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ULTRATECH STEPPER, INC.
and
THE FIRST NATIONAL BANK OF BOSTON
Rights Agent
Amended Rights Agreement
Dated as of February 11, 1997, as
amended March 18, 1998
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . 6
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . . . 6
Section 4. Form of Right Certificates. . . . . . . . . . . . . . . . . . 7
Section 5. Countersignature and Registration . . . . . . . . . . . . . . 8
Section 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates . . . . . . . . . . . . . . . . . . 8
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 8. Cancellation and Destruction of Right Certificates. . . . . .10
Section 9. Availability of Preferred Shares. . . . . . . . . . . . . . .11
Section 10. Preferred Shares Record Date. . . . . . . . . . . . . . . . .12
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. . . . . . . . . . . . . . . . . . . . . . .13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. .20
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power . . . . . . . . . . . . . . . . . . .21
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . .23
Section 15. Rights of Action. . . . . . . . . . . . . . . . . . . . . . .24
Section 16. Agreement of Right Holders. . . . . . . . . . . . . . . . . .24
Section 17. Right Certificate Holder Not Deemed a Stockholder . . . . . .25
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . .25
Section 19. Merger or Consolidation or Change of Name of Rights Agent . .26
Section 20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . .27
Section 21. Change of Rights Agent. . . . . . . . . . . . . . . . . . . .29
Section 22. Issuance of New Right Certificates. . . . . . . . . . . . . .30
Section 23. Redemption. . . . . . . . . . . . . . . . . . . . . . . . . .30
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Section 24. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . .31
Section 25. Notice of Certain Events. . . . . . . . . . . . . . . . . . .33
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Section 27. Supplements and Amendments. . . . . . . . . . . . . . . . . .35
Section 28. Successors. . . . . . . . . . . . . . . . . . . . . . . . . .35
Section 29. Determinations and Actions by the Board of Directors. . . . .35
Section 30. Benefits of this Agreement. . . . . . . . . . . . . . . . . .36
Section 31. Severability. . . . . . . . . . . . . . . . . . . . . . . . .36
Section 32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . .36
Section 33. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . .36
Section 34. Descriptive Headings. . . . . . . . . . . . . . . . . . . . .37
Exhibit A - Form of Certificate of Designations of Series A Junior
Participating Preferred Stock of Ultratech Stepper, Inc.
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
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RIGHTS AGREEMENT
Rights Agreement, dated as of February 11, 1997 (as amended March
18, 1998), between Ultratech Stepper, Inc., a Delaware corporation (the
"Company"), and The First National Bank of Boston, a national banking
association (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common
Share (as hereinafter defined) of the Company outstanding as of the Close of
Business (as hereinafter defined) on February 24, 1997 (the "Record Date"),
each Right representing the right to purchase one one-hundredth (1/100th) of
a Preferred Share (as hereinafter defined) upon the terms and subject to the
conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date or the Final Expiration Date (as such terms are
hereinafter defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
1
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 15% or more of
the Common Shares of the Company then outstanding, but shall not include the
Company, any Subsidiary (as such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or any Subsidiary of the Company, or
any entity holding Common Shares for or pursuant to the terms of any such
plan. Notwithstanding the foregoing:
(i) no Person shall become an "Acquiring Person" as the result
of an acquisition of Common Shares by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to 15% or more of the Common
Shares of the Company then outstanding; PROVIDED, HOWEVER, that if a
Person shall become the Beneficial Owner of 15% or more of the Common
Shares of the Company then outstanding by reason of share purchases by
the Company and shall, after such share purchases by the Company, become
the Beneficial Owner of any additional Common Shares of the Company,
then such Person shall be deemed to be an "Acquiring Person";
(ii) if the Board of Directors of the Company determines (upon
approval by a majority of the Continuing Directors (as such term is
hereinafter defined)) in good faith that a Person who would otherwise
be an Acquiring Person, as defined pursuant to the foregoing provisions
of this paragraph (a), is eligible to file and did file a Schedule 13G,
and such Person divests as promptly as practicable a sufficient number
of Common Shares so that such Person would no longer be an Acquiring
Person, as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be an "Acquiring
Person" for any purpose of this Agreement; and
(iii) no Person shall become an "Acquiring Person" if the
transaction or series of related transactions in which such Person
(together with all Affiliates or Associates of such Person) became
the Beneficial Owner of 15% or more of the Common Shares of the Company
then outstanding had received prior approval of a majority of the
Continuing Directors; PROVIDED, that in the event a Person is not an
Acquiring Person by reason of this clause (iii) of this Section 1(a), such
Person shall become an Acquiring Person, in the event such Person
thereafter acquires Beneficial Ownership of any additional Common Shares
unless such acquisition of such additional Common Shares would not result
in such Person becoming an Acquiring Person by reason by any provision of
this Agreement, including, without limitation, this clause (iii) of this
Section 1(a).
(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 Exchange Act (as such term is hereinafter defined).
(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 beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights (other than
these Rights), warrants or options, or otherwise; PROVIDED, HOWEVER that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own,
(1) securities tendered pursuant to a tender or exchange offer made by or
on behalf of such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange or
(2) securities which a Person or any Person's Affiliates or Associates may
be deemed to have the right to acquire pursuant to any merger or other
acquisition agreement between the Company and such Person (or one or more
of such Person's Affiliates or Associates) if such agreement has been
approved by the Board of Directors of the Company, upon the affirmative
vote of a majority of the Continuing Directors, prior to there being an
Acquiring Person; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; PROVIDED, HOWEVER, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent
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given to such Person in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates
or Associates has any agreement, arrangement or understanding (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 to the extent contemplated
by the proviso to Section 1(c)(ii)(B)) or disposing of any securities of
the Company.
Notwithstanding anything in this definition of Beneficial Ownership
to the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of California or
the state in which the principal office of the Rights Agent is located are
authorized or obligated by law or executive order to close.
(e) "Company" shall have the meaning set forth in the first
paragraph at the beginning of this Agreement.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
Eastern time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 P.M., Eastern time, on the next succeeding
Business Day.
(g) "Common Shares" when used with reference to the Company shall
mean the shares of common stock of the Company. "Common Shares" when used
with reference to any Person other than the Company shall mean the capital
stock (or other equity interest) with the greatest voting power of such other
Person or, if such other Person is a Subsidiary of another Person, the Person
or Persons which ultimately control such first-mentioned Person.
(h) "common stock equivalents" shall have the meaning set forth in
Section 11(a)(iv) hereof.
(i) "Continuing Director" shall mean (i) any person who is a member
of the Board of Directors of the Company, while such person is a member of
the Board of Directors, who is not an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, or a representative or agent of an
Acquiring Person or of any such Affiliate or Associate, and who was a member
of the Board of Directors prior to the date of this Agreement, or (ii) any
person who subsequently becomes a member of the Board of Directors and who,
while such person is a member of the Board of Directors, is not an Acquiring
Person or an Affiliate or Associate of an Acquiring Person, or a
representative or agent of an Acquiring Person or of any such Affiliate or
Associate, if such Person's nomination for election or such Person's election
to the Board of Directors is recommended or approved by a majority of the
Continuing Directors then on the Board of Directors.
(j) "current per share market price" shall have the meaning set
forth in Section 11(d)(i) hereof.
(k) "Current Value" shall have the respective meanings set forth in
Section 11(a)(iv) hereof and Section 24 hereof.
(l) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(m) "equivalent preferred shares" shall have the meaning set forth
in Section 11(b) hereof.
(n) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, as in effect on the date of this Agreement.
(o) "Exchange ratio" shall have the meaning set forth in Section 24
hereof.
(p) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
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(q) "issuer" shall have the meaning set forth in Section 13 hereof.
(r) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
(s) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Shares, par value .001, of the Company having the
rights and preferences set forth in the Form of Certificate of Designations
attached to this Agreement as Exhibit A.
(t) "Purchase Price" shall have the meaning set forth in Section 4
hereof.
(u) "Record Date" shall have the meaning set forth in the second
paragraph at the beginning of this Agreement.
(v) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(w) "Redemption Price" shall have the meaning set forth in Section
23 hereof.
(x) "Right" shall have the meaning set forth in the second
paragraph at the beginning of this Agreement.
(y) "Right Certificate" shall have the meaning set forth in Section
3 hereof.
(z) "Rights Agent" shall have the meaning set forth in the first
paragraph at the beginning of this Agreement.
(aa) "Securities Act" shall have the meaning set forth in Section 9
hereof.
(bb) "Security" shall have the meaning set forth in Section 11(d)(i)
hereof.
(cc) "Shares 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.
(dd) "Spread" shall have the meaning set forth in Section 11(a)(iv)
hereof.
(ee) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person.
(ff) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iv) hereof.
(gg) "Summary of Rights" shall have the meaning set forth in Section
3 hereof.
(hh) "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-Rights Agents as it may
deem necessary or desirable upon ten (10) days prior written notice to the
Rights Agent. The Rights Agent shall have no duty to supervise and shall in
no event be liable for the acts or omissions of any such co-Rights Agent.
Section 3. ISSUE OF RIGHT CERTIFICATES. Until the earlier of (i)
the tenth day after the Shares Acquisition Date or (ii) the tenth business
day (or such later date as may be determined by action of the Board of
Directors (upon approval by a majority of the Continuing Directors) prior to
such time as any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity
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holding Common Shares for or pursuant to the terms of any such plan) of, or
of the first public announcement of the intention of any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding Common
Shares for or pursuant to the terms of any such plan) to commence, a tender
or exchange offer the consummation of which would result in any Person
becoming the Beneficial Owner of Common Shares aggregating 15% or more of the
then outstanding Common Shares (including any such date which is after the
date of this Agreement and prior to the issuance of the Rights; the earlier
of such dates being herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be Right Certificates)
and not by separate Right Certificates, and (y) the right to receive Right
Certificates will be transferable only in connection with the transfer of
Common Shares. As soon as practicable after the Distribution Date, the
Company will notify the Rights Agent thereof and the Company will prepare and
execute, the Rights Agent will countersign, and the Company will send or
cause to be sent (and the Rights Agent will, if requested, send) by
first-class, insured, postage-prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the address
of such holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right for each Common Share so held. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares,
in substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Shares 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 Common
Shares outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names of the
holders thereof together with a copy of the Summary of Rights attached
thereto. Until the Distribution Date (or the earlier of the Redemption Date
or the Final Expiration Date), the surrender for transfer of any certificate
for Common Shares outstanding on the Record Date, with or without a copy of
the Summary of Rights attached thereto, shall also constitute the transfer of
the Rights associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the
last sentence of this paragraph (c)) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Ultratech
Stepper, Inc. and The First National Bank of Boston, dated as of
February 11, 1997 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of Ultratech Stepper, 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. Ultratech Stepper, Inc. will mail
to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. Under
certain circumstances, as set forth in the Rights Agreement, Rights
issued to any Person who becomes an Acquiring Person (as defined in
the Rights Agreement) may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
In the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the Common Shares which
are no longer outstanding.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and
the forms of election to purchase Preferred Shares and of assignment to be
printed on the reverse thereof) shall be substantially the same as 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 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 or transaction reporting system on which the Rights may
from time to time be listed, or to conform to usage. Subject to the
provisions of Section 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of one one-hundredths of a Preferred
Share
5
as shall be set forth therein at the price per one one-hundredth of a
Preferred Share set forth therein (the "Purchase Price"), but the number of
such one one-hundredths of a Preferred Share and the Purchase Price shall be
subject to adjustment as provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right
Certificates shall be executed on behalf of the Company by its Chairman of
the Board, its President, any of its Vice Presidents, or its Treasurer or
Chief Financial Officer, either manually or by facsimile signature, shall
have affixed thereto the Company's seal or a facsimile thereof, and shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose
unless countersigned. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery
by the Company, such Right Certificates, nevertheless, may be countersigned
by the Rights Agent and issued and delivered by the Company with the same
force and effect as though the person who signed such Right Certificates had
not ceased to be such officer of the Company; and any Right Certificate may
be signed on behalf of the Company by any person who, at the actual date of
the execution of such Right Certificate, shall be a proper officer of the
Company to sign such Right Certificate, although at the date of the execution
of this Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office 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 respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
Subject to the provisions of Section 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 earlier of the Redemption Date or the Final Expiration Date,
any Right Certificate or Right Certificates (other than Right Certificates
representing Rights that have become void pursuant to Section 11(a)(ii)
hereof or that have been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number
of one one-hundredths of a Preferred Share (or other securities or property)
as the Right Certificate or Right Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates 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 of the Rights Agent designated for such
purpose. Thereupon the Rights Agent shall countersign and deliver to the
person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment 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.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) Except as provided in Section 23(c), the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and certification on the reverse side thereof duly
executed, to the Rights Agent at the office of the Rights Agent designated
for such purpose, together with payment of the Purchase Price for each one
one-hundredth of a Preferred Share as to which the Rights are exercised, at
or prior to the earliest of (i) the Close of Business on February 9, 2007,
(the "Final Expiration Date"), (ii) the time at which the Rights are redeemed
as provided in Section 23 hereof (the "Redemption Date"), (iii) the time at
which such Rights are exchanged as provided in Section 24 hereof, or (iv) the
consummation of any merger or other acquisition involving the Company
pursuant to an agreement described in Section 1(c)(ii)(A)(2) hereof.
(b) The Purchase Price for each one one-hundredth of a Preferred
Share pursuant to the exercise of a Right shall initially be $145.00, shall
be subject to adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
6
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof by certified
check, cashier's check or money order payable to the order of the Company,
the Rights Agent shall thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares (if such transfer agent is an entity
other than the Rights Agent) certificates for the number of Preferred Shares
to be purchased and the Company hereby irrevocably authorizes such transfer
agent to comply with all such requests, or (B) requisition from a depositary
agent properly appointed by the Company depositary receipts representing such
number of one one-hundredths of a Preferred Share as are to be purchased (in
which case certificates for the Preferred Shares represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company hereby directs the depositary agent to comply with such request, (ii)
when appropriate, requisition from the Company the amount of cash to be paid
in lieu of issuance 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) when appropriate, after receipt, deliver
such cash to or upon the order of the registered holder of such Right
Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14
hereof.
(e) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred
Shares or any Preferred Shares held in its treasury, the number of Preferred
Shares that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with this Section 7.
(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 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and
no Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Right Certificate
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. AVAILABILITY OF PREFERRED SHARES. (a) The company
covenants and agrees that it will use its best efforts to cause to be
reserved and kept available out of and to the extent of its authorized and
unissued shares of Preferred Stock not reserved for another purpose (and,
following the occurrence of an event described in Section 11(a)(ii) or
Section 13(a), out of its authorized and unissued shares of Common Stock
and/or other securities), the number of Preferred Shares (and, following the
occurrence of any such event, Common Stock and/or other securities) that will
be sufficient to permit the exercise in full of all outstanding Rights.
(b) If the Preferred Shares (or, following the occurrence of an
event described in Section 11(a)(ii) or Section 13(a), the Common Shares
and/or other securities) are at any time listed on a national securities
exchange or included for quotation on any transaction reporting system, then
so long as the Preferred Shares (and, following the occurrence of any such
event, Common Shares and/or other securities) issuable and deliverable upon
exercise of the Rights may be listed on such exchange or included for
quotation on any such transaction reporting system, the Company shall use its
best efforts to cause, from and after such time as the Rights become
exercisable (but only to the extent that it is reasonably likely that the
Rights will be exercised), all shares reserved for such issuance to be listed
on such exchange or included for quotation on any such transaction reporting
system upon official notice of issuance upon such exercise.
7
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of an
event described in Section 11(a)(ii) in which the consideration to be
delivered by the Company upon exercise of the Rights has been determined in
accordance with Section 11(a)(iv) hereof, or as soon as is required by law
following the Distribution Date, as the case may be, a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the 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 Securities Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities or (B) the
date of expiration of the Rights. The Company may temporarily suspend, for a
period not to exceed ninety (90) days after the date set forth in clause (i)
of the first sentence of this Section 9(c), the exercisability of the Rights
in order to prepare and file such registration statement and permit it to
become effective. Upon any such suspension, the Company shall issue a public
announcement stating, and notify the Rights Agent, that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement
and notification to the Rights Agent at such time as the suspension is no
longer in effect. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of the
Rights. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction, unless the requisite
qualification in such jurisdiction shall have been obtained, or an exemption
therefrom shall be available and until a registration statement has been
declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for
such Preferred Shares (subject to payment of the Purchase 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 or of any Preferred Shares upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Right Certificates to a
person other than, or the issuance or delivery of certificates or depositary
receipts for the Preferred Shares in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered for
exercise or to issue or to deliver any certificates or depositary receipts
for Preferred Shares upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's reasonable satisfaction that no such tax is due.
Section 10. PREFERRED SHARES RECORD DATE. Each person in whose name
any certificate for Preferred Shares is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred Shares represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; PROVIDED, HOWEVER, that if the date of such surrender and
payment is a date upon which the Preferred Shares transfer books of the
Company are closed, such person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a holder
of Preferred 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 PURCHASE PRICE, NUMBER OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number of Preferred 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 Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification,
and the number and kind of shares of capital stock issuable on such date,
shall be
8
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to
such date and at a time when the Preferred Shares transfer books of the
Company were open, such holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification; PROVIDED, HOWEVER, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company issuable upon exercise of
one Right. If an event occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to any
adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the event that
any Person becomes an Acquiring Person, each holder of a Right shall
thereafter have a right to receive, upon exercise thereof at a price equal to
the then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of Preferred Shares,
such number of Common Shares of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number of
one one-hundredths of a Preferred Share for which a Right is then exercisable
and dividing that product by (y) 50% of the then current per share market
price of the Company's Common Shares (determined pursuant to Section 11(d)
hereof) on the date of the occurrence of such event. Except as provided in
Section 23(C), in the event that any Person shall become an Acquiring Person
and the Rights shall then be outstanding, the Company shall not take any
action which would eliminate or diminish the benefits intended to be afforded
by the Rights.
Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of an event in which any Person shall become
an Acquiring Person, any Rights beneficially owned by (A) an Acquiring Person
or an Associate or Affiliate of an Acquiring Person, (B) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (C) 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 (1) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests
in such Acquiring Person or to any Person with whom the Acquiring Person has
any continuing agreement, arrangement or understanding regarding the
transferred Rights or (2) a transfer which the Board of Directors, upon
approval by a majority of the Continuing Directors, has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of this Section 11(a)(ii), shall become null and void without
any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. No Right Certificate shall be issued pursuant to
Section 3 that represents Rights beneficially owned by an Acquiring Person
whose Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof; no Right Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person whose Rights
would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights Agent for
transfer to an Acquiring Person whose Rights would be void pursuant to the
preceding sentence shall be cancelled. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 11(a)(ii) 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.
(iii) The right to buy Common Shares of the Company pursuant to
subparagraph (ii) of this paragraph (a) shall not arise if the event causing
such Person to become an Acquiring Person (A) is a consolidation, merger,
sale, transfer or similar transaction subject to Section 13 hereof, or (B) is
an acquisition of shares of Common Stock pursuant to a tender offer or an
exchange offer for all outstanding Common Shares at a price and on terms
determined by at least a majority of the Continuing Directors, and after
receiving advice from one or more investment banking firms, to be (1) at a
price which is fair to stockholders (taking into account all factors which
such members of the Board of Directors deem relevant including, without
limitation, prices which could reasonably be achieved if the Company or its
assets were sold in an orderly basis designed to realize maximum value) and
(2) otherwise in the best interests of the Company and its stockholders.
(iv) In lieu of issuing Common Shares in accordance with
Section 11(a)(ii) hereof, the Company may, if the Board of Directors of the
Company, upon approval by a majority of the Continuing Directors, determines
that such action is necessary or appropriate and not contrary to the interest
of holders of Rights (and, in the event that the number of Common Shares
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,
or if any necessary regulatory approval for such issuance has not been
obtained by the Company), the Company shall: (A) determine the excess of (1)
the value of the Common Shares issuable upon the exercise of a Right (the
"Current Value")
9
over (2) the Purchase Price (such excess being referred to as the "Spread")
and (B) with respect to each Right, make adequate provision to substitute for
such Common Shares, upon exercise of the Rights, (1) cash, (2) a reduction in
the Purchase Price, (3) other equity securities of the Company (including,
without limitation, shares or units of shares of any series of preferred
stock which the Board of Directors of the Company, upon approval by a
majority of the Continuing Directors, has deemed to have the same value as
Common Shares (such shares or units of shares of preferred stock are herein
called "common stock equivalents")), except to the extent that the Company
has not obtained any necessary regulatory approval for such issuance, (4)
debt securities of the Company, except to the extent that the Company has not
obtained any necessary regulatory approval for such issuance, (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, upon approval by a majority of the
Continuing Directors, based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of the Company,
upon approval by a majority of the Continuing Directors; 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 occurrence
of an event described in Section 11(a)(ii), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Common Shares (to the extent
available), except to the extent that the Company has not obtained any
necessary regulatory approval for such issuance, and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the Spread.
If the Board of Directors, upon approval by a majority of the Continuing
Directors, shall determine in good faith that it is likely that sufficient
additional Common Shares could be authorized for issuance upon exercise in
full of the Rights or that any necessary regulatory approval for such
issuance will be obtained, the thirty (30) day period set forth above may be
extended to the extent necessary, but not more than ninety (90) days after
the occurrence of an event described in Section 11(a)(ii), in order that the
Company may seek stockholder approval for the authorization of such
additional shares or take action to obtain such regulatory approval (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)(iv), the Company (x)
shall provide that such action shall apply uniformly to all outstanding
Rights held by holders entitled to receive Common Shares or other securities
or property upon exercise of such 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, to take any action
to obtain any required regulatory approval and/or to decide the appropriate
form of distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect and shall promptly
notify the Rights Agent of such suspension. For purposes of this Section
11(a)(iv), the value of the Common Shares shall be the current per share
market price (as determined pursuant to Section 11(d) hereof) of the Common
Shares at the Close of Business on the date of the occurrence of one of the
events described in Section 11(a)(ii) and the value of any "common stock
equivalent" shall be deemed to have the same value as the Common Shares on
such date.
(b) In the event that the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Preferred Shares (or shares having
the same rights, privileges and preferences as the Preferred Shares
("equivalent preferred shares")) or securities convertible into Preferred
Shares or equivalent preferred shares at a price per Preferred Share or
equivalent preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent preferred shares)
less than the then current per share market price of the Preferred Shares (as
defined in Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares outstanding on
such record date plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares and/or equivalent
preferred shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such
current market price and the denominator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares 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, upon approval by a majority of the
Continuing Directors, 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. Preferred Shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants
are not so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
10
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then current per share market price of
the Preferred Shares on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, upon
approval by a majority of the Continuing Directors, whose determination shall
be described in a statement filed with the Rights Agent) of the portion of
the assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market price of the
Preferred Shares. Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
per share market price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the thirty (30) consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date; PROVIDED, HOWEVER, that in the event that the current per share market
price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or distribution
on such Security payable in shares of such Security or securities convertible
into such shares, or (B) any subdivision, combination or reclassification of
such Security and prior to the expiration of thirty (30) Trading Days 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 per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security.) 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 Nasdaq National Market ("Nasdaq") or, if the
Security is not listed or admitted to trading on the Nasdaq, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not listed
or admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by the Nasdaq or such other
system then in use, or, if on any such date the Security is 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 Security
selected by the Board of Directors of the Company, upon approval by a
majority of the Continuing Directors. If on any such date no market maker is
making a market in the Security, the "current per share market price" of such
Security on such date as determined in good faith by the Board of Directors
of the Company as provided for above shall be used. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the "current
per share market price" of the Preferred Shares shall be determined in
accordance with the method set forth in Section 11(d)(i). If the Preferred
Shares are not publicly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common Shares as determined pursuant to Section 11(d)(i)
(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by one hundred. If
neither the Common Shares nor the Preferred Shares are publicly held or so
listed or traded, "current per share market price" shall mean the fair value
per share as determined in good faith by the Board of Directors of the
Company, upon approval by a majority of the Continuing Directors, whose
determination shall be described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; PROVIDED, HOWEVER, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one
one-millionth of a Preferred Share or one ten-thousandth of any other share
or security as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction
which requires such adjustment or (ii) the date of the expiration of the
right to exercise any Rights.
11
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred
Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Preferred Shares contained in Section 11(a) through (c),
inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 with respect to
the Preferred Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of
a Preferred Share purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a Preferred Share (calculated to the
nearest one one-millionth of a Preferred Share) obtained by (i) multiplying
(x) the number of one one-hundredths of a share covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after
such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a Preferred Share 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 Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 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 shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par value, if
any, of the Preferred Shares issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
of the Preferred Shares and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the Preferred Shares and
other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; PROVIDED, HOWEVER that the Company shall deliver to such holder a
due xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring
such adjustment.
12
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price,
in addition to those adjustments expressly required by this Section 11, as
and to the extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in Preferred Shares
or issuance of rights, options or warrants referred to hereinabove in Section
11(b), hereafter made by the Company to holders of its Preferred Shares shall
not be taxable to such stockholders.
(n) In the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (A)
the number of one one-hundredths of a Preferred Share purchasable after such
event upon proper exercise of each Right shall be determined by multiplying
the number of one one-hundredths of a Preferred Share so purchasable
immediately prior to such event by a fraction, the numerator of which is the
number of Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding immediately
after such event, and (B) each Common Share outstanding immediately after
such event shall have issued with respect to it that number of Rights which
each Common Share outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section 11(n) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall promptly (a) prepare a certificate setting forth
such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Shares or the Preferred Shares (if such transfer agent is an
entity other than the Rights Agent) a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate in accordance
with Section 25 hereof. Notwithstanding the foregoing sentence, the failure
by the Company to make such certification or 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 contained therein and shall not be deemed
to have knowledge of such adjustment unless and until it shall have received
such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. (a) After the Rights become exercisable, except as provided in
Section 13(b) hereof, in the event, directly or indirectly, (1) the Company
shall consolidate with, or merge with and into, any other Person, (2) any
Person shall consolidate with the Company, or merge with and into the Company
and the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the Common Shares shall be changed into or exchanged for stock
or other securities of any other Person (or the Company) or cash or any other
property, or (3) the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, directly or indirectly, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person other than the Company or one or more
of its wholly-owned Subsidiaries, then, and in each such case, proper
provision shall be made so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive, upon
the exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for which
a Right is then exercisable, in accordance with the terms of this Agreement
and in lieu of Preferred Shares, such number of Common Shares of such other
Person (including the Company as successor thereto or as the surviving
corporation) as shall equal the result obtained by (A) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable and dividing that product by (B)
50% of the then current per share market price of the Common Shares of such
other Person (determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) the issuer
of such Common Shares shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such issuer; and (iv) such
issuer shall take such steps (including, but not limited to, the reservation
of a sufficient number of its Common Shares in accordance with Section 9
hereof) in connection with such consummation as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the Common Shares thereafter deliverable
upon the exercise of the Rights. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company and
such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement so providing. The
13
Company shall not enter into any transaction of the kind referred to in this
Section 13 if at the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or arrangements
which, as a result of the consummation of such transaction, would eliminate
or substantially diminish the benefits intended to be afforded by the Rights.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
The supplemental agreement referred to above in this Section 13(a)
to be entered into by the Company and the Rights Agent shall also provide
that, as soon as practicable after the date of any of the events described in
this Section 13(a), such issuer shall:
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, use its best efforts to cause
such registration statement to become effective as soon as practicable after
such filing and use its best efforts to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of
the Securities Act) until the Final Expiration Date, and similarly comply
with applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility requirements for
quotation on Nasdaq; and
(iii) deliver to holders of the Rights historical financial
statements for such issuer which comply in all respects with the requirements
for registration on Form 10 (or any successor form) under the Exchange Act.
(b) In the event of any merger or other acquisition transaction
involving the Company pursuant to an agreement described in Section
1(c)(ii)(A)(2), the provisions of Section 13(a) hereof shall not be
applicable to such transaction and this Rights Agreement and the rights of
holders of Rights hereunder shall be terminated in accordance with Section
7(a) hereof.
(c) The term "issuer," for purposes of this Section 13, shall refer
to the Person (or Affiliate or Associate) referred to in Section 13(a);
PROVIDED, HOWEVER, that (i) if such Person (or Affiliate or Associate) is a
direct or indirect Subsidiary of another Person, the term "issuer" shall
refer to such other Person, and (ii) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the term "issuer" shall
refer to whichever of such Persons is the issuer of such Common Shares having
the greatest aggregate value.
(d) If, for any reason, the Rights cannot be exercised for Common
Shares of such issuer as provided in Section 13(a), then each holder of
Rights shall have the right to exchange its Rights for cash from such issuer
in an amount equal to the number of Common Shares that it would otherwise be
entitled to purchase multiplied by 50% of the current per share market price,
as determined pursuant to Section 11(d) hereof, of such Common Shares of such
issuer. If, for any reason, the foregoing provision cannot be applied to
determine the cash amount into which the Rights are exchangeable, then the
Board of Directors of the Company, upon approval by a majority of the
Continuing Directors, based upon the advice of one or more nationally
recognized investment banking firms, shall determine such amount reasonably
and with good faith due to the holders of Rights. Any such determination
shall be final and binding on the Rights Agent and the holders of Rights.
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 the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable. The closing price for any day shall be
the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the Nasdaq
or, if the Rights are not listed or admitted to trading on the Nasdaq, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported 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
14
maker making a market in the Rights selected by the Board of Directors of the
Company, upon approval by a majority of the Continuing Directors. If on any
such date no such market maker is making a market in the Rights, the fair
value of the Rights on such date as determined in good faith by the Board of
Directors of the Company, upon approval by a majority of the Continuing
Directors, shall be used. If the Rights are not publicly traded, the current
market value of a whole Right shall equal the difference between the closing
price of a Common Share (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) less the current Purchase Price, multiplied by 100.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other
than fractions which are integral multiples of one one-hundredth of a
Preferred Share). Fractions of Preferred Shares in integral multiples of one
one-hundredth of a Preferred Share may, at the election of the Company, 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 Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not integral
multiples of one one-hundredth of a Preferred Share, the Company shall 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 Preferred Share. For the purposes of this
Section 14(b), the current market value of a Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise. If the Preferred Shares are not publicly traded,
the current market value shall be determined in accordance with Section
11(d)(ii) hereof.
(c) 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 provided above).
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting 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 Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
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 Shares), may,
in such holder's own behalf and for such holder's own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company
to enforce, or otherwise act in respect of, such holder's right to exercise
the Rights evidenced by such Right Certificate in the manner provided in such
Right Certificate and in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at
law for any breach of this Agreement and will be entitled to specific
PERFORMANCE OF THE OBLIGATIONS HEREUNDER, AND INJUNCTIVE RELIEF AGAINST
ACTUAL OR THREATENED VIOLATIONS OF THE OBLIGATIONS OF ANY PERSON SUBJECT TO
THIS AGREEMENT.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) subject to Sections 6 and 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
the Right Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
(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
15
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 Preferred Shares or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a 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 25 hereof), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, for any action taken, suffered or
omitted by the Rights Agent in connection with the execution, acceptance and
administration of this Agreement and the exercise and performance hereunder
of its duties, including the costs and expenses of defending against and
appealing any claim of liability in the premises. The indemnity provided
herein shall survive the termination of this Agreement and the expiration of
the Rights.
The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement and the exercise and
performance of its duties hereunder in reliance upon any Right Certificate or
certificate for the Preferred Shares or Common Shares 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, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto, provided that such corporation would
be eligible for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned,
the Rights Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
16
(a) The Rights Agent may consult with legal counsel of its choice
(who may be legal counsel for the Company), and the advice or opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent as to any action taken, suffered or omitted by it in good faith and in
accordance with such advice or opinion.
(b) Whenever in the administration, exercise and performance of its
duties under this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the Company
prior to taking, suffering or omitting 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 any one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken, suffered or omitted in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own gross negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any liability or
responsibility in respect of the legality, validity or enforceability of this
Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the legality, validity or
enforceability or the execution of any Right Certificate (except its
countersignature thereof); nor shall it be liable or responsible for any
breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including the Rights becoming
void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of
the Rights (including the manner, method or amount thereof) provided for in
Section 3, 11, 13, 23 or 24, or the ascertaining of the existence of facts
that would require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after receipt of the
certificate described in Section 12 hereof); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or 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 administration, exercise and performance of
its duties hereunder from any one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Secretary or the
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be responsible
or liable for any action taken, suffered or omitted by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions. 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 Rights Agreement and the date on and/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 five (5) Business Days after the date any officer of the Company
actually received 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
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
17
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 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 the Rights Agent in good faith believes that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise, transfer, split up, combination or exchange, the
certification on the form of assignment or form of election to purchase, as
the case may be, that the Rights evidenced by the Right Certificate are not
owned by an Acquiring Person, or an Affiliate or Associate thereof, has
either not been completed or in any manner indicates any other response
thereto, the Rights Agent shall not take any further action with respect to
such requested exercise, transfer, split up, combination or exchange, without
first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty (30) days' notice in writing mailed to the Company
and to each other transfer agent of the Common Shares or Preferred Shares (if
any) (as to which the Rights Agent has received prior written notice) by
registered or certified mail, and the Company shall mail notice thereof 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 other transfer agent of the Common Shares or
Preferred Shares (if any) (as to which the Rights Agent has received prior
written notice) 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 such holder's 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, in good standing, authorized under such laws to exercise
corporate trust or stock transfer powers, and 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
million. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment the Company shall
file notice thereof in writing with the predecessor Rights Agent and each
other transfer agent of the Common Shares or Preferred Shares (if any), and
mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors, upon approval by a
majority of the Continuing Directors, to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Shares following the Distribution Date
and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to Common Shares so issued or sold pursuant to the
exercise of stock options or under any employee benefit plan or arrangement
or upon the exercise, conversion or exchange of securities of the Company
currently outstanding or issued at any time in the future by the Company and
(b) may, in any other case, if deemed necessary
18
or appropriate by the Board of Directors of the Company, upon approval by a
majority of the Continuing Directors, 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 and
this sentence shall be null and void AB INITIO if, and to the extent that,
such issuance or this sentence would create a significant risk of or result
in material adverse tax consequences to the Company or the Person to whom
such Right Certificate would be issued or would create a significant risk of
or result in such options' or employee plans' or arrangements' failing to
qualify for otherwise available special tax treatment 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. (a) The Company may, at its option, upon
approval by a majority of the Continuing Directors, at any time prior to the
earlier of (i) the tenth business day following the Shares Acquisition Date,
or (ii) such date or dates on or after the tenth business day following the
Shares Acquisition Date to which such option may be extended by a majority of
the Continuing Directors (for one or more successive 10 day periods) by
vote(s) first taken or written consent(s) first given prior to the tenth
business day following the Shares Acquisition Date and, thereafter, prior to
the completion of any such 10 day extension or extensions (or, if the Shares
Acquisition Date shall have occurred prior to the Record Date, prior to (A)
the tenth business day following the Record Date or (B) such date or dates on
or after the tenth business day after the Record Date to which such option
may be extended by a majority of the Continuing Directors (for one or more
successive 10 day periods) by vote(s) first taken or written consent(s) first
given prior to the tenth business day following the Record Date and,
thereafter, prior to the completion of any such 10 day extension or
extensions), redeem all but not less than all the then outstanding Rights at
a redemption price of $.01 per Right, 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"), and the Company may, at its option, pay the Redemption
Price either in cash, Common Shares (based on the current per share market
price thereof (as determined pursuant to Section 11(d) hereof) at the time of
redemption), or any other form of consideration deemed appropriate by the
Board of Directors. The redemption of the Rights by the Board of Directors
may be made effective at such time on such basis and with such conditions as
the Board of Directors in its sole discretion may establish, upon approval by
a majority of the Continuing Directors.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of
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. The Company
shall promptly give public notice of any such redemption; PROVIDED, HOWEVER,
that the failure to give, or any defect in, any such notice shall not affect
the validity of such redemption. Within 10 days after such action of the
Board of Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and shall mail a notice of
redemption to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent
for the Common Shares. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of
its Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24 hereof, and other than in connection with
the purchase of Common Shares prior to the Distribution Date.
(c) Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable pursuant to Section 7(a) at any
time when the Rights are redeemable hereunder.
Section 24. EXCHANGE. (a) The Company, at its option, upon approval
by a majority of the Continuing Directors, at any time after any Person
becomes an Acquiring Person, may exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for Common Shares at
an exchange ratio of one Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity holding Common
Shares for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50%
or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the
right to exercise
19
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number
of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange; PROVIDED,
HOWEVER that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their
last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Common Shares for
Rights will be effected and, in the event of any partial exchange, the number
of Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have become
void pursuant to the provisions of Section 11(a)(ii) hereof) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute Preferred Shares (or equivalent preferred shares,
as such term is defined in Section 11(b) hereof) for Common Shares
exchangeable for Rights, at the initial rate of one one-hundredth of a
Preferred Share (or equivalent preferred share) for each Common Share, as
appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Shares pursuant to the terms thereof, so that the fraction of a
Preferred Share delivered in lieu of each Common Share shall have the same
voting rights as one Common Share.
(d) In the event that there shall not be sufficient Common Shares
or Preferred Shares issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with Section
24(a), the Company shall either take such action as may be necessary to
authorize additional Common Shares or Preferred Shares for issuance upon
exchange of the Rights or alternatively, at the option of the Board of
Directors, upon approval by a majority of the Continuing Directors, with
respect to each Right (i) pay cash in an amount equal to the Purchase Price,
in lieu of issuing Common Shares or Preferred Shares in exchange therefor, or
(ii) issue debt or equity securities, or a combination thereof, having a
value equal to the Current Value (as hereinafter defined) of the Common
Shares or Preferred Shares exchangeable for each such Right, where the value
of such securities shall be determined by a nationally recognized investment
banking firm selected by the Board of Directors, upon approval by a majority
of the Continuing Directors, or (iii) deliver any combination of cash,
property, Common Shares, Preferred Shares and/or other securities having a
value equal to the Current Value in exchange for each Right. The term
"Current Value," for the purposes of this Section 24, shall mean the product
of the current per share market price of Common Shares (determined pursuant
to Section 11(d) on the date of the occurrence of the event described above
in subparagraph (a)) multiplied by the number of Common Shares for which the
Right otherwise would be exchangeable if there were sufficient shares
available. To the extent that the Company determines that some action need
be taken pursuant to clauses (i), (ii) or (iii) of this Section 24(d), the
Board of Directors, upon approval by a majority of the Continuing Directors,
may temporarily suspend the exercisability of the Rights for a period of up
to sixty (60) days following the date on which the event described in Section
24(a) shall have occurred, in order to seek any authorization of additional
Common Shares or Preferred Shares and/or to decide the appropriate form of
distribution to be made pursuant to the above provision and to determine the
value thereof. In the event of any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended.
(e) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares.
In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of a whole Common Share.
For the purposes of this paragraph (e), the current market value of a whole
Common Share shall be the closing price of a Common Share (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of exchange pursuant to this Section 24.
Section 25. NOTICE OF CERTAIN EVENTS. (a) In case the Company shall
propose (i) to pay any dividend payable in stock of any class to the holders
of its Preferred Shares or to make any other distribution to the holders of
its Preferred Shares (other than a regular quarterly cash dividend), (ii) to
offer to the holders of its Preferred Shares rights or warrants to subscribe
for or to purchase any additional Preferred Shares or shares of stock of any
class or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding Preferred Shares), (iv) to
effect any consolidation or merger into or with, or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company, or (vi) to declare or pay any dividend on the
Common Shares payable in Common Shares or to effect a subdivision,
combination or consolidation of the Common Shares (by
20
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, or 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 Common Shares and/or Preferred Shares, if any
such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least ten (10) days prior
to the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at least
ten (10) days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate, in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such
event and the consequences of such event to holders of Rights under Section
11(a)(ii) hereof. In the event any Person becomes an Acquiring Person, the
Company will promptly notify the Rights Agent thereof.
Section 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:
Ultratech Stepper, Inc.
0000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxxx
Chairman and Chief Executive Officer
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
The First National Bank of Boston
c/o Boston EquiServe Limited Partnership
000 Xxxxxx Xxxxxx, Xxxx Xxxx 00-00-00
Xxxxxx, XX 00000
Attention: Shareholder Services Division
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 shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date, the Company may supplement or amend this Agreement in any respect,
without the approval of any holders of Rights, by action of its Board of
Directors upon approval by a majority of the Continuing Directors, and the
Rights Agent shall, if the Company so directs, execute such supplement or
amendment. From and after the Distribution Date, the Company may from time to
time supplement or amend this Agreement without the approval of any holders
of Rights, by action of its Board of Directors, upon approval by a majority
of the Continuing Directors, in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other
provisions with respect to the Rights which the Company may deem necessary or
desirable and which shall be consistent with, and for the purpose of
fulfilling, the objectives of the Board of Directors in adopting this
Agreement, including, without limitation, to change the Purchase Price, the
Redemption Price, any time periods herein specified, and any other term
hereof, any such supplement or amendment to be evidenced by a writing signed
by the Company and the Rights Agent; PROVIDED, HOWEVER, that from and after
such time as any Person becomes an Acquiring Person, this Agreement shall not
be amended in any manner which would adversely affect the interests of the
holders of Rights. Upon receipt of a certificate from an appropriate officer
of the Company that the proposed supplement or amendment is consistent with
this Section 27 and, after such time as any Person has become an Acquiring
Person, that the proposed supplement or amendment does not adversely affect
the interests of the
21
holders of Rights, the Rights Agent shall execute such supplement or
amendment. Without limiting the foregoing, the Company may at any time prior
to such time as any Person becomes an Acquiring Person, by action of its
Board of Directors, upon approval by a majority of the Continuing Directors,
amend this Agreement to lower the thresholds set forth in Sections 1(a) and
3(a) to not less than the greater of (i) any percentage greater than the
largest percentage of the outstanding Common Shares then known by the Company
to be beneficially owned by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any entity holding Common Shares for or
pursuant to the terms of any such plan) and (ii) 10%.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares of
which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Company (and, where
specifically provided for herein, only upon approval by a majority of the
Continuing Directors) 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 power to (i) interpret the provisions of this Agreement and (ii)
make all determinations deemed necessary or advisable for the administration
of this Agreement (including a determination to redeem or not redeem the
Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing), which are done or made
by the Board (or, where specifically provided for herein, upon approval by a
majority of the Continuing Directors) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Right Certificates and all other parties and (y) not subject the Board or the
Continuing Directors to any liability to the holders of the Rights.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) 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, the Common Shares).
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; PROVIDED, HOWEVER, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board of Directors of the Company, upon approval by a
majority of the Continuing Directors, 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 tenth
business day following the date of such determination by the Board of
Directors of the Company.
Section 32. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts
to be made and performed entirely within such State.
Section 33. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
22
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted or convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and attested, all as of the day and year first above
written.
ATTEST: ULTRATECH STEPPER, INC.
By /s/ Xxxxxxx X. Xxxxxx, III By /s/ Xxxxxx X. Xxxxxxxxxxx
-------------------------------- --------------------------------
Name: Xxxxxxx X. Xxxxxx, III Name: Xxxxxx X. Xxxxxxxxxxx
Title: Chief Financial Officer Title: Chairman and Chief
and Secretary Executive Officer
ATTEST: THE FIRST NATIONAL BANK OF
BOSTON, as Rights Agent
By /s/ Xxxxxx X. Xxxx By /s/ Xxxxxxxxx X. Xxxxxxxx
-------------------------------- --------------------------------
Name: Xxxxxx X. Xxxx Name: Xxxxxxxxx X. Xxxxxxxx
Title: Account Manager Title: Administration Manager
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