Exhibit 99.1
RIGHTS AGREEMENT
This Rights Agreement (this "Agreement"), dated as of August 9, 2002,
is by and between Waters Corporation (the "Company"), a Delaware corporation,
and EquiServe Trust Company, N.A. (the "Rights Agent"), a national banking
association.
The Company's Board of Directors has declared a dividend of one
preferred share purchase right (a "Right") in respect of each share of the
Company's Common Stock outstanding of record as of the close of business, New
York City time, on August 27, 2002 (the "Record Date"), each Right representing
the right to purchase one one-hundredth of a Preferred Share, upon the terms and
subject to the conditions set forth in this Agreement, and has further
authorized and directed the issuance of one Right with respect to each Common
Share that shall become outstanding between the Record Date and the earliest of
the Distribution Date, the Redemption Date and the Final Expiration Date.
The parties hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement:
(a) "Acquiring Person" means any Person who, together with all
Affiliates and Associates of such Person, is the Beneficial Owner of 15% or more
of the Common Shares of the Company then outstanding or who was such a
Beneficial Owner at any time after the date hereof, whether or not such Person
continues to be the Beneficial Owner of 15% or more of the Common Shares then
outstanding, but will not include the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any Subsidiary of the Company, or
any entity holding securities of the Company organized, appointed, or
established by the Company or any Subsidiary for or pursuant to the terms of any
such plan. Notwithstanding the foregoing, no Person will become an "Acquiring
Person" solely as the result of an acquisition of Common Shares by the Company
which, by reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 15% or more of the Common
Shares of the Company then outstanding; provided, however, that if a Person
becomes the Beneficial Owner of 15% or more of the Common Shares of the Company
then outstanding by reason of share purchases by the Company, and after such
share purchases by the Company becomes the Beneficial Owner of any additional
Common Shares of the Company, then such Person will be deemed to be an
"Acquiring Person." Notwithstanding the foregoing, if the Board of Directors of
the Company determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of Common Shares so that such Person
would no longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Rights Agreement.
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(b) "Adjustment Shares" shall have the meaning ascribed thereto in
(S)11(a)(ii) hereof.
(c) "Affiliate" and "Associate" have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect
on the date of this Agreement.
(d) A Person will be deemed the "Beneficial Owner" of and will be
deemed to "beneficially own" any securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement, or understanding (whether
or not in writing) or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; provided, however,
that a Person will 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 payment,
purchase, or exchange, or (B) at any time prior to the occurrence of a
Triggering Event, securities issuable upon exercise of Rights, or (C)
from and after the occurrence of a Triggering Event, securities
issuable upon exercise of Rights, 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 23 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in connection
with an adjustment made with respect to any Original Rights;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of
or has "beneficial ownership" of (as determined pursuant to Rule 13d-3
of the General Rules and Regulations under the Exchange Act), including
without limitation pursuant to any agreement, arrangement, or
understanding, whether or not in writing; provided, however, that a
Person will not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph (ii) as a
result of an oral or written agreement, arrangement, or understanding
to vote such security if such agreement, arrangement, or understanding:
(A) arises solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in accordance with,
the applicable provisions of the General Rules and Regulations under
the Exchange Act, and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) 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 as described in the proviso to subparagraph (ii) of
this paragraph (d)) or disposing of any voting securities of the
Company.
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provided, however, that nothing in this paragraph (d) will cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of, or to "beneficially own," any securities 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.
(e) "Business Day" means any day other than a Saturday, a Sunday, or a
day on which banking institutions in Boston, Massachusetts are authorized or
obligated by law or executive order to close.
(f) "Close of Business" on any given date means 5:00 P.M., Boston time,
on such date; provided, however, that if such date is not a Business Day, it
means 5:00 P.M., Boston time, on the next succeeding Business Day.
(g) "Common Shares" when used with reference to the Company means the
shares of common stock, par value $.01 per share, of the Company. "Common
Shares" when used with reference to any Person other than the Company means the
capital stock with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of such other
Person, or if such other Person is a Subsidiary of another Person, of the Person
or Persons that ultimately control such first-mentioned Person and which have
issued and outstanding such capital stock, equity securities, or equity
interests.
(h) "Distribution Date" has the meaning set forth in Section 3 hereof.
(i) "Expiration Date" has the meaning set forth in Section 7(a) hereof.
(j) "Final Expiration Date" has the meaning set forth in Section
7(a)(i) hereof.
(k) "Person" means any individual, firm, corporation, partnership,
limited liability company, trust, or other entity, and includes any successor
(by merger or otherwise) of such entity.
(l) "Preferred Shares" means shares of Series A Junior Participating
Preferred Stock, par value $.01 per share, of the Company, having rights and
preferences set forth in the Form of Certificate of Designations attached to
this Rights Agreement as Exhibit A.
(o) "Purchase Price" has the meaning set forth in Section 7(b) hereof.
(p) "Record Date" has the meaning set forth in the preamble hereto.
(q) "Redemption Date" has the meaning set forth in Section 7(a)(ii)
hereof.
(r) "Right" has the meaning set forth in the second paragraph hereof.
(s) "Rights Certificate" shall have the meaning ascribed thereto in
Section 3(a) hereof.
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(t) "Section 7(e) Person" has the meaning set forth in Section 7(e)
hereof.
(u) "Section 11(a)(ii) Event" means any event described in Section
11(a)(ii) hereof.
(v) "Section 13 Event" means any event described in clauses (x), (y),
or (z) of Section 13(a) hereof.
(w) "Security" has the meaning set forth in Section 11(d)(i) hereof.
(x) "Shares Acquisition Date" means the first date of public
announcement (which, for purposes of this definition, includes without
limitation a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such.
(y) "Subsidiary" of any Person means any other Person of which a
majority of the voting power of the voting equity securities or equity interest
is owned, directly or indirectly, by such first-mentioned Person, or which is
otherwise controlled by such first-mentioned Person.
(z) "Summary of Rights" shall have the meaning ascribed thereto in
Section 3(b) hereof.
(aa) "Triggering Event" means any Section 11(a)(ii) Event or any
Section 13 Event.
(bb) "Voting Stock" means (i) the Common Shares of the Company, and
(ii) any other shares of capital stock of the Company entitled to vote generally
in the election of directors or entitled to vote together with the Common Shares
in respect of any merger, consolidation, sale of all or substantially all of the
Company's assets, liquidation, dissolution, or winding-up. Whenever any
provision of this Agreement requires a determination of whether a number of
shares of Voting Stock constituting a specified percentage of such Voting Stock
has been voted, tendered, acquired, sold or otherwise disposed of, or a
determination of whether a Person has offered or proposed to acquire a number of
shares of Voting Stock constituting such specified percentage, the number of
shares of Voting Stock constituting such specified percentage of Voting Stock
will in every such case be deemed to be the number of shares of Voting Stock
constituting the specified percentage of the Company's entire voting power then
entitled to vote generally in the election of directors or then entitled to vote
together with the Common Shares in respect of any merger, consolidation, sale of
all or substantially all of the Company's assets, liquidation, dissolution, or
winding-up.
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,
until the Distribution Date, will also be the holders of the Common Shares in
accordance with Section 3 hereof) 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
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deem necessary or desirable, upon ten (10) days' prior written notice to the
Rights Agent. The Rights Agent shall have no duty to supervise, and shall in no
event be liable for, the acts or omissions of any such co-Rights Agent. In the
event the Company appoints one or more co-Rights Agents, the respective duties
of the Rights Agents and any co-Rights Agents will be as the Company may
determine.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of:
(i) the close of business on the tenth (10/th/) Business Day
after the Shares Acquisition Date; or
(ii) the tenth (10/th/) Business Day (or such later date as may
be determined by action of the Board of Directors prior to such time as
any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such plan) of, or of the first public
announcement of the intention of any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company or any entity holding Common Shares
for or pursuant to the terms of any such plan) to commence, a tender or
exchange offer, the consummation of which would result in any Person
becoming the Beneficial Owner of Common Shares aggregating 15% or more
of the then outstanding Common Shares;
(including any such date which is after the date of this Agreement and prior to
the issuance of the Rights; the earliest of such dates being herein referred to
as the "Distribution Date"):
(x) no Right may be exercised;
(y) the Rights will be evidenced (subject to the provisions of
Section 3(b) hereof) by the certificates for Common Shares registered
in the names of the holders thereof (which certificates will also be
deemed to be certificates for Rights) and not by separate certificates;
and
(z) the Rights (and the right to receive certificates therefor)
will be transferable only in connection with the transfer of the
underlying Common Shares.
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 if requested, the Rights Agent will send) by first-class,
postage-prepaid mail or other appropriate means, to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the address of
such holder shown on the records of the Company, a certificate for Rights, in
substantially the form of the attached Exhibit B (collectively, "Rights
Certificates"), evidencing
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one Right for each Common Share so held. As of and after the Distribution Date,
the Rights will be evidenced solely by Rights Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of the attached Exhibit C (the "Summary of Rights"), by
first-class, postage-prepaid mail, or other appropriate means, to each record
holder of Common Shares as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company or its transfer
agent.
With respect to certificates for Common Shares outstanding as of the
Record Date, until the Distribution Date (or earlier redemption, expiration or
termination of the Rights), the Rights will be evidenced by such certificates
registered in the names of the holders thereof together with a copy of the
Summary of Rights attached thereto, and the registered holders of the Common
Shares will also be the registered holders of the associated Rights. With
respect to uncertificated Common Shares outstanding as of the Record Date, until
the Distribution Date, the Rights will be evidenced by the registration of the
Common Shares in the Company's share register in the names of the holders
thereof.
Until the Distribution Date (or earlier redemption, expiration or
termination of the Rights), the surrender for transfer of any certificate for
Common Shares outstanding on the Record Date, even without a copy of the Summary
of Rights attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate.
(c) Certificates issued for Common Shares (including without limitation
certificates issued upon transfer or exchange of Common Shares) after the Record
Date but prior to the earlier of the Distribution Date, the Redemption Date, the
Expiration Date or the Final Expiration Date will be deemed also to be
certificates for Rights and will have impressed, printed, or written thereon, or
otherwise affixed thereto, the following legend:
"This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Waters
Corporation and EquiServe Trust Company, N.A., dated as of August 9,
2002 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of Waters Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be
redeemed, may expire, or may be evidenced by separate certificates and
will no longer be evidenced by this certificate. Waters Corporation
will mail to the registered holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written request
therefor. As described in the Rights Agreement, under certain
circumstances, Rights held by Acquiring Persons (as defined in the
Rights Agreement), or certain related Persons, and any subsequent
holder of such Rights, may become null and void."
and, in the case of the initial transaction or subsequent periodic statements
with respect to
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uncertificated Common Shares, the following legend:
"The registration in the share register of Waters Corporation of the
shares of common stock to which this initial transaction or subsequent
periodic statement relates also evidences and entitles the registered
holder of such shares to certain rights as set forth in a Rights
Agreement between Waters Corporation and EquiServe Trust Company, dated
as of August 9, 2002 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of Waters Corporation Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
by such registration in the share register of Waters Corporation.
Waters Corporation will mail to the holder of this certificate a copy
of the Rights Agreement without charge after receipt of a written
request therefor. Under certain circumstances, as set forth in the
Rights Agreement, Rights issued to any Person who becomes an Acquiring
Person (as defined in the Rights Agreement) may become null and void."
Until the Distribution Date, the Rights associated with Common Shares
will be evidenced only by the certificates representing such Common Shares, and
the surrender for transfer of any such certificate will also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
However, with respect to such initial transaction or subsequent periodic
statements containing the foregoing legend, until the Distribution Date, the
Rights associated with the Common Shares with respect to which such statements
are issued shall be evidenced solely by the registration of ownership of such
Common Shares in the share register of the Company, and the registration of
transfer of ownership in such share register shall also constitute the transfer
of the Rights associated with the Common Shares whose ownership is so
transferred. In the event that the Company purchases or acquires any Common
Shares after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares will be deemed cancelled and retired so that
the Company will not be entitled to exercise any Rights associated with the
Common Shares that are no longer outstanding.
Notwithstanding anything to the contrary stated herein, no Rights
Certificate shall be issued pursuant to this Section 3 that represents Rights
"beneficially owned" by an Acquiring Person whose Rights would be void pursuant
to Section 7(e) or any Associate or Affiliate of any such Acquiring Person; no
Rights Certificate shall be issued at any time upon the transfer of any Rights
to an Acquiring Person whose Rights would be void pursuant to Section 7(e) or
any Associate or Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate; any Rights Certificate delivered to the Rights Agent for
transfer to an Acquiring Person whose Rights would be void pursuant to Section
7(e) shall be canceled.
Section 4. Form of Rights Certificates. The Rights Certificates (and
the forms of election to purchase shares and of assignment to be printed on the
reverse thereof) will be substantially in the form of the attached Exhibit B,
and may have such marks of identification or designation and such legends,
summaries, or endorsements printed thereon as the Company may
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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 securities quotation system on or by which the Rights may from
time to time be listed or quoted, or to conform to usage. Subject to the
provisions of Section 11 and Section 23 hereof, the Rights Certificates
initially will entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as may be set forth therein at the price per
one one-hundredths of a Preferred Share set forth therein, but the number of
such one one-hundredths of a Preferred Share and the Purchase Price will be
subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Rights Certificates
will be executed on behalf of the Company by such officer or officers who would
be entitled to sign certificates representing Preferred Shares, either manually
or by facsimile signature, may (but need not) have affixed thereto the Company's
seal or a facsimile thereof, and may (but need not) be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates will be countersigned by the Rights Agent and
will not be valid for any purpose unless so countersigned. If any officer of the
Company who signed any Rights Certificate ceases to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificate, 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 Certificate 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, will 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.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept books for registration and transfer of the Rights Certificates, showing
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 date of each Rights Certificate.
Section 6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. Subject
to the provisions of Sections 3(c), 4, 7(e), and 15 hereof, at any time after
the close of business on the Distribution Date, and before the close of business
on the Expiration Date, any Rights Certificate(s) may be transferred, split up,
combined, or exchanged for one or more new Rights Certificates entitling the
registered holder to purchase the same number of one one-hundredths of a
Preferred Share as the Rights Certificate(s) surrendered then entitled such
holder to purchase.
Any registered holder desiring to transfer, split up, combine, or
exchange any Rights Certificate(s) will make such request in writing delivered
to the Rights Agent, and will surrender the Rights Certificate or Rights
Certificates to be transferred, split up, combined, or exchanged at the office
of the Rights Agent designated for such purpose. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to the
transfer, split up, combination or exchange of any such surrendered Rights
Certificate until the registered holder
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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) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent will countersign and
deliver to the Person entitled thereto one or more Rights Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer, split-up, combination, or exchange of Rights
Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction, or mutilation of a Rights
Certificate, and in case of loss, theft, or destruction, of indemnity and/or
security reasonably satisfactory to them, and at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for delivery to the
registered holder 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) 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 on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose, together
with payment of the Purchase Price for each one one-hundredth of a Preferred
Share (or other securities) as to which the Rights are being exercised, at or
prior to the earliest of (such earliest time being herein referred to as the
"Expiration Date"):
(i) the close of business on August 27, 2012 (the "Final
Expiration Date");
(ii) the time at which the Rights are redeemed as provided in
Section 24 hereof (the "Redemption Date"); or
(iii) the time at which such Rights are exchanged as provided in
Section 25 hereof.
(b) The Purchase Price for each one one-hundredth of a Preferred Share
upon the exercise of a Right will initially be $120.00, will be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof, and will
be payable in lawful money of the United States of America in accordance with
Section 7(c) hereof (the "Purchase Price").
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the appropriate form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the shares to be purchased and
an amount equal to any applicable transfer tax required
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to be paid by the holder of such Rights Certificate in accordance with Section 9
hereof, in cash or by certified check, cashier's check, money order, or bank
draft paid or payable to the order of the Company, the Rights Agent will
thereupon promptly:
(i) (A) requisition from any transfer agent of the Preferred
Shares (or make available, if the Rights Agent is the transfer agent)
certificates for the number of Preferred Shares to be purchased (and
the Company hereby irrevocably authorizes its transfer agent to comply
with all such requests), or (B) if the Company, in its sole discretion,
elects to deposit the Preferred Shares issuable upon conversion of the
Rights hereunder into a depository, requisition from the depository
agent depository receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (in which
case certificates for the Preferred Shares represented by such receipts
will be deposited by the transfer agent with the depository agent) and
the Company will direct the depository agent to comply with such
request;
(ii) when appropriate, requisition from the Company the
amount of cash, if any, to be paid in lieu of issuance of fractional
shares in accordance with Section 15 hereof;
(iii) promptly after receipt of such certificates or
depository 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) when appropriate, after receipt, promptly deliver such
cash to or upon the order of the registered holder of such Rights
Certificate. In the event that the Company is obligated to issue other
securities of the Company pursuant to Section 11(a), the Company will
make all arrangements necessary so that such other securities are
available for distribution by the Rights Agent, if, as, and when
appropriate.
(d) Subject to the provisions of Section 15 hereof, if the
registered holder of any Rights Certificate exercises less than all of the
Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent
to the Rights remaining unexercised will be issued by the Rights Agent to the
registered holder of such Rights Certificate.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any Rights
acquired or beneficially owned by any:
(i) Acquiring Person or Associate or Affiliate of an
Acquiring Person;
(ii) transferee of an Acquiring Person (or of any
Associate or Affiliate of an Acquiring Person) who becomes such a
transferee after the Acquiring Person becomes such; or
(iii) transferee of an Acquiring Person (or of any Associate
or Affiliate of an Acquiring Person) who becomes a transferee prior to
or concurrently with the Acquiring
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Person becoming such and who receives such Rights pursuant to either
(A) a transfer (regardless of whether for consideration) from such
Acquiring Person, Associate, or Affiliate to holders of equity
interests in such Acquiring Person, Associate, or Affiliate, or to any
Person with whom such Acquiring Person, Associate, or Affiliate has any
continuing oral or written plan, 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 an oral
or written plan, agreement, arrangement, or understanding that has as a
primary purpose or effect avoidance of this Section 7(e);
(each Person described in the preceding clauses (i) through (iii) of this
Section 7(e), a "Section 7(e) Person") will become null and void without any
further action being required therefor, and no holder of such Rights will have
any rights whatsoever with respect to such Rights, whether under this Agreement
or otherwise.
The Company will use reasonable efforts to insure that the provisions
of this Section 7(e) and Sections 3(c) and 4 hereof are complied with, but will
have no liability to any holder of Rights Certificates or any other Person as a
result of its failure to make or erroneous making of any determination with
respect to an Acquiring Person, Affiliate or Associate of an Acquiring Person,
or transferee of any such Person.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company will be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless the certificate contained in the form of
election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise will have been properly completed and duly
executed by the registered holder thereof and the Company will have been
provided with such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
may 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 will, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or if surrendered to the Rights Agent, will be cancelled by it; and no Rights
Certificates will be issued in lieu thereof except as expressly permitted by any
of the provisions of this Rights Agreement. The Company will deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent will so
cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent will deliver
all cancelled Rights Certificates to the Company, or at the written request of
the Company, will destroy such cancelled Rights Certificates and certify such
destruction to the Company.
Section 9. Reservation and Availability of Preferred Shares.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Preferred Shares or any
Preferred Shares held in its
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treasury, a number of Preferred Shares (or other securities) sufficient to
permit the exercise in full of all outstanding Rights in accordance with Section
7 of this Agreement.
(b) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares or other securities
delivered upon due exercise of Rights and payment of the purchase price therefor
will be duly and validly authorized and issued, fully paid, and nonassessable at
the time of delivery of the certificates for such Preferred Shares or other
securities.
(c) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges payable in
respect of the issuance or delivery of the Rights Certificates or of any
Preferred Shares or other securities upon the exercise of Rights. The Company
will not, however, be required to pay any transfer tax payable in respect of any
transfer or delivery of Rights Certificates to a Person other than, or the
issuance or delivery of certificates or depository receipts for the Preferred
Shares or other securities in a name other than that of, the registered holder
of the Rights Certificate evidencing Rights surrendered for exercise; or to
issue or to deliver any certificates or depository receipts for Preferred Shares
or other securities upon the exercise of any Rights until any such tax has 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 reasonable
satisfaction that no such tax is due.
(d) The Company may temporarily suspend the exercisability of the
Rights in order to prepare and file any registration statement as may be
required to be filed pursuant to applicable law with respect to securities
purchasable upon exercise of the Rights. Upon any such suspension, the Company
will issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended. The Company will thereafter issue a public
announcement at such time as the suspension is no longer in effect.
Section 10. Preferred Shares Record Date. Each Person in whose name any
certificate for Preferred Shares (or other securities) is issued upon the
exercise of Rights will for all purposes be deemed to have become the holder of
record of the Preferred Shares (or other securities) represented thereby on, and
such certificate will be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Shares (or
other securities) transfer books of the Company are closed, such Person will be
deemed to have become the record holder of such shares on, and such certificate
will be dated, the next succeeding Business Day on which the Preferred Shares
(or other securities) transfer books of the Company are open.
Until a Rights Certificate has been duly exercised, the holder thereof
will not be entitled to any rights of a stockholder of the Company with respect
to shares for which the Rights may be exercisable (including without limitation
the rights to vote and to receive dividends and other distributions) and will
not be entitled to receive any notice of any proceedings of the Company, except
as specifically provided herein.
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Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right, and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) Except as otherwise provided in this Section 11(a)
and in Section 7(e), if the Company at any time after the date of this
Agreement (A) declares a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivides the outstanding Preferred Shares, (C)
combines the outstanding Preferred Shares into a smaller number of
shares, or (D) issues any shares of its capital stock in a
reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), then the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination, or
reclassification, as the case may be, and the number and kind of shares
of capital stock issuable on such date, each will be proportionately
adjusted so that the holder of any Right duly exercised after such
applicable time will be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares
of capital stock that, if such Right had been exercised immediately
prior to such applicable time and at a time when the Preferred Shares
transfer books of the Company were open, such holder would have owned
upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination, or reclassification; provided,
however, that in no event will the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one
Right. If an event occurs that would require an adjustment under both
this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided
for in this Section 11(a)(i) will be in addition to, and will be made
prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 25 of this Agreement, if any Person
becomes an Acquiring Person then, and in each such case, proper
provision will be made promptly so that, following the Distribution
Date, each holder of a Right, except as provided in Section 7(e)
hereof, will have a right to receive, upon exercise thereof at a price
equal to the then current Purchase Price multiplied by the number of
one one-hundredths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu
of Preferred Shares, such number of Common Shares of the Company as is
equal to the result obtained by (x) multiplying the then current
Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
(which following such first occurrence will thereafter be referred to
as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the then current per share market price of the
Company's Common Shares (determined pursuant to Section 11(d) hereof)
on the date of such first occurrence (such number of shares, the
"Adjustment Shares"); provided, however, that if the transaction that
would otherwise give rise to the foregoing adjustment is also subject
to the provisions of Section 13 hereof, then only the provisions of
Section 13 hereof will apply and no adjustment will
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be made pursuant to this Section 11(a)(ii). If any Person shall become
an Acquiring Person and the Rights shall then be outstanding, the
Company shall not take any action which would eliminate or diminish the
benefits intended to be afforded by the Rights.
(iii) If the number of Common Shares that are authorized by the
Company's certificate of incorporation (as amended and in effect as of
the relevant time) but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights, are not sufficient to
permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a), then the Company
shall take all such action as may be necessary to authorize additional
Common Shares for issuance upon exercise of the Rights. If the Company
shall, after good faith effort, be unable to take all such action as
may be necessary to authorize such additional Common Shares, then the
Company shall substitute, for each Common Share that would otherwise be
issuable upon exercise of a Right, a number of Preferred Shares or
fraction thereof such that the current per share market price of one
Preferred Share multiplied by such number or fraction is equal to the
current per share market price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.
(b) If the Company fixes a record date for the issuance of rights,
options, or warrants to all holders of Preferred Shares entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Preferred Shares (or shares having the same or more favorable
rights, privileges, and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than the
then current per share market price of the Preferred Shares (as defined in
Section 11(d)) on such record date, the Purchase Price to be in effect after
such record date will be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which will
be the number of Preferred Shares outstanding on such record date plus the
number of Preferred Shares that the aggregate offering price of the total number
of Preferred Shares and/or equivalent preferred shares so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and the denominator of
which will be the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or equivalent Preferred
Shares to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however, that
in no event will the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case such subscription price may be paid
in a consideration part or all of which will be in a form other than cash, the
value of such consideration will be as determined in good faith by the Board of
Directors of the Company, whose determination will be described in a statement
filed with the Rights Agent. Preferred Shares owned by or held for the account
of the Company will not be deemed outstanding for the purpose of any such
computation. Such adjustment will 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 will be adjusted to be the Purchase Price which would
then be in effect if such
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record date had not been fixed.
(c) If the Company fixes a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of cash, evidences of
indebtedness, or other assets (other than a dividend payable in Preferred
Shares) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record date
will be determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which will be the then
current per share market price of the Preferred Shares on such record date, less
the fair market value (as determined in good faith by the Board of Directors of
the Company, whose determination will be described in a statement filed with the
Rights Agent) of the portion of the cash, evidences of indebtedness, or other
assets so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of which will be such
current per share market price of the Preferred Shares; provided, however, that
in no event will the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
to be issued upon exercise of one Right. Such adjustments will be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price will again be adjusted to be the
Purchase Price that would then be in effect if such record date had not been
fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of any Security (a "Security" for the
purpose of this Section 11(d)(i)) on any date will be deemed to be the
average of the daily closing prices per share of such Security for the
30 consecutive Trading Days (as hereinafter defined) immediately prior
to such date; provided, however, that in the event that the current per
share market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of such
Security or securities convertible into such shares, or (B) any
subdivision, combination, or reclassification of such Security and
prior to the expiration of 30 Trading Days after the ex-dividend date
for such dividend or distribution, or the record date for such
subdivision, combination, or reclassification, then, and in each such
case, the current per share market price will be appropriately adjusted
to reflect the current market price per share equivalent of such
Security. The closing price for each day will be the last sale price,
regular way, or in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the
New York Stock Exchange ("NYSE"), or if the Security is not listed or
admitted to trading on the NYSE as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the American Stock Exchange or other principal national
securities exchange on which the Security is listed or admitted to
trading, or if the Security is not listed or admitted to trading on any
national securities exchange, the last quoted price, or if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq Automated Quotations
System or such other system then in use, or if on any such date the
Security is not quoted
-16-
by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in
the Security selected by the Board of Directors of the Company. The
term "Trading Day" means a day on which the principal national
securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security is
not listed or admitted to trading on any national securities exchange,
a Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares will be
determined in accordance with the method set forth in Section 11(d)(i).
If the Preferred Shares are not publicly traded, the "current per share
market price" of the Preferred Shares shall be conclusively deemed to
be the current per share market price of the Common Shares as
determined pursuant to Section 11(d)(i) (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by one hundred. If neither
the Common Shares nor the Preferred Shares are publicly held or so
listed or traded, "current per share market price" means the fair value
per share as determined in good faith by the Board of Directors of the
Company, whose determination will be described in a statement filed
with the Rights Agent.
(e) Subject to the final sentence of this Section 11(e), no adjustment
in the Purchase Price will 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 will be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 will be made to the nearest
cent or to the nearest one-millionth of a Preferred Share or one ten-thousandth
of any other share or security, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11 will
be made no later than the earlier of (i) three years from the date of the
transaction that requires such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised will become entitled to
receive any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right will be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through (c), (e), (h) through (k),
and (m), and the provisions of Sections 7, 9, 10, 13, 14, and 15 with respect to
the Preferred Shares will 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 will evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company has exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and
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(c), each Right outstanding immediately prior to the making of such adjustment
will thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a Preferred Share (calculated to the
nearest one one-millionth of a Preferred Share) obtained by (i) multiplying (x)
the number of one one-hundredths of a Preferred Share (calculated to the nearest
one millionth of a Preferred Share) covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights will be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights will become that number of Rights (calculated
to the nearest one ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase Price. The Company
will 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, will 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
as promptly as practicable will cause to be distributed to holders of record of
Rights Certificates on such record date Rights Certificates evidencing, subject
to Section 15 hereof, the additional Rights to which such holders will be
entitled as a result of such adjustment, or at the Company's option, will 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 are entitled after such
adjustment. Rights Certificates so to be distributed will 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 will 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-hundredths of a Preferred Share issuable upon the exercise
of the Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-hundredths of a
Preferred 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 one one-hundredths of the then par value, if any, of
the Preferred Shares issuable upon exercise of the Rights, the Company will take
any corporate action that may be necessary,
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in the opinion of its counsel, in order that the Company may validly and legally
issue fully paid and nonassessable Preferred Shares at such adjusted Purchase
Price.
(l) In any case in which this Section 11 requires that an adjustment in
the Purchase Price be made effective as of a record date for a specified event,
the Company may defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date of the Preferred Shares and
other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company will deliver to such holder an appropriate instrument evidencing
such holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company will be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion determines to be advisable in order
that any consolidation or subdivision of the Preferred Shares, issuance wholly
for cash of any Preferred Shares at less than the current market price, issuance
wholly for cash of Preferred Shares or securities that by their terms are
convertible into or exchangeable for Preferred Shares, stock dividends, or
issuance of rights, options, or warrants referred to hereinabove in this Section
11, hereafter made by the Company to holders of its Preferred Shares will not be
taxable to such stockholders.
(n) If at any time after the date of this Rights Agreement and prior to
the Distribution Date, the Company shall (i) declare or pay any dividend on the
Common Shares payable in Common Shares or (ii) effect a subdivision, combination
or consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares) into a greater or lesser number of Common
Shares, then in any such case (A) the number of one one-hundredths of a
Preferred Share purchasable after such event upon proper exercise of each Right
shall be determined by multiplying the number of one one-hundredths of a
Preferred Share so purchasable immediately prior to such event by a fraction,
the numerator of which is the number of Common Shares outstanding immediately
before such event and the denominator of which is the number of Common Shares
outstanding immediately after such event, and (B) each Common Share outstanding
immediately after such event shall have issued with respect to it that number of
Rights which each Common Share outstanding immediately prior to such event had
issued with respect to it. The adjustments provided for in this Section 11(n)
shall be made successively whenever such a dividend is declared or paid or such
a subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made pursuant to Sections 11 or 13 hereof, the Company
will promptly (a) prepare a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Common Shares or the Preferred
Shares 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
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each holder of a certificate representing Preferred Shares) in accordance with
Section 27 hereof. The Rights Agent may rely on such certificate without further
inquiry and may assume that no such adjustment has been made unless and until it
will have received such certificate.
Section 13. Consolidation, Merger, or Sale or Transfer of Assets or
Earning Power of the Company.
(a) If, following the Shares Acquisition Date, directly or indirectly:
(x) the Company consolidates with, or merges with and into,
any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 14(b) hereof), and the Company
is not 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 14(b) hereof) consolidates with
the Company, or merges with and into the Company and the Company is the
continuing or surviving corporation of such merger, and in connection
with such merger, all or part of the Common Shares will be changed into
or exchanged for stock or other securities of any other Person (or the
Company) or cash or any other property;
(z) the Company sells or otherwise transfers (or one or more of
its Subsidiaries sells or otherwise transfers), in one or more
transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person (other than to the Company or one or more of its
Subsidiaries, in one or more transactions that complies with Section 14
hereof);
then, and in each such case, proper provision will be made so that (i) following
the Distribution Date, and subject to Section 7(e) hereof, each holder of a
Right will have the right to receive, upon the exercise thereof, at a price
equal to the then current Purchase Price (as determined in accordance with
clause (2), below, of this sentence) multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of Preferred Shares,
such number of freely tradable Common Shares of the Principal Party (as
hereinafter defined), free and clear of liens, rights of call or first refusal,
encumbrances, and other adverse claims, as is equal to the result obtained by
(1) multiplying the then current Purchase Price (as determined in accordance
with clause (2), below, of this sentence) by the number of one one-hundredths of
a Preferred Share for which a Right is exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred, prior to the first occurrence of a Section 13 Event, multiplying the
number of such shares for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event, by the Purchase Price in effect
immediately prior to such first occurrence), and (2) dividing that product
(which following the first occurrence of a Section 13 Event, will be referred to
as the "Purchase Price" for each Right and for all purposes of this Agreement)
by 50% of the current per share market price of the Common Shares of such
Principal Party (determined pursuant to Section 11(d) hereof) on the date of
consummation of
-20-
such Section 13 Event; (ii) such Principal Party will thereafter be liable for,
and will assume, by virtue of such consolidation, merger, sale, or transfer, all
the obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company" will thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11 hereof will apply
to such Principal Party; and (iv) such Principal Party will take such steps
(including without limitation the reservation of a sufficient number of its
Common Shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof will
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" means
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of subsection (a) of this Section 13, the
Person that is the issuer of any securities into which Common Shares of
the Company are converted in such merger of consolidation, and if no
securities are so issued, the Person that is the other party to the
merger or consolidation (including, if applicable, the Company, if it
is the surviving corporation); and
(ii) in the case of any transaction described in clause (z) of
the first sentence of paragraph (a) of this Section 13, the Person that
is the party receiving the greatest portion of the assets or earning
power transferred pursuant to such transaction or transactions;
provided, however, that in any such case (1) if the Common Shares of such Person
are not at such time and have not been continuously over the preceding 12-month
period registered under Section 12 of the Securities Exchange Act of l934, as
amended (the "Exchange Act"), and such Person is a direct or indirect subsidiary
or Affiliate of another Person, then "Principal Party" will refer to such other
Person; (2) in case such Person is a subsidiary, directly or indirectly, or
Affiliate of more than one Person, the Common Shares of two or more of which are
and have been so registered, "Principal Party" will refer to whichever of such
Persons is the issuer of the Common Shares having the greatest aggregate market
value; and (3) in case such Person is owned, directly or indirectly, by a joint
venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in the preceding clauses (1)
and (2) will 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
ventures and the Principal Parties in each such chain will 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 will not consummate any such consolidation, merger,
sale or transfer unless the Principal Party has a sufficient number of
authorized Common Shares 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
unless prior thereto the Company and each Principal Party and each other Person
who may become a Principal Party as a result of such consolidation, merger,
sale, or transfer first execute and deliver 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
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that, as soon as practicable after the date of any Section 13 Event, the
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 the exercise of the Rights, will use its best efforts
to cause such registration statement to become effective as soon as
practicable after such filing and will use its best efforts to cause
such registration statement to remain effective (with a prospectus
meeting the requirements of the Securities Act) until the Expiration
Date;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under the
blue sky laws of such jurisdictions as may be necessary;
(iii) use its best efforts to list (or continue the listing
of) the Rights and the securities purchasable upon exercise of the
Rights on a national securities exchange or to meet the eligibility
requirements for quotation on Nasdaq; and
(iv) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates, which
financial statements comply in all material respects with the
requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 will similarly apply to successive mergers or
consolidations or sales or other transfers. If a Section 13 Event occurs at any
time after the occurrence of a Section 11(a)(ii) Event, the Rights that have not
theretofore been exercised will thereafter become exercisable solely in the
manner described in paragraph (a) of this Section 13.
Section 14. Additional Covenants.
(a) The Company covenants and agrees that it will not at any time
after the Distribution Date (i) consolidate with, (ii) merge with or into, or
(iii) sell or transfer, in one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
subsidiaries taken as a whole, to any other Person, if at the time of or after
such consolidation, merger, or sale there are any charter or by-law provisions
or any rights, warrants, or other instruments outstanding or any other action
taken or circumstances existent (whether as to the Company or any other Person)
that would diminish or otherwise eliminate the benefits intended to be afforded
by the Rights. The Company will not consummate any such consolidation, merger,
or sale unless the Company and such other Person first execute and deliver to
the Rights Agent a supplemental agreement evidencing compliance with this
subsection.
(b) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 24 or Section 28 hereof, take
any action if at the time such action is taken it is reasonably foreseeable that
such action will substantially diminish or otherwise
-22-
eliminate the benefits intended to be afforded by the Rights.
-23-
Section 15. Fractional Rights and Fractional Shares.
(a) The Company will not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(i), or to
distribute Rights Certificates that evidence fractional Rights. In lieu of such
fractional Rights, there will 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 current market
value of a whole Right. For the purposes of this Section 15(a), the current
market value of a whole Right will be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day will be the last
sale price, regular way, or in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the NYSE, or if the Rights are
not listed or admitted to trading on the NYSE, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price, or if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by the NYSE or such other system then in use, or if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights, the fair value of
the Rights on such date as determined in good faith by the Board of Directors of
the Company will be used.
(b) The Company will not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredths
of a Preferred Share) upon exercise of the Rights or to distribute certificates
that evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredths of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredths of a Preferred
Share may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as Beneficial Owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-hundredths of a Preferred Share, the
Company will 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 current market value of one Preferred Share. For the purposes of
this Section 15(b), the current market value of a Preferred Share will be the
closing price of a Preferred Share (as determined pursuant to Section 11(d)(ii)
hereof) for the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right.
-24-
Section 16. Rights of Action. Excepting the rights of action given to
the Rights Agent under Section 19 hereof, all rights of action in respect of
this Agreement are vested in the respective registered holders of the Rights
Certificates (and prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Rights Certificate (or prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action, or proceeding
against the Company or any other Person to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Rights Certificate in the
manner provided in such Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this
Agreement. Holders of Rights will 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 17. Agreement of Rights Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly indorsed or accompanied by a
proper instrument of transfer;
(c) subject to Section 6 and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the Person in whose name the Rights Certificate
(or prior to the Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent will be affected by any notice to the contrary;
and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent will have any liability to any holder of a
Right or a beneficial interest in 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,
-25-
decree or ruling lifted or otherwise overturned as soon as possible.
Section 18. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate will be entitled to vote, receive
dividends or be deemed for any purpose to be the holder of the Preferred Shares
or any other securities of the Company that may at any time be issuable on the
exercise of the Rights represented thereby, nor will 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 stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 26 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate have been exercised in accordance with the provisions
hereof.
Section 19. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
gross negligence, bad faith, or willful misconduct on the part of the Rights
Agent, for 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 arising directly therefrom.
The Rights Agent will be protected and will 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 Shares or other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed, and if necessary,
verified or acknowledged, by the proper Person or Persons.
Section 20. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent may be a party, or any corporation succeeding to the stock transfer or
corporate trust business of the Rights Agent or any successor Rights Agent, will
be the successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 22 hereof. In case at the
time such successor Rights Agent succeeds to the agency created by this
Agreement, any of the Rights Certificates will have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in
-26-
case at that time any of the Rights Certificates have not been countersigned,
any successor Rights Agent may countersign such Rights Certificates either in
the name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates will have the full force
provided in the Rights Certificates and in this Agreement.
In case at any time the name of the Rights Agent is changed and at such
time any of the Rights Certificates 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 have not 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 will have the full force provided in the
Rights Certificates and in this Agreement.
Section 21. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, will be bound:
(a) The Rights Agent may consult with legal counsel reasonably
acceptable to the Company (who may be legal counsel for the Company), and the
opinion of such counsel will be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent deems it necessary or desirable that any fact or matter (including
without limitation the identity of any Acquiring Person) 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 is specifically
prescribed herein) may be deemed to be conclusively proved and established by a
certificate signed by the Chief Executive Officer, President, any Vice
President, the Treasurer, or the Secretary of the Company and delivered to the
Rights Agent; and such certificate will 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 will be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith, or willful
misconduct.
(d) The Rights Agent will 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 its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have been
made by the Company only.
(e) The Rights Agent will 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
will it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor will it
be
-27-
responsible for any adjustment required under the provisions of Section 11 or
Section 13 hereof or for the manner, method, or amount of any 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 a certificate furnished pursuant to Section 12 describing any
such adjustment); nor will it be responsible for any determination by the Board
of Directors of the Company of the current market value of the Rights, Common
Shares or Preferred Shares; nor will it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
Preferred Shares, Common Shares or other securities to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any Preferred Shares,
Common Shares or other securities will, when issued, be validly authorized and
issued, fully paid, and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge, and
deliver or cause to be performed, executed, acknowledged, and delivered all such
further and other acts, instruments, and assurances as may reasonably be
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
Chief Executive Officer, President, any Vice President, the Treasurer, or the
Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it will not be liable for any
action taken or suffered by it in good faith in accordance with instructions of
any such officer or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this Rights
Agreement and the date on and/or after which such action will be taken or such
omission will be effective. The Rights Agent will 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 will not be less than ten (10) Business Days after the
date the Chief Executive Officer, President, any Vice President, the Treasurer,
or the Secretary of the Company actually receives such application, unless any
such officer of the Company consents 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 receives written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer, or
employee of the Rights Agent may buy, sell, or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein will preclude the Rights Agent
from acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent will not be answerable or
accountable for any act, default, neglect, or
-28-
misconduct of any such attorneys or agents or for any loss to the Company
resulting from any the act, default, neglect, or misconduct of any such attorney
or agent, provided reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement will 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 will be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certification 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 l and/or 2
thereof, the Rights Agent will not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
Section 22. 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' prior notice in writing to the Company and to each transfer agent
of the Common Shares or Preferred Shares in accordance with Section 27 hereof,
and to the holders of the Rights Certificates by first-class mail at the expense
of the Company. In the event the agent relationship between the parties hereto
terminates, the Rights Agent will be deemed to resign automatically on the
effective date of such termination; and any required notice will be sent by the
Company.
The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' prior notice in writing sent to the Rights Agent or successor
Rights Agent, as the case may be, and each transfer agent of the Common Shares
or Preferred Shares in accordance with Section 27 hereof, and to the holders of
the Rights Certificates by first-class mail.
If the Rights Agent resigns or is removed or otherwise becomes
incapable of acting, the Company will appoint a successor to the Rights Agent.
If the Company fails 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 will, with such notice, submit his
Rights Certificate for inspection by the Company), then 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 a
court, will be an entity organized and doing business under the laws of the
United States or any state of the United States (so long as such entity is in
good standing), and 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 $100 million. After
appointment, the successor Rights Agent will 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
-29-
will 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 will file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, 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 22, however, or any defect therein, will 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 23. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
at its option may issue new Rights Certificates 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.
Section 24. Redemption.
(a) The Rights may be redeemed by action of the Board of Directors
pursuant to paragraph (b) of this Section 24, and will not be redeemed in any
other manner.
(b) The Board of Directors of the Company may, at its option, by a vote
of two-thirds of the Directors then in office, at any time prior to the earliest
of (x) the close of business on the tenth (10th) day following a Shares
Acquisition Date, or (y) 5:00 p.m., E.S.T., on the Final Expiration Date, redeem
all but not less than all of the then outstanding Rights at a redemption price
of $0.001 per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof. The redemption
of the Rights by the Board of Directors may be made effective at such time, on
such basis, and with such conditions as the Board of Directors in its sole
discretion may establish.
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (b) of this
Section 24, 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 will be to receive the Redemption Price. The Company will promptly
give public notice of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice will not affect the validity of such
redemption. Within 10 days after such action ordering the redemption of the
Rights pursuant to paragraph (b) or (c), as the case may be, the Company will
mail a notice of redemption to all the holders of the then outstanding Rights at
their last addresses as they appear upon the registry books of the Rights Agent,
or prior to the Distribution Date, on the registry books of the transfer agent
for the Common Shares. Any notice mailed in the manner herein provided will be
deemed duly given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made. The Company may, at its option, pay the
Redemption Price in cash, Common Shares (based on the current per share
-30-
market price of the Common Shares as of the time of redemption) or any other
form of consideration deemed appropriate by the Board of Directors.
Notwithstanding anything contained in this Agreement to the contrary, the Rights
will not be exercisable after the first occurrence of a Section 11(a)(ii) Event
until such time as the Company's right of redemption under Section 24(b) has
expired.
Section 25. Exchange.
(a) The Company's Board of Directors, at its option, at any time after
the occurrence of a Section 11(a)(ii) Event, may exchange all or part of the
then outstanding and exercisable Rights (which will not include Rights that have
become void pursuant to the provisions of Section 7(e) hereof) for Common Shares
at an exchange ratio of one Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend, or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Company's Board of
Directors may not effect such exchange at any time after any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any such Subsidiary, or any entity holding Common Shares for or
pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding.
(b) Immediately upon the action of the Company's Board of Directors
ordering the exchange of any Rights pursuant to subsection (a) of this Section
25, and without any further action and without any notice, the right to exercise
such Rights will terminate and the only right thereafter of a holder of such
Rights will be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
will promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice will not affect the validity
of such exchange. The Company promptly will 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 will be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Common Shares for Rights will be effected and, in the event of any
partial exchange, the number of Rights that will be exchanged. Any partial
exchange will be effected pro rata based on the number of Rights (other than
Rights that have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
(c) If there are not sufficient Common Shares issued but not
outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 25, the Company will take all such
action as may be necessary to authorize additional Common Shares for issuance
upon exchange of the Rights. If the Company shall, after good faith effort, be
unable to take all such action as may be necessary to authorize such additional
Common Shares, the Company shall substitute, for each Common Share that would
otherwise be issuable upon exchange of a Right, a number of Preferred Shares or
fraction thereof such that the current per share market price of one Preferred
Share multiplied by such number or
-31-
fraction is equal to the current per share market price of one Common Share as
of the date of issuance of such Preferred Shares or fraction thereof.
(d) The Company will not be required to issue fractions of Common
Shares or to distribute certificates that evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Company will pay to the registered
holders of the Rights Certificates with regard to which such fractional Common
Shares would otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
paragraph (e), the current market value of a whole Common Share will be the
closing price of a Common Share (as determined pursuant to Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of exchange pursuant
to this Section 25.
Section 26. Notice of Certain Events.
(a) In case the Company proposes, at any time after the Distribution
Date, (i) to pay any dividend payable in stock of any class to the holders of
its Preferred Shares or to make any other distribution to the holders of its
Preferred Shares, (ii) to offer to the holders of its Preferred Shares rights or
warrants to subscribe for or to purchase any additional Preferred Shares or
shares of stock of any class or any other securities, rights, or options, (iii)
to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect the liquidation, dissolution, or
winding-up of the Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares), then, in each such case, the Company
will give to each holder of a Rights Certificate, in accordance with Section 27
hereof, a notice of such proposed action, which will specify the record date for
the purposes of such stock dividend, or distribution of rights or warrants, or
the date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding-up is to take place and the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice will be so given in the
case of any action covered by clause (i) or (ii) above at least 10 days prior to
the record date for determining holders of the Preferred Shares for purposes of
such action, and in the case of any such other action, at least 10 days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, whichever
will be the earlier.
(b) If a Section 11(a)(ii) Event shall occur, (i) the Company will as
soon as practicable thereafter give to each holder of a Rights Certificate, in
accordance with Section 27 hereof, a notice of the occurrence of such event (and
the Rights Agent shall at the Company's reasonable request assist the Company in
effecting such notice), which notice will describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof,
and (ii) all references in the preceding paragraph to Common Shares will be
deemed thereafter to
-32-
refer to Preferred Shares or, if appropriate, other securities.
Section 27. Notices. Any notice or demand 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 will be sufficiently given or made if sent by
reputable overnight courier or by registered, certified, or first-class mail,
postage or delivery charges prepaid and addressed (until another address is
filed in writing with the Rights Agent) as follows:
Waters Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: President
with a copy to:
Xxxxxx X. Xxxx, Esq.
Xxxxxxx XxXxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
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 will be sufficiently given or made if sent by reputable overnight courier
or by registered, certified, or first-class mail, postage or delivery charges
prepaid and addressed (until another address is filed in writing with the
Company) as follows:
EquiServe Trust Company, N.A.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: General Counsel
Tel: (000) 000-0000
Fax: (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
certificate representing Common Shares or Preferred Shares will be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Company.
Section 28. Supplements and Amendments. Prior to the Distribution Date,
if the Company so directs, the Company and the Rights Agent will supplement or
amend any provision of this Agreement without the approval of any holders of
certificates representing Common
-33-
Shares. From and after the Distribution Date, if the Company so directs, the
Company and the Rights Agent will 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 will not adversely affect the interests of the holders of
Rights Certificates (other than an Acquiring Person or any Affiliate or
Associate of an Acquiring Person).
Section 29. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent will bind and
inure to the benefit of their respective successors and assigns hereunder.
Section 30. Benefits of this Agreement. Nothing in this Agreement will
be construed to give to any Person or corporation other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and prior to
the Distribution Date, of the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement will 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, of the
Common Shares).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement will remain in
full force and effect and will in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Rights Certificate
issued hereunder will be deemed to be a contract made under the laws of the
State of Delaware and for all purposes will be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts will for all purposes be deemed to
be an original, and all such counterparts will together constitute but one and
the same agreement.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and will not
control or affect the meaning or construction of any of the provisions hereof.
[ Remainder of Page Intentionally Left Blank ]
-34-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, as an agreement under seal, as of the date first
above written.
WATERS CORPORATION
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
Title: Vice President, Finance and
Administration and Chief
Financial Officer
EQUISERVE TRUST COMPANY, N.A.,
as Rights Agent
By: /s/ Xxxxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Managing Director
Exhibit A
FORM OF CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
WATERS CORPORATION
(Pursuant to Section 151 of the Delaware General Corporation Law)
Waters Corporation (the "Corporation"), a corporation organized
and existing under the General Corporation Law of the State of Delaware (the
"DGCL"), hereby certifies that the following resolution was adopted by the Board
of Directors of the Corporation as required by Section 151 of the DGCL at a
meeting duly called and held on August 9, 2002:
RESOLVED: That pursuant to Article Fourth, Section A of the Certificate
of Incorporation, as amended, of the Corporation, the Board
of Directors hereby establishes a series of Preferred Stock,
par value $.01 per share (the "Series A Preferred Stock"), of
the Corporation and hereby states the designation and number
of shares, and fixes the preferences, voting powers,
qualifications and special or relative rights or privileges
thereof, as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall
be designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 4,000,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided that no decrease shall reduce the
number of shares of Series A Preferred Stock to a number less than the number of
shares of Series A Preferred Stock then outstanding, plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon conversion of any outstanding securities issued by the
Corporation and convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and
superior to the Series A Preferred Stock with respect to dividends, and
subject to the terms of any financing arrangement to which the Company
is then a party, the holders of shares of Series A Preferred Stock, in
preference to the holders of the Common Stock of the Corporation, par
value $.01 per
-2-
share ("Common Stock"), and of any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends
payable in cash on the first day of March, June, September and December
in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share
of Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate
per share amount of all cash dividends, and 100 times the aggregate per
share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Preferred Stock. In the
event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the amount to which
holders of shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) of this
Section immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $1 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date for
the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares
of Series A Preferred Stock in an amount less than the total amount of
-3-
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series A Preferred Stock
entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of the stockholders of
the Corporation. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other Certificate
of Designations creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series A Preferred Stock and
the holders of shares of Common Stock and any other capital stock of
the Corporation having general voting rights shall vote together as one
class on all matters submitted to a vote of stockholders of the
Corporation.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
-4-
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
A Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such junior stock
in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up)
to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any shares of
stock ranking on a parity with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock subject to the conditions and restrictions on issuance set forth
herein, in the Certificate of Incorporation, or in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $120.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon
-5-
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each share
of Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock
shall not be redeemable. Section 9. Rank. The Series A Preferred Stock shall
rank, with respect to the payment of dividends and the distribution of assets,
junior to all series of any other class of the Corporation's Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single class.
-6-
IN WITNESS WHEREOF, this Certificate of Designations is executed
on behalf of the Corporation by its Vice President, Finance and Administration
and Chief Financial Officer as of August ___, 2002.
WATERS CORPORATION
By:__________________________
Exhibit B
Form of Rights Certificate
Certificate No. R-___ ________ Rights
NOT EXERCISABLE AFTER AUGUST 27, 2012, OR EARLIER IF NOTICE
OF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT, AT
THE OPTION OF THE COMPANY, TO REDEMPTION AT $0.001 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID.
Rights Certificate
WATERS CORPORATION
This certifies that , or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions, and conditions of the Rights Agreement, dated
as of August 9, 2002 (the "Rights Agreement"), by and between Waters Corporation
(the "Company"), a Delaware corporation, and EquiServe Trust Company, N.A., a
national banking association (the "Rights Agent"), to purchase from the Company
at any time after the Distribution Date (as defined in the Rights Agreement) and
prior to 5:00 P.M., Boston time, on August 27, 2012, at the office of the Rights
Agent designated for such purpose, or at the office of its successor as Rights
Agent designated for such purpose, one one-hundredth of a share of the Series A
Junior Participating Preferred Stock, par value $0.01 per share (the "Preferred
Shares"), of the Company, at a purchase price of $120.00 per one one-hundredth
of a Preferred Share (the "Purchase Price"), upon presentation and surrender of
this Rights Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Rights Certificate (and the number of one
one-hundredths of a Preferred Share that may be purchased upon exercise hereof)
set forth above, and the Purchase Price set forth above, are the number of
Rights and Purchase Price as of August 27, 2002, based on the Preferred Shares
as constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of one one-hundredths of a Preferred Share 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.
-2-
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 of the Rights Agent,
the Company and the holders of the Rights Certificates. Copies of the Rights
Agreement are on file at the principal executive offices of the Company and the
above-mentioned office of the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, may
be surrendered at the principal office of the Rights Agent in exchange for
another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase the same aggregate number of
one one-hundredths of a Preferred Share as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered entitled such holder to purchase.
If this Rights Certificate is exercised in part, the holder will 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 $0.001 per Right, or (ii) may be exchanged in whole or in
part by the Company, at its option, for the appropriate number of one
one-hundredths of a Preferred Share.
Fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby.
No holder of this Rights Certificate, as such, will be entitled to vote
or receive dividends or be deemed for any purpose the holder of any Preferred
Shares or of any other securities of the Company that may at any time be
issuable on the exercise hereof, nor will anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate have been exercised as provided in the Rights Agreement.
This Rights Certificate will not be valid or obligatory for any purpose
until it is countersigned by the Rights Agent.
-3-
Dated as of August __,2002.
WATERS CORPORATION
By:_____________________________
Name:
Title:
Countersigned:
____________________________________
By:_________________________________
Name:
Title:
-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 to ________________________________________
________________________________________________________________________________
(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 _____________________ as
attorney, to transfer the within Rights Certificate on the books of Waters
Corporation, with full power of substitution.
Dated: _____________, _____ __________________________________
(Signature)
Medallion Signature Guaranty:
________________________________________________________________________________
Assignment Certification
The undersigned hereby certifies by checking the appropriate boxes
that:
(l) The Rights evidenced by this Rights Certificate [ ] are [ ] are not
being sold, assigned, and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such term is defined pursuant to the Rights Agreement);
(2) After due inquiry and to the best knowledge of the undersigned, he,
she, or it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any person who is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _____________, _____ ____________________________________
(Signature)
-5-
Notice
The signatures to the foregoing Assignment and Certification must
correspond exactly to the name of the registered owner hereof, as written upon
the face of this Rights Certificate, without any change whatsoever.
________________________________________________________________________________
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate.)
To WATERS CORPORATION:
The undersigned hereby irrevocably elects to exercise _________________
Rights represented by this Rights Certificate to purchase the Preferred Shares
(or fractions thereof or such other securities of the Company or of any other
person) issuable upon the exercise of such Rights and requests that certificates
for such shares be issued in the name of:
Please insert social security
or other identifying number:___________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(If the above number of Rights is not all of the Rights evidenced by
this Rights Certificate, then a new Rights Certificate for the balance remaining
of such Rights will be registered and returned to the undersigned.)
Dated: _____________, _____ ___________________________________
(Signature)
Medallion Signature Guaranty:
________________________________________________________________________________
Election Certification
The undersigned hereby certifies by checking the appropriate boxes
that:
-6-
(1) The Rights evidenced by this Rights Certificate [ ] are [ ] are not
being sold, assigned, and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any Acquiring Person (as
such terms are defined pursuant to the Rights Agreement).
(2) After due inquiry and to the best knowledge of the undersigned, he,
she, or it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any person who is or was an Acquiring Person or an Affiliate or
Associate of any Acquiring Person.
Dated: _____________, _____ ___________________________________
(Signature)
________________________________________________________________________________
NOTICE
The signatures in the foregoing Election to Purchase and Certification
must correspond exactly to the name of the registered owner hereof, as written
upon the face of this Rights Certificate, without any change whatsoever.
In the event the certification set forth above in the Assignment or the
Election to Purchase, as the case may be, is not completed, the Company and the
Rights Agent will deem the beneficial owner of the Rights evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and such Assignment or Election to
Purchase will not be honored.
Exhibit C
SUMMARY OF RIGHTS
On August 9, 2002, the Board of Directors of Waters Corporation (the
"Company") declared a dividend of one fractional preferred share purchase right
(a "Right") for each outstanding share of common stock, par value $.01 per share
(the "Common Shares"), of the Company. The dividend is payable on August 27,
2002 (the "Record Date") to the stockholders of record on that date. Except as
described below, each Right, when exercisable, entitles the registered holder to
purchase from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock of the Company, par value $.01 per share (the
"Preferred Shares"), at a price of $120.00 per one one-hundredth of a Preferred
Share (the "Purchase Price"), subject to adjustment or substitution of other
securities of the Company in place of the Preferred Shares. The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and EquiServe Trust Company, N.A., a national banking
association, as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Rights certificates will be
distributed. Until the earlier to occur of (i) 10 business days following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") have acquired beneficial ownership of 15% or more of the
outstanding Common Shares (the date of such an announcement being a "Shares
Acquisition Date"), or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any Person
becomes an Acquiring Person) following the commencement of, or announcement of
an intention to make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group of 15% or more of
such outstanding Common Shares (in either case, (i) or (ii), the "Distribution
Date"), the Rights will be evidenced, with respect to any of the Common Share
certificates outstanding as of the Record Date, by such Common Share
certificates together with a copy of this Summary of Rights.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even without such notation or a
copy of this Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and the separate Rights Certificates alone will evidence the
Rights.
-2-
The Rights are not exercisable until the Distribution Date. The Rights
will expire on August 27, 2012 (the "Final Expiration Date"), unless the Rights
are earlier redeemed by the Company, as described below.
If any person becomes an Acquiring Person, each holder of a Right will
thereafter have the right to receive upon exercise that number of Common Shares
having a market value of two times the exercise price of the Right. Upon
occurrence of any of the events described in the immediately preceding sentence,
any Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person shall immediately
become null and void. At any time after the occurrence of any such event and
prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors may exchange the Rights (other
than Rights owned by such person or group which have become void), in whole or
in part, at an exchange ratio of one Common Share, or one one-hundredth of a
Preferred Share (or of a share of a class or series of the Company's preferred
stock having equivalent rights, preferences and privileges), per Right (subject
to adjustment).
If, after the first date of public announcement by the Company or an
Acquiring Person that an Acquiring Person has become such, the Company is
involved in a merger or other business combination transaction in which the
Common Shares are exchanged or changed, or 50% or more of the Company's
consolidated assets or earning power are sold (in one transaction or a series of
transactions), proper provision will be made so that each holder of a Right
(other than an Acquiring Person) will thereafter have the right to receive, upon
the exercise thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company (or, in the event
there is more than one acquiring company, the acquiring company receiving the
greatest portion of the assets or earning power transferred) which at the time
of such transaction would have a market value of two times the exercise price of
the Right.
At any time prior to the earlier of (i) the tenth day after a Shares
Acquisition Date, or (ii) the expiration of the Rights, the Board of Directors
may redeem the Rights (other than Rights owned by such person or group which
have become void), in whole, but not in part, at a price of $0.001 per Right
(the "Redemption Price"). The redemption of the Rights may be made effective at
such time on such basis and with such conditions as the Board of Directors in
its sole discretion may establish. Immediately upon any redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares, or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of
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earnings or retained earnings or dividends payable in Preferred Shares) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each Preferred
Share will have 100 votes, voting together with the Common Shares. Finally, in
the event of any merger, consolidation or other transaction in which Common
Shares are exchanged, each Preferred Share will be entitled to receive 100 times
the amount received per Common Share. These rights are protected by customary
anti-dilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares (other than fractions which
are integral multiples of one one-hundredth of a Preferred Share, which may, at
the election of the Company, be evidenced by depositary receipts) will be issued
and in lieu thereof, an adjustment in cash will be made based on the market
price of the Preferred Shares on the last trading day prior to the date of
exercise.
Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, to make changes that do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not
redeemable.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights
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Agreement is available free of charge from the Company. This summary description
of the Rights does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement, which is hereby incorporated herein by
reference.
