EXECUTION COPY
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RIGHTS AGREEMENT
SYMBOL TECHNOLOGIES, INC.
and
The Bank of New York,
as Rights Agent
Dated as of August 13, 2001
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions..........................................1
Section 2. Appointment of Rights Agent..................................5
Section 3. Issue of Right Certificates..................................5
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 of Right Certificates..........................11
Section 9. Availability of Shares of Preferred Stock...................11
Section 10. Preferred Stock Record Date.................................12
Section 11. Adjustment of Purchase Price, Number of Shares
and Number of Rights........................................13
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares...................................................22
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earnings Power...........................................22
Section 14. Fractional Rights and Fractional Shares.....................26
Section 15. Rights of Action............................................28
Section 16. Agreement of Right Holders..................................28
Section 17. Right Certificate Holder Not Deemed a Stockholder...........29
Section 18. Concerning the Rights Agent.................................29
Section 19. Merger or Consolidation or Change of Name of
Rights Agent................................................30
Section 20. Duties of Rights Agent......................................30
Section 21. Change of Rights Agent......................................33
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Page
Section 22. Issuance of New Right Certificates..........................34
Section 23. Redemption..................................................34
Section 24. Exchange....................................................35
Section 25. Notice of Certain Events....................................36
Section 26. Notices.....................................................36
Section 27. Supplements and Amendments..................................37
Section 28. Successors..................................................38
Section 29. Benefits of this Agreement..................................38
Section 30. Severability................................................38
Section 31. Governing Law...............................................39
Section 32. Counterparts................................................39
Section 33. Descriptive Headings........................................39
Section 34. Administration..............................................39
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INDEX OF DEFINED TERMS
Page
Acquiring Person.........................................................1
Affiliate................................................................2
Agreement................................................................1
Associate................................................................2
Beneficial Owner.........................................................2
Beneficial Ownership.....................................................2
beneficially own.........................................................2
Business Day.............................................................3
close of business........................................................4
Common Stock.............................................................4
Common Stock Equivalents................................................15
Company..................................................................1
Current Value...........................................................15
current per share market price..........................................17
Distribution Date........................................................5
Equivalent Preferred Shares.............................................16
Exchange Act.............................................................2
Exchange Ratio..........................................................35
Exempt Person............................................................4
Expiration Date..........................................................9
Final Expiration Date....................................................9
invalidation time.......................................................14
New York Stock Exchange..................................................4
Original Rights..........................................................3
Person...................................................................4
Preferred Stock..........................................................4
Principal Party.........................................................23
Purchase Price..........................................................18
Record Date..............................................................1
Redemption Date..........................................................9
Redemption Price........................................................34
Right....................................................................1
Right Certificate........................................................6
Rights Agent.............................................................1
Section 11(a)(ii) Trigger Date..........................................15
Securities Act...........................................................5
Security................................................................18
Spread..................................................................15
Stock Acquisition Date...................................................5
Subsidiary...............................................................5
Substitution Period.....................................................16
Summary of Rights........................................................6
then outstanding.........................................................2
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Trading Day.............................................................18
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RIGHTS AGREEMENT
Agreement, dated as of August 13, 2001, (as amended, supplemented or
otherwise modified from time to time, the "Agreement") between Symbol
Technologies, Inc., a Delaware corporation (the "Company"), and The Bank of
New York, a New York banking corporation, as Rights Agent (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 share of
Common Stock (as hereinafter defined) of the Company outstanding as of the
close of business (as defined below) on September 14, 2001 (the "Record
Date"), each Right representing the right to purchase one one-thousandth
(subject to adjustment) of a share of Preferred Stock (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 (subject to
adjustment as provided herein) with respect to each share of Common Stock that
shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date (as such
terms are hereinafter defined); provided, however, that Rights may be issued
with respect to shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the Redemption Date and the Final Expiration
Date in accordance with Section 22.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meaning indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which shall be the Beneficial Owner (as
such term is hereinafter defined) of 15% or more of the shares of
Common Stock then outstanding, but shall not include an Exempt
Person (as such term is hereinafter defined); provided, however,
that (i) if the Board of Directors of the Company determines in good
faith that a Person who would otherwise be an "Acquiring Person" has
become such inadvertently (including, without limitation, because
(A) such Person was unaware that it beneficially owned a percentage
of Common Stock that would otherwise cause such Person to be an
"Acquiring Person" or (B) such Person was aware of the extent of its
Beneficial Ownership of Common Stock but had no actual knowledge of
the consequences of such Beneficial Ownership under this Agreement)
and without any intention of changing or influencing control of the
Company, and such Person, as promptly as practicable (as determined
in good faith by the Board of Directors of the Company) divested or
divests himself or itself of Beneficial Ownership of a sufficient
number of shares of Common Stock so that such Person would no longer
be an Acquiring Person, then such Person shall not be deemed to be
or to have become an "Acquiring Person" for any purposes of this
Agreement or (ii) if, as of the date hereof or prior to the first
public announcement of the adoption of this Agreement, any Person is
or becomes the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding, such Person shall not be deemed to
be or to become an "Acquiring Person" unless and until such time as
such Person shall, after the first public announcement of the
adoption of this Agreement, become the Beneficial Owner of
additional shares of Common Stock (other than pursuant to a dividend
or distribution paid or made by the Company on the outstanding
Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), unless, upon becoming the Beneficial
Owner of such additional shares of Common Stock, such Person is not
then the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding. Notwithstanding the foregoing, no Person
shall be deemed an "Acquiring Person" as the result of an
acquisition of shares of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to
15% or more of the shares of Common Stock then outstanding;
provided, however, that if a Person shall become the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding
by reason of such share acquisitions by the Company and thereafter
becomes the Beneficial Owner of any additional shares of Common
Stock, then such Person shall be deemed to be an "Acquiring Person",
subject to the proviso set forth in the first sentence of this
Section 1(a),unless upon the consummation of the acquisition of such
additional shares of Common Stock such Person does not beneficially
own 15% or more of the shares of Common Stock then outstanding. 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.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date of this
Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, shall
be deemed to have "Beneficial Ownership" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates
or Associates is deemed to beneficially own, directly or
indirectly within the meaning of Rule 13d-3 of the General
Rules and Regulations under the Exchange Act as in effect on
the date of this Agreement;
(ii) which such Person or any of such Person's Affiliates
or Associates 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
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fide public offering of securities), written or otherwise, or
upon the exercise of conversion rights, exchange rights, rights
(other than the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, (x) securities
tendered pursuant to a tender or exchange offer made pursuant
to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act 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, (y) securities which such Person has a right to
acquire upon the exercise of Rights at any time prior to the
time a Person becomes an Acquiring Person or (z) securities
issuable upon exercise of Rights from and after the time a
Person becomes an Acquiring Person if such Rights were acquired
by such Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof ("Original Rights") or pursuant to Section
11(i) or Section 11(n) with respect to an adjustment to
Original Rights; 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 by reason of such agreement,
arrangement or understanding if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to
a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations
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 (or any Affiliate or Associate
thereof) and with respect to 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 such securities.
Notwithstanding the foregoing, no Person who is an officer, director or
employee of an Exempt Person shall be deemed, solely by reason of such
Person's status or authority as such to be the "Beneficial Owner" of, to have
"Beneficial Ownership" of, or to "beneficially own" any securities that are
"beneficially owned" (as defined in this Section 1(c)), including, without
limitation, in a fiduciary capacity, by an Exempt Person or by any other such
officer, director or employee of an Exempt Person.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of New
York, or the
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State in which the office of the Rights Agent is located, are
authorized or obligated by law or executive order to close.
(e) "close of business" on any given date shall mean 5:00 P.M.,
New York City time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., New York City
time, on the next succeeding Business Day.
(f) "Common Stock" when used with reference to the Company
shall mean the Common Stock, par value $.01 per share, of the
Company. "Common Stock" when used with reference to any Person other
than the Company shall mean the capital stock (or, in the case of an
unincorporated entity, the equivalent 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.
(g) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(h) "Exempt Person" shall mean the Company, any Subsidiary (as
such term is hereinafter defined) of the Company, in each case
including, without limitation, in its fiduciary capacity, any
employee benefit plan of the Company or of any Subsidiary of the
Company, or any entity or trustee holding Common Stock for or
pursuant to the terms of any such plan or for the purpose of funding
any such plan or funding other employee benefits for employees of
the Company or of any Subsidiary of the Company.
(i) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(j) "New York Stock Exchange" shall mean the New York Stock
Exchange, Inc.
(k) "Person" shall mean any individual, firm, corporation,
partnership, limited partnership, business trust, limited liability
company, unincorporated association or other entity, and shall
include any successor (by merger or otherwise) of such entity.
(l) "Preferred Stock" shall mean the Series A Junior
Participating Preferred Stock, par value $1.00 per share, of the
Company having the rights and preferences upon adoption as and set
forth in the Form of Certificate of Designations attached to this
Agreement as Exhibit A.
(m) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
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(n) "Right Certificate" shall have the meaning set forth in
Section 3 hereof.
(o) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(p) "Stock Acquisition Date" shall mean the first date of
public announcement (which for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section
13(d) of the Exchange Act) by the Company or an Acquiring Person
that an Acquiring Person has become such or such earlier date as a
majority of the Board of Directors shall become aware of the
existence of an Acquiring Person.
(q) "Subsidiary" or "subsidiary" of any Person shall mean any
corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient to elect a
majority of the board of directors or other persons performing
similar functions are beneficially owned, directly or indirectly, by
such Person, and any corporation or other entity that is otherwise
controlled by such Person.
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. The Company shall promptly
send written notice to the Rights Agent of any such appointment. 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.
(a) Until the close of business on the earlier of (i) the tenth
day after the Stock Acquisition Date or (ii) the tenth Business Day
(or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement by any Person (other than
an Exempt Person) of, or of the first public announcement of the
intention of such Person (other than an Exempt Person) to commence,
a tender or exchange offer the consummation of which would result in
any Person (other than an Exempt Person) becoming the Beneficial
Owner of shares of Common Stock aggregating 15% or more of the
shares of Common Stock then outstanding (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"; provided, however, that if either of such
dates occurs after the date of this Agreement and on or prior to the
Record Date, then the Distribution Date shall be the Record Date),
(x) the Rights will be evidenced (subject to the provisions of
Section 3(b) hereof) by the certificates for Common
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Stock registered in the names of the holders thereof, and not by
separate Right Certificates and (y) the Rights will be transferable
only in connection with the transfer of Common Stock. As soon as
practicable after the Company has notified the Rights Agent of the
occurrence of the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign and the Company will send
or cause to be sent (and the Rights Agent will, if requested and at
the Company's expense, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Stock as of
the close of business on the Distribution Date (other than any
Acquiring Person or any Associate or Affiliate of an Acquiring
Person), 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 (subject to
adjustment as provided herein) for each share of Common Stock so
held. As of the and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) (i) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights to
Purchase Shares of Preferred Stock, in substantially the form of
Exhibit C hereto (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Stock as of
the close of business on the Record Date (other than any Acquiring
Person or any Associate or Affiliate of any Acquiring Person), at
the address of such holder shown on the records of the Company.
(ii) With respect to shares of Common Stock outstanding as of
the Record Date, until the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date, the Rights associated
with such shares of Common Stock will be evidenced by the share
certificate for such shares of Common Stock registered in the names
of the holders thereof, together with the Summary of Rights. Until
the earlier of the Distribution Date and the Expiration Date (as
defined below), the surrender for transfer of any certificate for
shares of Common Stock outstanding on the Record Date, with or
without a copy of the Summary of Rights, shall also, except as
otherwise provided herein, constitute the transfer of the Rights
associated with the Common Stock represented thereby.
(c) (i) Rights shall be issued in respect of all shares of
Common Stock issued or disposed of (including, without limitation,
upon transfer of outstanding Common Stock, disposition of Common
Stock out of treasury stock or issuance or reissuance of Common
Stock out of authorized, but unissued shares) after the Record Date
but prior to the earlier of the Distribution Date and the Expiration
Date (as defined below), or in certain circumstances provided in
Section 22 hereof after the Distribution Date. Certificates issued
for Common Stock (including, without limitation, upon transfer of
outstanding Common Stock, disposition of Common Stock out of
treasury stock or issuance or reissuance of Common Stock out of
authorized, but unissued shares) after the Record Date, but prior to
the earlier of the Distribution Date and the Expiration Date (as
defined below), shall
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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
Symbol Technologies, Inc. and The Bank of New York, as Rights
Agent, dated as of August 13, 2001, as the same may be amended,
supplemented or otherwise modified from time to time (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 Symbol Technologies, 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. Symbol
Technologies, 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 owned by or transferred
to any Person who becomes an Acquiring Person (as defined in
the Rights Agreement) and certain transferees thereof will
become null and void and will no longer be transferable.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby.
(ii) In the event that the Company purchases or otherwise
acquires any Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock
shall be deemed canceled and retired so that the Company shall not
be entitled to exercise any Rights associated with the Common Stock
which are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend shall
not affect the enforceability of any part of this Agreement or the rights of
any holder of the Rights.
Section 4. Form of Right Certificates. The Right Certificates (and
the forms of election to purchase shares and of assignment to be printed
on the reverse thereof) shall be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with
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any applicable law or with any rule or regulation made pursuant thereto
or with any rule or regulation of the New York Stock Exchange or of any
other stock exchange or automated quotation system on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 11, Section 13 and Section 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of
one one-thousandths of a share of Preferred Stock as shall be set forth
therein at the price per one one-thousandth of a share of Preferred Stock
set forth therein (the "Purchase Price"), but the number of such one
one-thousandths of a share of Preferred Stock and the Purchase Price
shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by the Chairman
of the Board of Directors, the President, any of the Vice Presidents, the
Treasurer or the Controller of the Company, 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 countersigned by the Rights Agent, by manual
signature, 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, or shall have attested the Company's seal thereon, 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, or who attested the
Company's seal thereon, had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company, and the
Company's seal may be attested, 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 Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at an office or agency 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.
(a) Subject to the provisions of Section 7(e), Section 11(a)(ii) and
Section 14 hereof, at any time after the close of business on the
Distribution Date, and prior to the close of business on the earlier of
the Redemption Date or the Final Expiration Date, any Right Certificate
or Right Certificates 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-thousandths of a
share of Preferred Stock (or, following such time, other
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securities, cash or assets, as the case may be) 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 or agency 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 by
the registered holder of such Right Certificate or Right Certificates of
a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
(b) Subject to the provisions of Section 11(a)(ii) hereof, at any
time after the Distribution Date and prior to the close of business on
the earlier of the Redemption Date or the Final Expiration Date, upon
receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a
Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security satisfactory to them, and reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation of the
Right Certificate, if mutilated, the Company will 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 otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered
holder of any Right Certificate may, subject to Section 11(a)(ii) hereof
and except as otherwise provided herein, exercise the Rights evidenced
thereby in whole or in part upon surrender of the Right Certificate, with
the form of election to purchase on the reverse side thereof duly
executed, to the Rights Agent at the office or agency of the Rights Agent
designated for such purpose, together with payment of the Purchase Price
for each one one-thousandth of a share of Preferred Stock as to which the
Rights are exercised (or other securities, cash or other assets, as the
case may be), at any time which is both after the Distribution Date and
prior to the time (the "Expiration Date") that is the earliest of (i) the
close of business on August 13, 2011 (the "Final Expiration Date"), (ii)
the time at which the Rights are redeemed as provided in Section 23
hereof (the "Redemption Date") or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
(b) The Purchase Price shall be initially $80.00 for each one
one-thousandth of a share of Preferred Stock purchasable upon the
exercise of a Right. The Purchase Price and the number of one
one-thousandths of a share of Preferred Stock or other securities or
property to be acquired upon exercise of a Right shall be subject to
adjustment from time to time as provided in Sections 11
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and 13 hereof and shall be payable in lawful money of the United States
of America in accordance with paragraph (c) of this Section 7.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase
Price for the shares of Preferred Stock to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof, in cash or by
certified check, 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 Stock, or make
available if the Rights Agent is the transfer agent for the Preferred
Stock, certificates for the number of shares of Preferred Stock to be
purchased (and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests), or (B) requisition from the
depositary agent appointed by the Company depositary receipts
representing interests in such number of one one-thousandths of a share
of Preferred Stock as are to be purchased (in which case certificates for
the Preferred Stock 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) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate,
after receipt, promptly deliver such cash to or upon the order of the
registered holder of such Right Certificate.
(d) Except as otherwise provided herein, 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 exercisable 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) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder of Rights upon the
occurrence of any purported transfer or exercise of Rights pursuant to
Section 6 hereof or this Section 7 unless such registered holder shall
have (i) completed and signed the certificate contained in the form of
assignment or election to purchase set forth on the reverse side of the
Right Certificate surrendered for such transfer or exercise and (ii)
provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) thereof as the Company shall reasonably
request.
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Section 8. Cancellation 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 canceled
by it, and no Right Certificates shall be issued in lieu thereof except
as expressly permitted by any of the provisions of this Agreement. The
Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other
Right Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all canceled
Right Certificates to the Company.
Section 9. Availability of Shares of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued
shares of Preferred Stock or any shares of Preferred Stock held in
its treasury, the number of shares of Preferred Stock that will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following
the time that a Person becomes an Acquiring Person, shares of Common
Stock and other securities) issuable upon the exercise of Rights may
be listed or admitted to trading on the New York Stock Exchange or
listed on any other national securities exchange or quotation
system, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed or admitted to trading on
the New York Stock Exchange or listed on any other national
securities exchange or quotation system upon official notice of
issuance upon such exercise.
(c) From and after such time as the Rights become exercisable,
the Company shall use its best efforts, if then necessary to permit
the issuance of shares of Preferred Stock (and following the time
that a Person first becomes an Acquiring Person, shares of Common
Stock and other securities) upon the exercise of Rights, to register
and qualify such shares of Preferred Stock (and following the time
that a Person first becomes an Acquiring Person, shares of Common
Stock and other securities) under the Securities Act and any
applicable state securities or "Blue Sky" laws (to the extent
exemptions therefrom are not available), cause such registration
statement and qualifications to become effective as soon as possible
after such filing and keep such registration and qualifications
effective until the earlier of the date as of which the Rights are
no longer exercisable for such securities and the Final Expiration
Date. The Company may temporarily suspend, for a period of time not
to exceed 90 days, the exercisability of the Rights in order to
prepare and file a registration statement under the Securities Act
and permit it to become effective. Upon any such suspension, the
Company shall promptly issue a public announcement stating that
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the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no
longer in effect, in each case with prompt notice to the Rights
Agent. 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 and until a registration statement under the
Securities Act (if required) shall have been declared effective,
unless an exemption therefrom is available.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Preferred
Stock (and, following the time that a Person becomes an Acquiring
Person, shares of Common Stock and other securities) delivered upon
exercise of Rights shall, at the time of delivery of the
certificates therefor (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 shares of Preferred
Stock (or shares of Common Stock or other securities) upon the
exercise of Rights. The Company shall not, however, be required to
pay any tax or charge 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 Stock (or shares of Common Stock or other
securities) in a name other than that of, the registered holder of
the Right Certificate evidencing Rights surrendered for exercise or
to issue or deliver any certificates or depositary receipts for
Preferred Stock (or shares of Common Stock or other securities) upon
the exercise of any Rights until any such tax or charge shall have
been paid (any such tax or charge being payable by that 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 or charge is due.
Section 10. Preferred Stock Record Date. Each Person in whose name
any certificate for Preferred Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of
the shares of Preferred Stock represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase
Price (and any applicable taxes or charges) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Stock transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day on
which the Preferred Stock 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
Stock for which the Rights shall be exercisable, including, without
limitation, the right to vote or to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be
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entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares and
Number of Rights. The Purchase Price, the number of shares of Preferred
Stock or other securities or property purchasable upon exercise of each
Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
shares of Preferred Stock, (C) combine the outstanding shares of
Preferred Stock into a smaller number of shares of Preferred Stock
or (D) issue any shares of its capital stock in a reclassification
of the shares of Preferred Stock (including any such
reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), 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, as the case may be, and the number and kind of
shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive the aggregate number
and kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, the 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.
(ii) Subject to Section 24 of this Agreement and except as
otherwise provided in this Section 11(a)(ii), in the event that
any Person becomes an Acquiring Person, each holder of a Right
shall thereafter have the right to receive, upon exercise
thereof at a price equal to the then current Purchase Price
immediately prior to the Person becoming an Acquiring Person
multiplied by the number of one one-thousandths of a share of
Preferred Stock for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of
shares of Preferred Stock, such number of shares of Common
Stock (or at the option of the Company, such number of one
one-thousandths of shares of Preferred Stock) as shall equal
the result obtained by (x) multiplying the then current
Purchase Price by the number of one one-thousandths of a share
of Preferred Stock 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 Stock (determined pursuant
to Section 11(d) hereof)
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on the date of the occurrence of such event; provided, however,
that the Purchase Price (as so adjusted) and the number of
shares of Common Stock so receivable upon exercise of a Right
shall thereafter be subject to further adjustment as
appropriate in accordance with Section 11(f) hereof.
Notwithstanding anything in this Agreement to the contrary,
however, from and after the time (the "invalidation time") when
any Person first becomes an Acquiring Person, any Rights that
are beneficially owned by (x) any Acquiring Person (or any
Affiliate or Associate of any Acquiring Person), (y) a
transferee of any Acquiring Person (or any such Affiliate or
Associate) who becomes a transferee after the invalidation time
or (z) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who became a transferee prior to or
concurrently with the invalidation time pursuant to either (I)
a transfer from the Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing
agreement, arrangement or understanding regarding the
transferred Rights or (II) a transfer that the Board of
Directors has determined is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the
provisions of this paragraph, and subsequent transferees of
such Persons, shall be null and void without any further action
and any holder of such Rights shall thereafter have no rights
whatsoever with respect to such Rights under any provision of
this Agreement. 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. From
and after the invalidation time, no Right Certificate shall be
issued pursuant to Section 3 or Section 6 hereof that
represents Rights that are or have become null and void
pursuant to the provisions of this paragraph, and any Right
Certificate delivered to the Rights Agent that represents
Rights that are or have become null and void pursuant to the
provisions of this paragraph shall be canceled. From and after
the occurrence of an event specified in Section 13(a) hereof,
any Rights that theretofore have not been exercised pursuant to
this Section 11(a)(ii) shall thereafter be exercisable only in
accordance with Section 13 and not pursuant to this Section
11(a)(ii).
(iii) The Company may at its option substitute for a share
of Common Stock issuable upon the exercise of Rights in
accordance with the foregoing subparagraph (ii) such number or
fractions of shares of Preferred Stock having an aggregate
current market value equal to the current per share market
price of a share of Common Stock. In the event that there shall
not be sufficient shares of Common Stock issued but not
outstanding or authorized (and unreserved) but unissued to
permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii), the Board of Directors shall,
to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party (A)
determine the excess of (1) the value of the shares of Common
Stock issuable upon the exercise of a Right in accordance with
the foregoing
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subparagraph (ii) (the "Current Value") over (2) the then
current Purchase Price multiplied by the number of one
one-thousandths of shares of Preferred Stock for which a Right
was exercisable immediately prior to the time that the
Acquiring Person became such (such excess, the "Spread"), and
(B) with respect to each Right (other than Rights which have
become void pursuant to Section 11(a)(ii)), make adequate
provision to substitute for the shares of Common Stock issuable
in accordance with subparagraph (ii) upon exercise of the Right
and payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) shares of Preferred Stock
or other equity securities of the Company (including, without
limitation, shares or fractions of shares of preferred stock
which, by virtue of having dividend, voting and liquidation
rights substantially comparable to those of the shares of
Common Stock, are deemed in good faith by the Board of
Directors to have substantially the same value as the shares of
Common Stock (such shares of Preferred Stock and shares or
fractions of shares of preferred stock are hereinafter referred
to as "Common Stock Equivalents")), (4) debt securities of the
Company, (5) other assets or (6) any combination of the
foregoing, having a value which, when added to the value of the
shares of Common Stock actually issued upon exercise of such
Right, shall have an aggregate value equal to the Current Value
(less the amount of any reduction in such Purchase Price),
where such aggregate value has been determined by the Board of
Directors upon the advice of a nationally recognized investment
banking firm selected in good faith by the Board of Directors;
provided, however, if the Company shall not make adequate
provision to deliver value pursuant to clause (B) above within
thirty (30) days following the date that the Acquiring Person
became such (the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, to the extent permitted
by applicable law and any material agreements then in effect to
which the Company is a party, upon the surrender for exercise
of a Right and without requiring payment of such Purchase
Price, shares of Common Stock (to the extent available), and
then, if necessary, such number or fractions of shares of
Preferred Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate
value equal to the Spread. If, upon the date any Person becomes
an Acquiring Person, the Board of Directors shall determine in
good faith that it is likely that sufficient additional shares
of Common Stock could be authorized for issuance upon exercise
in full of the Rights, then, if the Board of Directors so
elects, the thirty (30) day period set forth above may be
extended to the extent necessary, but not
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more than ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek stockholder approval
for the authorization of such additional shares (such thirty
(30) day period, as it may be extended, is herein called the
"Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the
second and/or third sentence of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 11(a)(ii) hereof
and the last sentence of this Section 11(a)(iii) hereof, that
such action shall apply uniformly to all outstanding Rights and
(y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such
second sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the shares of
Common Stock shall be the current per share market price (as
determined pursuant to Section 11(d)(i)) on the Section
11(a)(ii) Trigger Date and the per share or fractional value of
any "Common Stock Equivalent" shall be deemed to equal the
current per share market price of the Common Stock. The Board
of Directors of the Company may, but shall not be required to,
establish procedures to allocate the right to receive shares of
Common Stock upon the exercise of the Rights among holders of
Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred
Stock entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Stock
(or shares having similar rights, privileges and preferences as the
Preferred Stock ("Equivalent Preferred Shares")) or securities
convertible into Preferred Stock or Equivalent Preferred Shares at a
price per share of Preferred Stock or Equivalent Preferred Shares
(or having a conversion price per share, if a security convertible
into shares of Preferred Stock or Equivalent Preferred Shares) less
than the then current per share market price of the Preferred Stock
(determined pursuant to Section 11(d) hereof) on such record date,
the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock and Equivalent
Preferred Shares outstanding on such record date plus the number of
shares of Preferred Stock and Equivalent Preferred Shares which the
aggregate offering price of the total number of shares of Preferred
Stock 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
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shares of Preferred Stock and Equivalent Preferred Shares
outstanding on such record date plus the number of additional shares
of Preferred Stock 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); 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. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good
faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent.
Shares of Preferred Stock and Equivalent 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.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of the Preferred Stock (including
any such distribution made in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness or assets (other than a
regular quarterly cash dividend or a dividend payable in Preferred
Stock) 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 Stock (determined pursuant to Section
11(d) hereof) on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company
whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or
warrants applicable to one share of Preferred Stock, and the
denominator of which shall be such current per share market price
(determined pursuant to Section 11(d) hereof) of the Preferred
Stock; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate
par value of the shares of capital stock of the Company to be issued
upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event
that such distribution is not so made, the 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) Except as otherwise provided herein, for the purpose of
any computation hereunder, the "current per share market price" of
any security (a
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"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 30 consecutive Trading Days (as such
term is hereinafter defined) immediately prior to but not including
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 30 Trading Days after but not including
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 by the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange or, if the Security is not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the
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 National Association of Securities Dealers, Inc. Automated
Quotations System "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. 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, if the
Preferred Stock is publicly traded, the "current per share
market price" of the Preferred Stock shall be determined in
accordance with the method set forth in Section 11(d)(i). If
the Preferred Stock is not publicly traded but the Common Stock
is publicly traded, the "current per share market price" of the
Preferred Stock shall be conclusively deemed to be the current
per share market price of the Common Stock as determined
pursuant to Section 11(d)(i) multiplied by one thousand
(appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date
hereof). If neither the Common Stock nor the Preferred Stock is
-18-
publicly 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, 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 hundred-thousandth
of a share of Preferred Stock or one hundredth of a share of Common
Stock or 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 Expiration Date.
(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 the Preferred Stock, thereafter the Purchase
Price and the number of such other shares so receivable upon
exercise of a Right shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections
11(a), 11(b), 11(c), 11(e), 11(h), 11(i) and 11(m) hereof, as
applicable, and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on like terms
to any such other shares.
(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-thousandths of a share of Preferred Stock purchasable from
time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the 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-thousandths of a
share of Preferred Stock (calculated to the nearest one
hundred-thousandth of a share of Preferred Stock) obtained by (i)
multiplying (x) the number of one one-thousandths of a share of
Preferred Stock purchasable upon the exercise of a Right immediately
prior to such adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii)
dividing the
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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-thousandths
of a share of Preferred Stock 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-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest one hundredth)
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 may, 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-thousandths of a share of Preferred
Stock issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of one one-thousandths of
a share of Preferred Stock which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the
shares of Preferred Stock or other shares of capital stock issuable
upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid
-20-
and nonassessable shares of Preferred Stock or other such 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 Stock, Common
Stock, other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Stock,
Common Stock, 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.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
adjustments 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 Stock, issuance
wholly for cash of any shares of Preferred Stock at less than the
current market price, issuance wholly for cash or Preferred Stock or
securities which by their terms are convertible into or exchangeable
for Preferred Stock, dividends on Preferred Stock payable in shares
of Preferred Stock or issuance of rights, options or warrants
referred to hereinabove in Section 11(b), hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to
such stockholders.
(n) Anything in this Agreement to the contrary notwithstanding,
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 Stock payable in Common Stock or (ii)
effect a subdivision, combination or consolidation of the Common
Stock (by reclassification or otherwise than by payment of a
dividend payable in Common Stock) into a greater or lesser number of
shares of Common Stock, then in any such case, the number of Rights
associated with each share of Common Stock then outstanding, or
issued or delivered thereafter, shall be proportionately adjusted so
that the number of Rights thereafter associated with each share of
Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction
the numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event
and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of
such event. The adjustments provided for in this Section 11(n) shall
be made successively
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(but without duplication) whenever such a dividend is declared or
paid or such subdivision, combination or consolidation is effected.
(o) The Company agrees that, after the earlier of the
Distribution Date or the Stock Acquisition Date, it will not, except
as permitted by Sections 23, 24 or 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken
it is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be afforded by
the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or 13
hereof, the Company shall promptly (a) prepare a certificate setting
forth such adjustment, and a brief statement of the facts and
computations accounting for such adjustment, (b) file with the Rights
Agent and with each transfer agent for the Common Stock or the Preferred
Stock 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
(if so required under Section 25 hereof). The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment
therein contained and shall not be deemed to have knowledge of any such
adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earnings Power.
(a) In the event, directly or indirectly, at any time after any
Person has become an Acquiring Person, (i) the Company shall
consolidate with or merge with and into any other Person, (ii) any
Person shall consolidate with the Company, or any Person shall merge
with and into the Company and the Company shall be the continuing or
surviving corporation of such merger and, in connection with such
merger, all or part of the Common Stock shall be changed into or
exchanged for stock or other securities of any other Person (or of
the Company) or cash or any other property, or (iii) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more transactions,
assets or earning 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 upon the first occurrence of such
event, proper provision shall be made so that: (A) each holder of
record of a Right (other than Rights which have become null and void
pursuant to Section 11(a)(ii)) 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
thousandths of a share of Preferred Stock for which a Right was
exercisable (whether or not such Right was then exercisable)
immediately prior to the time that any Person first became an
Acquiring Person (each as subsequently adjusted pursuant to Sections
11(a)(i), 11(b), 11(c), 11(f), 11(h), 11(i) and 11(m)), in
accordance with the terms of this Agreement and in lieu of shares of
Preferred Stock or Common Stock of the
-22-
Company, such number of validly issued, fully paid and
non-assessable and freely tradeable shares of Common Stock of the
Principal Party (as defined herein) not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one one thousandths of a
share of Preferred Stock for which a Right was exercisable
immediately prior to the time that any Person first became an
Acquiring Person (as subsequently adjusted thereafter pursuant to
Sections 11(a)(i), 11(b), 11(c), 11(f), 11(h), 11(i) and 11(m)) and
(2) dividing that product by 50% of the then current per share
market price of the Common Stock of such Principal Party (determined
pursuant to Section 11(d)(i) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; provided, that the
Purchase Price (as theretofore adjusted pursuant to Sections
11(a)(i), 11(b), 11(c), 11(f), 11(h), 11(i) and 11(m)) and the
number of shares of Common Stock of such Principal Party issuable
upon exercise of each Right shall be further adjusted as provided in
Section 11(f) of this Agreement to reflect any events occurring in
respect of such Principal Party after the date of such
consolidation, merger, sale or transfer; (B) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (C) the term
"Company" shall thereafter be deemed to refer to such Principal
Party; and (D) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient
number of its shares of Common Stock in accordance with Section 9
hereof) in connection with such consummation of any such transaction
as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in
relation to the shares of its Common Stock thereafter deliverable
upon the exercise of the Rights; provided, that, upon the subsequent
occurrence of any consolidation, merger, sale or transfer of assets
or other extraordinary transaction in respect of such Principal
Party, each holder of a Right shall thereupon be entitled to
receive, upon exercise of a Right and payment of the Purchase Price
as provided in this Section 13(a), such cash, shares, rights,
warrants and other property which such holder would have been
entitled to receive had such holder, at the time of such
transaction, owned the Common Stock of the Principal Party
receivable upon the exercise of a Right pursuant to this Section
13(a), and such Principal Party shall take such steps (including,
but not limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights,
warrants and other property.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clauses
(i) or (ii) of the first sentence of Section 13(a) hereof: (A)
the Person that is the issuer of the securities into which the
shares of Common Stock are
-23-
converted in such merger or consolidation, or, if there is more
than one such issuer, the issuer the shares of Common Stock of
which have the greatest aggregate market value of shares
outstanding, or (B) if no securities are so issued, (x) the
Person that is the other party to the merger, if such Person
survives said merger, or, if there is more than one such
Person, the Person the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding or (y) if
the Person that is the other party to the merger does not
survive the merger, the Person that does survive the merger
(including the Company if it survives) or (z) the Person
resulting from the consolidation; and
(ii) in the case of any transaction described in clause
(iii) of the first sentence in Section 13(a) hereof, the Person
that is the party receiving the greatest portion of the assets
or earning power transferred pursuant to such transaction or
transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person
receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such Persons is the issuer
of Common Stock having the greatest aggregate market value of
shares outstanding;
provided, however, that in any such case described in the foregoing clause
(b)(i) or (b)(ii), if the Common Stock of such Person is not at such time or
has not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (1) if such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which is and has
been so registered, the term "Principal Party" shall refer to such other
Person, or (2) if such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Stock of all of which is and has been so
registered, the term "Principal Party" shall refer to whichever of such
Persons is the issuer of Common Stock having the greatest aggregate market
value of shares outstanding, or (3) if such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in
clauses (1) and (2) above shall apply to each of the owners having an interest
in the venture as if the Person owned by the joint venture was a Subsidiary of
both or all of such joint venturers, and the Principal Party in each such case
shall bear the obligations set forth in this Section 13 in the same ratio as
its interest in such Person bears to the total of such interests.
(c) The Company shall not consummate any consolidation, merger, sale
or transfer referred to in Section 13(a) hereof unless prior thereto the
Company and the Principal Party involved therein shall have executed and
delivered to the Rights Agent an agreement confirming that the
requirements of Sections 13(a) and (b) hereof shall promptly be performed
in accordance with their terms and that such consolidation, merger, sale
or transfer of assets shall not result in a default by the Principal
Party under this Agreement as the same shall have been assumed by the
Principal Party pursuant to Sections 13(a) and (b)
-24-
hereof and providing that, as soon as practicable after executing such
agreement pursuant to this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, 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, if the Common Stock of the Principal
Party shall be listed or admitted to trading on the New York Stock
Exchange or on another national securities exchange, to list or
admit to trading (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on the New York
Stock Exchange or such securities exchange, or, if the Common Stock
of the Principal Party shall not be listed or admitted to trading on
the New York Stock Exchange or a national securities exchange, to
cause the Rights and the securities receivable upon exercise of the
Rights to be authorized for quotation on the over-the-counter
market, as reported by NASDAQ or on such other system then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with
the requirements for registration on Form 10 (or any successor form)
under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the Principal
Party subject to purchase upon exercise of outstanding Rights.
(d) In case the Principal Party has a provision in any of its
authorized securities or in its certificate of incorporation or
by-laws or other instrument governing its affairs, which provision
would have the effect of (i) causing such Principal Party to issue
(other than to holders of Rights pursuant to this Section 13), in
connection with, or as a consequence of, the consummation of a
transaction referred to in this Section 13, shares of Common Stock
or Common Stock Equivalents of such Principal Party at less than the
then current market price per share thereof (determined pursuant to
Section 11(d) hereof) or securities exercisable for, or convertible
into, Common Stock or Common Stock Equivalents of such Principal
Party at less than such then current market price, or (ii) providing
for any special payment, tax or similar provision in connection with
the issuance of the Common Stock or Common Stock Equivalents of such
-25-
Principal Party pursuant to the provisions of Section 13, then, in
such event, the Company hereby agrees with each holder of Rights
that it shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing
that the provision in question of such Principal Party shall have
been canceled, waived or amended, or that the authorized securities
shall be redeemed, so that the applicable provision will have no
effect in connection with, or as a consequence of, the consummation
of the proposed transaction.
(e) The Company covenants and agrees that it shall not, at any
time after a Person first becomes an Acquiring Person, enter into
any transaction of the type contemplated by clauses (i), (ii) or
(iii) of Section 13(a) hereof if (x) at the time of or immediately
after such consolidation, merger, sale, transfer or other
transaction there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights, (y) prior to, simultaneously with or
immediately after such consolidation, merger, sale, transfer or
other transaction, the stockholders of the Person who constitutes,
or would constitute, the Principal Party for purposes of Section 13
hereof shall have received a distribution of Rights previously owned
by such Person or any of its Affiliates or Associates or (z) the
form or nature of organization of the Principal Party would preclude
or limit the exercisability of the Rights.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights (except prior to the Distribution Date in accordance with
Section 11(n) hereof) 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 New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported
-26-
by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker
is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of
the Company shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock) or to
distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples
of one one-thousandth of a share of Preferred Stock) upon exercise
or exchange of the Rights. Interests in fractions of Preferred Stock
in integral multiples of one one-thousandth of a share of Preferred
Stock 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 Stock represented
by such depositary receipts. In lieu of fractional shares of
Preferred Stock that are not integral multiples of one
one-thousandth of a share of Preferred Stock, the Company shall pay
to the registered holders of Right Certificates at the time such
Rights are exercised or exchanged as herein provided an amount in
cash equal to the same fraction of the current market value of one
share of Preferred Stock. For the purposes of this Section 14(b),
the current market value of a share of Preferred Stock shall be the
closing price of a share of Preferred Stock (as determined pursuant
to Section 14(a) hereof) for the Trading Day immediately prior to
the date of such exercise or exchange.
(c) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock upon the exercise or exchange of
Rights. In lieu of such fractional shares of Common Stock, the
Company shall pay to the registered holders of the Right
Certificates at the time such Rights are exercised or exchanged for
shares of Common Stock as herein provided an amount in cash equal to
the same fraction of the current market value of one share of Common
Stock. For the purposes of this Section 14(c), the current market
value of a share of Common Stock shall be the closing price of a
share of Common Stock (as determined pursuant to Section 14(a)
hereof) for the Trading Day immediately prior to the date of such
exercise or exchange.
(d) The holder of a Right by the acceptance of the Right
expressly waives the right to receive any fractional Rights or any
fractional shares upon exercise or exchange of a Right (except as
provided above).
-27-
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 Stock); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of the Common
Stock), without the consent of the Rights Agent or of the holder of any
other Right Certificate (or, prior to the Distribution Date, of the
Common Stock), on such holder's own behalf and for such holder's own
benefit, may 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 (or, prior to the Distribution Date, such Common Stock) in
the manner provided in such Right Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders
of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations under,
and injunctive relief against actual or threatened violations of, the
obligations of any Person subject to this Agreement.
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
Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office or agency of the Rights Agent designated
for such purpose, duly endorsed or accompanied by a proper
instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the
Distribution Date, the Common Stock) 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 Common Stock made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent, subject to Section 7(e) hereof, shall be affected by
any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability
to perform any of its obligations under this Agreement by reason of
any preliminary or permanent injunction or other order, decree, or
ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or
any statute,
-28-
rule, regulation or executive order promulgated by any governmental
authority prohibiting or otherwise restraining performance of such
obligation.
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 Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Right Certificate be construed
to confer upon the holder of any Right Certificate, as such, any of the
rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action,
or to receive notice of meetings or other actions affecting stockholders
(except as provided in this Agreement), or to receive dividends or
subscription rights, or otherwise, until the Rights evidenced by such
Right Certificate shall have been exercised or exchanged in accordance
with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent such
reasonable compensation as shall be agreed in writing between the
Company and the Rights Agent for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and 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 done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of
liability arising therefrom, directly or indirectly. The
reimbursement and compensation (to the extent accrued but unpaid)
provisions and the indemnity provisions of this Section 18(a) shall
survive the expiration of the Rights and termination of this
Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or
omitted by it in connection with its acceptance and administration
of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Stock or Common Stock or for other
securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, instruction, letter,
notice, direction, consent, certificate, statement, or other paper
or document believed by it to be genuine and to be signed and
executed by the proper Person or Persons, or otherwise upon the
advice of counsel as set forth in Section 20 hereof.
-29-
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or
any Person resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
Person succeeding to all or substantially all of the shareholder
services business, stock transfer or corporate trust powers 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 Person would be eligible for
appointment as a successor Rights Agentunder 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.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates
so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in
its changed name and in all such cases such Right Certificates shall
have the full force provided in the Right Certificates and in this
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations expressly set forth in this Agreement, and no
implied duties or obligations shall be read into this Agreement against
the Rights Agent unless otherwise provided by any applicable law, upon
the following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel of its
selection (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by
it in good faith and in accordance with such opinion.
-30-
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established
by a certificate signed by any one of the Chairman of the Board of
Directors, the President, any Vice President, the Treasurer, the
Controller 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 or suffered in good faith by
it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence, bad faith or
willful misconduct; provided, however, that the Rights Agent shall
not be liable for any punitive damages.
(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 validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by
the Rights Agent) or in respect of the validity or execution of any
Right Certificate (except its countersignature thereof); nor shall
it be 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 liable or 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 Sections 3, 11, 13, 23 and 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 actual notice to the Rights Agent or
receipt of a certificate furnished pursuant to Section 12,
describing such change or adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock or
other securities to be issued pursuant to this Agreement or any
Right Certificate or as to whether any shares of Preferred Stock or
other securities 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
-31-
required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any person reasonably believed by the Rights Agent to
be one of the Chairman of the Board of Directors, the President, any
Vice President, the Treasurer, the Controller or the Secretary of
the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be
liable for any action taken or suffered 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 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 Business Days after the date any officer of the
Company actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions
in response to such application specifying the action to be taken or
omitted.
(h) The Rights Agent and any stockholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any
of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may
be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any other
Person or 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, for which it is entitled to
reimbursement hereunder, or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise
of its rights, for which it is entitled to indemnification
-32-
hereunder, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such
risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate contained
in the form of assignment or the form of election to purchase set
forth on the reverse thereof, as the case may be, has not been
completed to certify the holder is not an Acquiring Person (or an
Affiliate or Associate thereof) or a transferee thereof, the Rights
Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the
Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and
to each transfer agent of the Common Stock or Preferred Stock by
registered or certified mail, and, following the Distribution Date, to
the holders of the Right Certificates by first-class mail. The Company
may remove the Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common Stock or
Preferred Stock by registered or certified mail, and, following the
Distribution Date, 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 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the
holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered
holder of any Right Certificate or the Rights Agent may, at the expense
of the Company, apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a Person
organized and doing business under the laws of the United States or any
State thereof or the District of Columbia, in good standing, which is
authorized under such laws to perform shareholder services and exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which at the time of its
appointment as Rights Agent has 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 transfer agent of the Common Stock or
Preferred Stock, and, following the Distribution Date, mail a notice
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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 forms as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or
kind or class of shares or other securities or property purchasable under
the Right Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of Common
Stock following the Distribution Date and prior to the earlier of the
Redemption Date and the Final Expiration Date, the Company may with
respect to shares of Common Stock so issued or sold pursuant to (i) the
exercise of stock options, (ii) under any employee plan or arrangement,
(iii) upon the exercise, conversion or exchange of securities notes or
debentures issued by the Company or (iv) a contractual obligation of the
Company, in each case existing prior to the Distribution Date, issue
Right Certificates representing the appropriate number of Rights in
connection with such issuance or sale.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at any time
prior to such time as any Person becomes an Acquiring Person, redeem
all but not less than all of 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 (the redemption price being
hereinafter referred to as the "Redemption Price"). The redemption
of the Rights 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. The Redemption Price shall be payable at
the option of the Company, in cash, shares of Common Stock (based on
the current market price of Common Stock at the time of redemption
as determined pursuant to Section 11(d)(i) hereof), or such other
form of consideration as the Board of Directors shall determine.
(b) Immediately upon the action of the Board of Directors
ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23 (or at such later time as the Board of Directors may
establish for the effectiveness of such redemption), 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 (or such later time as the Board of Directors may
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establish for the effectiveness of such redemption), the Company
shall mail a notice of redemption to the Rights Agent and 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 Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the
method by which the payment of the Redemption Price will be made.
Section 24. Exchange
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring
Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have
not become effective or that have become null and void pursuant
to the provisions of Section 11(a)(ii) hereof) for shares of
Common Stock at an exchange ratio of one share of Common Stock
per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the Board
of Directors shall not be empowered to effect such exchange at
any time after an Acquiring Person shall have become the
Beneficial Owner of shares of Common Stock aggregating 50% or
more of the shares of Common Stock then outstanding. From and
after the occurrence of an event specified in Section 13(a)
hereof, any Rights that theretofore have not been exchanged
pursuant to this Section 24(a) shall thereafter be exercisable
only in accordance with Section 13 and may not be exchanged
pursuant to this Section 24(a). The exchange of the Rights by
the Board of Directors may, subject to Section 24(b) hereof, be
made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may
establish.
(b) Immediately upon the effectiveness of the action of
the Board of Directors of the Company ordering the exchange of
any Rights pursuant to paragraph (a) of this Section 24 and
without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that
number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give 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 shall promptly mail a notice of any such
exchange to all of the holders of the Rights so exchanged 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 shares of Common
Stock for Rights will be effected and, in the event of any
partial exchange, the
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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 null and void pursuant to the
provisions of Section 11(a)(ii) hereof) held by each holder of
Rights.
(c) The Company may at its option substitute, and, in the
event that there shall not be sufficient shares of Common Stock
issued but not outstanding or authorized but unissued (and
unreserved) to permit any exchange of Rights for Common Stock
as contemplated in accordance with this Section 24, the Company
may, in its discretion, take such action as may be necessary to
authorize additional shares of Common Stock for issuance upon
exchange of the Rights. In the event that the Company shall
determine not to take such action or shall, after good faith
effort, be unable to take such action as may be necessary to
authorize additional shares of Common Stock, the Company shall
substitute, to the extent of such insufficiency, for each share
of Common Stock that would otherwise be issuable upon exchange
of a Right, a number of shares of Preferred Stock or fractions
thereof (or Equivalent Preferred Shares as such term is defined
in Section 11(b)) having an aggregate current per share market
price (determined pursuant to Section 11(d) hereof) equal to
the current per share market price of one share of Common Stock
(determined pursuant to Section 11(d) hereof) as of the date of
issuance of such shares of Preferred Stock or fractions thereof
(or equivalent preferred shares).
(d) The Company shall not, in connection with any exchange
pursuant to this Section 24, be required to issue fractions of
shares of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of such
fractional shares of Common Stock, the Company shall pay to the
registered holders of the Right Certificates with regard to
which such fractional shares of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock. For the
purposes of this paragraph (d), the current market value of a
whole share of Common Stock shall be the closing price of a
share of Common Stock (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall at any time after the
earlier of the Distribution Date or the Stock Acquisition Date
propose (i) to pay any dividend payable in stock of any class
to the holders of its Preferred Stock or to make any other
distribution to the holders of its Preferred Stock (other than
a regular quarterly cash dividend), (ii) to offer to the
holders of its Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or
shares of stock of any class or any other securities, rights or
options, (iii) to
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effect any reclassification of its Preferred Stock (other than
a reclassification involving only the subdivision or
combination of outstanding Preferred Stock), (iv) to effect the
liquidation, dissolution or winding up of the Company or (v) to
declare or pay any dividend on the Common Stock payable in
Common Stock or to effect a subdivision, combination or
consolidation of the Common Stock (by reclassification or
otherwise than by payment of dividends in Common Stock), then,
in each such case, the Company shall give to each holder of a
Right Certificate and to the Rights Agent, in accordance with
Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock
dividend, or distribution or offering of rights or warrants, or
the date on which such liquidation, dissolution, winding up,
reclassification, subdivision, combination or consolidation is
to take place and the date of participation therein by the
holders of the Common Stock and/or Preferred Stock, if any such
date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least
10 days prior to the record date for determining holders of the
Preferred Stock for purposes of such action, and in the case of
any such other action, at least 10 days prior to the date of
the taking of such proposed action or the date of participation
therein by the holders of the Common Stock and/or Preferred
Stock, whichever shall be the earlier.
(b) In case any event described in Section 11(a)(ii) or
Section 13 shall occur then the Company shall as soon as
practicable thereafter give to each holder of a Right
Certificate (or if occurring prior to the Distribution Date,
the holders of the Common Stock) and to the Rights Agent, 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) and Section 13 hereof.
Section 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Symbol Technologies, Inc.
Xxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxx
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:
-00-
Xxx Xxxx xx Xxx Xxxx
000 Xxxxxxx Xxxxxx - 00 Xxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Stock Transfer Administration
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. Except as provided in the
penultimate sentence of this Section 27, for so long as the Rights are
then redeemable, the Company may in its sole and absolute discretion, and
the Rights Agent shall if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any
holders of the Rights. At any time when the Rights are no longer
redeemable, except as provided in the penultimate sentence of this
Section 27, the Company may, and the Rights Agent shall, if the Company
so directs, supplement or amend this Agreement without the approval of
any holders of Rights; provided, that no such supplement or amendment may
(a) adversely affect the interests of the holders of Rights as such
(other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person), (b) cause the Rights again to become redeemable or (c)
cause the Agreement again to become amendable other than in accordance
with this sentence. Notwithstanding anything contained in this Agreement
to the contrary, no supplement or amendment shall be made which decreases
the Redemption Price. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made that
alters the rights or duties of the Rights Agent hereunder, without the
prior written consent of the Rights Agent. Upon the delivery of a
certificate from an appropriate officer of the Company which states that
the supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment,
provided that any supplement or amendment that does not amend Sections
18, 19, 20 or 21 hereof in a manner adverse to the Rights Agent shall
become effective immediately upon execution by the Company, whether or
not also executed by the Rights Agent.
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. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Stock) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be
for the sole and exclusive benefit of the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock).
-38-
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement or applicable to 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.
Section 31. 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; provided,
however, that the rights and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New
York.
Section 32. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
Section 34. Administration. The Board of Directors of the Company
shall have the exclusive power and authority to administer and interpret
the provisions of this Agreement and to exercise all rights and powers
specifically granted to the Board of Directors 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, without limitation, a determination to redeem or not redeem
the Rights or to amend or not amend this Agreement). All such actions,
calculations, determinations and interpretations that are done or made by
the Board of Directors in good faith shall be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and
all other parties
[The remainder of this page intentionally left blank.]
-39-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the day and year first above written.
SYMBOL TECHNOLOGIES, INC.
By: /s/ Xxxxxxx Xxxxxxx
----------------------------
Name: Xxxxxxx Xxxxxxx
Title: Executive Vice President and
General Counsel
THE BANK OF NEW YORK, as Rights Agent
By: /s/ Xxxxxxxxx Xxxxx
---------------------------
Name: Xxxxxxxxx Xxxxx
Title: Assistant Vice President
Exhibit A
FORM
OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
SYMBOL TECHNOLOGIES, INC.
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
-------------------
Symbol Technologies, Inc., a corporation organized and existing
under the General Corporation Law of the State of Delaware (hereinafter called
the "Company"), hereby certifies that the following resolution was duly
adopted by the Board of Directors of the Company as required by Section 151 of
the General Corporation Law of the State of Delaware at a meeting duly called
and held on August 13, 2001:
RESOLVED, that pursuant to the authority granted to and vested in
the Board of Directors of the Company (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Company's
Certificate of Incorporation, as amended to date (hereinafter called the
"Certificate of Incorporation"), the Board of Directors hereby creates a
series of Preferred Stock, par value $1 per share, of the Company, to be
designated the "Series A Junior Participating Preferred Stock", and hereby
adopts the resolution establishing the designation and number of shares, and
fixing the relative rights, powers and preferences and the restrictions and
limitations thereof, of the shares of such series as set forth below:
(A) Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the
"Series A Preferred Stock") and the number of shares constituting
the Series A Preferred Stock shall be 500,000. Such number of shares
may be increased or decreased by resolution of the Board of
Directors; provided, that no decrease shall reduce the number of
shares of Series A Preferred Stock to a number less than the number
of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued
by the Company convertible into Series A Preferred Stock.
(B) Dividends and Distributions.
(1) Subject to the rights of the holders of any shares of
any stock of the Company ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders
of shares of Series A Preferred Stock, in preference to the
holders of Common Stock, par value $.01 per share of the
Company (the "Common Stock") and of any other class or series
of stock of the Company ranking junior to the Series A
Preferred Stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally
available for such purpose, quarterly dividends payable in cash
on the last day of March, June, September and December, in each
year (each such date being referred to herein as a "Dividend
Payment Date"), commencing on the first Dividend Payment Date
after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount per share (rounded to
the nearest cent) equal to the greater of (a) $10.00 or (b)
subject to the provision for adjustment hereinafter set forth,
1000 times the aggregate per share amount of all cash
dividends, and 1000 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common
Stock or subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common
Stock since the immediately preceding Dividend Payment Date or,
with respect to the first Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Company shall at any time
after August 13, 2001, declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of Series
A Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which
is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior
to such event.
(2) The Company shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) of
this Section immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable
in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common
Stock during the period between any
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Dividend Payment Date and the next subsequent Dividend Payment
Date, a dividend of $1 per share on the Series A Preferred
Stock shall nevertheless be payable, when, as and if declared,
on such subsequent Dividend Payment Date.
(3) Dividends shall begin to accrue and be cumulative,
whether or not earned or declared, on outstanding shares of
Series A Preferred Stock from the Dividend Payment Date next
preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first
Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Dividend Payment Date or is a
date after the record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive a
quarterly dividend and before such Dividend Payment Date, in
either of which events such dividends shall begin to accrue and
be cumulative from such Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable
on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon,
which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
(C) Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(1) Subject to the provision for adjustment hereinafter
set forth and except as otherwise provided in the Certificate
of Incorporation or required by law, each whole share of Series
A Preferred Stock shall entitle the holder thereof to 1000
votes on all matters upon which the holders of the Common Stock
of the Company are entitled to vote. In the event the Company
shall at any time after August 13, 2001, declare or pay any
dividend on the Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to
which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which
is the number of shares of Common Stock outstanding immediately
after such
-3-
event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such
event.
(2) Except as otherwise provided herein, in the
Certificate of Incorporation or in any other Certificate of
Designations creating a series of Preferred Stock or any
similar stock, and except as otherwise required by law, the
holders of shares of Series A Preferred Stock and the holders
of shares of Common Stock and any other capital stock of the
Company having general voting rights shall vote together as one
class on all matters submitted to a vote of stockholders of the
Company.
(3) Except as set forth herein, or as otherwise provided
by law, holders of Series A Preferred Stock shall have no
special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate
action.
(4) If, at the time of any annual meeting of stockholders
for the election of directors, the equivalent of six quarterly
dividends (whether or not consecutive) payable on any share or
shares of Series A Preferred Stock are in default, the number
of directors constituting the Board of Directors of the Company
shall be increased by two. In addition to voting together with
the holders of Common Stock for the election of other directors
of the Company, the holders of record of the Series A Preferred
Stock, voting separately as a class to the exclusion of the
holders of Common Stock, shall be entitled at said meeting of
stockholders (and at each subsequent annual meeting of
stockholders), unless all dividends in arrears on the Series A
Preferred Stock have been paid or declared and set apart for
payment prior thereto, to vote for the election of two
directors of the Company, the holders of any Series A Preferred
Stock being entitled to cast a number of votes per share of
Series A Preferred Stock as is specified in paragraph (1) of
this Section C. Each such additional director shall serve until
the next annual meeting of stockholders for the election of
directors, or until their successor shall be elected and shall
qualify, or until their right to hold such office terminates
pursuant to the provisions of this Section C(4). Until the
default in payments of all dividends which permitted the
election of said directors shall cease to exist, any director
who shall have been so elected pursuant to the provisions of
this Section C(4) may be removed at any time, without cause,
only by the affirmative vote of the holders of the shares of
Series A Preferred Stock at the time entitled to cast a
majority of the votes entitled to be cast for the election of
any such director at a special meeting of such holders called
for that purpose, and any vacancy thereby created may be filled
by the vote of such holders. If and when such default shall
cease to exist, the holders of the Series A Preferred Stock
shall be divested of the foregoing special voting rights,
subject to revesting in the event of each and every subsequent
like default in payments of dividends. Upon the termination of
the foregoing special
-4-
voting rights, the terms of office of all persons who may have
been elected directors pursuant to said special voting rights
shall forthwith terminate, and the number of directors
constituting the Board of Directors shall be reduced by two.
The voting rights granted by this Section C(4) shall be in
addition to any other voting rights granted to the holders of
the Series A Preferred Stock in this Section C.
(D) Certain Restrictions.
(1) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
earned or declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Company shall
not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution
or winding up) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and
all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either
as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock, provided that
the Company may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for
shares of any stock of the Company ranking junior (as to
dividends and upon dissolution, liquidation or winding up)
to the Series A Preferred Stock or rights, warrants or
options to acquire such junior stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or
any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except in
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accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences
of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment
among the respective series or classes.
(2) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of
stock of the Company unless the Company could, under paragraph (1)
of this Section D, purchase or otherwise acquire such shares at such
time and in such manner.
(E) Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof.
All such shares shall upon their retirement become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new
series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to any conditions and restrictions on
issuance set forth herein.
(F) Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Company, voluntary or otherwise, no
distribution shall be made (1) to the holders of the Common Stock or of
shares of any other stock of the Company ranking junior, upon
liquidation, dissolution or winding up, to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A Preferred Stock
shall have received an amount equal to the greater of (i) $1,000 per
share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not earned or declared, to the date of
such payment and (ii) an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 1000 times the
aggregate amount of all cash and other property to be distributed per
share to holders of shares of Common Stock or (2) to the holders of
shares of stock ranking on a parity upon liquidation, dissolution or
winding up with the Series A Preferred Stock, except distributions made
ratably on the Series A Preferred Stock and all such parity stock in
proportion to the total amounts to which the holders of all such shares
are entitled upon such liquidation, dissolution or winding up. In the
event, however, that there are not sufficient assets available to permit
payment in full of the Series A Preferred Stock liquidation preference
and the liquidation preferences of all other classes and series of stock
of the Company, if any, that rank on a parity with the Series A Preferred
Stock in respect thereof, then the assets available for such distribution
shall be distributed ratably to the holders of the Series A Preferred
Stock and the holders of such
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parity shares in proportion to their respective liquidation preferences.
In the event the Company shall at any time after August 13, 2001, declare
or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Neither the merger or consolidation of the Company into or with
another entity nor the merger or consolidation of any other entity into or
with the Company (nor the sale of all or substantially all of the assets of
the Company) shall be deemed to be a liquidation, dissolution or winding up of
the Company within the meaning of this Section F.
(G) Consolidation, Merger, etc. In case the Company shall enter into
any consolidation, merger, combination or other transaction in which the
shares of Common Stock are converted into, exchanged for or changed into
other stock or securities, cash and/or any other property, then in any
such case each share of Series A Preferred Stock shall at the same time
be similarly converted into, exchanged for or changed into an amount per
share (subject to the provision for adjustment hereinafter set forth)
equal to 1000 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into
which or for which each share of Common Stock is converted, exchanged or
converted. In the event the Company shall at any time after August 13,
2001, declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such
case the amount set forth in the preceding sentence with respect to the
conversion, exchange or change of shares of Series A Preferred Stock
shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
(H) No Redemption. The shares of Series A Preferred Stock shall not
be redeemable from any holder.
-7-
(I) Rank. The Series A Preferred Stock shall rank junior to all
other series of Preferred Stock, with respect to the payment of dividends
and the distribution of assets upon liquidation, dissolution or winding
up of the Company, unless the terms of any such series shall provide
otherwise, and shall rank senior to the Common Stock as to such matters.
(J) Amendment. If any proposed amendment to the Certificate of
Incorporation (including this Certificate of Designations) would alter,
change or repeal any of the preferences, powers or special rights given
to the Series A Preferred Stock so as to affect the Series A Preferred
Stock adversely, then the holders of the Series A Preferred Stock shall
be entitled to vote separately as a class upon such amendment, and the
affirmative vote of two-thirds of the outstanding shares of the Series A
Preferred Stock, voting separately as a class, shall be necessary for the
adoption thereof, in addition to such other vote as may be required by
the General Corporation Law of the State of Delaware.
(K) Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share that shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights
of holders of Series A Preferred Stock.
-8-
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Company by its _____________ and attested by its Secretary this
__ day of August ___, 2001
-------------------------------
Name:
Title:
Attest:
-----------------------------
Secretary
-9-
Exhibit B
Form of Right Certificate
Certificate No. R- ____ ___ Rights
NOT EXERCISABLE AFTER AUGUST 13, 2011 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES
THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
SYMBOL TECHNOLOGIES, INC.
This certifies that ___________ or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of August 13, 2001, as the same may be amended
from time to time (the "Rights Agreement"), between Symbol Technologies, Inc.,
a Delaware corporation (the "Company"), and The Bank of New York, a New York
banking corporation, as Rights Agent (the "Rights Agent"), to purchase from
the Company at any time after the Distribution Date (as such term is defined
in the Rights Agreement) and prior to 5:00 P.M., New York City time, on the
earlier of August 13, 2011 or the earlier expiration of the Rights in
accordance with the terms of the Rights Agreement in accordance with its
terms, at the office or agency of the Rights Agent designated for such
purpose, or of its successor as Rights Agent, one one-thousandth of a fully
paid non-assessable share of Series A Participating Preferred Stock, par value
$1 per share (the "Preferred Stock"), of the Company, at a purchase price of
$80.00 per one one-thousandth of a share of Preferred Stock (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the
Form of Election to Purchase duly executed. The number of Rights evidenced by
this Rights Certificate (and the number of one one-thousandths of a share of
Preferred Stock which may be purchased upon exercise hereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as
of August 13, 2001, based on the Preferred Stock as constituted at such date.
As provided in the Rights Agreement, the Purchase Price, the number of one
one-thousandths of a share of Preferred Stock (or other securities or
property) which may be purchased upon the exercise of the Rights and the
number of Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
Notwithstanding anything in the Rights Agreement to the contrary,
however, from and after the time (the "invalidation time") when any person
first becomes an Acquiring Person (as defined in the Rights Agreement), the
Rights evidenced hereby beneficially owned by (x) any Acquiring Person (or any
Affiliate (as defined in the Rights Agreement) or Associate (as defined in
the Rights Agreement) of any Acquiring Person), (y) a transferee of any
Acquiring Person (or
any such Affiliate or Associate) who becomes a transferee after the
invalidation time or (z) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who became a transferee prior to or concurrently with
the invalidation time pursuant to either (I) a transfer from the Acquiring
Person to holders of its equity securities or to any person with whom it has
any continuing agreement, arrangement or understanding regarding the
transferred Rights or (II) a transfer that the Board of Directors of the
Company has determined is part of a plan, arrangement or understanding which
has the purpose or effect of avoiding the provisions of Section 11(a)(ii) of
the Rights Agreement, and subsequent transferees of such persons, shall be
null and void without any further action and any holder of such Rights hereof
shall thereafter have no rights whatsoever with respect to the Rights
evidenced hereby under any provision of the Rights Agreement.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices
of the Company and the above-mentioned office or agency of the Rights Agent.
The Company will mail to the holder of this Right Certificate a copy of the
Rights Agreement without charge after receipt of a written request therefor.
This Right Certificate, with or without other Right Certificates,
upon surrender at the office or agency of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a
like aggregate number of shares of Preferred Stock as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged in whole or in
part for shares of Preferred Stock or shares of the Company's Common Stock,
par value $.01 per share.
No fractional shares of Preferred Stock or Common Stock are required
to be issued upon the exercise or exchange of any Right or Rights evidenced
hereby (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock, which may, at the election of
the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder
of the Preferred Stock or of any other securities of the Company which may at
any time be issuable on the exercise or exchange hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
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holder hereof, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement) or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right certificate shall have been exercised or exchanged as
provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by an authorized signatory of
the Rights Agent.
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WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _________________.
ATTEST: SYMBOL TECHNOLOGIES, INC.
By: _____________________ By: ______________________
Name: Name:
Title: Title:
Countersigned as of ________________:
______________________________,
as Rights Agent
By: ______________________________
Authorized Signatory
-4-
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED _________________________ hereby sells, assigns
and transfer unto ___________________________
____________________________________________________________________________
(Please print name and address of transferee)
____________________________________________________________________________
Rights represented by this Right Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
___________________ Attorney, to transfer said Rights on the books of the
within-named Company, with full power of substitution.
Dated: _________________
------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company, broker,
dealer or other eligible institution participating in a recognized signature
guarantee medallion program.
------------------------------------------------------------
(To be completed)
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by, were not acquired by the
undersigned from, and are not being sold, assigned or transferred to, an
Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).
-------------------------------
Signature
-5-
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
To SYMBOL TECHNOLOGIES, INC.
The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate to purchase
the shares of Preferred Stock (or other securities or property) issuable upon
the exercise of such Rights and requests that certificates for such shares of
Preferred Stock (or such other securities) be issued in the name of:
--------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------
Dated: ____________________
------------------------
Signature
(Signature must conform to holder specified on Right Certificate)
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company, broker,
dealer or other eligible institution participating in a recognized signature
guarantee medallion program.
-6-
Form of Reverse Side of Right Certificate -- continued
-----------------------------------------------------------------
(To be completed)
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by, were not acquired by the
undersigned from, and are not being sold, assigned or transferred to, an
Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement)
----------------------
Signature
-----------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the
face of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
-7-
Exhibit C
STOCKHOLDER RIGHTS PLAN
SYMBOL TECHNOLOGIES, INC.
SUMMARY OF RIGHTS TO PURCHASE SHARES OF PREFERRED STOCK
Distribution and Transfer The Board of Directors of Symbol Technologies,
of Rights; Rights Inc. (the "Company") has declared a dividend of
Certificates: one preferred stock purchase right (a "Right")
for each share of theCompany's Common Stock,
par value $.01 per share (the "Common Stock"),
outstanding on September 14, 2001. Prior to the
Distribution Date referred to below, the Rights
will be evidenced by and trade with the
certificates for the Common Stock. As soon as
practicable following the Distribution Date,
separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders
of record of the Common Stock as of the close of
business on the Distribution Date and such
separate Right Certificates alone will evidence
the Rights.
Distribution Date: Rights will separate from the Common Stock and
become exercisable following the earlier to
occur of (i) the tenth day following a public
announcement that a person or group of
affiliated or associated persons (an
"Acquiring Person"), other than an exempt
person, has acquired beneficial ownership of 15%
or more of the outstanding shares of Common
Stock or (ii) the tenth business day (or such
later date as may be determined by action of the
Board of Directors prior to such time as any
person or group of affiliated persons becomes an
Acquiring Person) following the commencement
of, or the first public announcement of an
intention to make, a tender offer or exchange
offer the consummation of which would result
in the beneficial ownership by a person or
group of 15% or more of the outstanding shares
of Common Stock (the earlier of such dates
being called the "Distribution Date").
Preferred Stock Purchasable Each Right entitles the registered holder to
Upon Exercise of Rights: purchase from the Company, after the
Distribution Date, one one-thousandth of a share
of Series A Junior Participating Preferred Stock,
par value $1 per share (the "Preferred Stock"),
of the Company at a price of $80.00 per one
one-thousandth of a share of Preferred Stock
(the "Purchase Price"), subject to adjustment.
The designation and number of shares, and the
relative rights, powers, preferences,
restrictions and limitations, of the Preferred
Stock are described in detail in the
Certificate of Designations attached as
Exhibit A to the Rights Agreement referred to
below.
Flip-In: In the event that any person or group of
affiliated or associated persons becomes an
Acquiring Person, proper provision will be made
so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person or any
affiliate or associate of the Acquiring Person or
certain other transferees (which will thereupon
become void), will thereafter have the right to
receive upon exercise of a Right and payment
at the Purchase Price of the Rights, that
number of shares of Common Stock, or that
number of one one-thousandths of a share of
Preferred Stock, having a market value of two
times the Purchase Price.
Flip-Over: In the event that, after a person or group has
become an Acquiring Person, the Company is
acquired in a merger or other business
combination transaction or 50% or more of its
consolidated assets or earning power are sold,
proper provision will be made so that each holder
of a Right (other than Rights beneficially owned
by an Acquiring Person or any affiliate or
associate of the Acquiring Person or certain
other transferees which will have become void)
will thereafter have the right to receive,
upon the exercise thereof at the Purchase
Price, that number of shares of common stock
of the person with whom the Company has
engaged in the foregoing transaction (or its
parent), which number of shares at the time of
such transaction will have a market value of
two times the Purchase Price.
Exchange Provision: At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by
such person or group of 50% or more of the
outstanding shares of Common Stock or the
occurrence of an event described in the prior
paragraph, the Board of Directors of the Company
may exchange the Rights (other than Rights owned
by such Acquiring Person or any affiliate or
associate of the Acquiring Person or certain
other transferees which will have become void),
in whole or in part, at an exchange ratio of one
share of Common Stock or one one-thousandth of a
share of Preferred Stock, per Right (subject to
adjustment).
Redemption of the Rights: At any time prior to the time an Acquiring Person
becomes such, the Board of Directors of the
Company may redeem the Rights in whole, but not
in part, at a price of $.01 per Right (the
"Redemption Price") payable, at the option of the
Company, in cash, shares of Common Stock or such
other form of consideration as the Board of
Directors shall determine. The redemption of the
Rights 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
Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate
and the only right of the holders of Rights will
be to receive the Redemption Price.
-2-
Expiration of the Rights: The Rights will expire no later than August 13,
2011 (the "Final Expiration Date"), unless the
Final Expiration Date is advanced or extended or
unless the Rights are earlier redeemed or
exchanged by the Company.
Amendment of Terms of For so long as the are then redeemable, the
Rights Company may, except with respect to Rights: the
Redemption Price, amend the terms of the Rights
and Rights Agreement referred to below in any
manner. After the Rights are no longer
redeemable, the Company may, except with
respect to the Redemption Price, amend the
Rights Agreement in any manner that does not
adversely affect the interests of holders of
the Rights.
Voting and Dividend Rights: Until a Right is exercised or exchanged, the
holder thereof, as such, will have no rights as a
stockholder of the Company, including, without
limitation, the right to vote or to receive
dividends.
Anti-Dilution Provisions: The Rights are protected by customary
anti-dilution provisions.
Taxes: The distribution of the Rights should not be
taxable for federal income tax purposes.
However, following an event that renders the
Rights exercisable or upon redemption of the
Rights, stockholders may recognize taxable
income.
A copy of the Rights Agreement, dated as of August 13, 2001, (the
"Rights Agreement"), between the Company and The Bank of New York, a New York
banking corporation, as Rights Agent (the "Rights Agent"), has been filed with
the Securities and Exchange Commission as an Exhibit to a Registration
Statement on Form 8-A dated August 21, 2001. A copy of the Rights Agreement is
available free of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, as the same may be amended from time to
time, which is hereby incorporated herein by reference.
-3-
