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RESMED, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Rights Agent
Rights Agreement
Dated as of April 23, 1997
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RIGHTS AGREEMENT
Agreement, dated as of April 23, 1997, between RESMED, INC., a
Delaware corporation (the "Company"), and AMERICAN STOCK TRANSFER & TRUST
COMPANY, a New York corporation, as Rights Agent (the "Rights Agent").
RECITALS
The Board of Directors of the Company has authorized and declared a
dividend of one right (a "Right") for each Common Share (as defined in
Section 1.6) of the Company outstanding at the close of business on April
30, 1997 (the "Record Date") and has authorized the issuance of one Right
(subject to adjustment as provided herein) with respect to each Common Share
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 defined in Sections 3.1 and 7.1), each Right initially
representing the right to purchase one one-hundredth of a share of Series A
Junior Participating Preferred Stock (the "Preferred Shares") of the Company
having the rights, powers and preferences set forth in the form of Certificate
of Designations attached hereto as Exhibit A, upon the terms and subject to
the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Rights
Agreement, the following terms have the meanings indicated:
1.1 "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 15% or more of the
Common Shares of the Company then outstanding but shall not include the
Company, any Subsidiary of the Company or any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding shares of
capital stock of the Company for or pursuant to the terms of any such plan, in
its capacity as an agent or trustee for any such plan. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Common Shares of the Company then
outstanding; PROVIDED, HOWEVER, that if a Person shall become the Beneficial
Owner of 15% or more of the Common Shares of the Company then outstanding
solely by reason of share purchases by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any additional Common
Shares of the Company, then such Person shall be deemed to be an "Acquiring
Person." Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
Section 1.1, has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of Common Shares so that such
Person would no longer be an Acquiring Person, as defined pursuant to the
foregoing provisions of this Section 1.1, then such Person shall not be
deemed to be an "Acquiring Person" at any time for any purposes of this
Agreement.
1.2 "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations, as in effect on the date of this Rights Agreement, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
1.3 A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own" any securities:
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(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly (as determined pursuant
to 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, directly or indirectly, has (A) the right to acquire (whether
such right is exercisable immediately, or only after the passage of time,
compliance with regulatory requirements, fulfillment of a condition or
otherwise) pursuant to any agreement, arrangement or understanding, whether or
not in writing (other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or otherwise; PROVIDED,
HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, (1) securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for purchase or
exchange or (2) securities which such Person or any of such Person's
Affiliates or Associates may acquire, does or do acquire or may be deemed to
have the right to acquire, pursuant to any merger or other acquisition
agreement between the Company and such Person (or one or more of his
Affiliates or Associates) if such agreement has been approved by the Board of
Directors of the Company prior to such Person's becoming an Acquiring Person;
or (B) the right to vote pursuant to any agreement, arrangement or
understanding (whether or not in writing); PROVIDED, HOWEVER, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, any
security under this clause (B) 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
of 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) with which such
Person or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), whether or not in writing, for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as described
in the proviso to Section 1.3(ii)(B)) or disposing of any securities of the
Company.
1.4 "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
1.5 "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.
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1.6 "Common Shares" when used with reference to the Company
shall mean the shares of common stock, par value $.004 per share, of the
Company. "Common Shares" when used with reference to any Person other than
the Company shall mean the capital stock with the greatest voting power, or
the equity securities or other equity interest having power to control or
direct the management, of such other Person or, if such Person is a Subsidiary
of another Person, the Person or Persons which ultimately control such
first-mentioned Person, and which has issued and outstanding such capital
stock, equity securities or equity interest.
1.7 "Continuing Director" shall mean (i) any member of the Board
of Directors of the Company, while such Person is a member of the Board, who
is not an Acquiring Person, or an Affiliate or Associate of an Acquiring
Person, or an employee, director, representative, nominee or designee of any
Acquiring Person or of any such Affiliate or Associate, and was a member of
the Board prior to the time that any Person becomes an Acquiring Person or
(ii) any Person (during such period in which such Person is a member of the
Board) who, after the time that any Person becomes an Acquiring Person,
becomes a member of the Board and who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or an employee, director,
representative, nominee or designee of an Acquiring Person or of any such
Affiliate or Associate, if such Person's nomination for election or election
to the Board is recommended or approved by a majority of the Continuing
Directors.
1.8 "Person" shall mean any individual, partnership, joint
venture, limited liability company, firm, corporation, unassociated
association, trust or other entity, and shall include any successor (by merger
or otherwise) of such entity.
1.9 "Shares Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, the filing of a report pursuant to Section 13(d) of the
Exchange Act or pursuant to a comparable successor statute) by the Company or
an Acquiring Person that an Acquiring Person has become such or that discloses
information which reveals the existence of an Acquiring Person.
1.10 "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting equity
securities or equity interests is owned, of record or beneficially, directly
or indirectly, by such Person.
1.11 A "Trigger Event" shall be deemed to have occurred upon any
Person becoming an Acquiring Person. Notwithstanding the foregoing, a Trigger
Event shall not be deemed to have occurred if the event causing the 15%
ownership threshold to be crossed is an acquisition of Common Shares made
pursuant to a cash tender offer made pursuant to the rules and regulations
under the Exchange Act and filed with the Securities and Exchange Commission
on Schedule 14D-1 (or any successor form) for all outstanding Common Shares
not beneficially owned by the Person making such offer (or by its Affiliates
or Associates) so long as the Board of Directors of the Company determines,
after receiving advice from one or more investment banking firms, that such
offer is (i) at a price and on terms which are fair to stockholders (taking
into account all factors which such members of the Board deem relevant,
including without limitation, prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to realize
maximum value) and (ii) otherwise in the best interests of the Company and its
stockholders; PROVIDED, HOWEVER, that there must be Continuing Directors then
in office and any such determination shall require the concurrence of a
majority of such Continuing Directors.
1.12 The following terms shall have the meanings defined for
such terms in the Sections set forth below:
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Term Section
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Adjustment Shares 11.1.2
common stock equivalent 11.1.3
Company Recitals
current per share market price 11.4
Current Value 11.1.3
Distribution Date 3.1
equivalent preferred stock 11.2
Exchange Act 1.2
Exchange Consideration 27
Final Expiration Date 7.1
Nasdaq 9
Preferred Shares Recitals
Purchase Price 4
Record Date Recitals
Redemption Date 7.1
Redemption Price 23.1
Right Recitals
Right Certificate 3.1
Rights Agent Recitals
Security 11.4
Spread 11.1.3
Substitution Period 11.1.3
Summary of Rights 3.2
Trading Day 11.4
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3, shall prior to the
Distribution Date also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable. In the event the Company appoints one
or more co-Rights Agents, the respective duties of the Rights Agent and any
co-Rights Agent shall be as the Company shall determine. Contemporaneously
with such appointment, if any, the Company shall notify the Rights Agent
thereof.
Section 3. Issuance of Right Certificates.
3.1 Rights Evidenced by Share Certificates. Until the earlier
of (i) the tenth day after the Shares Acquisition Date or (ii) the tenth day
after the date of the commencement of, or first public announcement of the
intent of any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company
or any entity holding shares of capital stock of the Company for or pursuant
to the terms of any such plan, in its capacity as an agent or trustee for any
such plan) to commence, a tender or exchange offer the consummation of which
would result in any Person becoming the Beneficial Owner of Common Shares
aggregating 15% or more of the then outstanding Common Shares of the Company
(the earlier of (i) and (ii) being herein referred to as the "Distribution
Date," whether or not either such date occurs prior to the Record Date), (x)
the Rights (unless earlier expired, redeemed or terminated) will be evidenced
(subject to the provisions of Section 3.2) by the certificates for Common
Shares registered in the names of the holders thereof (which certificates for
Common Shares shall also be deemed to be Right Certificates) and not by
separate certificates, and (y) the Rights (and the right to receive
certificates therefor) will be transferable only in connection with the
transfer of the underlying Common Shares. The preceding sentence
notwithstanding, prior to the Distribution Date specified therein (or such
later Distribution Date as the
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Board of Directors of the Company may select pursuant to this sentence), the
Board of Directors of the Company may postpone, one or more times, the
Distribution Date beyond the earlier of the dates set forth in such preceding
sentence; PROVIDED, HOWEVER, that there must be Continuing Directors then in
office and any such postponement shall require the approval of at least a
majority of such Continuing Directors. As soon as practicable after the
Distribution Date, the Rights Agent will send, by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the close of business on
the Distribution Date, at the address of such holder shown on the records of
the Company, one or more certificates for Rights, in substantially the form of
Exhibit B hereto (a "Right Certificate"), evidencing one Right (subject to
adjustment as provided herein) for each Common Share so held. As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
3.2 Summary of Rights. On the Record Date or as soon as
practicable thereafter, the Company will send or cause to be sent a copy of a
Summary of Rights to Purchase Preferred Shares, in substantially the form
attached hereto as Exhibit C (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the close
of business on the Record Date at the address of such holder shown on the
records of the Company. With respect to certificates for Common Shares
outstanding as of the close of business on the Record Date, until the
Distribution Date (or the earlier Redemption Date or Final Expiration Date),
the Rights will be evidenced by such certificates for Common Shares registered
in the names of the holders thereof together with a copy of the Summary of
Rights and the registered holders of the Common Shares shall also be
registered holders of the associated Rights. Until the Distribution Date (or
the earlier Redemption Date or Final Expiration Date), the surrender for
transfer of any certificate for Common Shares outstanding at the close of
business on the Record Date, with or without a copy of the Summary of Rights,
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.
3.3 New Certificates After Record Date. Certificates for
Common Shares which become outstanding (whether upon issuance out of
authorized but unissued Common Shares, issuance out of treasury or transfer or
exchange of outstanding Common Shares) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Final Expiration
Date, shall be deemed also to be certificates for Rights, and shall have
impressed, printed, stamped, written or otherwise affixed onto them the
following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between ResMed, Inc. and American
Stock Transfer & Trust Company, dated as of April 23, 1997, as the same may be
amended 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 ResMed, 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. ResMed,
Inc. will mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor. AS
DESCRIBED IN THE RIGHTS AGREEMENT, RIGHTS WHICH ARE HELD BY OR HAVE BEEN HELD
BY ACQUIRING PERSONS OR ASSOCIATES OR AFFILIATES THEREOF (AS DEFINED IN THE
RIGHTS AGREEMENT) SHALL BECOME NULL AND VOID.
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With respect to such certificates containing the foregoing legend, until the
Distribution Date (or the earlier Redemption Date or Final Expiration Date),
the Rights associated with the Common Shares represented by such certificates
shall be evidenced by such certificates (together with a copy of the Summary
of Rights), and the surrender for transfer of any such certificates shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases or acquires any
Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed cancelled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase Preferred Shares, certification and
assignment to be printed on the reverse thereof) shall be substantially the
same as Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions
of this Rights Agreement, or as may be required to comply with any applicable
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or trading system on which the Rights may
from time to time be listed or quoted, or to conform to usage. Subject to the
terms and conditions hereof, the Right Certificates, whenever issued, shall be
dated as of the Record Date, and shall show the date of countersignature by
the Rights Agent, and on their face shall entitle the holders thereof to
purchase such number of one one-hundredths of a Preferred Share as shall be
set forth therein at the price per one one-hundredth of a Preferred Share set
forth therein (the "Purchase Price"), but the number of such one
one-hundredths of a Preferred Share and the Purchase Price shall be subject to
adjustment as provided herein.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board of Directors, the Chief Executive Officer, President or any Vice
President, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by
the Secretary or any Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned
by an authorized signatory of the Rights Agent, but it shall not be necessary
for the same signatory to countersign all of the Right Certificates hereunder.
No Right Certificate shall be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights
Agent, and issued and delivered by the Company with the same force and effect
as though the person who signed such Right Certificates had not ceased to be
such officer of the Company; and any Right Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement
any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its principal office in Brooklyn, New York, 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, the certificate number of each of the Right Certificates
and the date of each of the Right Certificates.
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Section 6. Transfer, Split Up, Combination and Exchange of Right
Certifi-xxxxx; Mutilated, Destroyed, Lost or Stolen Right Certificates.
Subject to the provisions of Section 11.1.2 and Section 14, at any time
after the close of business on the Distribution Date, and at or prior to the
close of business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates (other than Right
Certificates representing Rights that have become void pursuant to Section
11.1.2 or that have been exchanged pursuant to Section 27) may be
transferred, split up or combined or exchanged for another Right Certificate
or Right Certificates, entitling the registered holder to purchase a like
number of one one-hundredths of a Preferred Share as the Right Certificate or
Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up or combine or exchange any
Right Certificate shall make such request in writing delivered to the Rights
Agent, and shall surrender, together with any required form of assignment and
certificate duly completed, the Right Certificate or Right Certificates to be
transferred, split up or combined or exchanged at the office of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer
of any such surrendered Right Certificate or Right Certificates until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate or Right
Certificates and shall have provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the
Rights Agent shall 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 from the holders of Right Certificates of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up or combination or exchange of such
Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
7.1 Exercise of Rights. Subject to Section 11.1.3 and
except as otherwise provided herein, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase and certification on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the Purchase Price for
each one one-hundredth of a Preferred Share as to which the Rights are
exercised, at or prior to the earliest of (i) the close of business on April
30, 2007 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 (the "Redemption Date"), (iii) the
closing of any merger or other acquisition transaction involving the Company
pursuant to an agreement of the type described in Section 1.3(ii)(A)(2), at
which time the Rights are deemed terminated, or (iv) the time at which the
Rights are exchanged as provided in Section 27.
7.2 Purchase Price. The Purchase Price for each one
one-hundredth of a Preferred Share pursuant to the exercise of a Right shall
initially be $80.00, shall be subject to adjustment from time to time as
provided in Sections 11, 13 and 26 and shall be payable in lawful money of
the United States of America in accordance with Section 7.3.
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7.3 Payment Procedures. Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to purchase and
certification duly executed, accompanied by payment of the Purchase Price for
the shares to be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in accordance with
Section 9, by certified or cashier's check or money order payable to the
order of the Company, the Rights Agent shall thereupon promptly (i)(A)
requisition from any transfer agent of the Preferred Shares (or make
available, if the Rights Agent is the transfer agent) certificates for the
number of Preferred Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of Preferred Shares
issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one one-hundredths of a Preferred Share as are to be purchased (in
which case certificates for the Preferred Shares represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company hereby directs the depositary agent to comply with all such requests,
(ii) when appropriate, requisition from the Company the amount of cash to be
paid in lieu of the issuance of fractional shares in accordance with Section
14, (iii) promptly after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the registered holder
of such Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt, promptly
deliver such cash to or upon the order of the registered holder of such Right
Certificate. In the event that the Company is obligated to issue other
securities of the Company, pay cash and/or distribute other property pursuant
to Section 11.1.3, the Company will make all arrangements necessary so that
such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate.
7.4 Partial Exercise. In case the registered holder of any
Right Certificate shall exercise less than all the Rights evidenced thereby, a
new Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of Section 14.
7.5 Full Information Concerning Ownership. Notwithstanding
anything in this Rights Agreement to the contrary, neither the Rights Agent
nor the Company shall be obligated to undertake any action with respect to a
registered holder of Rights upon the occurrence of any purported exercise as
set forth in this Section 7 unless the certificate contained in the form of
election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise shall have been duly completed and signed by the
registered holder thereof and the Company shall have been provided with such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or to
any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Rights Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Right Certificates to the
Company, or shall, at the written request of the Company, destroy such
cancelled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
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Section 9. Reservation and Avail-ability of Capital Stock. The
Company covenants and agrees that from and after the Distribution Date it will
cause to be reserved and kept available out of its authorized and unissued
Preferred Shares (and, following the occurrence of a Trigger Event, out of its
authorized and unissued Common Shares or other securities or out of its shares
held in its treasury) the number of Preferred Shares (and, following the
occurrence of a Trigger Event, Common Shares and/or other securities) that
will be sufficient to permit the exercise in full of all outstanding Rights.
So long as the Preferred Shares (and, following the occurrence of a
Trigger Event, Common Shares and/or other securities) issuable upon the
exercise of Rights may be listed on any national securities exchange or traded
in the over-the-counter market and quoted on the National Association of
Securities Dealers, Inc. Automated Quotation System ("Nasdaq"), 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 on such
exchange or so traded in such over-the-counter market, upon official notice of
issuance upon such exercise.
The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares (and, following the
occurrence of a Trigger Event, Common Shares and/or other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable
shares.
The Company further covenants and agrees that it will pay when due
and payable any and all Federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any Preferred Shares (or Common Shares and/or other securities, as the case
may be) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates for the Preferred Shares (or Common
Shares and/or other securities, as the case may be) 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 for Preferred
Shares (or Common Shares and/or other securities, as the case may be) in a
name other than that of the registered holder upon the exercise of any Rights
until any such tax shall have been paid (any such tax being payable by the
holder of such Right Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each person in whose
name any certificate for Preferred Shares (or Common Shares and/or other
securities, as the case may be) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the
Preferred Shares (or Common Shares and/or other securities, as the case may
be) represented thereby on, and such certificate shall be dated the date upon
which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
PROVIDED, HOWEVER, that if the date of such surrender and payment is a date
upon which the Preferred Shares (or Common Shares and/or other securities, as
the case may be) transfer books of the Company are closed, such person shall
be deemed to have become the record holder of such shares (fractional or
otherwise) on, and such certificate shall be dated the next succeeding
Business Day on which the Preferred Shares (or Common Shares and/or other
securities, as the case may be) transfer books of the Company are open.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
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11.1 Post Execution Events.
11.1.1 Corporate Dividends, Reclassifications, Etc. In the event
the Company shall at any time after the date of this Rights Agreement (A)
declare a dividend on the Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares into a smaller number of shares or (D) issue any shares of
its capital stock in a reclassification of the Preferred Shares (including any
such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11.1, the Purchase Price in effect at the time of
the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to such date and at
a time when the Preferred Shares transfer books of the Company were open, he
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. If an event
occurs which would require an adjustment under both Section 11.1.1 and
Section 11.1.2, the adjustment provided for in this Section 11.1.1 shall
be in addition to, and shall be made prior to, the adjustment required
pursuant to, Section 11.1.2.
11.1.2 Acquiring Person Events; Triggering Events. Subject to
Sections 23.1 and 27 of this Agreement, in the event
(A) any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, at any time after the date of this Rights Agreement,
directly or indirectly, shall merge into the Company or otherwise combine with
the Company and the Company shall be the continuing or surviving corporation
of such merger or combination and the Common Shares of the Company shall
remain outstanding and not changed into or exchanged for stock or other
securities of any other Person or the Company or cash or any other property,
or
(B) that a Trigger Event occurs,
then, from and after the first occurrence of such event, each holder of a
Right, except as provided below, shall thereafter have a right to receive,
upon exercise thereof at a price per Right equal to the then current Purchase
Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable (without giving effect to this Section
11.1.2), in accordance with the terms of this Rights Agreement, such number
of Common Shares as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of one one-hundredths of a
Preferred Share for which a Right is then exer-cis-able (without giving effect
to this Section 11.1.2) and (y) dividing that product by 50% of the current
per share market price of the Common Shares (determined pursuant to Section
11.4) on the first of the date of the occurrence of, or the date of the first
public announcement of, one of the events listed above in this Section
11.1.2 (the "Adjust-ment Shares"); PROVIDED, HOWEVER, that if the transaction
that would otherwise give rise to the fore-going adjustment is also sub-ject
to the provisions of Section 13, then only the provisions of Section 13
shall apply and no adjustment shall be made pursuant to this Section 11.1.2;
PROVIDED, FURTHER, that nothing contained in this Section 11.1.2 shall limit
or otherwise diminish the power of the Board of Directors (or, if applicable,
the Continuing Directors) to postpone the Distribution Date pursuant to
Section 3.1 or to extend the period during which the Rights may be redeemed
pursuant to Section 23.1; PROVIDED, FURTHER, that the Purchase Price and the
number of Adjustment Shares shall thereafter be subject to further adjustment
pursuant to Section 11.1.1 hereof. Notwithstanding the foregoing, upon the
occurrence of either of the events listed above in this Section 11.1.2, any
Rights that are or were acquired or beneficially owned by (1) an Acquiring
Person or any Associate or Affiliate thereof, (2) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
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the Acquiring Person becomes such, or (3) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
avoidance of this Section 11.1.2, shall become void, and any holder (whether
or not such holder is an Acquiring Person or an Associate or Affiliate of an
Acquiring Person) of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Rights Agreement or otherwise. The
Company shall not enter into any transaction of the type described in this
Section 11.1.2 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any arrangements which, as
a result of the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the Rights.
Any Right Certif-i-cate issued pursuant to Section 3 or Section 22 that
repre-sents Rights beneficially owned by: (1) an Acquiring Person or any
Associate or Affiliate thereof, (2) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (3) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any
Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
avoidance of this Section 11.1.2, and any Right Certificate issued pursuant
to Section 6, 7.4 or 22 or this Section 11 upon transfer, ex-change,
replacement or adjustment of any other Right Certificate referred to in this
sen-tence, shall contain the following legend (PROVIDED, HOWEVER, that the
Rights Agent shall not be responsible for affixing such legend unless it has
actual knowledge as to the foregoing circumstances or the Company has notified
the Rights Agent in writing thereof):
THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE HELD OR HAVE
BEEN HELD BY A PERSON WHO IS OR WAS AN ACQUIRING PERSON OR AN AFFILIATE OR AN
ASSOCIATE OF AN ACQUIRING PERSON OR A NOMINEE THEREOF. THIS RIGHT CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY HAVE BECOME NULL AND VOID AS SPECIFIED IN
SECTION 11.1.2 OF THE RIGHTS AGREEMENT.
The Company shall use all reasonable efforts to insure that the
provisions of this Section 11.1.2 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 any Acquiring Person or
its Affiliates, Associates or transferees hereunder.
11.1.3 Insufficient Shares. In the event that upon the
occurrence of one or more of the events listed in Section 11.1.2 above there
shall not be sufficient Common Shares authorized but unissued, or held by the
Company as treasury shares, to permit the exercise in full of the Rights in
accordance with the foregoing Section 11.1.2, the Company shall take all
such action as may be necessary to authorize additional Common Shares for
issuance upon exercise of the Rights, PROVIDED, HOWEVER, that if the Company
determines that it is unable to cause the authorization of a sufficient number
of additional Common Shares, then, in the event the Rights become exercisable,
the Company, with respect to each Right and to the extent necessary and
permitted by applicable law and any agreements or instruments in effect on the
date hereof to which it is a party, shall: (A) determine the excess of (1)
the value of the Adjustment Shares issuable upon the exercise of a Right (the
"Current Value"), over (2) the Purchase Price (such excess, the "Spread") and
(B) with respect to each Right,
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make adequate provision to substitute for the Adjustment Shares, upon payment
of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Common Shares or other equity securities of the Company (including,
without limitation, shares, or units of shares, of preferred stock which the
Board of Directors of the Company has deemed to have the same value as Common
Shares) (each such share of preferred stock constituting a "common stock
equivalent")), (4) debt securities of the Company, (5) other assets or (6) any
combination of the foregoing having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board of
Directors of the Company based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of the Company;
PROVIDED, HOWEVER, that if the Company shall not have made adequate provision
to deliver value pursuant to clause (B) above within thirty (30) days
following the first occurrence of one of the events listed in Section 11.1.2
above, then the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase Price,
Common Shares (to the extent available) and then, if necessary, cash, which in
the aggregate are equal to the Spread. If the Board of Directors of the
Company shall determine in good faith that it is unlikely that sufficient
additional Common Shares could be authorized for issuance upon exercise in
full of the Rights, the thirty (30) day period set forth above may be extended
and re-extended to the extent necessary, but not more than ninety (90) days
following the first occurrence of one of the events listed in Section 11.1.2
above, in order that the Company may seek stockholder approval for the
authorization of such additional shares (such period as may be extended, the
"Substitution Period"). To the extent that the Company determines that some
action need be taken pursuant to the first and/or second sentences of this
Section 11.1.3, the Company (x) shall provide that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek
any authorization of additional shares and/or to decide the appropriate form
of distribution to be made pursuant to such first sentence and to determine
the value 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 11.1.3,
the value of a Common Share shall be the current per share market price (as
determined pursuant to Section 11.4) on the date of the first occurrence of
one of the events listed in Section 11.1.2 above and the value of any
"common stock equivalent" shall be deemed to have the same value as the Common
Shares on such date.
11.2 Dilutive Rights Offering. In case the Company shall fix a
record date for the issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Shares (or
securities having the same rights, privileges and preferences as the Preferred
Shares ("equivalent preferred stock")) or securities convertible into
Preferred Shares or equivalent preferred stock at a price per share of
Preferred Shares or per share of equivalent preferred stock (or having a
conversion or exercise price per share, if a security convertible into or
exercisable for Preferred Shares or equivalent preferred stock) less than the
current per share market price of the Preferred Shares (as defined in Section
11.4) on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of Preferred Shares outstanding on such record date plus
the number of Preferred Shares which the aggregate offering price of the total
number of Preferred Shares and/or equivalent preferred stock to be offered
(and/or the aggregate initial conversion price of the convertible securities
so to be offered) would purchase at such current per share market price and
the denominator of which shall be the number of Preferred Shares outstanding
on such record date plus the number of additional Preferred Shares and/or
equivalent preferred stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible).
In case such subscription price may be paid in a consideration part or all of
which shall be in a form other than cash, the value of such consideration
shall be as determined in good faith by the
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Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Preferred Shares owned by or held for
the account of the Company or any Subsidiary of the Company shall not be
deemed outstanding for the purpose of any such computation. Such
adjustments shall be made successively whenever such a record date is fixed;
and in the event that such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
11.3 Distributions. In case the Company shall fix a record date
for the making of a distribution to all holders of the Preferred Shares
(including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness, cash, securities or assets (other than a regular
periodic cash dividend at a rate not in excess of 125% of the rate of the last
regular periodic cash dividend theretofore paid or, in case regular periodic
cash dividends have not theretofore been paid, at a rate not in excess of 50%
of the average net income per share of the Company for the four quarters ended
immediately prior to the payment of such dividend, or a dividend payable in
Preferred Shares (which dividend, for purposes of this Agreement, shall be
subject to the provisions of Section 11.1.1(A) hereof)) or convertible
securities, or subscription rights or warrants (excluding those referred to in
Section 11.2), 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
current per share market price of the Preferred Shares (as defined in Section
11.4) 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
cash, assets, securities or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to one Preferred Share and
the denominator of which shall be such current per share market price of the
Preferred Shares. Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
11.4 Current Per Share Market Value.
11.4.1 General. For the purpose of any computation hereunder,
the "current per share market price" of any security (a "Security" for the
purpose of this Section 11.4.1) on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the thirty
(30) consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; PROVIDED, HOWEVER, that in the event that the
current per share market price of the Security is determined during any period
following the announcement by the issuer of such Security of (i) a dividend or
distribution on such Security payable in shares of such Security or securities
convertible into such shares or (ii) any subdivision, combination or
reclassifi-cation of such Security, and prior to the expiration of thirty (30)
Trading Days after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification, then,
and in each such case, the "current per share market price" shall be
appropriately adjusted to reflect the current market price per share
equivalent of such Security. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the 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 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
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Security selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Security, the fair value
of the Security on such date as determined in good faith by the Board of
Directors of the Company shall be used. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which the 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. If the Security is not publicly held
or not so listed or traded, "current per share market price" shall mean the
fair value per share as determined in good faith by the Board of Directors of
the Company or, if at the time of such determination there is an Acquiring
Person, by a majority of the Continuing Directors then in office, or if there
are no Continuing Directors, by a nationally recognized investment banking
firm selected by the Board of Directors, which shall have the duty to make
such determination in a reasonable and objective manner, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
11.4.2 Preferred Shares. Notwithstanding Section 11.4.1, for
the purpose of any computation hereunder, the "current per share market price"
of the Preferred Shares shall be determined in the same manner as set forth
above in Section 11.4.1 (other than the last sentence thereof). If the
current per share market price of the Preferred Shares cannot be determined in
the manner described in Section 11.4.1, the "current per share market price"
of the Preferred Shares shall be conclusively deemed to be an amount equal to
100 (as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common
Shares occurring after the date of this Agreement) multiplied by the current
per share market price of the Common Shares. If neither the Common Shares nor
the Preferred Shares is publicly held or so listed or traded, "current per
share market price" of the Preferred Shares shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company,
or, if at the time of such determination there is an Acquiring Person, by a
majority of the Continuing Directors then in office, or if there are no
Continuing Directors, by a nationally recognized investment banking firm
selected by the Board of Directors of the Company, which shall have the duty
to make such determination in a reasonable and objective manner, which
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes. For purposes of this Agreement, the
"current per share market price" of one one-hundredth of a Preferred Share
shall be equal to the "current per share market price" of one Preferred Share
divided by 100.
11.5 Insignificant Changes. No adjustment in the Purchase Price
shall be required unless such adjustment would require an increase or decrease
of at least 1% in such price. Any adjustments which by reason of this
Section 11.5 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-millionth
of a Preferred Share or the nearest ten-thousandth of a Common Share, as the
case may be.
11.6 Shares Other Than Preferred Shares. If as a result of an
adjustment made pursuant to Section 11.1, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock of the
Company other than Preferred Shares, thereafter the number of such other
shares so receivable upon exercise of any Right shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Preferred Shares contained in Sections
11.1 through 11.3, inclusive, and the provisions of Sections 7, 9, 10 and
13 with respect to the Preferred Shares shall apply on like terms to any such
other shares.
11.7 Rights Issued Prior to Adjustment. All Rights originally
issued by the Company subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the adjusted Purchase
Price, the number of one one-hundredths of a Preferred Share purchasable from
time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
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11.8 Effect of Adjustments. Unless the Company shall have
exercised its election as provided in Section 11.9, upon each adjustment of
the Purchase Price as a result of the calculations made in Sections 11.2 and
11.3, each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a Preferred Share
(calculated to the nearest one-millionth of a Preferred Share) obtained by (i)
multiplying (x) the number of one one-hundredths of a Preferred Share covered
by a Right immediately prior to this adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
11.9 Adjustment in Number of Rights. The Company may elect on or
after the date of any adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number of one one-hundredths
of a Preferred Share issuable upon the exercise of a Right. Each of the
Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-hundredths of a Preferred Share for
which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11.9, the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14, the additional Rights to which such holders shall be entitled as
a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for
the Right Certificates held by such holders prior to the date of adjustment,
and upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
11.10 Right Certificates Unchanged. Irrespective of any
adjustment or change in the Purchase Price or the number of one one-hundredths
of a Preferred Share issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of one one-hundredths of a Preferred
Share which were expressed in the initial Right Certificates issued hereunder.
11.11 Par Value Limitations. Before taking any action that would
cause an adjustment reducing the Purchase Price below one one-hundredth of the
then par value, if any, of the Preferred Shares issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Preferred Shares at such adjusted Purchase
Price.
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11.12 Deferred Issuance. In any case in which this Section 11
shall require that an adjustment in the Purchase Price be made effective as of
a record date for a specified event, the Company may elect to defer until the
occurrence of such event the issuing to the holder of any Right exercised
after such record date of the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; PROVIDED, HOWEVER, that the Company shall deliver to
such holder a due xxxx or other appropriate instrument evidencing such
holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment.
11.13 Reduction in Purchase Price. Anything in this Section 11
to the contrary notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any consolidation or
subdivision of the Preferred Shares, issuance wholly for cash of any of the
Preferred Shares at less than the current market price, issuance wholly for
cash of Preferred Shares or securities which by their terms are convertible
into or exchangeable for Preferred Shares, dividends on Preferred Shares
payable in Preferred Shares or issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the Company to
holders of its Preferred Shares shall not be taxable to such stockholders.
11.14 The Company covenants and agrees that after the Distribution
Date it will not, except as permitted by Section 23 or Section 26, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
11.15 Notwithstanding anything contained in this Agreement to the
contrary, in the event that the Company shall at any time after the date
hereof and prior to the Distribution Date (i) declare or pay any dividend on
the outstanding Common Shares payable in Common Shares, (ii) effect a
subdivision or consolidation of the outstanding Common Shares (by
reclassification or otherwise than by the payment of dividends payable in
Common Shares), or (iii) combine the outstanding Common Shares into a greater
or lesser number of Common Shares, then in any such case, the number of Rights
associated with each Common Share then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be proportionately
adjusted so that the number of Rights thereafter associated with each Common
Share following any such event shall equal the result obtained by multiplying
the number of Rights associated with each Common Share immediately prior to
such event by a fraction, the numerator of which shall be the total number of
Common Shares outstanding immediately prior to the occurrence of the event and
the denominator of which shall be the total number of Common Shares
outstanding immediately following the occurrence of such event. The
adjustments provided for in this Section 11.15 shall be made successively
whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and 13,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Shares or the Preferred Shares a copy of such certificate and (c) mail
a brief summary thereof to each holder of a Right Certificate in accordance
with Section 25. 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.
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Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
13.1 General. In the event that, from and after the first
occurrence of a Trigger Event, directly or indirectly, (A) the Company shall
consolidate with, or merge with and into, any other Person and the Company
shall not be the continuing or surviving corporation, (B) any Person shall
consolidate with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger and,
in connection with such merger, all or part of the Common Shares shall be
changed into or exchanged for stock or other securities of the Company or any
other Person or cash or any other property, or (C) the Company shall sell,
exchange, mortgage or otherwise transfer (or one or more of its Subsidiaries
shall sell, exchange, mortgage 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 or Persons, then, and in each such case, proper provision shall
be made so that (i) each holder of a Right (except as provided in Section
11.1.2 and as otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof at a price per Right equal to the then
current Purchase Price multiplied by the number of one one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to the
first occurrence of a Trigger Event (as subsequently adjusted pursuant to
Sections 11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12), in accordance with the
terms of this Rights Agreement and in lieu of Preferred Shares, such number of
Common Shares of such other Person (including the Company as successor thereto
or as the surviving corporation) as shall be equal to the result obtained by
(x) multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of a Trigger Event (as subsequently
adjusted pursuant to Sections 11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12) and
(y) dividing that product by 50% of the then current per share market price of
the Common Shares of such other Person (determined pursuant to Section 11.4)
on the date of consummation of such consolidation, merger, sale or transfer;
PROVIDED, that the price per Right so payable and the number of Common Shares
of such Person so purchasable shall thereafter be adjusted in accordance with
Sections 11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12 by reason of such
subsequent events covered thereby occurring in respect of such Person; (ii)
the issuer of such Common Shares shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Rights Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such issuer; and
(iv) such issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in accordance with
Section 9) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable
upon the exercise of the Rights. The Company shall not enter into any
transaction of the kind referred to in this Section 13 if at the time of
such transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or substantially diminish
the benefits intended to be afforded by the Rights. The Company shall not
consummate any such consolidation, merger, sale or transfer unless prior
thereto the Company and such issuer shall have executed and delivered to the
Rights Agent a supplemental agreement so providing. The provisions of this
Section 13 shall similarly apply to successive mergers or consolidations or
sales or other transfers.
13.2 Approved Acquisitions. Notwithstanding anything contained
herein to the contrary, in the event of any merger or other acquisition
transaction involving the Company pursuant to a merger or other acquisition
agreement between the Company and any Person (or one or more of such Person's
Affiliates or Associates) which agreement has been approved by the Board of
Directors of the Company prior to any Person becoming an Acquiring Person,
this Rights Agreement and the rights of holders of Rights hereunder shall be
terminated in accordance with Section 7.1.
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Section 14. Fractional Rights and Fractional Shares.
14.1 Cash in Lieu of Fractional Rights. The Company shall not be
required to issue fractions of Rights or to distribute Right Certificates
which evidence fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Right Certificates with regard
to which such fractional Rights would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole Right. For
the purposes of this Section 14.1, 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 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.
14.2 Cash in Lieu of Fractional Shares. The Company shall not be
required to issue fractions of Preferred Shares (other than fractions which
are integral multiples of one one-hundredth of a Preferred Share) upon
exercise of the Rights or to distribute certificates which evidence fractional
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share). Fractions of Preferred Shares in
integral multiples of one one-hundredth of a Preferred Share may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it;
PROVIDED, that such agreement shall provide that the holders of such
depositary receipts shall have all the rights, privileges and preferences to
which they are entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred
Shares that are not integral multiples of one one-hundredth of a Preferred
Share, the Company shall pay to the registered holders of Right Certificates
at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current per share market price of one
Preferred Share. For purposes of this Section 14.2, the current per share
market price of a Preferred Share shall be the closing price of a Preferred
Share (as determined pursuant to the second sentence of Section 11.4.2) for
the Trading Day immediately prior to the date of such exercise.
14.3 Waiver of Right to Receive Fractional Rights or Shares. The
holder of a Right by the acceptance of the Rights expressly waives his right
to receive any fractional Rights or any fractional shares upon exercise of a
Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of
this Rights Agreement, except the rights of action given to the Rights Agent
under Section 18, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares), may,
in his own behalf and for his own benefit, enforce this Rights Agreement, and
may institute and maintain any suit, action or proceeding against the Company
to enforce this Rights Agreement, or otherwise enforce or act in respect of
his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in
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such Right Certificate and in this Rights 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 Rights Agreement and shall be
entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of, the obligations of any
Person (including, without limitation, the Company) subject to this Rights
Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right
by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) as of and after the Distribution Date, the Right
Certificates are transferable only on the registry books of the Rights Agent
if surrendered at the office of the Rights Agent designated for such purpose,
duly endorsed or accompanied by a proper instrument of transfer with all
required certifications completed; and
(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 associated Common Shares certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the associated
Common Shares certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 24), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder in accordance with a fee schedule to be mutually agreed upon 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 Rights Agreement and the exercise and performance of its
duties hereunder. The Company also agrees to indemnify the Rights Agent for,
and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Rights Agreement, including the costs
and expenses of defending against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Rights Agreement in reliance upon any Right
Certificate or certificate for the Preferred Shares or the Common Shares or
for other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, instruction,
direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons.
-20-
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Rights Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto, PROVIDED that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21. In case at the time such successor Rights Agent
shall succeed to the agency created by this Rights 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 Rights Agreement.
In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in its prior name
or in its changed name; and in all such cases such Right Certificates shall
have the full force provided in the Right Certificates and in this Rights
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Rights Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
20.1 Legal Counsel. The Rights Agent may consult with legal
counsel selected by it (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
20.2 Certificates as to Facts or Matters. Whenever in the
performance of its duties under this Rights 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 Chief Executive Officer, the President, the Chief Financial
Officer, any Vice President, the Treasurer, the Secretary or any Assistant
Treasurer or Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the provisions of
this Rights Agreement in reliance upon such certificate.
20.3 Standard of Care. The Rights Agent shall be liable
hereunder only for its own negligence, bad faith or willful misconduct.
20.4 Reliance on Rights Agreement and Right Certificates. The
Rights Agent shall not be liable for or by reason of any of the statements of
fact or recitals contained in this Rights Agreement or in the Right
Certificates (except as to 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.
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20.5 No Responsibility as to Certain Matters. The Rights Agent
shall not be under any responsibility in respect of the validity of this
Rights Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Rights Agreement or in any Right Certificate; nor
shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11.1.2) or any
adjustment required under the provisions of Sections 3, 11, 13, 23 or 27 or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Preferred Shares to be issued pursuant to this Rights
Agreement or any Right Certificate or as to whether any Preferred Shares will,
when so issued, be validly authorized and issued, fully paid and
nonassessable.
20.6 Further Assurance by Company. The Company agrees that it
will perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights Agent
for the carrying out or performing by the Rights Agent of the provisions of
this Rights Agreement.
20.7 Authorized Company Officers. The Rights Agent is hereby
authorized and directed to accept instructions with respect to the performance
of its duties hereunder from any one of the Chairman of the Board of
Directors, the Chief Executive Officer, the President, the Chief Financial
Officer, any Vice President, the Treasurer, the Secretary or any Assistant
Treasurer or Assistant Secretary of the Company, and to apply to such officers
for advice or instructions in connection with its duties under this Rights
Agreement, and it shall not be liable for any action taken or suffered to be
taken by it in good faith in accordance with instructions of any such officer
or for any delay in acting while waiting for these 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 with respect to its duties or
obligations under this Rights Agreement and the date on and/or after which
such action shall be taken or omitted. The Rights Agent shall not be liable
to the Company for any action taken or omitted in accordance with a proposal
included in any such application on or after the date specified therein (which
date shall not be less than three business days after the date any such
officer actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking of any such
action (or the effective date in the case of omission), the Rights Agent shall
have received written instructions in response to such application specifying
the action to be taken or omitted.
20.8 Freedom to Trade in Company Securities. The Rights Agent
and any stockholder, director, officer or employee of the Rights Agent may
buy, sell or deal in any of the Rights or other securities of the Company or
become pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this Rights
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
20.9 Reliance on Attorneys and Agents. The Rights Agent may
execute and exercise any of the rights or powers hereby vested in it or
perform any duty hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or accountable for any
act, omission, default, neglect or misconduct of any such attorneys or agents
or for any loss to the Company resulting from any such act, omission, default,
neglect or misconduct, PROVIDED that reasonable care was exercised in the
selection and continued employment thereof.
-22-
20.10 Rights Holders List. At any time and from time to time
after the Distribution Date, upon the request of the Company, the Rights Agent
shall promptly deliver to the Company a list, as of the most recent
practicable date (or as of such earlier date as may be specified by the
Company), of the holders of record of Rights.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon thirty (30) days' notice in writing mailed to the
Company and to each transfer agent of the Common Shares and/or Preferred
Shares, as applicable, by registered or certified mail. The Company shall
promptly notify the holders of the Right Certificates by first-class mail of
any such resignation. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares and/or Preferred Shares, as applicable, by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the resigning, removed, or incapacitated
Rights Agent shall remit to the Company, or to any successor Rights Agent
designated by the Company, all books, records, funds, certificates or other
documents or instruments of any kind then in its possession which were
acquired by such resigning, removed or incapacitated Rights Agent in
connection with its services as Rights Agent hereunder, and shall thereafter
be discharged from all duties and obligations hereunder. Following notice of
such removal, resignation or incapacity, the Company shall appoint a successor
to such Rights Agent. If the Company shall fail to make such appointment
within a period of thirty (30) days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of the State of
California or the State of New York (or any other state of the United States
so long as such corporation is authorized to do business as a banking
institution in the State of California or the State of New York) in good
standing, having a principal office in the State of California or the State of
New York, which is authorized under such laws to exercise stock transfer or
corporate trust powers and is subject to supervision or examination by Federal
or state authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $10 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 Shares and/or Preferred Shares, as applicable, and mail a notice
thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Rights Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the 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 Rights Agreement.
In addition, in connection with the issuance or sale of Common Shares
following the Distribution Date and prior to the redemption, exchange,
termination or expiration of the Rights, the Company (a) shall, with respect
to Common Shares so issued or sold pursuant to the exercise of stock options
or under any employee plan or arrangement, granted or awarded as of the
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Distribution Date, or upon exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; PROVIDED, HOWEVER, that (i) no such Right Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Right Certificate
would be issued, (ii) no such Right Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof and (iii) at the time of a determination by the Board of
Directors to cause the Company to issue a Right Certificate under clause (b)
above, there must be Continuing Directors then in office and any such
determination shall require the approval of at least a majority of such
Continuing Directors.
Section 23. Redemption.
23.1 Right to Redeem. The Board of Directors of the Company may,
at its option, at any time prior to the close of business on the tenth day
following the Shares Acquisition Date, 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, recapitalization or
similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price") PROVIDED, HOWEVER,
that if the Board of Directors of the Company authorizes redemption of the
Rights after the time a Person becomes an Acquiring Person, then there must be
Continuing Directors then in office and such authorization shall require the
approval of at least a majority of such Continuing Directors. The preceding
sentence notwithstanding, prior to the expiration of the period during which
the Rights may be redeemed as specified therein (or such longer period as the
Board of Directors of the Company may select pursuant to this sentence), the
Board of Directors of the Company may extend, one or more times, the period
during which the Rights may be redeemed beyond the close of business on the
tenth day following the Shares Acquisition Date; PROVIDED, HOWEVER, that there
must be Continuing Directors then in office and any such extension shall
require the approval of at least a majority of such Continuing Directors.
Anything contained in this Rights Agreement to the contrary notwithstanding,
the Rights shall not be exercisable following a transaction or event described
in Section 11.1.2 prior to the expiration of the Company's right of
redemption hereunder.
23.2 Redemption Procedures. Immediately upon the action of the
Board of Directors of the Company ordering the redemption of the Rights, and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so held. Within ten
(10) days after the action of the Board of Directors ordering the redemption
of the Rights, the Company shall give, or cause the Rights Agent to give,
notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Shares. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be
made. Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any manner other than
that specifically set forth in this Section 23 or in Section 27, and other
than in connection with the purchase, acquisition or redemption of Common
Shares prior to the Distribution Date.
Section 24. Notice of Certain Events. In case the Company shall
propose at any time after the Distribution Date (a) to pay any dividend
payable in stock of any class to the holders of Preferred Shares or to make
any other distribution to the holders of Preferred Shares (other than a
regular periodic cash dividend at a rate not in excess of 125% of the rate of
the last regular periodic cash dividend theretofore paid or, in case regular
periodic cash dividends have not theretofore been paid, at a
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rate not in excess of 50% of the average net income per share of the Company
for the four quarters ended immediately prior to the payment of such
dividends, or a stock dividend on, or a subdivision, combination or
reclassification of the Common Shares), or (b) to offer to the holders of
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, or (c) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of out-standing Preferred Shares), or (d) to effect any consolidation or
merger into or with, or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other transfer), in one or
more trans-actions, of 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person (other
than pursuant to a merger or other acquisition agreement of the type described
in Section 1.3(ii)(A)(2)), or (e) to effect the liquidation, dissolu-tion or
winding up of the Company, or (f) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares), then, in each such case, the Company
shall give to the Rights Agent and to each holder of a Right Certificate, in
accordance with Section 25, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
dis-tribu-tion of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Preferred Shares and/or Common Shares, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (a) or (b) above at least ten (10) days prior to the
record date for determining holders of the Preferred Shares for purposes of
such action, and in the case of any such other action, at least ten (10) days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Preferred Shares and/or Common
Shares, whichever shall be the earlier.
In case any event set forth in Section 11.1.2 of this Rights
Agreement shall occur, then, in any such case, (i) the Company shall as soon
as practicable thereafter give to the Rights Agent and to each holder of a
Right Certificate, in accordance with Section 25, a notice of the occurrence
of such event, which notice shall describe the event and the consequences of
the event to holders of Rights under Section 11.1.2, and (ii) all references
in this Section 24 to Preferred Shares shall be deemed thereafter to refer
to Common Shares and/or, if appropriate, other securities.
Notwithstanding anything in this Rights Agreement to the contrary,
prior to the Distribution Date a filing by the Company with the Securities and
Exchange Commission shall constitute sufficient notice to the holders of
securities of the Company, including the Rights, for purposes of this Rights
Agreement and no other notice need be given.
Section 25. Notices. Notices or demands authorized by this
Rights 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:
ResMed, Inc.
00 Xxxxxxxx Xxxx
Xxxxx Xxxx
Xxx Xxxxx Xxxxx 0000, Xxxxxxxxx
Attention: Xxxxxx Xxxxxxx
and
ResMed, Inc.
0000 Xxxxxxx Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. XxXxxx
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Subject to the provisions of Section 21, any notice or demand authorized by
this Rights 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:
American Stock Transfer & Trust Company
0000 00xx Xxxxxx
1st Floor/Inside Delivery
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate (or,
prior to the Distribution Date, to the holder of any certificate representing
Common Shares) 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 26. Supplements and Amendments. Prior to the
Distribution Date and subject to the last sentence of this Section 26, the
Company and the Rights Agent may, if the Company so directs, supplement or
amend any provision of this Rights Agreement without the approval of any
holders of certificates representing Common Shares. From and after the
Distribution Date and subject to the last sentence of this Section 26, the
Company and the Rights Agent may from time to time supplement or amend this
Rights Agreement without the approval of any holders of Right Certificates (i)
to cure any ambiguity or to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions
herein, (ii) to shorten or lengthen any time period hereunder (which
shortening or lengthening, after the time a Person becomes an Acquiring
Person, shall be effective only if there are Continuing Directors and shall
require the approval of at least a majority of such Continuing Directors) or
(iii) so long as the interests of the holders of the Right Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person)
are not adversely affected thereby, to make any other changes or provisions in
regard to matters or questions arising hereunder which the Company and the
Rights Agent may deem necessary or desirable, including but not limited to
extending the Final Expiration Date; PROVIDED, HOWEVER, that the right of the
Board of Directors to extend the Distribution Date or Redemption Date shall
not require any amendment or supplement hereunder. Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this
Section 26, the Rights Agent shall execute such supplement or amendment.
Prior to the Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common Shares.
Without limiting the foregoing, at any time prior to such time as any Person
becomes an Acquiring Person, the Company and the Rights Agent may amend this
Agreement to lower the thresholds set forth in Sections 1.1 and 3.1 to not
less than the greater of (i) any percentage greater than the largest
percentage of the outstanding Common Shares then known by the Company to be
beneficially owned by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to the terms of
any such plan) and (ii) 10%.
Section 27. Exchange.
27.1 Exchange of Common Shares for Rights. The Board of
Directors of the Company may, at its option, at any time after the occurrence
of a Trigger Event, exchange Common Shares for all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 11.1.2) by exchanging that
number of Common Shares having an aggregate value equal to the Spread (with
such value being based on the current per share market
-26-
price (as determined pursuant to Section 11.4) on the date of the occurrence
of a Trigger Event) per Right, appro-priately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such amount per Right being hereinafter referred to as the "Exchange
Consideration"). Notwithstanding the foregoing, (i) the Board of Directors
shall not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity holding Common
Shares for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50%
or more of the Common Shares then outstanding and (ii) the Board shall not be
empowered to effect an exchange for more than that number of Rights for which
there are sufficient Common Shares authorized but unissued, or held by the
Company as treasury shares, to permit the exchange for Rights.
27.2 Exchange Procedures. Immediately upon the action of the
Board of Directors of the Company ordering the exchange for any Rights
pursuant to Section 27.1 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
Common Shares equal to the number of such Rights held by such holder
multiplied by the Exchange Consideration. The Company shall promptly give
public notice of any such exchange; PROVIDED, HOWEVER, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the Common Shares for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than the Rights which have become void pursuant to the
provisions of Section 11.1.2) held by each holder of Rights.
27.3 No Fractional Shares Upon Exchange. The Company shall not
be required to issue fractions of Common Shares or to distribute certificates
which evidence fractional Common Shares. In lieu of such fractional Common
Shares, the Company shall pay to the registered holders of the Right
Certificates, with regard to which such fractional Common Shares would
otherwise be issuable, in an amount in cash equal to the same fraction of the
current market value of a whole Common Share. For the purposes of this
Section 27.3, the current market value of a whole Common Share shall be the
current per share market price (as determined pursuant to Section 11.4) for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 27.
Section 28. Successors. All the covenants and provisions of this
Rights 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 Rights Agreement. Nothing in this
Rights Agreement shall be construed to give to any Person or corporation other
than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) any
legal or equitable right, remedy or claim under this Rights Agreement; but
this Rights Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Shares).
Section 30. Severability. If any term, provision, covenant or
restriction of this Rights 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 Rights
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
-27-
Section 31. Governing Law. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 32. Counterparts. This Rights 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 Heading. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of the
provisions hereof.
[Signature Page to Follow]
-28-
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed, all as of the day and year first above written.
RESMED, INC.,
a Delaware corporation
By /S/ XX. XXXXX X XXXXXXX
Name: Xx. Xxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
[SEAL]
AMERICAN STOCK TRANSFER & TRUST COMPANY,
a New York corporation
By /S/ J WOLF
Name: J Wolf
Title: Vice President
[SEAL]
-29-
EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
RESMED, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
_____________________________
RESMED, INC., a corporation organized and existing under the General
Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on April 15, 1997.
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the
Certificate of Incorporation, the Board of Directors hereby creates a series
of Preferred Stock, par value $.01 per share (the "Preferred Stock"), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 150,000. 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 Corporation
convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) 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 $.004 per share (the "Common Stock"), of the Corporation, and of any
other junior stock, shall be entitled to receive, when, as and if declared by
the Board of
A-1
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the first day of March, June, September and December in
each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly 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) $1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 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 a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since
the immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision, 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.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section 2
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 Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share
on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date
of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60
days prior to the date fixed for the payment thereof.
A-2
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or effect
a subdivision, 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 event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock, or
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 Corporation having
general voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(C) 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.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, 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 Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
A-3
(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 with the Series A Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
(B) The Corporation shall not permit any Subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Certificate of Incorporation, or in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock or
as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either as
to dividends or 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 $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount 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 (either as to dividends or 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 the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision, 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 are outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each
share of Series A Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100
A-4
times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision, 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 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.
Section 8. No Redemption. The shares of Series A Preferred Stock
shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of the Corporation's Preferred Stock, except to
the extent that any such other series specifically provides that it shall rank
on a parity with or junior to the Series A Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the
holders of at least two-thirds of the outstanding shares of Series A Preferred
Stock, voting together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its Chairman of the Board and attested by its
Secretary this 29th day of April, 1997.
/S/ XX XXXXX X XXXXXXX
Chairman of the Board
Attest:
/S/ XXXXXX XXXXXXX
Secretary
A-5
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER April 30, 2007 OR EARLIER IF NOTICE OF REDEMPTION
OR EXCHANGE IS GIVEN OR IF THE COMPANY IS MERGED OR ACQUIRED PURSUANT TO AN
AGREEMENT OF THE TYPE DESCRIBED IN SECTION 1.3(ii)(A)(2) OF THE RIGHTS
AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 11.1.2 OF THE RIGHTS
AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON, OR ITS
AFFILIATES OR ASSOCIATES, OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE HELD OR HAVE
BEEN HELD BY A PERSON WHO IS OR WAS AN ACQUIRING PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON OR A NOMINEE THEREOF. THIS RIGHT CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY HAVE BECOME NULL AND VOID AS SPECIFIED IN
SECTION 11.1.2 OF THE RIGHTS AGREEMENT.
Right Certificate
RESMED, 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 April 23, 1997, as the same
may be amended from time to time (the "Rights Agreement"), between ResMed,
Inc., a Delaware corporation (the "Company"), and American Stock Transfer &
Trust Company, a New York corporation, as Rights Agent (the "Rights Agent"),
to purchase from the Company at any time after the Distribution Date and prior
to 5:00 P.M. (New York City time) on April 30, 2007, at the offices of the
Rights Agent, or its successors as Rights Agent, designated for such purpose,
one one-hundredth of a fully paid, nonassessable share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the "Preferred
Shares") of the Company, at a purchase price of $80.00 per one one-hundredth
of a share, subject to adjustment (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
and certification duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths of a Preferred Share which
may be purchased upon exercise thereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of April 30, 1997
based on the Preferred Shares as constituted at such date. Capitalized terms
used in this Right Certificate without definition shall have the meanings
ascribed to them in the Rights Agreement. As provided in the Rights
Agreement, the Purchase Price and the number of Preferred Shares which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain
events.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal offices of the
Company and the Rights Agent.
B-1
This Right Certificate, with or without other Right Certificates,
upon surrender at the offices 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 one one-hundredths of a Preferred Share 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 Board of
Directors may, at its option, (i) redeem the Rights evidenced by this Right
Certificate at a redemption price of $.01 per Right at any time prior to ten
(10) days after the Shares Acquisition Date or (ii) exchange Common Shares for
the Rights evidenced by this Certificate, in whole or in part, after the
occurrence of a Trigger Event. The period during which redemption of the
Rights is permitted may be extended by the Board of Directors of the Company,
but such an extension shall require the concurrence of a majority of the
Continuing Directors. Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the concurrence of a majority
of the Continuing Directors.
No fractional Preferred Shares will be issued upon the exercise of
any Right or Rights evidenced hereby, 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 Shares or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action,
or to receive notice of meetings or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by this
Right Certificate shall have been exercised as provided in the Rights
Agreement.
If any term, provision, covenant or restriction of the Rights
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 the Rights Agreement shall remain in full force
and effect and shall in no way be affected, impaired or invalidated.
This Right Certificate shall not be valid or binding for any purpose
until it shall have been countersigned by the Rights Agent.
B-2
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ________________.
Attest: RESMED, INC.,
a Delaware corporation
By ______________________________ By ______________________________
Title: Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
a New York corporation
By_______________________________
Authorized Signature
B-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED __________________________________________________
hereby sells, assigns and transfers unto
_________________________________________
________________________________________________________________________
________________________________________________________________________
(Please print name and address
of transferee)
this Right Certificate and the Rights evidenced thereby, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint ______________________ Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full power of
substitution.
Dated: _______________________
_____________________
Signature
Signature Guaranteed:
_______________________________________
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
B-4
___________________________________________________________________
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [
] are not beneficially owned by an Acquiring Person or an Affiliate or an
Associate thereof; and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any person who is, was or
subsequently became an Acquiring Person or an Affiliate or Associate thereof.
Dated:
Signature
B-5
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: RESMED, INC.
The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate to purchase
the Preferred Shares issuable upon the exercise of such Rights (or such other
securities of the Company or of any other Person which may be issuable upon
the exercise of the Rights) and requests that certificates for such shares be
issued in the name of:
Please insert social security
or other identifying number
____________________________________________________________
(Please print name and address)
____________________________________________________________
If such number of Rights shall not be all the Rights evi-denced 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 Guaranteed:
_______________________________________________
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or corres-pondent in the United States.
B-6
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not beneficially owned by an Acquiring Person or an Affiliate or an
Associate thereof; and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate thereof.
Dated:____________________
___________________________________
Signature
___________________________________________________________________________
NOTICE
The signature in the foregoing Form of Assignment and Form of
Election to Purchase 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 Form of Election to Purchase is not completed, the Company will
deem the beneficial owner of the Rights evidenced by this Right Certificate to
be an Acquiring Person or an Affiliate or Associate hereof and, in the case of
an Assignment, will affix a legend to that effect on any Right Certificates
issued in exchange for this Right Certificate.
B-7
EXHIBIT C
As described in the Rights Agreement, Rights which are held by
or have been held by Acquiring Persons or Associates or Affiliates
thereof (as defined in the Rights Agreement) shall become null and
void.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On April 15, 1997 the Board of Directors of ResMed, Inc. (the
"Company") declared a dividend of one Right for each share of common stock,
$.004 par value (the "Common Shares"), of the Company outstanding at the close
of business on April 30, 1997 (the "Record Date"). As long as the Rights are
attached to the Common Shares, the Company will issue one Right (subject to
adjustment) with each new Common Share so that all such shares will have
attached Rights. When exercisable, each Right will entitle the registered
holder to purchase from the Company one one-hundredth of a share of Series A
Junior Participating Preferred Stock (the "Preferred Shares") at a price of
$80.00 per one one-hundredth of a Preferred Share, subject to adjustment (the
"Purchase Price"). The description and terms of the Rights are set forth in a
Rights Agreement, dated as of April 23, 1997, as the same may be amended from
time to time (the "Rights Agreement"), between the Company and American Stock
Transfer & Trust Company, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) ten (10) days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the Common Shares or (ii) ten (10) days following
the commencement or announcement of an intention to make a tender offer or
exchange offer the consummation of which would result in the beneficial
owner-ship by a person or group of 15% or more of the Common Shares (the
earlier of (i) and (ii) being called the "Distribution Date," whether or not
either such date occurs prior to the Record Date), the Rights will be
evidenced, with respect to any of the Common Share certificates outstanding as
of the Record Date, by such Common Share certificate together with a copy of
this Summary of Rights.
The Rights Agreement provides that the Board of Directors, with the
concurrence of a majority of the Continuing Directors (as defined below), may
postpone the Distribution Date and that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the close of business on the Record
Date upon transfer or new issuance of the Common Shares will contain a
notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption, exchange, termination or expiration
of the Rights), the surrender for transfer of any certificates for Common
Shares, with or without a copy of this Summary of Rights, will also constitute
the transfer of the Rights associated with the Common Shares represented by
such certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Shares as of the close of business
on the Distribution Date and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on April 30, 2007, subject to the Company's right to extend
such date (the "Final Expiration Date"), unless earlier redeemed or exchanged
by the Company or terminated.
C-1
Each Preferred Share purchasable upon exercise of the Rights will be
entitled to a minimum preferential quarterly dividend payment of $1.00 per
share but will be entitled to an aggregate dividend of 100 times the dividend,
if any, declared per Common Share. In the event of liquidation, the holders
of the Preferred Shares will be entitled to a minimum preferential liquidation
payment of $100 per share but will be entitled to an aggregate payment of 100
times the payment made per Common Share. Each Preferred Share will have 100
votes and will vote together with the Common Shares. Finally, in the event of
any merger, consolidation or other transaction in which Common Shares are
exchanged, each Preferred Share will be entitled to receive 100 times the
amount received per Common Share. These rights are protected by customary
antidilution provisions. Because of the nature of the Preferred Share's
dividend, liquidation and voting rights, the value of one one-hundredth of a
Preferred Share purchasable upon exercise of each Right should approximate the
value of one Common Share.
The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification of the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares or
convertible securities at less than the current market price of the Preferred
Shares or (iii) upon the distribution to holders of the Preferred Shares of
evidences of indebtedness, cash, securities or assets (excluding regular
periodic cash dividends at a rate not in excess of 125% of the rate of the
last regular periodic cash dividend theretofore paid or, in case regular
periodic cash dividends have not theretofore been paid, at a rate not in
excess of 50% of the average net income per share of the Company for the four
quarters ended immediately prior to the payment of such dividend, or dividends
payable in Preferred Shares (which dividends will be subject to the adjustment
described in clause (i) above)) or of subscription rights or warrants (other
than those referred to above).
In the event that a Person becomes an Acquiring Person (except
pursuant to certain cash offers for all outstanding Common Shares approved by
the Board) or if the Company were the surviving corporation in a merger with
an Acquiring Person or any affiliate or associate of an Acquiring Person and
the Common Shares were not changed or exchanged, each holder of a Right, other
than Rights that are or were acquired or beneficially owned by the 15%
stockholder (which Rights will thereafter be void), will thereafter have the
right to receive upon exercise that number of Common Shares having a market
value of two times the then current Purchase Price of the Right. With certain
exceptions, in the event that the Company were acquired in a merger or other
business combination transaction or more than 50% of its assets or earning
power were sold, proper provision shall be made so that each holder of a Right
shall thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction would
have a market value of two times the then current Purchase Price of the Right.
At any time after a Person becomes an Acquiring Person and prior to
the acquisition by such Acquiring Person of 50% or more of the outstanding
Common Shares, the Board of Directors may cause the Company to acquire the
Rights (other than Rights owned by an Acquiring Person which have become
void), in whole or in part, in exchange for that number of Common Shares
having an aggregate value equal to the Spread (the excess of the value of the
Common Shares issuable upon exercise of a Right after a Person becomes an
Acquiring Person over the Purchase Price) per Right (subject to adjustment).
No adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such Purchase
Price. No fractional shares will be issued and in lieu thereof, a payment in
cash will be made based on the market price of the Preferred Shares on the
last trading date prior to the date of exercise.
C-2
The Rights may be redeemed in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price") by the Board of Directors at any time
prior to the close of business on the tenth day following the first date of
public announcement that a Person has become an Acquiring Person. The Board
of Directors, with the concurrence of a majority of the Continuing Directors
(as defined below), may extend the period during which the Rights are
redeemable beyond the ten (10) days following the public announcement that a
Person has become an Acquiring Person. Under certain circumstances set forth
in the Rights Agreement, the decision to redeem shall require the concurrence
of a majority of the Continuing Directors. Immediately upon the action of the
Board of Directors of the Company electing to redeem the Rights, the Company
shall make an announcement thereof, and upon such election, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
The term "Continuing Directors" means any member of the Board of
Directors of the Company who was a member of the Board prior to the time that
any Person becomes an Acquiring Person, and any person who is subsequently
elected to the Board if such person is recommended or approved by a majority
of the Continuing Directors. Continuing Directors do not include an Acquiring
Person, or an affiliate or associate of an Acquiring Person, or any
representative of the foregoing.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company beyond those as an existing
stockholder, including, without limitation, the right to vote or to receive
dividends.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the Company and the Rights Agent may amend or supplement
the Rights Agreement without the approval of any holders of Right Certificates
to cure any ambiguity, to correct or supplement any provision contained
therein which may be defective or inconsistent with any other provisions
therein, to shorten or lengthen any time period under the Rights Agreement (so
long as, under certain circumstances, a majority of Continuing Directors
approve such shortening or lengthening) or so long as the interests of the
holders of Right Certificates (other than an Acquiring Person or an affiliate
or associate of an Acquiring Person) are not adversely affected thereby, to
make any other provisions in regard to matters or questions arising thereunder
which the Company and the Rights Agent may deem necessary or desirable,
including but not limited to extending the Final Expiration Date. The Company
may at any time prior to such time as any Person becomes an Acquiring Person
amend the Rights Agreement to lower the thresholds described above to not less
than the greater of (i) any percentage greater than the largest percentage of
the outstanding Common Shares then known by the Company to be beneficially
owned by any person or group of affiliated or associated persons and (ii) 10%.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A.
A copy of the Rights Agreement is available free of charge from the Company.
This summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
C-3
