EXHIBIT 1
BENCHMARK ELECTRONICS, INC.
AND
XXXXXX TRUST AND SAVINGS BANK,
AS RIGHTS AGENT
----------------
RIGHTS AGREEMENT
DATED AS OF DECEMBER 11, 1998
TABLE OF CONTENTS
Section 1. CERTAIN DEFINITIONS............................................... 1
Section 2. APPOINTMENT OF RIGHTS AGENT....................................... 7
Section 3. ISSUE OF RIGHTS CERTIFICATES...................................... 7
Section 4. FORM OF RIGHTS CERTIFICATES....................................... 9
Section 5. COUNTERSIGNATURE AND REGISTRATION................................. 9
Section 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS
CERTIFICATES......................................................10
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.....11
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES...............13
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.....................13
Section 10. PREFERRED STOCK RECORD DATE.......................................14
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number
of Rights.........................................................15
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES........23
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.............................................................23
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES...........................26
Section 15. RIGHTS OF ACTION..................................................27
Section 16. AGREEMENT OF RIGHTS HOLDERS.......................................27
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER................28
Section 18. CONCERNING THE RIGHTS AGENT.......................................28
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.........29
Section 20. DUTIES OF RIGHTS AGENT............................................29
-i-
Section 21. CHANGE OF RIGHTS AGENT............................................32
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES...............................32
Section 23. REDEMPTION AND TERMINATION........................................33
Section 24. EXCHANGE..........................................................34
Section 25. NOTICE OF CERTAIN EVENTS..........................................35
Section 26. NOTICES...........................................................36
Section 27. SUPPLEMENTS AND AMENDMENTS........................................36
Section 28. SUCCESSORS........................................................37
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.........37
Section 30. BENEFITS OF THIS AGREEMENT........................................38
Section 31. SEVERABILITY......................................................38
Section 32. GOVERNING LAW AND CONSENT TO JURISDICTION.........................38
Section 33. COUNTERPARTS......................................................38
Section 34. DESCRIPTIVE HEADINGS..............................................39
Exhibit A - Form of Resolution Establishing and Designating Series A Cumulative
Junior Participating Preferred Stock
Exhibit B - Form of Rights Certificate
Exhibit C - Summary of Rights to Purchase Preferred Stock
-ii-
RIGHTS AGREEMENT
This Rights Agreement, dated as of December 11, 1998 (the
"Agreement"), between Benchmark Electronics, Inc., a Texas corporation (the
"Company"), and Xxxxxx Trust and Savings Bank, an Illinois banking corporation
(the "Rights Agent"),
W I T N E S S E T H:
WHEREAS, on December 11, 1998 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a dividend
of one preferred share purchase right (a "Right") for each share of Common Stock
(as defined below) of the Company outstanding at the Close of Business on
December 21, 1998 (the "Record Date"), each Right representing the right to
purchase one one-thousandth (subject to adjustment) of a share of Preferred
Stock (as hereinafter defined), upon the terms and subject to the conditions
herein set forth, and has further authorized and directed the issuance of one
Right (subject to adjustment as provided herein) with respect to each share of
Common Stock that shall become outstanding between the Record Date and the
earlier of the Distribution Date and the Expiration Date (as such terms are
hereinafter defined); PROVIDED, however, that Rights may be issued with respect
to shares of Common Stock that shall become outstanding after the Distribution
Date and prior to the Expiration Date in accordance with Section 22;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms shall have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
15% or more of the shares of Common Stock then outstanding, but shall not
include any Exempt Person; PROVIDED, however, (i) if the Board of Directors of
the Company determines in good faith that a Person who would otherwise be an
"Acquiring Person" became such inadvertently (including, without limitation,
because (A) such Person was unaware that it beneficially owned a percentage of
Common Stock that would otherwise cause such Person to be an "Acquiring Person"
or (B) such Person was aware of the extent of its Beneficial Ownership of Common
Stock but had no actual knowledge of the consequences of such Beneficial
Ownership under this Agreement) and without any intention of changing or
influencing control of the Company, then such Person shall not be deemed to be
or to have become an "Acquiring Person" for any purposes of this Agreement
unless and until such Person shall have failed to divest itself, as soon as
practicable (as determined, in good faith, by the Board of Directors of the
Company), of Beneficial Ownership of a sufficient number of shares of Common
Stock so that such Person would no longer otherwise qualify as an "Acquiring
Person"; (ii) if, as of the date hereof or prior to the first public
announcement of the adoption of this Agreement, any Person is or becomes the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding, such
Person shall not be deemed to be or to become an "Acquiring Person" unless and
until such time as
such Person shall, after the first public announcement of the adoption of this
Agreement, become the Beneficial Owner of additional shares of Common Stock
(other than pursuant to a dividend or distribution paid or made by the Company
on the outstanding Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), unless, upon becoming the Beneficial Owner of such
additional shares of Common Stock, such Person is not then the Beneficial Owner
of 15% or more of the shares of Common Stock then outstanding; and (iii) no
Person shall become an "Acquiring Person" as the result of an acquisition of
shares of Common Stock by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares of Common Stock
beneficially owned by such Person to 15% or more of the shares of Common Stock
then outstanding, PROVIDED, however, that if a Person shall become the
Beneficial Owner of 15% or more of the shares of Common Stock then outstanding
by reason of such share acquisitions by the Company and shall thereafter become
the Beneficial Owner of any additional shares of Common Stock (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), then such Person shall be deemed to be an "Acquiring
Person" unless upon becoming the Beneficial Owner of such additional shares of
Common Stock such Person does not beneficially own 15% or more of the shares of
Common Stock then outstanding. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at any
particular time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i)
of the General Rules and Regulations under the Exchange Act, as in effect on the
date hereof.
"Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, is the "beneficial owner" of (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) or
otherwise has the right to vote or dispose of, including pursuant to any
agreement, arrangement or understanding (whether or not in writing);
PROVIDED, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," any security under this subparagraph
(i) as a result of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
proxy or consent solicitation made pursuant to, and in accordance with,
the applicable provisions of the General Rules and Regulations under the
Exchange Act and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report);
-2-
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right or obligation to acquire
(whether such right or obligation is exercisable or effective immediately
or only after the passage of time or the occurrence of an event) pursuant
to any agreement, arrangement or understanding (whether or not in writing)
or upon the exercise of conversion rights, exchange rights, other rights,
warrants or options, or otherwise; PROVIDED, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer made by such
Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or (B)
securities issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event, or (C) securities issuable upon exercise
of Rights from and after the occurrence of a Triggering Event which Rights
were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof (collectively, the "Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment made with respect to
any Original Rights; or
(iii) that are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such
Person or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for the purpose
of acquiring, holding, voting (except pursuant to a revocable proxy or
consent as described in the proviso to subparagraph (i) of this
definition) or disposing of any voting securities of the Company;
PROVIDED, however, that nothing in this definition shall cause a Person engaged
in business as an underwriter of securities to be the "Beneficial Owner" of, or
to "beneficially own," any securities acquired or to be acquired through such
Person's participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of Texas or the State of New York
or the State of Illinois are authorized or obligated by law or executive order
to close.
"Close of Business" on any given date shall mean 5:00 p.m., Houston,
Texas time, on such date; PROVIDED, however, that if such date is not a Business
Day, it shall mean 5:00 p.m., Houston, Texas time, on the next succeeding
Business Day.
"Closing Price" of a security for any day shall mean the last sales
price, regular way, on such day or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, on such day,
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 such 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 such security is listed or admitted to trading, or,
if such security is not listed or admitted to trading on any national securities
exchange, the last
-3-
quoted sales price on such day or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market on such day, as reported by
NASDAQ or such other system then in use or, if on such day such security is not
quoted by any such entity, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in such security
selected by the Board of Directors of the Company. If on such day no market
maker is making a market in such security, the fair value of such security on
such day as determined in good faith by the Board of Directors of the Company
shall be deemed to constitute the Closing Price.
"Common Stock" shall mean the common stock, par value $0.10 per
share, of the Company, except that "Common Stock" when used with reference to
stock issued by any Person other than the Company shall mean the capital stock
of such Person with the greatest voting power to control or direct the
management of such Person, or the equity securities or other equity interest
having power to control or direct the management, of such Person.
"Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
"Company" shall mean the Person named as the "Company" in the
preamble of this Agreement until a successor Person shall have become such or
until a Principal Party thereafter shall be liable for and shall assume all
obligations and duties of the Company hereunder, pursuant to the applicable
provisions of this Agreement, and thereafter "Company" shall mean such successor
Person or Principal Party.
"Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
"Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Distribution Date" shall mean the earlier of (i) the Close of
Business on the tenth day (or, in connection with a Permitted Offer only, such
later date as may be determined by the Company's Board of Directors before the
Distribution Date occurs) after the Stock Acquisition Date (or, if the tenth day
after the Stock Acquisition Date occurs before the Record Date, the Close of
Business on the Record Date) or (ii) the Close of Business on the tenth Business
Day (or such later date as may be determined by the Company's Board of Directors
before the Distribution Date occurs) after the date of the commencement by any
Person (other than an Exempt Person) of, or of the first public announcement of
the intention of such Person (other than an Exempt Person) to commence, a tender
or exchange offer, if upon consummation thereof, such Person would be an
Acquiring Person. The Board of Directors of the Company may, if deferral is
allowed in clause (i) or (ii) of the preceding sentence, defer the date set
forth in such clause, as applicable, to a specified later date or an unspecified
later date to be determined by a subsequent action or event.
"Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
-4-
"Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
"Exempt Person" shall mean the Company, any Subsidiary of the
Company, any employee stock ownership plan, employee benefit plan or other
compensation program or arrangement of the Company or of any Subsidiary of the
Company, any Person holding Common Stock for or pursuant to any such plan,
program or arrangement, and any Person organized, appointed or established by
the Company for or pursuant to the terms of any such plan, program or
arrangement during the time such Person acts in such capacity.
"Expiration Date" shall mean the earliest of (i) the Final
Expiration Date, (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof, (iii) the time the Rights are exchanged as provided in
Section 24 hereof, and (iv) the time at which the Rights expire pursuant to
Section 13(d) hereof.
"Final Expiration Date" shall mean the Close of Business on December
11, 2008.
"Flip-In Event" shall mean an event described in Section 11(a)(ii)
hereof.
"Flip-In Trigger Date" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Flip-Over Event" shall mean any event described in clause (x), (y)
or (z) of Section 13(a) hereof.
"NASDAQ" shall mean The NASDAQ Stock Market.
"Original Rights" shall have the meaning set forth in the definition
of "Beneficial Owner."
"Permitted Offer" shall mean a tender offer or an exchange offer for
all outstanding shares of Common Stock determined by at least a majority of the
members of the Board of Directors who are not officers or employees of the
Company and who are not representatives, nominees, Affiliates or Associates of
an Acquiring Person, after receiving advice from one or more investment banking
firms, to be (a) at a price and on terms that are fair to shareholders (taking
into account all factors that such members of the Board deem relevant including,
without limitation, prices that could reasonably be achieved if the Company or
its assets were sold on an orderly basis designed to realize maximum value) and
(b) otherwise in the best interests of the Company and its shareholders. In
considering whether the condition set forth in (b) above is satisfied, the Board
of Directors may take into account the factors set forth in Article 13.06 of the
Texas Business Corporation Act as in effect on the date of this Agreement and
any other factors it deems relevant.
"Person" shall mean any individual, firm, corporation, partnership,
limited liability company, association, trust, unincorporated organization or
other entity and shall include any successor (by merger or otherwise) of any of
the foregoing.
-5-
"Preferred Stock" shall mean shares of Series A Cumulative Junior
Participating Preferred Stock, par value $0.10 per share, of the Company having
the rights, powers and preferences set forth in the form of Resolution
Establishing and Designating Series A Cumulative Junior Participating Preferred
Stock attached hereto as Exhibit A and, to the extent that there is not a
sufficient number of shares of Series A Cumulative Junior Participating
Preferred Stock authorized to permit the full exercise of the Rights, any other
series of preferred stock, par value $0.10 per share, of the Company designated
for such purpose containing terms substantially similar to the terms of the
Series A Cumulative Junior Participating Preferred Stock.
"Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
"Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
"Record Date" shall have the meaning set forth in the recitals
clause at the beginning of this Agreement.
"Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
"Rights" shall have the meaning set forth in the recitals clause at
the beginning of this Agreement.
"Rights Agent" shall mean the Person named as the "Rights Agent" in
the preamble of this Agreement until a successor Rights Agent shall have become
such pursuant to the applicable provisions hereof, and thereafter "Rights Agent"
shall mean such successor Rights Agent. If at any time there is more than one
Person appointed by the Company as Rights Agent pursuant to the applicable
provisions of this Agreement, "Rights Agent" shall mean and include each such
Person.
"Rights Certificates" shall mean the rights certificates evidencing
the Rights after the Distribution Date.
"Rights Dividend Declaration Date" shall have the meaning set forth
in the recitals clause at the beginning of this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
"Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such.
"Subsidiary" shall mean, with reference to any Person, any
corporation or other Person of which an amount of voting securities or other
ownership interests having ordinary voting
-6-
power sufficient to elect at least a majority of the directors or other persons
performing similar functions is beneficially owned, directly or indirectly, by
such Person, or otherwise controlled by such Person.
"Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Summary of Rights" shall mean the Summary of Rights to Purchase
Preferred Stock sent pursuant to Section 3(b) hereof.
"Trading Day" with respect to a security shall mean a day on which
the principal national securities exchange on which such security is listed or
admitted to trading is open for the transaction of business or, if such security
is not listed or admitted to trading on any national securities exchange, a
Business Day.
"Triggering Event" shall mean any Flip-In Event or any Flip-Over
Event.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
Section 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the Distribution Date, (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for Common Stock registered in the names of the holders of the
Common Stock and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company). As soon as practicable after
the Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign and the Company will send or cause to be sent (and the Rights
Agent will, if requested, and at the expense of the Company, send) by
first-class, insured, postage prepaid mail, to each record holder of the Common
Stock as of the Close of Business on the Distribution Date (other than any
Acquiring Person or any Associate or Affiliate of an Acquiring Person), at the
address of such holder shown on the records of the Company, one or more Rights
Certificates, evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates. In the event
that an adjustment in the number of Rights per share of Common Stock has been
made pursuant to Section 11(p) hereof, at the time of distribution of the Right
Certificates the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights.
-7-
(b) As promptly as practicable following the Record Date, the
Company will send (or cause the Rights Agent, at the expense of the Company, to
send) a copy of a Summary of Rights, in substantially the form attached hereto
as Exhibit C, by first-class, postage prepaid mail, to each record holder of
Common Stock as of the Close of Business on the Record Date (other than any
Acquiring Person or any Associate or Affiliate of an Acquiring Person), at the
address of such holder shown on the records of the Company. With respect to
certificates for Common Stock outstanding as of the Record Date, until the
Distribution Date or the earlier surrender for transfer thereof or the
Expiration Date, the Rights associated with the shares of Common Stock
represented by such certificates shall be evidenced by such certificates for
Common Stock together with a copy of the Summary of Rights, and the registered
holders of the Common Stock shall also be the registered holders of the
associated Rights. Until the earlier of the Distribution Date or the Expiration
Date, the transfer of any of the certificates for Common Stock outstanding on
the Record Date, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
(c) Rights shall be issued in respect of all shares of Common Stock
that are issued or sold by the Company (whether originally issued or delivered
from the Company's treasury) after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date or, in certain circumstances
provided in Section 22 hereof, after the Distribution Date. Certificates issued
for shares of Common Stock that shall so become outstanding or shall be
transferred or exchanged after the Record Date but prior to the earlier of the
Distribution Date or the expiration or redemption of the Rights shall also be
deemed to be certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Benchmark
Electronics, Inc. (the "Company") and Xxxxxx Trust and Savings Bank (the
"Rights Agent") dated as of December 11, 1998 as it may from time to time
be supplemented or amended (the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and a copy of which is on file
at the principal offices of the Company. Under certain circumstances, as
set forth in the Rights Agreement, such Rights may be redeemed, may be
exchanged, may expire or may be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Company will mail to
the holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after receipt of a
written request therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any Person who is, was or
becomes an Acquiring Person or an Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement), whether currently held by or
on behalf of any such Person or by any subsequent holder, will become null
and void and will no longer be transferrable.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the expiration or redemption of the
Rights, the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, and registered
holders of Common Stock shall also be the registered holders of the associated
Rights,
-8-
and the transfer of any of such certificates shall also constitute the transfer
of the Rights associated with the Common Stock represented by such certificates.
In the event that the Company purchases or otherwise acquires any Common Stock
after the Record Date but prior to the Distribution Date, any Rights associated
with such Common Stock shall be deemed canceled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common Stock
which are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.
Section 4. FORM OF RIGHTS CERTIFICATES. The Rights Certificates (and
the forms of election to purchase and of assignment to be printed on the reverse
thereof), when, as and if issued, shall be substantially in the form set forth
in Exhibit B hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or quotation system on which the Rights may from time to time be listed
or quoted, or to conform to usage. Subject to the provisions of this Agreement,
the Rights Certificates, whenever issued, shall be dated as of the Record Date
and on their face shall entitle the holders thereof to purchase such number of
one one-thousandths of a share of Preferred Stock as shall be set forth therein
at the price set forth therein (such exercise price per one one-thousandth of a
share, the "Purchase Price"), but the amount and type of securities purchasable
upon the exercise of each Right and the Purchase Price thereof shall be subject
to adjustment as provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any Vice President,
either manually or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof, which shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be countersigned by the Rights Agent,
either manually or by facsimile signature, and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Rights Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights 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 Rights Certificates had not ceased
to be such officer of the Company; and any Rights Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
-9-
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office or offices designated as the appropriate place
for surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the certificate number and the date of each of the Rights
Certificates.
Section 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Section 7(e), Section 13(d),
Section 14 and Section 24 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the Expiration
Date, any Rights Certificate or Rights Certificates may be transferred, split
up, combined or exchanged for another Rights Certificate or Rights Certificates,
entitling the registered holder to purchase a like number of one one-thousandths
of a share of Preferred Stock (or, following a Triggering Event, Common Stock,
other securities, cash or other assets, as the case may be) as the Rights
Certificate or Rights Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Rights Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the principal office or offices
of the Rights Agent designated for such purpose. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to the
transfer, split up, combination or exchange of any such surrendered Rights
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) thereof or of the
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 7(e), Section 13(d),
Section 14 and Section 24 hereof, countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment by the holder of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split-up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, completion and signature of the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate (or a separate certificate in the same form) and the receipt
by the Company of such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) thereof or the Affiliates or Associates
thereof as the Company shall reasonably request and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and
-10-
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly completed and executed, to the
Rights Agent at the office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of one one-thousandths of a share of Preferred Stock (or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earlier of (i) the
Expiration Date and (ii) the time at which all outstanding Rights are exchanged
as provided in Section 24 hereof.
(b) The Purchase Price for each one one-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $155,
and shall be subject to adjustment from time to time as provided in Sections 11
and 13(a) hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate on the reverse
side thereof duly executed, accompanied by payment, with respect to each Right
so exercised, of the Purchase Price per one one-thousandth of a share of
Preferred Stock (or other shares, securities, cash or other assets, as the case
may be) to be purchased as set forth below and an amount equal to any applicable
transfer tax, the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i)(A) requisition from any transfer agent of the shares of Preferred
Stock (or make available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of one one-thousandths of a share of
Preferred Stock to be purchased, and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the Company, in
its sole discretion, shall have elected to deposit the total number of shares of
Preferred Stock issued upon exercise of the Rights hereunder with a depositary
agent, requisition from the depositary agent depositary receipts representing
such number of one one-thousandths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) requisition from the Company the amount of cash, if any,
to be paid in lieu of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts, cause the same
to be delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder and (iv) after receipt thereof, deliver such cash, if any, to or upon the
order of the registered holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii)
hereof) may be made in cash or by certified check, cashiers or official
-11-
bank check or bank draft payable to the order of the Company or the Rights
Agent. In the event that the Company is obligated to issue other securities
(including Common Stock) of the Company, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, then, to the fullest extent
permissible under applicable law and regulations, 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. The
Company reserves the right to require prior to the occurrence of a Triggering
Event that, upon exercise of Rights, a number of Rights be exercised so that
only whole shares of Preferred Stock would be issued.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Flip-In Event, any Rights beneficially owned
by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person,
(ii) a direct or indirect transferee of such Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such or (iii) a direct or indirect transferee of such Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person's becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from such
Acquiring Person or such Affiliate or Associate to holders of equity interests
in such Acquiring Person or such Affiliate or Associate or to any Person with
whom such Acquiring Person or such Affiliate or Associate has any continuing
agreement, arrangement or understanding regarding the transferred Rights or (B)
a transfer that the Board of Directors of the Company has determined is part of
a plan, arrangement or understanding that has as a primary purpose or effect the
avoidance of this Section 7(e), shall become absolutely null and void without
any further action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise. From and after the Flip-In Event, no Right Certificate shall be
issued pursuant to Section 3 or Section 6 hereof that represents Rights that are
or have become void pursuant to the provisions of this paragraph, and any Right
Certificate delivered to the Rights Agent that represents Rights that are or
have become void pursuant to the provisions of this paragraph shall be canceled.
The Company shall use all reasonable efforts to ensure that the provisions of
this Section 7(e) are complied with, but shall have no liability to any holder
of Rights Certificates or other Person as a result of its failure to make any
determinations or identifications with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder of a Rights Certificate upon the
occurrence of any purported exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the certificate contained
in the form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such
-12-
exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock, the number of shares of Preferred Stock that will be sufficient
to permit the exercise in full of all outstanding Rights prior to the occurrence
of a Triggering Event. The Company further covenants and agrees that, following
the occurrence of a Triggering Event, it will cause to be reserved and kept
available out of its authorized and unissued shares of Common Stock or out of
its authorized and issued shares held in its treasury, the number of shares of
Common Stock required to be issued pursuant to the Rights and also to cause to
be reserved and kept available other securities as may be required to be issued
pursuant to the Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities) issuable
and deliverable upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
(c) The Company shall use its best efforts to (i) prepare and file,
as soon as practicable following the first occurrence of a Flip-In Event or, if
applicable, as soon as practicable following the earliest date after the first
occurrence of a Flip-In Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined pursuant to this
Agreement (including in accordance with Section 11(a)(iii) hereof), a
registration statement on an appropriate form under the Securities Act with
respect to the securities purchasable upon exercise of the Rights, (ii) cause
such registration statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The Company will
also take such action as may be appropriate under, or to ensure compliance with,
the securities or
-13-
"blue sky" laws of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period of time not to
exceed 90 days after the date set forth in clause (i) of the first sentence of
this Section 9(c), the exercisability of the Rights in order to prepare and file
such registration statement and permit it to become effective. In addition, if
the Company shall determine that the Securities Act requires an effective
registration statement under the Securities Act following the Distribution Date,
the Company may temporarily suspend the exercisability of the Rights until such
time as such a registration statement has been declared effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained, the exercise thereof shall not
be permitted under applicable law or any required registration statement shall
not have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all one one-thousandths of a share of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges that
may be payable in respect of the issuance or delivery of the Rights Certificates
and of any certificates for a number of one one-thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, however, be required to pay
any transfer tax that may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or delivery of a
number of one one-thousandths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in respect of a name other than
that of, the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for a number of
one one-thousandths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
Section 10. PREFERRED STOCK RECORD DATE. Each Person in whose name
any certificate for a number of one one-thousandths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such shares (fractional or otherwise) of Preferred Stock (or
Common Stock and/or other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and all applicable transfer taxes) was made; PROVIDED, however,
that if the date of such surrender and payment is a date upon which
-14-
the Preferred Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are closed, such Person shall be deemed to
have become the record holder of such shares (fractional or otherwise) on, and
such certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate, as such, shall not be
entitled to any rights of a shareholder of the Company with respect to shares
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES
OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares or other
securities subject to purchase upon exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a)(i)In the event the Company shall at any time after the
Rights Dividend Declaration Date (A) declare a dividend on the Preferred
Stock payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, 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 Preferred Stock or capital stock, as the
case may be, issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled
to receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Preferred Stock or capital stock,
as the case may be, which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in the event any
Person shall, at any time after the Rights Dividend Declaration Date,
become an Acquiring Person(a "Flip-In Event"), unless the event causing
such Person to become an Acquiring Person is (1) a transaction set forth
in Section 13(a) hereof or (2) an acquisition of shares of Common Stock
pursuant to a Permitted Offer, then, following the occurrence of the
Flip-In Event each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price in accordance
-15-
with the terms of this Agreement, in lieu of a number of one
one-thousandths of a share of Preferred Stock, such number of shares of
Common Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of one
one-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Flip-In Event
and (y) dividing that product (which product, following such first
occurrence, shall thereafter be the "Purchase Price" for each Right and
for all purposes of this Agreement) by 50% of the Current Market Price per
share of Common Stock on the date of such first occurrence (such number of
shares, the "Adjustment Shares"); PROVIDED that the Purchase Price and the
number of Adjustment Shares shall be further adjusted as provided in this
Agreement to reflect any events occurring after the date of such first
occurrence.
(iii) In the event that (a) the number of shares of Common
Stock that are authorized by the Company's articles of incorporation but
not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii) of this
Section 11(a), or (b) the quotient (the "Quotient") obtained by dividing
the Purchase Price by the number of Adjustment Shares issuable upon
exercise of a Right is less than the then par value per share of Common
Stock, the Company shall, to the extent permitted by applicable law and
regulation, (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (computed using the Current
Market Price used to determine the number of Adjustment Shares) (the
"Current Value") over (2) the Purchase Price (such excess is herein
referred to as the "Spread"), and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment Shares, upon the
exercise of the Rights and payment of the applicable Purchase Price, (1)
cash, (2) a reduction in the Purchase Price, (3) Common Stock or other
equity securities of the Company (including, without limitation, shares,
or units or fractions of shares, of preferred stock, by virtue of having
dividend, voting and liquidation rights substantially comparable to those
of the shares of Common Stock, are deemed in good faith by the Board of
Directors of the Company to have substantially the same value as shares of
Common Stock (such shares of preferred stock are herein referred to as
"Common Stock Equivalents")), (4) debt securities of the Company, (5)
other assets or (6) any combination of the foregoing, having an aggregate
value equal to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company based upon the advice
of a nationally recognized investment banking firm selected by the Board
of Directors of the Company; PROVIDED, however, if the Company shall not
have made adequate provision to deliver value pursuant to clause (B) above
within 30 days following the later of (x) the first occurrence of a
Flip-In Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being referred
to herein as the "Flip-In Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, shares of Common Stock
(to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is likely
that (a) sufficient additional shares of Common Stock could be authorized
for issuance
-16-
upon exercise in full of the Rights or (b) a reduction in the par value
per share of Common Stock to an amount that is equal to or less than the
Quotient could be authorized, the 30-day period set forth above may be
extended to the extent necessary, but not more than 90 days after the
Flip-In Trigger Date, in order that the Company may seek shareholder
approval for the authorization of such additional shares or for the
reduction of such par value, as the case may be (such period, as it may be
extended, the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares or
reduction of par value 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(a)(iii), the value of the Common Stock shall be the Current
Market Price per share of the Common Stock on the Flip-In Trigger Date and
the value of any Common Stock Equivalent shall be deemed to have the same
value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within 45 calendar days after
such record date) Preferred Stock (or shares having the same rights, privileges
and preferences as the shares of Preferred Stock ("Equivalent Preferred Stock"))
or securities convertible into Preferred Stock or Equivalent Preferred Stock at
a price per share of Preferred Stock or per share of Equivalent Preferred Stock
(or having a conversion price per share, if a security convertible into
Preferred Stock or Equivalent Preferred Stock) less than the Current Market
Price per share of Preferred Stock on such record date, the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock that the
aggregate offering price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such Current Market Price, and the denominator of which shall be the number
of shares of Preferred Stock outstanding on such record date, plus the number of
additional shares of Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible); PROVIDED, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case such subscription price may be paid by
delivery of consideration, part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Shares of Preferred Stock owned by or held for
the account of the
-17-
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, options or warrants are not so issued,
the Purchase Price shall be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution
to all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current Market
Price per share of Preferred Stock on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes) of the portion of the cash,
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to a share of Preferred Stock and the denominator
of which shall be such Current Market Price per share of Preferred Stock;
PROVIDED, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed, and
in the event that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if such record
date had not been fixed.
(d)(i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "Current
Market Price" per share of Common Stock of a Person on any date shall be
deemed to be the average of the daily Closing Prices per share of such
Common Stock for the 30 consecutive Trading Days immediately prior to such
date, and for purposes of computations made pursuant to Section 11(a)(iii)
hereof, the "Current Market Price" per share of Common Stock on any date
shall be deemed to be the average of the daily Closing Prices per share of
such Common Stock for the 10 consecutive Trading Days immediately
following such date; PROVIDED, however, that in the event that the Current
Market Price per share of Common Stock is determined during a period
following the announcement of (A) a dividend or distribution on such
Common Stock other than a regular quarterly cash dividend or the dividend
of the Rights or (B) any subdivision, combination or reclassification of
such Common Stock, and the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, shall not have occurred prior to the commencement of the
requisite 30 Trading Day or 10 Trading Day period, as set forth above,
then, and in each such case, the Current Market Price shall be properly
adjusted to take into account ex-dividend or ex-distribution trading. If
the Common Stock is not publicly held or listed or traded, "Current Market
Price" per share shall mean the fair value per share as determined in good
faith by
-18-
the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"Current Market Price" per share of Preferred Stock shall be determined in
the same manner as set forth above for the Common Stock in clause (i) of
this Section 11(d) (other than the last sentence thereof). If the Current
Market Price per share of Preferred Stock cannot be determined in such
manner or if the Preferred Stock is not publicly held or listed or traded,
the "Current Market Price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to the then applicable
Adjustment Number (as defined in and determined in accordance with the
Statement of Resolutions Establishing the Series A Cumulative Junior
Participating Preferred Stock) multiplied by the Current Market Price per
share of the Common Stock. If neither the Common Stock nor the Preferred
Stock is publicly held or listed or traded, Current Market Price per share
of the Preferred Stock shall mean the fair value per share as determined
in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. For all purposes of this
Agreement, the Current Market Price of one one-thousandth of a share of
Preferred Stock shall be equal to the Current Market Price of one share of
Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; PROVIDED, however,
that any adjustments that by reason of this Section 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share of Common Stock or other share
or one-millionth of a share of Preferred Stock, as the case may be.
(f) If as a result of an adjustment made pursuant to Section 11(a)
or Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Preferred
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a), (b),
(c), (e), (f), (g), (h), (i), (j), (k) and (m) hereof, and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections
-19-
11(b) and (c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-thousandths of a share of Preferred Stock
(calculated to the nearest one-millionth) obtained by (i) multiplying (x) the
number of one one-thousandths of a share of Preferred Stock covered by a Right
immediately prior to such adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in lieu of any adjustment in
the number of one one-thousandths of a share of Preferred Stock purchasable upon
the exercise of a Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of one one-thousandths
of a share of Preferred Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to the
nearest 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 Rights
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights 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 Rights Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-thousandths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-thousandth of a
share and the number of one-thousandths of a share that were expressed in the
initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value or stated value, if any, of the
number of one one-thousandths of a share of Preferred Stock or of the number of
shares of Common Stock or other securities issuable upon exercise of a Right,
the Company shall take any corporate action that may, in the
-20-
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable such number of one one-thousandths of
a share of Preferred Stock or such number of shares of Common Stock or other
securities at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one one-thousandths of a share of Preferred Stock or the number of
shares of Common Stock or other securities of the Company, if any, issuable upon
such exercise over and above the number of one one-thousandths of a share of
Preferred Stock, number of shares of Common Stock and other 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 (fractional or otherwise)
or securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the current market price, (iii) issuance wholly
for cash of shares of Preferred Stock or securities that by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11 hereafter made by the Company to holders of its Preferred Stock shall
not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), (ii) merge with or into or be acquired pursuant to a share exchange by
any other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof), (iii) sell, lease or transfer (or permit
one or more Subsidiaries to sell, lease or transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of which complies and all of
which together comply with Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger, share exchange, sale, lease or
transfer there are any rights, warrants or other instruments or securities of
the Company or any other Person outstanding or agreements, arrangements or
understandings in effect that would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights, (y) prior to,
simultaneously with or immediately after such consolidation, merger, share
exchange, sale, lease or transfer, the shareholders or other equity owners of
the Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person
-21-
or any of its Affiliates or Associates, or (z) the identity, form or nature of
organization of the Principal Party (including without limitation the
determination of the Principal Party that would be made as a result of the
Company's entering into one or a series of consolidations, mergers, share
exchanges, sales, leases or transfers with more than one party) would preclude
or limit the exercise of Rights or otherwise diminish substantially or eliminate
the benefits intended to be afforded by the Rights.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23, Section 24 or Section 27
hereof, take (or permit any Subsidiary to take) any action if the purpose of
such action is to, or if at the time such action is taken it is reasonably
foreseeable that such action will, diminish substantially or eliminate the
benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a dividend on
the outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, (iii) combine the outstanding
shares of Common Stock into a smaller number of shares or (iv) otherwise
reclassify the outstanding shares of Common Stock, the number of Rights
associated with each share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction (the "Adjustment
Fraction") the numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event. In lieu of such
adjustment in the number of Rights associated with one share of Common Stock,
the Company may elect to adjust the number of one one-thousandths of a share of
Preferred Stock purchasable upon the exercise of one Right and the Purchase
Price. If the Company makes such election, the number of Rights associated with
one share of Common Stock shall remain unchanged, and the number of one
one-thousandths of a share of Preferred Stock purchasable upon exercise of one
Right and the Purchase Price shall be proportionately adjusted so that (i) the
number of one one-thousandths of a share of Preferred Stock purchasable upon
exercise of a Right following such adjustment shall equal the product of the
number of one one-thousandths of a share of Preferred Stock purchasable upon
exercise of a Right immediately prior to such adjustment multiplied by the
Adjustment Fraction and (ii) the Purchase Price following such adjustment shall
equal the product of the Purchase Price immediately prior to such adjustment
multiplied by the Adjustment Fraction. In the event that the Company shall at
any time after the Rights Dividend Declaration Date and prior to the
Distribution Date declare a dividend or other distribution on the outstanding
shares of Common Stock payable in securities which are convertible into,
exchangeable for or which otherwise represent the right to acquire shares of
Common Stock, equitable adjustments in the number of Rights associated with each
share of Common Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be made as deemed appropriate by the
Board.
-22-
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or Section 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Rights Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 26 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained and shall not be obligated or responsible for calculating any
adjustment nor shall it be deemed to have knowledge of such adjustment unless
and until it shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, on or after the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof), and the Company shall not
be the continuing or surviving corporation of such consolidation or merger, (y)
any Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof) shall consolidate with, or merge with or
into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger, or the Company shall be party to a
share exchange, and, in connection with such consolidation or merger or share
exchange, all or part of the outstanding shares of Common Stock 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 (z) the Company shall sell, lease or
otherwise transfer (or one or more of its Subsidiaries shall sell, lease or
otherwise transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any Person or Persons
(other than the Company or any Subsidiary of the Company or any combination
thereof in one or more transactions each of which complies, and all of which
together comply, with Section 11(o) hereof), then, and in each such case (except
as may be contemplated by Section 13(d) hereof), proper provision shall be made
so that: (i) on and after the Distribution Date, each holder of a Right, except
as provided in Section 7(e) hereof, shall thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, such number of validly authorized and issued, fully
paid, nonassessable and freely tradeable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be equal
to the result obtained by (1) multiplying the then current Purchase Price by the
number of one one-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to the first occurrence of a Flip-Over Event
(or, if a Flip-In Event has occurred prior to the first occurrence of a
Flip-Over Event, multiplying the number of such one one-thousandths of a share
of Preferred Stock for which a Right was exercisable immediately prior to the
first occurrence of a Flip-In Event by the Purchase Price in effect immediately
prior to such first occurrence), and dividing that product (which, following the
first occurrence of a Flip-Over Event,
-23-
shall be the Purchase Price for each Right and for all purposes of this
Agreement) by (2) 50% of the Current Market Price per share of the Common Stock
of such Principal Party on the date of consummation of such Flip-Over Event;
(ii) such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Flip-Over Event, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed
to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Flip-Over Event; (iv) such Principal Party
shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall
be of no effect following the first occurrence of any Flip-Over Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), (A) the Person that is the issuer of
any securities into which shares of Common Stock of the Company are
converted in such merger or consolidation or share exchange, or, if there
is more than one such issuer, the issuer the Common Stock of which has the
greatest aggregate market value of shares outstanding, or (B) if no
securities are so issued, (x) the Person that survives such consolidation
or is the other party to the merger and survives such merger, or, if there
is more than one such Person, the Person the Common Stock of which has the
greatest aggregate market value of shares outstanding or (y) if the Person
that is the other party to the merger does not survive the merger, the
Person that does survive the merger (including the Company if it
survives); and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant
to such transaction or transactions, or, if each Person that is a party to
such transaction or transactions receives the same portion of the assets
or earning power so transferred, or if the Person receiving the greatest
portion of the assets or earning power cannot be determined, the Person
the Common Stock of which has the greatest aggregate market value;
PROVIDED, however, that in any such case, if (1) such Person is a direct or
indirect Subsidiary of another Person, "Principal Party" shall refer to such
other Person; (2) such Person is a Subsidiary, directly or indirectly, of more
than one Person, "Principal Party" shall refer to whichever of such Persons is
the issuer of the Common Stock having the greatest aggregate market value; and
(3) such Person is owned, directly or indirectly, by a joint venture formed by
two or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such party
were a "Subsidiary" of both or all of such joint venturers and the Principal
Parties in each such chain shall
-24-
bear the obligations set forth in this Section 13 in the same ratio as their
direct or indirect interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any Flip-Over Event unless (x)
each such Principal Party (or Person that may become a Principal Party as a
result of such Flip-Over Event) shall have a sufficient number of authorized
shares of its Common Stock that have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this Section 13 and
(y) prior thereto the Company and each such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of such Flip-Over Event,
each such Principal Party at its own expense will
(i) prepare and file a registration statement under the Securities
Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the Expiration Date;
(ii) take such action as may be appropriate under or to ensure
compliance with, the securities or "blue sky" laws of such jurisdictions
in connection with the Rights and the securities purchasable upon exercise
of the Rights;
(iii) use its best efforts, if the Common Stock of the Principal
Party is or shall become listed on a national securities exchange, to list
(or continue the listing of) the Rights and the securities purchasable
upon exercise of the Rights on such securities exchange and, if the Common
Stock of the Principal Party shall not be listed on a national securities
exchange, to cause the Rights and the securities purchasable upon exercise
of the Rights to be reported by NASDAQ or such other transaction reporting
system then in use;
(iv) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates that comply
in all respects with the requirements for registration on Form 10 under
the Exchange Act; and
(v) obtain waivers of any rights of first refusal or preemptive
rights in respect of the Common Stock of the Principal Party subject to
purchase upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Flip-Over Event
shall occur at any time after the occurrence of a Flip-In Event, the Rights that
have not theretofore been exercised shall thereafter become exercisable as
described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such
-25-
transaction is consummated with a Person or Persons who acquired shares of
Common Stock pursuant to a Permitted Offer (or a wholly owned subsidiary of any
such Person or Persons), (ii) the price per share of Common Stock offered in
such transaction is not less than the price per share of Common Stock paid to
all holders of Common Stock whose shares were purchased pursuant to such
Permitted Offer, and (iii) the form of consideration being offered to the
remaining holders of shares of Common Stock pursuant to such transaction is the
same as the form of consideration paid pursuant to such Permitted Offer. Upon
consummation of any such transaction contemplated by this Section 13(d), all
Rights hereunder shall expire.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date, unless the Company elects to utilize the
first sentence of Section 11(p) hereof, or to distribute Rights Certificates or
scrip evidencing fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Rights Certificates with regard
to which such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the Closing Price of one Right for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than, except as provided in the last sentence of
Section 7(c) hereof, fractions that are integral multiples of one one-thousandth
of a share of Preferred Stock) upon exercise of the Rights or to distribute
certificates or scrip evidencing fractional shares of Preferred Stock (other
than, except as provided in the last sentence of Section 7(c) hereof, fractions
that are integral multiples of one one-thousandth of a share of Preferred
Stock). Fractions of shares of Preferred Stock in integral multiples of one
one-thousandth of a share of Preferred Stock may, at the election of the Company
in its sole discretion, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the shares of Preferred Stock represented by
such depositary receipts. In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-thousandth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of one one-thousandth of the Closing Price of a share of Preferred
Stock for the Trading Day immediately prior to the date of such exercise.
(c) The Company shall not be required to issue fractions of shares
of Common Stock upon exercise of the Rights or to distribute certificates or
scrip evidencing fractional shares of Common Stock. In lieu of fractional shares
of Common Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the Closing Price of one share of Common
Stock for the Trading Day immediately prior to the date of such exercise.
-26-
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, other than rights of action vested in the Rights Agent pursuant
to Section 18 hereof, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered holders
of the Common Stock) and, where applicable, the Company; and any registered
holder of any Rights Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in (or, prior to the Distribution Date, the
Common Stock) the manner provided therein and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to the
extent not prohibited by applicable law and regulations to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
After a Triggering Event, holders of Rights shall be entitled to recover the
reasonable costs and expenses, including attorneys' fees, incurred by them in
any action to enforce the provisions of this Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that it accepts the terms and conditions of
this Agreement and the Rights Certificates and, without limiting the generality
of the foregoing, that:
(a) prior to the Distribution Date, the Rights will not be evidenced
by Rights Certificates and will be transferable only in connection with the
transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the office or offices of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer and with the form of
assignment set forth on the reverse side thereof and the certificate contained
therein duly completed and fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificates made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be affected by any notice to the contrary; and
-27-
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; PROVIDED, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
one-thousandths of a share of Preferred Stock or any other securities of the
Company that may at any time be issuable upon the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 25 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other reasonable disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises arising therefrom,
directly or indirectly. The costs and expenses of enforcing this right of
indemnification shall also be paid by the Company. The indemnification provided
for hereunder shall survive the expiration of the Rights and the termination of
this Agreement.
(b) The Rights Agent may conclusively rely upon and shall be
protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate for Common
Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement or other paper or document believed by it, after
proper inquiry or examination, to be genuine and to be
-28-
signed, executed and, where necessary, guaranteed, verified or acknowledged, by
the proper Person or Persons.
(c) Notwithstanding anything in this Agreement to the contrary, in
no event shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Rights Agent has been advised of the likelihood of such
loss or damage, regardless of the form of action.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; PROVIDED, however, that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, and no implied duties or obligations shall be read into this
Agreement against the Rights Agent, by all of which the Company and the holders
of Rights Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting, the Rights
Agent may consult with legal counsel (who may be legal counsel for the Company),
and the opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
-29-
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "Current Market Price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by the
Chairman of the Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except as to its countersignature on such Rights Certificates), or
be required to verify the same but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of actual knowledge 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 shares
of Preferred Stock or Common Stock or other securities to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any shares of
Preferred Stock or Common Stock or other securities will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties,
-30-
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.
(h) Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under this
Agreement and the date on or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than ten Business Days after the date
any officer of the Company actually receives such application, unless such
officer shall have consented in writing to an earlier date) unless prior to
taking any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(i) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(j) 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, however, that reasonable
care was exercised in the selection and continued employment thereof.
(k) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(l) The Rights Agent shall not be required to take notice or be
deemed to have notice of any fact, event or determination (including, without
limitation, any dates or events defined in this Agreement or the designation of
any Person as an Acquiring Person, Affiliate or Associate) under this Agreement
unless and until the Rights Agent shall be specifically notified in writing by
the Company of such fact, event or determination.
(m) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1
-31-
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the
Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing to the Company, and to each transfer
agent of the Common Stock and the Preferred Stock, by registered or certified
mail, and, at the expense of the Company, to the holders, if any, of the Rights
Certificates by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent (with or without cause) upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock and the Preferred Stock, by registered
or certified mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
Notwithstanding the foregoing provisions of this Section 21, in no event shall
the resignation or removal of a Rights Agent be effective until a successor
Rights Agent shall have been appointed and have accepted such appointment. If
the Company shall fail to make such appointment within a period of 30 days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then the Rights Agent or the
registered holder of any Rights 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) a
corporation organized and doing business under the laws of the United States or
any state thereof, in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000 or (b) an affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock
and the Preferred Stock, and mail a notice thereof in writing to the registered
holders of the Rights 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 RIGHTS CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or
-32-
sale of shares of Common Stock following the Distribution Date and prior to the
Expiration Date, the Company (a) shall, with respect to shares of Common Stock
so issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement granted or awarded on or prior to the Distribution
Date, or upon the exercise, conversion or exchange of securities issued by the
Company on or prior to the Distribution Date, and (b) may, in any other case, if
deemed necessary or appropriate by the Board of Directors of the Company, issue
Rights Certificates representing the appropriate number of Rights in connection
with such issuance or sale; PROVIDED, however, that (i) no such Rights
Certificate shall be issued and/or none of the Rights that would be evidenced by
the Rights Certificates will be granted if, and to the extent that, the Company
shall be advised by counsel that such issuance or such grant would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued, and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23. REDEMPTION AND TERMINATION.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the Close of Business on the tenth day
following the Stock Acquisition Date (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the Close of Business on the tenth day
following the Record Date) and (ii) the Final Expiration Date cause the Company
to redeem all but not less than all the then outstanding Rights at a redemption
price of $.01 per Right, as such amount may be appropriately adjusted, if
necessary, to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); PROVIDED, however, that the Rights may
not be redeemed following any merger to which the Company is a party that (i)
occurs after a Flip-In Event has occurred and (ii) was not approved by the
shareholders of the Company at a shareholders' meeting. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Flip-In Event until such time as the Company's
right of redemption hereunder has expired. The Company may, at its option, pay
the Redemption Price in cash, shares of Common Stock (based on the Current
Market Price of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the redemption of the Rights (which action may
be conditioned on the occurrence of one or more events or on the existence of
one or more facts or may be effective at some future time), evidence of which
shall have been filed with the Rights Agent and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price for each Right so held. Promptly after the effectiveness of the action of
the Board of Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at each holder's
last address as it appears upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the Company for the Common
Stock. Any notice that is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each
-33-
such notice of redemption shall state the method by which the payment of the
Redemption Price will be made. The failure to give notice as set forth above
shall not affect the validity of the redemption of the Rights.
Section 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at any
time and from time to time after the first occurrence of a Flip-In Event,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for shares of Common Stock or Common Stock Equivalents or any
combination thereof, at an exchange ratio of one share of Common Stock, or such
number of Common Stock Equivalents or units representing fractions thereof as
would be deemed to have the same value as one share of Common Stock, per Right,
appropriately adjusted, if necessary, to reflect any stock split, stock dividend
or similar transaction occurring after the Rights Dividend Declaration Date
(such exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors may not effect such
exchange at any time after any Person (other than an Exempt Person), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the shares of Common Stock then outstanding.
(b) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to and in
accordance with subsection (a) of this Section 24 (which action may be
conditioned on the occurrence of one or more events or on the existence of one
or more facts or may be effective at some future time) and without any further
action and without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to receive
that number of shares of Common Stock and/or Common Stock Equivalents equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange; PROVIDED,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the shares of Common Stock and/or Common Stock
Equivalents for Rights will be effected and, in the event of any partial
exchange, the number of Rights that will be exchanged. Any partial exchange
shall be effected as nearly pro rata as possible based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(c) In the event that the number of shares of Common Stock that are
authorized by the Company's certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit an exchange of Rights as contemplated in accordance with
this Section 24, the Company may, at its option, to the fullest
-34-
extent permitted by applicable law and regulations, take all such action as may
be necessary to authorize additional shares of Common Stock for issuance upon
exchange of the Rights.
(d) The Company shall not be required to issue fractions of shares
of Common Stock or to distribute certificates or scrip evidencing fractional
shares of Common Stock. If the Company elects not to issue fractional shares,
then in lieu of such fractional shares of Common Stock, the Company shall pay to
the registered holders of Rights with regard to which such fractional shares of
Common Stock would otherwise be issuable an amount in cash equal to the same
fraction of the value of a whole share of Common Stock. For purposes of this
Section 24, the value of a whole share of Common Stock shall be the Closing
Price per share of Common Stock for the Trading Day immediately prior to the
date of exchange pursuant to this Section 24, and the value of any Common Stock
Equivalent shall be deemed to have the same value as the Common Stock on such
date.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, or (iii) to effect any reclassification of its Preferred
Stock (other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof), or to effect any sale,
lease or other transfer (or to permit one or more of its Subsidiaries to effect
any sale or other transfer), in one transaction or a series of related
transactions, of more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more transactions each of
which complies and all of which together comply with Section 11(o) hereof), or
(v) to effect the liquidation, dissolution or winding up of the Company, or (vi)
to be acquired pursuant to a share exchange, then, in each such case, the
Company shall give to each holder of record of a Rights Certificate, to the
extent feasible and in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation therein
by the holders of the shares of Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 20 days prior to the record date for
determining holders of the shares of Preferred Stock for purposes of such
action, and in the case of any such other action, at least 20 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the shares of Preferred Stock, whichever shall be the earlier.
The failure to give notice required by this Section 25 or any defect therein
shall not affect the legality or validity of the action taken by the Company or
the vote upon any such action.
-35-
(b) In case any Flip-In Event shall occur, then (i) the Company
shall as soon as practicable thereafter give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26 hereof, a
notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii) hereof,
and (ii) all references in the preceding paragraph to Preferred Stock shall be
deemed thereafter to refer to Common Stock and/or, if appropriate, other
securities.
Section 26. NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made (i) when
delivered personally to the recipient or when sent to the recipient by telecopy
(receipt confirmed), (ii) one Business Day after the date when sent to the
recipient by reputable express courier service (charges prepaid) or (iii) on the
date of receipt if sent by registered or certified mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
Benchmark Electronics, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxx 00000
Attention: Corporate Secretary
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Subject to provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made (i)
when delivered personally to the recipient or when sent to the recipient by
telecopy (receipt confirmed), (ii) one Business Day after the date when sent to
the recipient by reputable express courier service (charges prepaid) or (iii) on
the date of receipt if sent by registered or certified mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
Xxxxxx Trust and Savings Bank
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
-36-
Section 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 27, the Company may
in its sole and absolute discretion and the Rights Agent shall, if the Company
so directs, supplement or amend any provision of this Agreement in any respect
without the approval of any holders of certificates representing shares of
Common Stock. From and after the Distribution Date and subject to the
penultimate sentence of this Section 27, the Company may and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein that may
be defective or inconsistent with any other provisions herein, (iii) to shorten
or lengthen any time period hereunder or (iv) to change or supplement the
provisions hereunder in any manner that the Company may deem necessary or
desirable and that shall not materially adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person); PROVIDED, that this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this sentence,
(A) a time period relating to when the Rights may be redeemed at such time as
the Rights are not then redeemable or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights (other than any Acquiring
Person and its Affiliates and Associates). 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 27, the
Rights Agent shall execute such supplement or amendment; PROVIDED, however, that
the Rights Agent may, but shall not be obligated to, enter into any such
supplement or amendment that adversely affects the Rights Agent's own rights,
duties or immunities under this Agreement. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made that changes
the Redemption Price. Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment that changes the rights and duties of the
Rights Agent under this Agreement will be effective against the Rights Agent
without the execution of such supplement or amendment by the Rights Agent.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS,
ETC. For all purposes of this Agreement, any calculation of the number of shares
of Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act as in effect on the date hereof. The Board of Directors
of the Company (or, as set forth herein, certain specified members thereof)
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of Directors of
the Company or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for
-37-
the administration of this Agreement (including, without limitation, a
determination to redeem or not redeem the Rights or to amend this Agreement).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the foregoing)
that are done or made by the Board of Directors of the Company in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights, as such, and all other parties, and (y) not subject the
Board of Directors to any liability to the holders of the Rights unless such
liability is otherwise required to be imposed by applicable law, regulations or
the Company's restated articles of incorporation.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be absolutely null, invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated; PROVIDED, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or restriction
is held by such court or authority to be absolutely null, invalid, void or
unenforceable and the Board of Directors of the Company determines in its good
faith judgment that severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth day following the date of such
determination by the Board of Directors of the Company. Without limiting the
foregoing, if any provision requiring that a determination be made by less than
the entire Board of Directors of the Company is held by a court of competent
jurisdiction or other authority to be absolutely null, invalid, void or
unenforceable, such determination shall then be made by the entire Board of
Directors of the Company.
Section 32. GOVERNING LAW AND CONSENT TO JURISDICTION. This
Agreement, each Right and each Rights Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Texas and for all
purposes shall be governed by and construed in accordance with the laws of such
State applicable to contracts made and to be performed entirely within such
State. The Company, the Rights Agent and each holder of a Right by accepting
same agrees that any suit, action or other proceeding arising out of this
Agreement (including without limitation any request that any Person take any
action in connection with this Agreement) initiated by any of the foregoing
Persons shall be brought and litigated only in the State or Federal courts
located in the State of Texas, and each of such Persons hereby waives any claim
it may have that such court is an inconvenient forum for the purposes of any
such suit, action or other proceeding, or that such court does not have personal
jurisdiction, or that venue is not proper in any suit, action or other
proceeding
-38-
brought in such court, or that reasonable service of process has not been
effected in any suit, action or other proceeding brought in such court.
Section 33. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
-39-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: BENCHMARK ELECTRONICS, INC.
/S/ XXXXXX X. XXXXXX By /S/ XXXXXX X. XXXXXX
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
Title: Secretary Title: President
Attest: XXXXXX TRUST AND SAVINGS BANK,
as Rights Agent
/S/ XXX X. XXXXXXXXX By /S/ XXXXXXXX XXXXXXXX
Name: Xxx X. Xxxxxxxxx Name: Xxxxxxxx Xxxxxxxx
Title: Vice President Title: Assistant Vice President
-40-
EXHIBIT A
Form of Statement of Resolution Establishing a Series of Preferred Stock
BENCHMARK ELECTRONICS, INC.
------------------------------------
STATEMENT OF RESOLUTION
ESTABLISHING A SERIES OF SHARES
Pursuant to Article 2.13 of the
Texas Business Corporation
------------------------------------
Series A Cumulative Junior Participating
Preferred Stock, Par Value $.10 per share
Benchmark Electronics, Inc., a Texas corporation (the
"Corporation"), pursuant to the provisions of Article 2.13 of the Texas Business
Corporation Act and authority expressly vested in the Board of Directors of the
Corporation by its Articles of Incorporation, as amended, hereby submits the
following statement for the purpose of establishing and designating a series of
shares and fixing and determining the designations, preferences, limitations and
relative rights thereof:
ARTICLE I
The name of the corporation is Benchmark Electronics, Inc.
ARTICLE II
The following recitals and resolutions, establishing and designating
a series of shares and fixing and determining the designating preferences,
limitations and relative rights thereof, were duly adopted by the Board of
Directors of the Corporation on December 11, 1998:
WHEREAS, Section 4.1 of the Articles of Incorporation, as amended,
of the Corporation authorizes 30,000,000 shares of a class of common stock, par
value $.10 per share ("Common Stock"), issuable from time to time, and 5,000,000
shares of a class of preferred stock, par value $.10 per share ("Preferred
Stock"), issuable from time to time in one or more series; and
WHEREAS, pursuant to Section 4.2 of the Articles of Incorporation,
as amended, of the Corporation, the Board of Directors of the Corporation is
authorized to fix and determine the designation, preferences, limitations and
relative rights of any series of preferred stock and to fix the number of shares
constituting such series and to increase or decrease the number of shares of any
such series (but not below the number of shares than outstanding); and
A-1
WHEREAS, it is the desire of the Board of Directors of the
Corporation, pursuant to its authority described above, to establish a series of
preferred stock and to fix and determine the designation, preferences,
limitations and relative rights thereof;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby
establishes a series of preferred stock of the Corporation and fixes and
determines the designation, preferences, limitations and relative rights thereof
as follows:
1. ESTABLISHMENT AND DESIGNATION OF SERIES. There is hereby
established, out of the authorized but unissued shares of Preferred Stock of the
Corporation, a series of Preferred Stock to be designated "Series A Cumulative
Junior Participating Preferred Stock" (the "Series A Preferred Stock"), to
consist of an aggregate of 30,000 shares and to have the preferences,
limitations and relative rights set forth herein.
2. DIVIDENDS. (A) The holders of the Series A Preferred Stock shall
be entitled to receive, when and as declared by the Board of Directors out of
the funds of the Corporation legally available therefor, subject to the prior
and superior rights of the holders of any other shares of any series of
Preferred Stock ranking senior to the shares of Series A Preferred Stock as to
dividends, but in preference to the holders of the Common Stock, and any other
capital stock of the Corporation ranking junior to the Series A Preferred Stock
as to dividends, cumulative preferential dividends per share of Series A
Preferred Stock payable in cash on the last day of March, June, September and
December in each year (each such date being referred to herein as a "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) $.25 or (b) subject to the provision for adjustment hereinafter set
forth, the Adjustment Number (as defined below) times the aggregate per share
amount of all cash dividends, and the Adjustment Number times the aggregate per
share amount (payable in kind) of all non-cash dividends or other distributions
other than a dividend or distribution 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. The "Adjustment Number" shall initially be
1,000. In the event the Corporation shall at any time after December 11, 1998
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment 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) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the
A-2
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall accrue and be cumulative 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.
(C) Each dividend on the Series A Preferred Stock shall be paid to
the holders of record of shares of the Series A Preferred Stock as they appear
on the stock register of the Corporation on such record date, not exceeding 30
days preceding the payment date thereof, as shall be fixed by the Board of
Directors of the Corporation. Dividends on account of arrears for any past
dividend periods may be declared and paid at any time, without reference to any
Quarterly Dividend Payment Date, to holders of record on such date, not
exceeding 45 days preceding the payment date thereof, as may be fixed by the
Board of Directors of the Corporation. No dividend may be declared on any other
series or class of stock ranking on a parity with the Series A Preferred Stock
as to dividends in respect of any dividend period, unless there shall also be or
have been declared on the Series A Preferred Stock like dividends for all
periods in the amounts provided therefor in paragraph 2(A) above. In the event
that full cumulative dividends on the Series A Preferred Stock have not been
declared and paid or set apart for payment, the Corporation may not declare or
pay or set apart for payment any dividends or make any other distributions on,
or make any payment on account of the purchase, redemption or retirement of, the
Common Stock or any other stock of the Corporation ranking junior to the Series
A Preferred Stock as to dividends or distributions of assets on liquidation,
dissolution or winding up of the Corporation (other than, in the case of
dividends or distributions, dividends or distributions paid in shares of Common
Stock or such other junior ranking stock), until full cumulative dividends on
the Series A Preferred Stock are declared and paid or set apart for payment.
Further, the Corporation shall not declare a dividend or distribution on the
Common Stock unless it also declares a dividend or distribution on the Series A
Preferred Stock as provided in paragraph 2(A) above immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
or distribution 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 $.25 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
3. REDEMPTION. (A) The Corporation, at its option, may redeem shares
of Series A Preferred Stock in whole at any time and in part from time to time,
at a redemption price equal to the Adjustment Number times the current per share
market price (as such term is hereinafter defined) of the Common Stock on the
date of the mailing of the notice of redemption, together with accrued and
unpaid dividends to the date of such redemption. The "current per share market
price" on any date shall be deemed to be the average of the closing price per
share of such Common Stock for the ten 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 Common Stock is
determined during a period following the announcement of (A) a dividend or
distribution on the Common Stock other than a regular quarterly cash dividend or
(B) any subdivision,
A-3
combination or reclassification of such Common Stock and the ex-dividend date
for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, shall not have occurred prior to the
commencement of such ten Trading Day period, then, and in each such case, the
current per share market price shall be properly adjusted to take into account
ex-dividend or ex-distribution trading. The closing price for each day shall be
the last sales 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 Common Stock is not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Common Stock is listed or admitted to trading or, if the
Common Stock is not listed or admitted to trading on any national securities
exchange, the last quoted sales price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System or
such other self-regulatory organization or registered securities information
processor (as such terms are used under the Securities Exchange Act of 1934, as
amended) that then reports information concerning the Common Stock or, if on any
such date the Common Stock is not quoted by any such entity, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Common Stock selected by the Board of Directors of the
Corporation. If on any such date no such market maker is making a market in the
Common Stock, the fair value of the Common Stock on such date as determined in
good faith by the Board of Directors of the Corporation shall be used. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, a business day.
(B) In case of the redemption of only part of the Series A Preferred
Stock at the time outstanding, such redemption shall be made pro rata, provided,
however, that the Corporation shall not be required to effect the redemption in
any manner that results in fractional shares being outstanding (unless
immediately prior to such time fractional shares were outstanding, in which case
the Corporation shall not be required to effect the redemption in any manner
that results in fractions of shares, other than one-thousandths of shares, being
outstanding); if full cumulative dividends shall not have been paid or declared
and set apart for payment for all quarterly dividends to and including the last
Quarterly Dividend Payment Date prior to the date fixed for redemption, the
Corporation shall not:
(i) call for redemption (except for redemptions in accordance
with subparagraph 3(B)(iii) below) any shares of Series A Preferred
Stock unless all such shares then outstanding are called for
simultaneous redemption; or
(ii) redeem or purchase or otherwise acquire (except for
redemptions, purchases or acquisitions in accordance with
subparagraph 3(B)(iii) below) for consideration shares of any stock
ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with Series A Preferred Stock, provided
that
A-4
the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of
any stock of the Corporation ranking junior (both as to dividends
and upon dissolution, liquidation or winding up) to Series A
Preferred Stock; or
(iii) redeem or purchase or otherwise acquire (except for
redemptions, purchases or acquisitions in accordance with
subparagraphs 3(B)(i) and 3(B)(ii) above) for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking
on a parity with 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 of parity
stock and Series A Preferred Stock 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.
(C) Notice of any proposed redemption of Series A Preferred Stock
shall be given by the Corporation not less than 10 days nor more than 60 days
prior to the date fixed for such redemption to each holder of record of the
shares to be redeemed at his address appearing on the books of the Corporation.
Notice of redemption shall be deemed to have been given when deposited in the
United States mails, by first class mail, whether or not such notice is actually
received. If on or before the redemption date specified in such notice all funds
necessary for such redemption shall have been set aside by the Corporation,
separate and apart from its other funds, in trust for the pro rata benefit of
the holders of the shares so called for redemption, so as to be and continue to
be available therefor, then from and after the date of redemption so designated,
notwithstanding that any certificate representing shares of Series A Preferred
Stock so called for redemption shall not have been surrendered for cancellation,
the shares represented thereby shall no longer be deemed outstanding, the right
to receive dividends thereon shall cease to accrue and all rights with respect
to such shares of Series A Preferred Stock so called for redemption shall
forthwith at the Close of Business on such redemption date cease and terminate,
except only the right of the holders thereof to receive the redemption price of
such shares so to be redeemed plus an amount equal to accrued and unpaid
dividends (whether or not declared) up to the date fixed for redemption, but
without interest thereon.
(D) The Corporation may, however, prior to the redemption date
specified in the notice of redemption, deposit in trust for the account of the
holders of the shares of Series A Preferred Stock to be redeemed, with a bank or
trust company in good standing organized under the laws of the United States of
America or of any state thereof, having its principal office located in the
continental United States, and having a capital, surplus and undivided profits
aggregating at least $50 million, designated in such notice of redemption, all
funds necessary for such redemption (including accrued and unpaid dividends up
to the date fixed for redemption), together with irrevocable written
instructions authorizing such bank or trust company, on behalf and at the
expense of the Corporation, to cause the notice of redemption to be mailed as
herein provided at least 15 days but not more than 60 days prior to the
redemption date and to include in said notice of redemption
A-5
a statement that all funds necessary for such redemption have been so deposited
in trust and are immediately available, and on the redemption date,
notwithstanding that any certificate representing shares of Series A Preferred
Stock called for redemption shall not have been surrendered for cancellation,
all shares of Series A Preferred Stock with respect to which such deposit shall
have been made and which are outstanding on such redemption date shall no longer
be deemed to be outstanding and all rights with respect to such shares of Series
A Preferred Stock shall forthwith at the Close of Business on such redemption
date cease and terminate, except only the right of the holders thereof to
receive from such bank or trust company, at any time after the redemption date,
the redemption price of such shares so to be redeemed plus accrued and unpaid
dividends up to the date fixed for redemption.
(E) If any shares of Series A Preferred Stock called for redemption
are not issued and outstanding as of the date fixed for redemption, the amount
set aside or deposited for the redemption thereof shall revert to or be paid
over to the Corporation.
(F) Any shares of Series A Preferred Stock which are redeemed or
otherwise purchased or acquired by the Corporation or any subsidiary thereof
shall be cancelled. The number of shares of Series A Preferred Stock shall be
reduced by the number of shares so cancelled and such cancelled shares shall be
restored to the status of authorized but unissued shares of Preferred Stock that
are undesignated as to series. For the purposes of this paragraph, a subsidiary
means a corporation of which a majority of the capital stock having voting power
under ordinary circumstances to elect a majority of the board of directors is
owned by (a) the Corporation, (b) the Corporation and one or more of its
subsidiaries or (c) one or more of the Corporation's subsidiaries.
4. VOTING RIGHTS. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(A) Each share of Series A Preferred Stock shall entitle the holder
thereof to a number of votes equal to the Adjustment Number for each share held
and, except as otherwise provided herein or by law, the Series A Preferred Stock
and the Common Stock (and any other capital stock of the Corporation entitled to
vote) shall vote together as a single class.
(B) Unless the vote of a larger percentage is required by law or the
Corporation's Articles of Incorporation, as amended, the affirmative vote of the
holders of a majority of the outstanding shares of Series A Preferred Stock
shall be sufficient to take any action as to which a class vote of the holders
of the Series A Preferred Stock is required by law or the Corporation's Articles
of Incorporation, as amended.
(C) Whenever, at any time, dividends payable on the Series A
Preferred Stock shall be in arrears for such number of dividend payments as
shall include not less than 540 calendar days, the holders of all Preferred
Stock (including holders of the Series A Preferred Stock) upon which these or
like voting rights have been conferred and are exercisable (the "Voting
Preferred Stock") with dividends in arrears for such number of dividend payments
as shall include not less than 540 calendar days, shall have the exclusive
right, voting separately as a class, irrespective of
A-6
series, to elect by a majority of the votes cast two directors of the
Corporation, (i) at the Corporation's next annual meeting of shareholders, (ii)
at a special meeting held in place thereof, (iii) at a special meeting of the
holders of shares of the Voting Preferred Stock called by the Secretary of the
Corporation upon the written request of the holders of record of 25% or more of
the total number of shares of Voting Preferred Stock then outstanding, to be
held within 60 days after delivery of such request, or (iv) by written consent
of the holders of a majority of the issued and outstanding shares of Voting
Preferred Stock in lieu thereof, and at each meeting of shareholders thereafter
at which directors shall be elected until such rights shall terminate as
hereinafter provided. The Board of Directors of the Corporation hereby
unanimously directs the Secretary of the Corporation to give notice of any
special meeting of the shareholders of the Corporation required from time to
time by the provisions of this paragraph, in the manner prescribed by the Bylaws
of the Corporation. Upon the vesting of such voting right in the holders of the
Voting Preferred Stock, the maximum authorized number of members of the Board of
Directors shall automatically be increased by two and the two vacancies so
created shall be filled by vote of the holders of the Voting Preferred Stock as
hereinabove set forth. The right of the holders of the Voting Preferred Stock,
voting separately as a class, to elect members of the Board of Directors of the
Corporation as aforesaid shall continue until such time as all dividends
accumulated on the Series A Preferred Stock shall have been paid in full, at
which time such right shall terminate, except as by law expressly provided,
subject to revesting in the event of each and every subsequent default of the
character above mentioned. Upon any termination of the right of the holders of
the Voting Preferred Stock to vote for directors as herein provided, the term of
office of all directors then in office elected by such Voting Preferred Stock
voting as a class shall terminate immediately. If the office of any director
elected by the holders of the Voting Preferred Stock becomes vacant by reason of
death, resignation, retirement, disqualification, removal from office, or
otherwise, the remaining director elected by the holders of Voting Preferred
Stock voting as a class may choose a successor who shall hold office for the
unexpired term in respect of which such vacancy occurred. Whenever the special
voting powers vested in the holders of the Voting Preferred Stock shall have
expired, the number of directors shall become such number as may be provided for
in the Bylaws, or resolution of the Board of Directors thereunder, irrespective
of any increase made pursuant to the provisions of this paragraph 4.
(D) At any time that any shares of Series A Preferred Stock are
outstanding, the Restated Articles of Incorporation, as amended, of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of Series A Preferred Stock so
as to affect them adversely without the affirmative vote of the holders of a
majority or more of the outstanding shares of Series A Preferred Stock, voting
separately as a class.
5. PRIORITY IN EVENT OF DISSOLUTION. (A) Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made 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 $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series A Liquidation Preference"). Following
the payment of the full amount of the Series A Liquidation
A-7
Preference, no additional distributions shall be made to the holders of shares
of Series A Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) the Adjustment Number. Following the payment of the full
amount of the Series A Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series A Preferred Stock and Common Stock,
respectively, holders of Series A Preferred Stock and holders of shares of
Common Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment Number to 1
with respect to such Series A Preferred Stock and Common Stock, on a per share
basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any, that
rank on a parity with Series A Preferred Stock, then such remaining assets shall
be distributed ratably to the holders of such parity shares (including the
Series A Preferred Stock) in proportion to their respective liquidation
preferences.
6. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share equal to the Adjustment Number 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.
7. RANKING. The Series A Preferred Stock shall rank junior to all
other series of the Corporation's Preferred Stock as to the payment of dividends
and the distribution of assets, unless the terms of any such series shall
provide otherwise, and shall rank senior to the Common Stock as to such matter.
8. FRACTIONAL SHARES. The Series A Preferred Stock may be issued in
fractions of a share that shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
9. SINKING FUND. The Series A Preferred Stock shall not be entitled
to any mandatory redemption or prepayment (except on liquidation, dissolution or
winding up of the affairs of the Corporation) or to the benefit of any sinking
fund.
10. AMOUNT. The number of shares of Series A Preferred Stock may be
increased or decreased by resolution of the Board of Directors; provided,
however, that no decrease shall reduce the number of shares of Series A
Preferred Stock to less than the number of shares then issued and outstanding
plus the number of shares issuable upon exercise of outstanding rights, options
or warrants or upon conversion of outstanding securities issued by the
Corporation.
A-8
11. DEFINITION. If the day upon which any payment is to be made or
any other action is to be taken or any event is scheduled to occur pursuant to
the terms of these Statement of Resolution is not a business day, the payment
shall be made or the other action shall be taken on the next succeeding business
day. A "business day" is defined as a day in the City of Houston, County of
Xxxxxx, Texas, that is not a legal holiday or a day on which banking
institutions are authorized or obligated by law to close.
12. NOTICE. Except as otherwise provided herein, any notice, demand
or other communication shall be deemed given and received as of the date of
delivery in person or receipt set forth on the return receipt. The inability to
deliver because of rejection or other refusal to accept any notice, demand or
other communication, shall be deemed to be receipt of such notice, demand or
other communication as of the date of such inability to deliver or rejection or
refusal to accept.
; and further
RESOLVED, that officers of the Corporation be and hereby authorized
and directed to make, execute and file with the Secretary of State of Texas, in
accordance with the provisions of Article 2.13 of the Texas Business Corporation
Act, a State of Resolution Establishing a Series of Shares with respect to the
Series A Preferred Stock, and to do all those acts and things as such officers
may deem necessary, appropriate, convenient or desirable, in order to carry into
effect the purpose and intent of these resolutions.
ARTICLE III
The foregoing recitals and resolutions have been duly adopted by all
necessary corporate action on the part of the Corporation.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to
be affixed and this certificate to be signed by its President, and attested to
by its Secretary, the 11th day of December, 1998.
BENCHMARK ELECTRONICS, INC.
By: _________________________
Name: Xxxxxx X. Xxxxxx
Title: President
By: __________________________
Name: Xxxxxx X. Xxxxxx
Title: Secretary
A-9
EXHIBIT B
Form of Rights Certificate
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER DECEMBER 11, 2008 OR EARLIER IF REDEEMED OR EXCHANGED BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY,
AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS WILL BECOME NULL AND VOID
AND WILL NO LONGER BE TRANSFERABLE.
RIGHTS CERTIFICATE
BENCHMARK ELECTRONICS, INC.
This certifies that _____________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of December 11, 1998 as it may from time to time
be supplemented or amended (the "Rights Agreement"), between Benchmark
Electronics, Inc., a Texas corporation (the "Company"), and Xxxxxx Trust and
Savings Bank, an Illinois banking corporation (the "Rights Agent"), to purchase
from the Company at any time prior to 5:00 p.m. (Houston, Texas time) on
December 11, 2008 at the office or offices of the Rights Agent designated for
such purpose, or its successors as Rights Agent, one one-thousandth of a fully
paid, nonassessable share of Series A Cumulative Junior Participating Preferred
Stock (the "Preferred Stock") of the Company, at a purchase price of [$___] per
one one-thousandth of a share (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and
related Certificate set forth on the reverse hereof duly executed. The Purchase
Price may be paid in cash or by certified check, cashiers or official bank check
or bank draft payable to the order of the Company or the Rights Agent. The
number of Rights evidenced by this Rights Certificate (and the number of shares
which may be purchased upon exercise thereof) set forth above, and the Purchase
Price per share set forth above, are the number and Purchase Price as of
December 11, 1998, based on the Preferred Stock as constituted at such date. The
Company reserves the right to require prior to the occurrence of a Triggering
Event (as such term is defined in the Rights Agreement) that a number of Rights
be exercised so that only whole shares of Preferred Stock will be issued.
B-1
From and after the occurrence of a Flip-In Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a direct or indirect transferee of any such Acquiring Person,
Associate or Affiliate, or (iii) under certain circumstances specified in the
Rights Agreement, a direct or indirect transferee of a person who, concurrently
with or after such transfer, became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void in the
circumstances set forth in the Rights Agreement, and no holder hereof shall have
any rights whatsoever with respect to such Rights from and after the occurrence
of such Flip-In Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Preferred Stock or other securities or other assets
that may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events.
This Rights 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 Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Company.
As provided in the Rights Agreement, this Rights Certificate, with
or without other Rights Certificates, upon surrender at the principal office or
offices of the Rights Agent designated for such purpose, and with the
Certificate in the Form of Assignment on the reverse hereof duly executed, may
be exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of one one-thousandths of a share of Preferred Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered shall
have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at its option
at a redemption price of $.01 per Right, payable, at the election of the
Company, in cash or shares of Common Stock or such other consideration as the
Board of Directors may determine, at any time prior to the earlier of the Close
of Business on (a) the tenth day following the Stock Acquisition Date (as
defined in the Rights Agreement) (as such time period may be extended or
shortened pursuant to the Rights Agreement) and (b) the Expiration Date (as such
term is defined in the Rights Agreement) or (ii) may be exchanged in whole or in
part for shares of the Company's Common Stock, par value $0.10 per
B-2
share, and/or other equity securities of the Company deemed to have the same
value as shares of Common Stock. After the expiration of the redemption period,
the Company's right of redemption may be reinstated if (i) an Acquiring Person
reduces its beneficial ownership to 10% or less of the outstanding shares of
Common Stock in a transaction or series of transactions not involving the
Company and (ii) there are no other Acquiring Persons.
No fractional shares of Preferred Stock are required to be issued
upon the exercise of any Right or Rights evidenced hereby (other than, except as
set forth above, fractions that are integral multiples of one one-thousandth of
a share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts), but in lieu thereof a cash payment may be
made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company that 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 shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
B-3
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of __________________ _____
ATTEST: BENCHMARK ELECTRONICS, INC.
____________________________ By ___________________________
Secretary Title:
Countersigned:
XXXXXX TRUST AND SAVINGS BANK,
as Rights Agent
By ____________________________
Authorized Signature
B-4
Form of Reverse Side of Rights Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the Rights Certificate.)
FOR VALUE RECEIVED ________________________________________ hereby sells,
assigns and transfers unto ___________________________________________________
____________________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _________________, 19__
___________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a 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.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned,
transferred, split up, combined or exchanged by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of an Acquiring Person
(as such terms are defined pursuant to the Rights Agreement);
B-5
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person or who is a direct or indirect
transferee of an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated: _____________, 19__
___________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a 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.
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-6
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: BENCHMARK ELECTRONICS, INC.
The undersigned hereby irrevocably elects to exercise _________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person that may be issuable upon the
exercise of the Rights) and requests that certificates for such shares (or other
securities) be issued in the name of and delivered to:
Please insert social security
or other identifying number
__________________________________________________________________________
(Please print name and address)
__________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
__________________________________________________________________________
(Please print name and address)
__________________________________________________________________________
Dated: ____________, 19__
_________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a 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-7
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or who is a direct or indirect transferee of an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: _____________, 19__
_________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a 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.
NOTICE
The signatures to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
B-8
EXHIBIT C
BENCHMARK ELECTRONICS, INC.
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On December 11, 1998, the Board of Directors of Benchmark
Electronics, Inc. (the "Company") declared a dividend of one right to purchase
preferred stock ("Right") for each outstanding share of the Company's Common
Stock, par value $0.10 per share ("Common Stock"), to shareholders of record at
the Close of Business on December 21, 1998. Each Right entitles the registered
holder to purchase from the Company a unit consisting of one one-thousandth of a
share (a "Unit") of Series A Cumulative Junior Participating Preferred Stock,
par value $0.10 per share (the "Preferred Stock"), at a purchase price of
[$____] per Unit, subject to adjustment (the "Purchase Price"). The description
and terms of the Rights are set forth in a Rights Agreement dated as of December
11, 1998 (the "Rights Agreement") between the Company and Xxxxxx Trust and
Savings Bank, as Rights Agent.
Initially, the Rights will be attached to all certificates
representing outstanding shares of Common Stock, and no separate certificates
for the Rights ("Rights Certificates") will be distributed. The Rights will
separate from the Common Stock and a "Distribution Date" will occur upon the
earlier of (i) ten days (or, in connection with a Permitted Offer only, such
later date as may be determined by the Company's Board of Directors before the
Distribution Date occurs) 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
outstanding shares of Common Stock (the date of the announcement being the
"Stock Acquisition Date"), or (ii) ten business days (or such later date as may
be determined by the Company's Board of Directors before the Distribution Date
occurs) following the commencement of a tender offer or exchange offer that
would result in a person's becoming an Acquiring Person. Until the Distribution
Date, (a) the Rights will be evidenced by the Common Stock certificates
(together with a copy of this Summary of Rights or bearing the notation referred
to below) and will be transferred with and only with such Common Stock
certificates, (b) new Common Stock certificates issued after December 21, 1998
will contain a notation incorporating the Rights Agreement by reference and (c)
the surrender for transfer of any certificate for Common Stock outstanding (with
or without a copy of this Summary of Rights) will also constitute the transfer
of the Rights associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the Close of Business on December 11, 2008, unless earlier redeemed or
exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of Common Stock as of the Close
of Business on the Distribution Date and, from and after the Distribution Date,
the separate Rights Certificates alone will represent the Rights. All shares of
Common Stock issued prior to the Distribution Date will be issued with Rights.
Shares of Common Stock issued after the Distribution Date in connection with
certain employee benefit plans or upon conversion of certain securities will be
issued with Rights. Except as otherwise
C-1
determined by the Board of Directors, no other shares of Common Stock issued
after the Distribution Date will be issued with Rights.
In the event (a "Flip-In Event") that a person becomes an Acquiring
Person, (except pursuant to a tender or exchange offer for all outstanding
shares of Common Stock at a price and on terms that a majority of the
independent directors of the Company determines to be fair to and otherwise in
the best interests of the Company and its shareholders (a "Permitted Offer"))
each holder of a Right will thereafter have the right to receive, upon exercise
of such Right, a number of shares of Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a Current Market Price
(as defined in the Rights Agreement) equal to two times the exercise price of
the Right. Notwithstanding the foregoing, following the occurrence of any
Flip-In Event, all Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring Person (or by
certain related parties) will be null and void in the circumstances set forth in
the Rights Agreement. However, Rights are not exercisable following the
occurrence of any Flip-In Event until such time as the Rights are no longer
redeemable by the Company as set forth below.
For example, at an exercise price of [$X] per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an event
set forth in the preceding paragraph would entitle its holder to purchase [$2X]
worth of Common Stock (or other consideration, as noted above), based upon its
then Current Market Price, for [$X]. Assuming that the Common Stock had a
Current Market Price of [$1/4X] per share at such time, the holder of each valid
Right would be entitled to purchase 8 shares of Common Stock for [$X].
In the event (a "Flip-Over Event") that, at any time on or after the
Stock Acquisition Date, (i) the Company is acquired in a merger or other
business combination transaction (other than a specified type of merger that
follows a Permitted Offer), or (ii) 50% or more of the Company's assets or
earning power is sold or transferred, each holder of a Right (except Rights that
previously have been voided as set forth above) shall thereafter have the right
to receive, upon exercise, a number of shares of common stock of the acquiring
company (or in certain cases its controlling person) having a Current Market
Price equal to two times the exercise price of the Right. Flip-In Events and
Flip-Over Events are collectively referred to as "Triggering Events."
The Purchase Price payable, and the number of Units of Preferred
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or convertible securities at
less than the current market price of the Preferred Stock, or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
No adjustment in the Purchase Price will be required until
cumulative adjustments amount to at least 1% of the Purchase Price. No
fractional Units are required to be issued and, in
C-2
lieu thereof, an adjustment in cash may be made based on the market price of the
Preferred Stock on the last trading date prior to the date of exercise. Pursuant
to the Rights Agreement, the Company reserves the right to require prior to the
occurrence of a Triggering Event that, upon any exercise of Rights, a number of
Rights be exercised so that only whole shares of Preferred Stock will be issued.
At any time until ten days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right, payable, at the option of the Company, in cash, shares of Common Stock or
such other consideration as the Board of Directors may determine. Immediately
upon the effectiveness of the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.01 redemption price.
At any time after the occurrence of a Flip-In Event and prior to a
person's becoming the beneficial owner of 50% or more of the shares of Common
Stock then outstanding, the Company may exchange the Rights (other than Rights
owned by an Acquiring Person or an affiliate or an associate of an Acquiring
Person, which will have become void), in whole or in part, at an exchange ratio
of one share of Common Stock, and/or other equity securities deemed to have the
same value as one share of Common Stock, per Right, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
should not be taxable to shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other consideration) of the
Company or for the common stock of the acquiring company as set forth above or
are exchanged as provided in the preceding paragraph.
Prior to the Distribution Date, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company other than the
provision establishing the Redemption Price. Thereafter, the provisions of the
Rights Agreement (other than the provision establishing the Redemption Price)
may be amended by the Board of Directors in order to cure any ambiguity, defect
or inconsistency, to make changes that do not materially adversely affect the
interests of holders of Rights (excluding the interests of any Acquiring
Person), or to shorten or lengthen any time period under the Rights Agreement;
PROVIDED, HOWEVER, that no amendment to lengthen the time period governing
redemption shall be made at such time as the Rights are not redeemable.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an exhibit to a Registration Statement on Form 8-A. A
copy of the Rights 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
