stock at the Exercise Price per one ten-thousandth of a
share of Preferred Stock. After the occurrence of an event set forth in clause
(i) above, the Rights will become exercisable as set forth below.
After the Record Date and until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock certificates issued
upon transfer or new issuance of the Common Stock will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender for transfer of
any certificates for Common Stock outstanding as of the Record Date will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to each holder of record of the Common Stock as of
the close of business on the Distribution Date and, thereafter, such separate
Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on July 6, 2009, unless earlier redeemed by the
Company as described below.
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As soon as practicable after the Distribution Date, Right Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Right
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that any person or group becomes the beneficial owner of
20% or more of the then outstanding shares of Common Stock (other than as a
result of a tender or exchange offer for all shares of the Common Stock at a
price determined by a majority of the directors who are not representatives,
nominees, affiliates or associates of an Acquiring Person, after receiving
advice from one or more nationally recognized investment banking firms selected
by such directors, to be fair and adequate to the stockholders, and otherwise in
the best interests of the Company and its stockholders (a "Permitted Offer")),
the Rights Agreement provides that proper provision shall be made so that each
holder of a Right will thereafter have the right to receive, for a 90-day period
(the "Exercise Period"), upon exercise, Common Stock (or, under certain
circumstances, cash, preferred stock or other securities of the Company) having
a market value equal to two times the exercise price paid (i.e., at a 50%
discount). Following the occurrence of this event, any Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person shall immediately become null and
void. However, Rights generally are not exercisable following the occurrence of
such an event until such time as the Rights are no longer redeemable by the
Company as set forth below. Further, Rights generally are exercisable only after
the effectiveness of a registration statement for the Common Stock under the
Securities Act of 1933.
In the event that, at any time after any person or group becomes the
beneficial owner of 20% or more of the then outstanding shares of Common Stock
(other than as a result of a Permitted Offer), (i) the Company engages in a
merger or other business combination transaction in which the Company is not the
surviving corporation (other than following a Permitted Offer), (ii) the Company
engages in a merger or other business combination transaction with another
person in which the Company is the surviving corporation, but in which its
Common Stock is changed or exchanged (other than following a Permitted Offer),
or (iii) 50% or more of the Company's assets or earning power (on a consolidated
basis) is sold or transferred, the Rights Agreement provides that proper
provision shall be made so that each holder of a Right (except Rights which
previously have been voided as set forth above) shall thereafter have the right
to receive, upon the exercise thereof at the then current exercise price of the
Right, common stock of the acquiring company having a market value equal to two
times the exercise price paid (i.e., at a 50% discount). The events described in
this paragraph are defined as "Triggering Events."
The Exercise Price payable, and the number of shares of Preferred Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for Preferred Stock or convertible
securities at less than the current market price of the Preferred Stock, or
(iii) upon the distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular quarterly cash
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dividends) or of subscription rights or warrants (other than those referred to
above). Provision is made for similar anti-dilution adjustments with respect to
the Common Stock.
With certain exceptions, no adjustment in the Exercise Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Exercise Price. No fractional shares of Preferred Stock will be issued
(except fractions which are integral multiples of one ten-thousandth of a share
of Preferred Stock) and, in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Stock on the last trading date prior
to the date of exercise.
At any time after the date of the Rights Agreement until 10 business
days (or such later date as the Board of Directors of the Company may determine)
following the Stock Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price"),
payable in cash, Common Stock or other consideration deemed appropriate by the
Board of Directors. Thereafter, the Company's right of redemption may be
reinstated if the Exercise Period has expired, no Triggering Event has occurred
and an Acquiring Person reduces his beneficial ownership to 5% or less of the
outstanding shares of Common Stock in a transaction or series of transactions
not involving the Company and there are no other Acquiring Persons. Immediately
upon the action of the Board of Directors of the Company ordering redemption of
the Rights, the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
The Rights Agreement includes a "TIDE" (Three-year Independent Director
Evaluation) provision. Under the TIDE provision, the Board of Directors'
Stockholder Rights Plan Committee composed of independent directors will review
the Rights Plan periodically (at least every three years). This committee will
communicate its conclusions to the full Board of Directors after each review,
including any recommendation as to whether the Rights Plan should be modified or
the Rights should be redeemed.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to the stockholders or the Company, the stockholders may, depending
upon the circumstances, recognize taxable income in the event that the Rights
become exercisable for Preferred Stock (or other consideration) of the Company
or for common stock of the acquiring company as set forth above.
Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board of Directors in order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights (excluding the interests of
any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not
redeemable.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights
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Agreement is available free of charge from the Company. This summary description
of the Rights does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement, which is incorporated herein by reference.
DESCRIPTION OF PREFERRED STOCK
Applied Materials, Inc. Series A Junior Participating Preferred Stock
(the "Preferred Stock") purchasable upon exercise of the Rights will be
nonredeemable and subordinate to other series of the Company's preferred stock.
Each Right shall entitle its holder to purchase one ten-thousandth (1/10,000) of
a share of Preferred Stock.
Each share of Preferred Stock will have a minimum preferential quarterly
dividend rate of $1.00 per share but will be entitled to an aggregate dividend
of 10,000 times the dividend declared on the Company's Common Stock.
In the event of liquidation, the holders of the Preferred Stock will
receive a preferred liquidation payment of $1.00 per share but will be entitled
to receive an aggregate liquidation payment equal to 10,000 times the payment
made per share of Common Stock.
Each share of Preferred Stock will have 10,000 votes, voting together
with the Company's Common Stock.
In the event of any merger, consolidation or other transaction in which
shares of Common Stock are exchanged, each share of Preferred Stock will be
entitled to receive 10,000 times the amount received per share of Common Stock.
The rights of the Preferred Stock as to dividends, liquidation and
voting, and in the event of mergers and consolidations, are protected by
customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the value of the one ten-thousandth interest in a share of
Preferred Stock purchasable upon the exercise of each Right should approximate
the value of one share of Applied Materials, Inc. Common Stock.
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