EXHIBIT 1
________________________________________________________________________________
________________________________________________________________________________
RIGHTS AGREEMENT
dated as of
February 18, 1999
between
VARIAN, INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
as Rights Agent
________________________________________________________________________________
________________________________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE I CERTAIN DEFINITIONS................................................ 2
1.1 Certain Definitions.................................................. 2
ARTICLE II THE RIGHTS........................................................ 10
2.1 Summary of Rights................................................... 10
2.2 Legend on Common Stock Certificates................................. 10
2.3 Exercise of Rights; Separation of Rights............................ 11
2.4 Adjustments to Exercise Price; Number of Rights..................... 14
2.5 Date on Which Exercise is Effective................................. 16
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates........................................................ 17
2.7 Registration, Registration of Transfer and Exchange................. 17
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates........... 19
2.9 Persons Deemed Owners............................................... 20
2.10 Delivery and Cancellation of Certificates........................... 20
2.11 Agreement of Rights Holders......................................... 21
ARTICLE III ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS.... 22
3.1 Flip-in............................................................. 22
3.2 Flip-over........................................................... 25
ARTICLE IV THE RIGHTS AGENT.................................................. 27
4.1 General............................................................. 27
4.2 Merger or Consolidation or Change of Name of Rights Agent........... 28
4.3 Duties of Rights Agent.............................................. 29
4.4 Change of Rights Agent.............................................. 32
ARTICLE V MISCELLANEOUS..................................................... 33
5.1 Redemption.......................................................... 33
5.2 Expiration.......................................................... 34
5.3 Issuance of New Rights Certificates................................. 34
5.4 Supplements and Amendments.......................................... 35
5.5 Fractional Rights and Fractional Shares............................. 36
5.6 Rights of Action.................................................... 37
5.7 Holder of Rights Not Deemed a Stockholder........................... 38
5.8 Notice of Proposed Actions.......................................... 38
5.9 Notices............................................................. 39
5.10 Suspension of Exercisability........................................ 40
5.11 Costs of Enforcement................................................ 40
5.12 Successors.......................................................... 41
5.13 Benefits of this Agreement.......................................... 41
5.14 Determination and Actions by the Board of Directors, Etc............ 41
5.15 Descriptive Headings................................................ 42
5.16 Governing Law....................................................... 42
5.17 Counterparts........................................................ 42
-i-
TABLE OF CONTENTS
(continued)
Page
5.18 Severability........................................................ 42
5.19 Book-Entry Account Statements....................................... 42
EXHIBIT A Form of Rights Certificate
(Together with Form of Election to Exercise)..................... A-1
EXHIBIT B Form of Certificate of Designation and
Terms of Participating Preferred Stock of Varian, Inc............ B-1
-ii-
RIGHTS AGREEMENT
RIGHTS AGREEMENT (as amended from time to time, this "Agreement"),
dated as of February 18, 1999, between Varian, Inc., a Delaware corporation (the
"Company"), and First Chicago Trust Company of New York, as Rights Agent (the
"Rights Agent," which term shall include any successor Rights Agent hereunder).
WITNESSETH:
WHEREAS, the Board of Directors of the Company has (a) authorized and
declared a dividend of one right ("Right") in respect of each outstanding share
of Common Stock (as hereinafter defined) held of record as of 5:00 p.m.,
California time, on April 2, 1999 (the "Record Time") and (b) authorized the
issuance of one Right in respect of each share of Common Stock issued after the
Record Time and prior to the Separation Time (as hereinafter defined) and, to
the extent provided in Section 5.3, each share of Common Stock issued after the
Separation Time;
WHEREAS, subject to the terms hereof, each Right entitles the holder
thereof, after the Separation Time, to purchase securities of the Company (or,
in certain cases, of certain other entities) pursuant to the terms and subject
to the conditions set forth herein; and
WHEREAS, the Company desires to appoint the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing so to act, in connection
with the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein;
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. For purposes of this Agreement, the following
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terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is Beneficial Owner (as
hereinafter defined) of 15% or more of the outstanding shares of Voting Stock
(as hereinafter defined); provided, however, that the term "Acquiring Person"
shall not include (i) any Person who is the Beneficial Owner of 15% or more of
the outstanding shares of Common Stock on the date of this Agreement or who
shall become the Beneficial Owner of 15% or more of the outstanding shares of
Voting Stock solely as a result of an acquisition by the Company of shares of
Voting Stock, until such time hereafter or thereafter as any of such Persons
shall become the Beneficial Owner (other than by means of a stock dividend or
stock split) of any additional shares of Voting Stock, (ii) any Person who
Beneficially Owns shares of Voting Stock consisting solely of one or more of (A)
shares of Voting Stock Beneficially Owned pursuant to the grant or exercise of
an option granted to such Person by the Company in connection with an agreement
to merge with, or acquire, the Company at a time at which there is no Acquiring
Person, (B) shares of Voting Stock (or securities convertible into, exchangeable
into or exercisable for Voting Stock), Beneficially Owned by such Person or its
Affiliates (as hereinafter defined) or Associates (as hereinafter defined) at
the time of grant of such option or (C) shares of Voting Stock (or securities
convertible into, exchangeable into or exercisable for Voting Stock) acquired by
Affiliates or Associates
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of such Person after the time of such grant, which, in the aggregate, amount
to less than 1% of the outstanding shares of Voting Stock, (iii) the Company,
any wholly owned Subsidiary (as hereinafter defined) of the Company, and any
employee stock ownership or other employee benefit plan of the Company or a
wholly owned Subsidiary of the Company or (iv) before the distribution of the
Company's outstanding stock to the stockholders of Varian Associates, Inc.,
Varian Associates, Inc. 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 definition of "Acquiring Person," has become such
inadvertently, and such Person divests as promptly as practicable a sufficient
number of shares of Common Stock so that such Person would no longer be an
"Acquiring Person," as defined pursuant to such foregoing provisions of this
definition of "Acquiring Person," then such Person shall not be deemed to be
an "Acquiring Person" for any purposes of this Agreement.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Securities Exchange Act of 1934,
as such Rule is in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner," and to have
"Beneficial Ownership" of, and to "Beneficially Own," any securities as to which
such Person or any of such Person's Affiliates or Associates is or may be deemed
to be the beneficial owner pursuant to Rule 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, as such Rules are in effect on the date of this Agreement,
as well as any securities as to which such Person or any of such Person's
Affiliates or Associates has the right to become the
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Beneficial Owner (whether such right is exercisable immediately or only after
the passage of time or the occurrence of conditions) pursuant to any
agreement, arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or options,
or otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner," or to have "Beneficial Ownership" of, or to "Beneficially
Own," any security (i) solely because such security has been tendered pursuant
to a tender or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered security is accepted for payment
or exchange or (ii) solely because such Person or any of such Person's
Affiliates or Associates has or shares the power to vote or direct the voting
of such security pursuant to a revocable proxy given in response to a public
proxy or consent solicitation made to holders of shares of a class of stock of
the Company registered under Section 12 of the Securities Exchange Act of
1934, and pursuant to, and in accordance with, the applicable rules and
regulations under the Securities Exchange Act of 1934, except if such power,
(or the arrangements relating thereto) is then reportable under Item 6 of
Schedule 13D under the Securities Exchange Act of 1934 (or any similar
provision of a comparable or successor report). For purposes of the Agreement,
in determining the percentage of the outstanding shares of Voting Stock with
respect to which a Person is the Beneficial Owner, all shares as to which such
Person is deemed the Beneficial Owner shall be deemed outstanding.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the City of New York are generally
authorized or obligated by law or executive order to close.
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"Close of Business" on any given date shall mean 5:00 P.M., California
time, on such date or, if such date is not a Business Day, 5:00 P.M., California
time, on the next succeeding Business Day.
"Common Stock" shall mean the shares of Common Stock, par value $0.01
per share, of the Company.
"Control" or "control" shall mean the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.
"Exchange Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at which a
holder may purchase the securities issuable upon exercise of one whole Right.
Until adjustment thereof in accordance with the terms hereof, the Exercise Price
shall equal $75.00.
"Expiration Time" shall mean the earliest of (i) the Exchange Time,
(ii) the Redemption Time (as hereinafter defined), (iii) the Close of Business
on the tenth-year anniversary of the Record Time and (iv) upon the merger of the
Company into another corporation pursuant to an agreement entered into when
there is no Acquiring Person.
"Flip-in Date" shall mean any Stock Acquisition Date (as hereinafter
defined) or such earlier or later date as the Board of Directors of the Company
may from time to time fix by resolution adopted prior to the Flip-in Date that
would otherwise have occurred.
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"Flip-over Entity" shall mean (i) in the case of Flip-over Transaction
or Event (as hereinafter defined) described in clause (i) of the definition
thereof, the Person issuing any securities into which shares of Common Stock are
being converted or exchanged and, if no such securities are being issued, the
other party to such Flip-over Transaction or Event and (ii) in the case of Flip-
over Transaction or Event referred to in clause (ii) of the definition thereof,
the Person receiving the greatest portion of the assets or earning power being
transferred in such Flip-over Transaction or Event, provided in all cases if
such Person is a Subsidiary of a corporation, the parent corporation shall be
the Flip-over Entity.
"Flip-over Stock" shall mean the class of capital stock (or similar
equity interest) with the greatest voting power in respect of the election of
directors (or other persons similarly responsible for direction of the business
and affairs) of the Flip-over Entity.
"Flip-over Transaction or Event" shall mean a transaction or series of
transactions after the time when an Acquiring Person has become such in which,
directly or indirectly, (i) the Company shall consolidate or merge or
participate in a share exchange with any other Person if, at the time of the
consolidation, merger or share exchange or at the time the Company enters into
any agreement with respect to any such consolidation, merger or share exchange,
the Acquiring Person controls the Board of Directors of the Company, or (ii) the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer) directly or by sale of stock, assets or
control of assets (A) aggregating more than 50% of the assets (measured by
either book value or fair market value) as of the end of the more recently
completed fiscal year
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or (B) generating more than 50% of the operating income or cash flow during
the more recently completed fiscal year, of the Company and its Subsidiaries
(taken as a whole) to any Person (other than the Company or one or more of its
wholly owned Subsidiaries) or to two or more such Persons which are Affiliates
or Associates or otherwise acting in concert, if, at the time of the entry by
the Company (or any such Subsidiary) into an agreement with respect to such
sale or transfer of assets, the Acquiring Person controls the Board of
Directors of the Company. For purposes of the foregoing description, the term
"Acquiring Person" shall include any Acquiring Person and its Affiliates and
Associates and others acting directly or indirectly on behalf of or in concert
with any such Acquiring Person, Affiliate or Associate, counted together as a
single Person.
"Market Price" per share of any securities on any date shall mean the
average of the daily closing prices per share of such securities (determined as
described below) on each of the 20 consecutive Trading Days (as hereinafter
defined) through and including the Trading Day immediately preceding such date;
provided, however, that if a type of event analogous to any of the events
described in Section 2.4 hereof shall have caused the closing prices used to
determine the Market Price on any Trading Days during such period of 20 Trading
Days not to be fully comparable with the closing price on such date because of
stock exchange or other trading adjustments, each such closing price so used
shall be appropriately adjusted in order to make it fully comparable with the
closing price on such date. The closing price per share of any securities on
any date shall be the last reported sale price, regular way, or, in case no such
sale takes place or is quoted on such date, the average of the closing bid and
asked prices, regular way, for each share of such securities, in either case as
reported in the principal consolidated transaction
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reporting system with respect to securities listed on the principal national
securities exchange on which the securities are listed or admitted to trading
or, if the securities are not listed or admitted to trading on any national
securities exchange, as reported by the Nasdaq Stock Market or any similar
quotation system, or, if on any such date the securities are not listed or
admitted to trading on any national securities exchange or quoted by any such
organization or system, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the securities
selected by the Board of Directors of the Company; provided, however, that if
on any such date the securities are not listed or admitted to trading on a
national securities exchange or quoted in the over-the-counter market, the
closing price per share of such securities on such date as determined in good
faith by the Board of Directors of the Company, after consultation with a
nationally recognized investment banking firm, and set forth in a certificate
delivered to the Rights Agent.
"Person" shall mean any individual, firm, partnership, limited
liability company, association, group (as such term is used in Rule 13d-5 under
the Securities Exchange Act of 1934, as such Rule is in effect on the date of
the Agreement), corporation or other entity.
"Preferred Stock" shall mean the series of Participating Preferred
Stock, par value $0.01 per share, of the Company created by a Certificate of
Designation and Terms in substantially the form set forth in Exhibit B hereto
appropriately completed.
"Redemption Price" shall mean an amount equal to $0.001 per Right, as
such amount may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof.
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"Redemption Time" shall mean the time at which the right to exercise
the Rights shall terminate pursuant to Section 5.1 hereof.
"Separation Time" shall mean the Close of Business on the earlier of
(i) the tenth Business Day (or such later date as the Board of Directors of the
Company may from time to time fix by resolution adopted prior to the Separation
Time that would otherwise have occurred) after the date on which any Person
commences a tender or exchange offer which, if consummated, would result in such
Person's becoming an Acquiring Person and (ii) the Flip-in Date; provided, that
if the foregoing results in the Separation Time being prior to the Record Time,
the Separation Time shall be the Record Time and provided further, that if any
tender or exchange offer referred to in clause (i) of this paragraph is
cancelled, terminated or otherwise withdrawn prior to the Separation Time
without the purchase of any shares of Voting Stock pursuant thereto, such offer
shall be deemed, for purposes of this paragraph, never to have been made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person (by any means) that an
Acquiring Person has become such, provided such Person otherwise comes within
the definition of an "Acquiring Person" hereinabove set forth.
"Stockholder" shall mean a holder of capital stock of the Company.
"Subsidiary" of any specified Person shall mean any corporation or
other entity of which a majority of the voting power of the equity securities or
a majority of the equity interest is Beneficially Owned, directly or indirectly,
by such Person.
"Trading Day," when used with respect to any securities, shall mean a
day on which the principal national securities exchange or quotation system on
which such
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securities are listed or traded is open for the transaction of business or, if
such securities are not listed or traded on any national securities exchange
or quotation system, a Business Day.
"Voting Stock" means shares of capital stock of the Company entitled
to vote generally in the election of directors.
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record Time, the
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Company will mail a letter summarizing the terms of the Rights to each holder of
record of Common Stock as of the Record Time, at such holder's address as shown
by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for the Common
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Stock issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and
shall have impressed on, printed on, written on or otherwise affixed to them
the following legend:
"Until the Separation Time (as defined in the Rights Agreement referred to
below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement, dated as of February 18,
1999 (as such may be amended from time to time, the "Rights Agreement"),
between Varian, Inc. (the "Company") and First Chicago Trust Company of New
York, as Rights Agent, the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive offices
of the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights may be redeemed, may be exchanged for shares of
Common Stock or other securities or assets of the Company or a Subsidiary
of the Company, may expire, may become void (if they are "Beneficially
Owned" by an "Acquiring Person" or an Affiliate or Associate thereof, as
such terms are defined in the Rights Agreement, or by any transferee of any
of the foregoing) or may be evidenced by separate certificates and may no
longer be evidenced by this certificate. The Company will mail or arrange
for the mailing of a copy of the Rights Agreement to the holder of this
certificate
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without charge within five days after the receipt of a written request
therefor."
Certificates representing shares of Common Stock that are issued and
outstanding at the Record Time shall evidence one Right for each share of Common
Stock evidenced thereby notwithstanding the absence of the foregoing legend.
2.3 Exercise of Rights; Separation of Rights.
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(a) Subject to Sections 3.1, 5.1 and 5.10 and subject to
adjustment as herein set forth, each Right will entitle the holder thereof,
after the Separation Time and prior to the Expiration Time, to purchase, for
the Exercise Price, one one-thousandth of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised and
(ii) each Right will be evidenced by the certificate for the associated share
of Common Stock (together, in the case of certificates issued prior to the
Record Time, with the letter mailed to the record holder thereof pursuant to
Section 2.1) and will be transferable only together with, and will be
transferred by a transfer (whether with or without such letter) of, such
associated share.
(c) Subject to the terms hereof, after the Separation Time and
prior to the Expiration Time, the Rights (i) may be exercised and (ii) may be
transferred independent of shares of Common Stock. Promptly following the
Separation Time, the Rights Agent will mail to each holder of record of Common
Stock as of the Separation Time (other than any Person whose Rights have
become void pursuant to Section 3.1(b)), at such holder's address as shown by
the records of the Company (the Company hereby agreeing to furnish copies of
such records to the Rights Agent for this purpose), (x) a certificate (a
"Rights Certificate") in substantially the form of Exhibit A hereto
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appropriately completed, representing the number of Rights held by such holder
at the Separation Time and having such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
national securities exchange or quotation system on which the Rights may from
time to time be listed or traded, or to conform to usage, and (y) a disclosure
statement describing the Rights. The Company shall make the necessary and
appropriate rounding adjustments (in accordance with Section 5.5 hereof) so
that Rights Certificates evidencing only whole numbers of Rights are
distributed and cash is paid in lieu of fractional Rights.
(d) Subject to the terms hereof, Rights may be exercised on any
Business Day after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent the Rights Certificate evidencing such Rights
with an Election to Exercise (an "Election to Exercise") substantially in the
form attached to the Rights Certificate duly completed, accompanied by payment
in cash, or by certified or official bank check or money order payable to the
order of the Company, of a sum equal to the Exercise Price multiplied by the
number of Rights being exercised and a sum sufficient to cover any transfer
tax or charge which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or delivery of
certificates for shares or depositary receipts (or both) in a name other than
that of the holder of the Rights being exercised.
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(e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 2.3(d), and subject to
the terms hereof, the Rights Agent will thereupon promptly (i)(A) requisition
from a transfer agent stock certificates evidencing such number of shares or
other securities to be purchased (the Company hereby irrevocably authorizing
its transfer agents to comply with all such requisitions) and (B) if the
Company elects pursuant to Section 5.5 not to issue certificates representing
fractional shares, requisition from the depositary selected by the Company
depositary receipts representing the fractional share to be purchased or
requisition from the Company the amount of cash to be paid in lieu of
fractional shares in accordance with Section 5.5 and (ii) after receipt of
such certificates, depositary receipts and/or cash, deliver the same to or
upon the order of the registered holder of such Rights Certificate, registered
(in the case of certificates or depositary receipts) in such name or names as
may be designated by such holder.
(f) In case the holder of any Rights shall exercise less than all
the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all
such action as may be necessary to ensure that all shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Exercise Prices), be duly and validly
authorized, executed, issued and delivered and fully paid and nonassessable;
(ii) take all such action as may be necessary to comply with any applicable
requirements of the Securities Act of 1933 or the Securities Exchange Act of
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1934, and the rules and regulations thereunder, and any other applicable law,
rule or regulation, in connection with the issuance of any shares upon
exercise of Rights; and (iii) pay when due and payable any and all federal and
state transfer taxes and charges which may be payable in respect of the
original issuance or delivery of the Rights Certificates or of any shares
issued upon the exercise of Rights, provided that the Company shall not be
required to pay any transfer tax or charge which may be payable in respect of
any transfer involved in the transfer of delivery of Rights Certificates or
the issuance or delivery of certificates for shares in a name other than that
of the holder of the Rights being transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights.
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(a) In the event the Company shall at any time after the Record
Time and prior to the Separation Time (i) declare or pay a dividend on Common
Stock payable in Common Stock, (ii) subdivide the outstanding Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of shares of
Common Stock, (x) the Exercise Price in effect after such adjustment will be
equal to the Exercise Price in effect immediately prior to such adjustment
divided by the number of shares of Common Stock (the "Expansion Factor") that
a holder of one share of Common Stock immediately prior to such dividend,
subdivision or combination would hold thereafter as a result thereof and (y)
each Right held prior to such adjustment will become that number of Rights
equal to the Expansion Factor, and the adjusted number of Rights will be
deemed to be distributed among the shares of Common Stock with respect to
which the original Rights were associated (if they remain outstanding) and the
shares issued in respect of such dividend, subdivision or combination, so that
each such share of Common Stock will have exactly
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one Right associated with it. Each adjustment made pursuant to this paragraph
shall be made as of the payment or effective date for the applicable dividend,
subdivision or combination.
In the event the Company shall at any time after the Record Time and
prior to the Separation Time issue any shares of Common Stock otherwise than in
a transaction referred to in the preceding paragraph, each such share of Common
Stock so issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such share. To the
extent provided in Section 5.3, Rights shall be issued by the Company in respect
of shares of Common Stock that are issued or sold by the Company after the
Separation Time.
(b) In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue or distribute any securities or
assets in respect of, in lieu of or in exchange for Common Stock (other than
pursuant to a regular periodic cash dividend or a dividend paid solely in
Common Stock) whether by dividend, in a reclassification or recapitalization
(including any such transaction involving a merger, consolidation or share
exchange), or otherwise, the Company shall make such adjustments, if any, in
the Exercise Price, number of Rights and/or securities or other property
purchasable upon exercise of Rights as the Board of Directors of the Company,
in its sole discretion, may deem to be appropriate under the circumstances in
order adequately to protect the interests of holders of Rights generally, and
the Company and the Rights Agent shall amend this Agreement as necessary to
provide for such adjustments.
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(c) Each adjustment to the Exercise Price made pursuant to this
Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment to
the Exercise Price is made pursuant to this Section 2.4, the Company shall (i)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (ii) promptly file with
the Rights Agent and with each transfer agent for the Common Stock a copy of
such certificate and (iii) mail a brief summary thereof to each holder of
Rights.
(d) Irrespective of any adjustment or change in the securities
purchase upon exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the securities so purchasable which
were expressed in the initial Rights Certificates issued hereunder.
2.5 Date on Which Exercise is Effective. Each Person in whose name any
-----------------------------------
certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Exercise Price for such Rights (and any applicable taxes and other governmental
charges payable by the exercising holder hereunder) was made; provided, however,
that if the date of such surrender and payment is a date upon which the stock
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares on, and such certificates shall be
dated, the next succeeding Business Day on which the stock transfer books of the
Company are open.
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2.6 Execution, Authentication, Delivery and Dating of Rights Certificates.
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(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its
President, any of its Vice Presidents, its Chief Financial Officer or its
Treasurer under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such officer prior to the countersignature and delivery of such Rights
Certificates.
Promptly after the Company learns of the Separation Time, the Company
will notify the Rights Agent of such Separation Time and will deliver Rights
Certificates executed by the Company to the Rights Agent for countersignature,
and, subject to Section 3.1(b), the Rights Agent shall manually countersign and
deliver such Rights Certificates to the holders of the Rights pursuant to
Section 2.3(c) hereof. No Rights Certificate shall be valid for any purpose
unless manually countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.7 Registration, Registration of Transfer and Exchange.
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(a) After the Separation Time, the Company will cause to be kept a
register (the "Rights Register") in which, subject to such reasonable
regulations as it may prescribe, the Company will provide for the registration
and transfer of Rights. The
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Rights Agent is hereby appointed "Rights Registrar" for the purpose of
maintaining the Rights Register for the Company and registering Rights and
transfers of Rights after the Separation Time as herein provided. In the event
that the Rights Agent will have the right to examine the Rights Register at
all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate,
and subject to the provisions of Section 2.7(c) and (d), the Company will
execute, and the Rights Agent will countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required pursuant to the
holder's instructions, one or more new Rights Certificates evidencing the same
aggregate number of Rights as did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be
entitled to the same benefits under this Agreement as the Rights surrendered
upon such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights
Agent, as the case may be, duly executed by the holder thereof or such
xxxxxx's attorney duly authorized in writing. As a condition to the issuance
of any new Rights Certificate under this Section 2.7, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto.
18
(d) The Company shall not be required to register the transfer or
exchange of any Rights after such Rights have become void under Section
3.1(b), been exchanged under Section 3.1(c) or been redeemed or terminated
under Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates.
---------------------------------------------------------
(a) If any mutilated Rights Certificate is surrendered to the
Rights Agent prior to the Expiration Time, then, subject to Section 3.1(b) and
5.1, the Company shall execute and the Rights Agent shall countersign and
deliver in exchange therefor a new Rights Certificate evidencing the same
number of Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights
Agent prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Section 3.1(b) and 5.1 and in the absence of
notice to the Company or the Rights Agent that such Rights Certificate has
been acquired by a bona fide purchaser, the Company shall execute and upon its
request the Rights Agent shall countersign and deliver, in lieu of any such
destroyed, lost or stolen Rights Certificate, a new Rights Certificate so
destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate
under this Section 2.8, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Rights Agent) connected therewith.
19
(d) Every new Rights Certificate issued pursuant to this Section
2.8 in lieu of any destroyed, lost or stolen Rights Certificate shall evidence
an original additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all other Rights duly
issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a Rights
---------------------
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and
any agent of the Company or the Rights Agent may deem and treat the Person in
whose name such Rights Certificate (or, prior to the Separation Time, such
Common Stock certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby for all purposes whatsoever, including the
payment of the Redemption Price, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary. As used in the Agreement,
unless the context otherwise requires, the term "holder" of any Rights shall
mean the registered holder of such Rights (or, prior to the Separation Time,
the associated shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights Certificates
-----------------------------------------
surrendered upon exercise or for registration of transfer or exchange shall, if
surrendered to any Person other than the Rights Agent, be delivered to the
Rights Agent and, in any case, shall be promptly cancelled by the Rights Agent.
The Company may at any time deliver to the Rights Agent for cancellation any
Rights Certificate previously countersigned and delivered hereunder which the
Company may have acquired in any
20
manner whatsoever, and all Rights Certificate so delivered shall be promptly
cancelled by the Rights Agent. No Rights Certificate shall be countersigned in
lieu of or in exchange for any Rights Certificate cancelled as provided in
this Section 2.10, except as expressly permitted by this Agreement. The Rights
Agent shall destroy all cancelled Rights Certificates and deliver a
certificate of destruction to the Company.
2.11 Agreement of Rights Holders. Every holder of Rights by accepting
---------------------------
the same consents and agrees with the Company and the Rights Agent and with
every other holder of Rights that:
(a) Prior to the Separation Time, each Right will be transferable
only together with, and will be transferred by a transfer of, the associated
share of Common Stock;
(b) After the Separation Time, the Rights Certificate will be
transferable only on the Rights Register as provided herein;
(c) Prior to due presentment of a Rights Certificate (or, prior
to the Separation Time, the associated Common Stock certificate) for
registration of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the Person in whose name the
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby for all purposes whatsoever, and neither the Company
nor the Rights Agent shall be affected by any notice to the contrary;
(d) Rights Beneficially Owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become void; and
21
(e) This Agreement may be supplemented or amended from time to
time pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in.
-------
(a) In the event that prior to the Expiration Time a Flip-in Date
shall occur, the Company shall take such action as shall be necessary to
ensure and provide that, except as provided in this Section 3.1, each Right
shall constitute the right to purchase from the Company, upon exercise thereof
in accordance with the terms hereof (but subject to Section 5.10), that number
of shares of Common Stock having an aggregate Market Price on the Stock
Acquisition Date equal to twice the Exercise Price for an amount in cash equal
to the Exercise Price (such right to be appropriately adjusted in order to
protect the interests of the holders of Rights generally in the event that on
or after such Stock Acquisition Date an event of a type analogous to any of
the events described in Section 2.4(a) or (b) shall have occurred with respect
to the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring
Person or an Affiliate or Associate thereof or by any transferee, direct or
indirect, of any of the foregoing shall become void and any holder of such
Rights (including transferees) shall thereafter have no right to exercise or
transfer such Rights under any provision of this Agreement. If any Rights
Certificate is presented for assignment or exercise and the Person presenting
the same will not complete the certification set forth at the end of the form
or assignment or notice of election to exercise and provide such additional
evidence
22
of the identity of the Beneficial Owner and its Affiliates and Associates (or
former Beneficial Owners and their Affiliates and Associates) as the Company
shall reasonably request, then the Company shall be entitled conclusively to
deem the Beneficial Owner thereof to be an Acquiring Person or an Affiliate or
Associate thereof or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced thereby to be void and not transferable or
exercisable.
(c) The Board of Directors of the Company may, at its option, at
any time after a Flip-in Date and prior to the time that an Acquiring Person
becomes the Beneficial Owner of more than 50% of the outstanding shares of
Voting Stock elect to exchange all or part of the then outstanding Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 3.1(b)) for shares of Common Stock at an exchange ratio
of one share of Common Stock per Right, appropriately adjusted in order to
protect the interests of holders of Rights generally in the event that after
the Separation Time an event of a type analogous to any of the events
described in Section 2.4(a) or (b) shall have occurred with respect to the
Common Stock (such exchange ratio, as adjusted from time to time, being
hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right (other
than Rights that have become void pursuant to Section 3.1(b)) will thereafter
represent only the right to receive a number of shares of Common Stock equal to
the Exchange Ratio. Promptly after the action of the Board of Directors
electing to exchange the Rights, the Company shall give
23
notice thereof (specifying the steps to be taken to receive shares of Common
Stock in exchange for Rights) to the Rights Agent and the holders of the
Rights (other than Rights that have become void pursuant to Section 3.1(b))
outstanding immediately prior thereto by mailing such notice in accordance
with Section 5.9.
Each Person in whose name any certificate for shares is issued upon
the exchange of Rights pursuant to the Section 3.1(c) or Section 3.1(d) shall
for all purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate shall be dated, the date upon which
the Rights Certificate evidencing such Rights was duly surrendered and payment
of any applicable taxes and other governmental charges by the holder was made;
provided, however, that if the date of such surrender and payment is a date upon
which the stock transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the stock transfer
books of the Company are open.
(d) Whenever the Company shall become obligated under Section
3.1(a) or (c) to issue shares of Common Stock upon exercise of or in exchange
for Rights, the Company, at its option, may substitute therefor shares of
Preferred Stock, at a ratio of one-thousandth of a share of Preferred Stock
for each share of Common Stock so issuable, appropriately adjusted to protect
interests of the holders of the Rights generally to reflect any event of this
type analogous to any of the events described in Section 2.4 (a) or (b) which
may have occurred with respect to the Common Stock.
(e) In the event that there shall not be sufficient treasury
shares or authorized but unissued shares of Common Stock or Preferred Stock of
the Company to
24
permit the exercise or exchange in full of the Rights in accordance with
Section 3.1(a) or (c), the Company shall either (i) call a meeting of
Stockholders seeking approval to cause sufficient additional shares to be
authorized (provided that if such approval is not obtained the Company will
take the action specified in clause (ii) of this sentence) or (ii) take such
action as shall be necessary to ensure and provide, to the extent permitted by
applicable law and any agreements or instruments in effect on the Stock
Acquisition Date to which it is a party, that each Right shall thereafter
constitute the right to receive, (x) at the Company's option, either (A) in
return for the Exercise Price, debt or equity securities or other assets (or a
combination thereof) having a fair value equal to twice the Exercise Price, or
(B) without payment of consideration (except as otherwise required by
applicable law), debt or equity securities or other assets (or a combination
thereof) having a fair value equal to the Exercise Price, or (y) if the Board
of Directors of the Company elects to exchange the Rights in accordance with
Section 3.1(c), debt or equity securities or other assets (or a combination
thereof) having a fair value equal to the product of the Market Price of a
share of Common Stock on the Flip-in Date times the Exchange Ratio in effect
on the Flip-in Date, where in any case set forth in (x) or (y) above the fair
value of such debt or equity securities or other assets shall be as determined
in good faith by the Board of Directors of the Company, after consultation
with a nationally recognized investment banking firm.
3.2 Flip-over.
---------
(a) Prior to the Expiration Time, the Company shall not enter into
any agreement with respect to, or consummate or permit to occur, any Flip-over
Transaction or Event unless and until it shall have duly entered into a
binding and enforceable
25
supplemental agreement with the Flip-over Entity, for the benefit of the
holders of the Rights, providing that, upon consummation or occurrence or the
Flip-over Transaction or Event (i) each Right shall thereafter constitute the
right to purchase from the Flip-over Entity, upon exercise thereof in
accordance with the terms hereof, that number of shares of Flip-over Stock of
the Flip-over Entity having an aggregate Market Price on the date of
consummation or occurrence of such Flip-over Transaction or Event Equal to
twice the Exercise Price for an amount in cash equal to the Exercise Price
(such right to be appropriately adjusted in order to protect the interests of
the holders of Rights generally in the event that after such date of
consummation or occurrence an event of a type analogous to any of the events
described in Section 2.4(a) or (b) shall have occurred with respect to the
Flip-over Stock) and (ii) the Flip-over Entity shall thereafter be liable for,
and shall assume, by virtue of such Flip-over Transaction or Event and such
supplemental agreement, all the obligations and duties of the Company pursuant
to this Agreement, but the Company's obligations under this Agreement shall
not be discharged and shall continue in full. The provisions of this Section
3.2 shall apply to successive Flip-over Transactions or Events.
(b) Prior to the Expiration Time, the Company shall not enter into
any agreement with respect to, or consummate or permit to occur, any Flip-over
Transaction or Event if at the time thereof there are any rights, warrants or
securities outstanding or any other arrangements, agreements or instruments
that would eliminate or otherwise diminish in any material respect the
benefits intended to be afforded by this Rights Agreement to the holders of
Rights upon consummation of such transaction.
26
ARTICLE IV
THE RIGHTS AGENT
4.1 General.
-------
(a) The Company hereby appoints the Rights Agent to act as agent
for the Company in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company 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
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted to be done 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.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
certificate for securities purchasable upon exercise of Rights, Rights
Certificate, certificate for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
27
4.2 Merger or Consolidation or Change of Name of Rights Agent.
---------------------------------------------------------
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent is a party, or any corporation succeeding
to the stockholder services 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
4.4 hereof. In case, at the time such successor Rights Agent succeeds to the
agency created by this Agreement, any of the Rights Certificates 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 case at that time any of the Rights
Certificates have not be 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.
(b) In case at any time the name of the Rights Agent is changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates
28
either in its prior name or in its changed name; and in all such cases such
Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
4.3 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, shall be
bound:
(a) The Rights Agent may consult with legal counsel (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 be
provided or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively provided and
established by a certificate signed by a person believed by the Rights Agent
to be the Chief Executive Officer, the President, any Vice President, the
Chief Financial Officer or the Treasurer, and by the Secretary or any
Assistant 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.
29
(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or willful misconduct. Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
indirect, consequential or incidental loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent has been
advised of the likelihood of such damages.
(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
certificates for securities purchasable upon exercise of Rights or 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 authorization, execution and delivery hereof by the Rights
Agent) or in respect of the validity or execution of any certificate for
securities purchasable upon exercise of Rights or 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 responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 3.1(b) hereof) or any adjustment required under the provisions of
Section 2.4, 3.1 or 3.2 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of
Rights after receipt of the certificate contemplated by Section 2.4 describing
any such adjustment); nor will it by any act hereunder be deemed to make any
30
representation or warranty as to the authorization or reservation of any
securities purchasable upon exercise of Rights or any Rights or as to whether
any securities purchasable upon exercise of Rights will, when issued, be duly
and validly authorized, executed, issued and delivered and 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 xxxxxx authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Rights Agent to be the Chief Executive Officer, the
President, any Vice President, the Chief Financial Officer, the Treasurer or
the Secretary or any Assistant Secretary of the Company, and to apply to such
persons for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such person.
(h) The Rights Agent and any Stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other legal entity.
31
(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 misconduct of any
such attorneys or agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
4.4 Change of Rights Agent. The Rights Agent may resign and be
----------------------
discharged from its duties under this Agreement upon 90 days' notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the
Company and to each transfer agent of Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. The
Company may remove the Rights Agent upon 30 days' notice in writing, mailed to
the Rights Agent and to each transfer agent of the Common Stock by registered
or certified mail, and to the holders of the Rights in accordance with Section
5.9. If the Rights Agent should resign or be removed or otherwise become
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
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
any Rights (which holder shall, with such notice, submit such holder's Rights
Certificate for inspection by the Company), then the holder of any Rights may
apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or
by such a court, shall be (A) a corporation organized and doing business under
the laws of the United States or of the State of New York or California, or of
any
32
other state of the United States so long as such corporation is authorized to
do business as a banking institution in the State of New York or California,
which is authorized under such laws to exercise the powers of the Rights Agent
contemplated by this Agreement 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 $15,000,000 or (B) an
Affiliate of a corporation described in clause (A) of this sentence. 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
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company will file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the
Common Stock, and mail a notice thereof in writing to the holders of the
Rights. Failure to give any notice provided for in this Section 4.4, however,
or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
ARTICLE V
MISCELLANEOUS
5.1 Redemption.
----------
(a) The Board of Directors of the Company may, at its option, at
any time prior to the Close of Business on the Flip-in Date, elect to redeem
all (but not less than all) the then outstanding Rights at the Redemption
Price and the Company, at its option, may pay the Redemption Price either in
cash or shares of Common Stock or other
33
securities of the Company deemed by the Board of Directors, in the exercise of
its sole discretion, to be at least equivalent in value to the Redemption
Price.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights (or, if the resolution of the Board of
Directors electing to redeem the Rights states that the redemption will not be
effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further action and
without any notice, the right to exercise the Rights will terminate and each
Right will thereafter represent only the right to receive the Redemption Price
in cash or securities, as determined by the Board of Directors. Promptly after
the Rights are redeemed, the Company shall give notice of such redemption to
the Rights Agent and the holders of the then-outstanding Rights by mailing
such notice in accordance with Section 5.9.
5.2 Expiration. The Rights and this Agreement shall expire at the
----------
Expiration Time and no Person shall have any rights pursuant to this Agreement
or any Right after the Expiration Time, except as provided in Sections 3.1 and
5.1 hereof, with respect to Rights which the Board of Directors of the Company
have elected to exchange or redeem, and except with respect to any Rights for
which an Election to Exercise has been duly filed with the Rights Agents prior
to the Expiration Time.
5.3 Issuance of New Rights Certificates. Notwithstanding any of the
-----------------------------------
provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such
form as may be approved by its Board of Directors to reflect any adjustment or
change in the number or kind or class of shares of stock purchasable upon
exercise of Rights made in accordance with the
34
provisions of this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock by the Company following the Separation Time
and prior to the Redemption Time or Expiration Time pursuant to the terms of
securities exercisable, convertible or exchangeable into shares of Common
Stock or pursuant to options exercisable for Common Stock or in connection
with the vesting or payment of securities awarded by the Corporation under any
plan or arrangement, in each case issued, granted or awarded prior to, and
outstanding at, the Separation Time, the Company shall issue to the holders of
such shares of Common Stock, Rights Certificates representing the appropriate
number of Rights in connection with the issuance or sale of such shares of
Common Stock; provided, however, in each case, (i) no such Rights Certificate
shall be issued, if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or to the Person to whom such Rights
Certificates would be issued, (ii) no such Rights Certificates shall be issued
if, and to the extent that, appropriate adjustment shall have otherwise been
made in lieu of the issuance thereof, and (iii) the Company shall have no
obligation to distribute Rights Certificates to any Acquiring Person or
Affiliate or Associate of an Acquiring Person or any transferee of any of the
foregoing.
5.4 Supplements and Amendments. The Company and the Rights Agent may
--------------------------
from time to time supplement or amend this Agreement without the approval of
any holders of Rights (i) prior to the Close of Business on the Flip-in Date,
in any respect and (ii) after the Close of Business on the Flip-in Date, to
make any changes that the Company may deem necessary or desirable and which
shall not materially adversely affect the interests of the holders of Rights
generally (other than an Acquiring Person or
35
an Affiliate or Associate of an Acquiring Person). The Rights Agent will duly
execute and deliver any supplement or amendment hereto requested by the
Company which satisfies the terms of the preceding sentence.
5.5 Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of Rights
or to distribute Rights Certificates that evidence fractional Rights. In lieu
of such fractional Rights, as soon as practicable following the Separation
Time there shall be paid to the registered holders of the Rights Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a
whole Right. For the purposes of this Section 5.5, the current market value of
a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last reported
sale price, regular way, or, in case no such sale takes place or is quoted on
such date, the average of the closing bid and asked prices, regular way, for
each share of such securities, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the securities are listed
or admitted to trading or, if the securities are not listed or admitted to
trading on any national securities exchange, as reported by the Nasdaq Stock
Market or any similar quotation system, or, if on any such date the securities
are not listed or admitted to trading on any national securities exchange or
quoted by any such organization or system, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in
the securities selected by the Board of Directors of the
36
Company; provided, however, that if on any such date the securities are not
listed or admitted to trading on a national securities exchange or quoted in
the over-the-counter market, the closing price per share of such securities on
such date as determined in good faith by the Board of Directors of the
Company, after consultation with a nationally recognized investment banking
firm, and set forth in a certificate delivered to the Rights Agent.
(b) If the Company elects not to issue certificates representing
fractional shares upon exercise or redemption of Rights, the Company shall, in
lieu thereof, in the sole discretion of the Board of Directors, either (a)
evidence such fractional shares by depositary receipts issued pursuant to an
appropriate agreement between the Company and a depositary selected by it,
providing that each holder of a depositary receipt shall have all of the
rights, privileges and preferences to which such holder would be entitled as a
Beneficial Owner of such fractional share, or (b) sell such shares on behalf
of the holders of Rights and pay to the registered holder of such Rights the
appropriate fraction of price per share received upon such sale.
(c) The holder of a Right by the acceptance of the Right expressly
waives his/her right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided in Section 5.5 hereof).
5.6 Rights of Action. Subject to the terms of this Agreement (including
----------------
Section 3.1(b)), rights of action in respect of this Agreement, other than
rights of action vested solely in the Rights Agent, are vested in the respective
holders of the Rights; and any holder of any Rights, without the consent of the
Rights Agent or of the holder of any other Rights, may, on such holder's own
behalf and for such holder's own benefit and the
37
benefit of other holders of Rights, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or otherwise
act in respect of, such holder's right to exercise such holder's Rights in the
manner provided in such holder's 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.
5.7 Holder of Rights Not Deemed a Stockholder. No holder, as such, of any
-----------------------------------------
Rights shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of shares or any other securities which may at any time be issuable
on the exercise of such Rights, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights, 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 5.8 hereof), or to receive dividends or subscription rights,
or otherwise, until such Rights shall have been exercised or exchanged in
accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose after
--------------------------
the Separation Time and prior to the Expiration Time (i) to effect or permit
(in cases where the Company's permission is required) the occurrence of any
Flip-in Date or Flip-over
38
Transaction or Event or (ii) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of a Right, in accordance with Section 5.9 hereof, notice of such
proposed action, which shall specify the Flip-in Date or the date on which
such Flip-over Transaction or Event, liquidation, dissolution, or winding up
is to take place, and such notice shall be as given at least 20 Business Days
prior to the date of the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by this
-------
Agreement to be given or made by the Rights Agent or by the holder of any
Rights to or on the Company shall be sufficiently given or made if delivered
or sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:
Varian, Inc.
0000 Xxxxxx Xxx
Xxxx Xxxx, Xxxxxxxxxx 00000-1000
Attention: Corporate Secretary
Any notice or demand authorized or required by this Agreement to be
given or made by the Company or by the holder of any Rights to or on the Rights
Agent shall be sufficiently given or made if delivered or sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Company) as follows:
First Chicago Trust Company of New York
000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Corporate Actions, Administration
Notices or demands authorized or required by this Agreement to be
given or made by the Company or the Rights Agent to or on the holder of any
Rights shall be sufficiently given or made if delivered or sent by first-class
mail, postage prepaid,
39
addressed to such holder at the address of such holder as it appears upon the
registry books of the Rights Agent or, prior to the Separation Time, on the
registry books of the transfer agent for the Common Stock.
All such notices and demands shall be deemed to have been given on
the date of delivery thereof, if delivered by hand, and on the third day after
the mailing thereof, if mailed. Any notice that is mailed in the manner herein
provided, shall be deemed given, whether or not the holder receives the
notice.
5.10 Suspension of Exercisability. To the extent that the Company
----------------------------
determines in good faith that some action will or need be taken pursuant to
Section 3.1(a), (b), (d) or (e) or to comply with federal or state securities
laws, the Company may suspend the exercisability of the Rights for a period of
up to ninety (90) days following the date of the occurrence of the Separation
Time or the Flip-in Date in order to take such action or comply with such
laws. In the event of any such suspension, the Company shall issue as promptly
as practicable a public announcement stating that the exercisability or
exchangeability of the Rights has been temporarily suspended. Notice thereof
pursuant to Section 5.9 shall not be required.
Failure to give a notice pursuant to the provisions of this Agreement
shall not affect the validity of any action taken hereunder.
5.11 Costs of Enforcement. The Company agrees that if the Company or any
--------------------
other Person the securities of which are purchasable upon exercise of Rights
fails to fulfill any of its obligations pursuant to this Agreement, then the
Company or such Person will reimburse the holder of any Rights for the costs
and expenses (including legal
40
fees) incurred by such holder in actions to enforce such holder's rights
pursuant to any Rights or this Agreement.
5.12 Successors. All the covenants and provisions of this Agreement by
----------
or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
5.13 Benefits of this Agreement. Nothing in this Agreement shall be
--------------------------
construed to give to any Person other than the Company, the Rights Agent and
the holders of the Rights any legal or equitable right, remedy or claim under
this Agreement; this Agreement shall be for the sole and exclusive benefit of
the Company, the Rights Agent and the holders of the Rights.
5.14 Determination and Actions by the Board of Directors, Etc. The Board
--------------------------------------------------------
of Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to
the foregoing) which are done or made by the Board in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties, and (y) not subject the Board of Directors
of the Company to any liability to the holders of the Rights.
41
5.15 Descriptive Headings. Descriptive headings appear herein for
--------------------
convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
5.16 Governing Law. This Agreement and each Right issued hereunder shall
-------------
be deemed to be a contract made under the laws of the State of Delaware and
for all purposes shall be governed by and construed in accordance with the
laws of such state applicable to contracts to be made and performed entirely
within such state.
5.17 Counterparts. This Agreement may be executed in any number of
------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
5.18 Severability. If any term or provision hereof or the application
------------
thereof to any circumstance shall, in any jurisdiction and to any extent, be
invalid or unenforceable, such term or provision shall be ineffective as to
such jurisdiction to the extent of such invalidity or unenforceability without
invalidation or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other
than those as to which it is held invalid or unenforceable.
5.19 Book-Entry Account Statements. Except where the context otherwise
------------------------------
indicates, (a) if at any time or from time to time the Company determines that
shares of Common Stock shall be evidenced by book-entry account statements or
similar instruments or documents ("Book-Entry Account Statements"), then all
references in this Agreement to Common Stock certificate(s), certificates for
the Common Stock, certificates representing shares of Common Stock or
certificate for the associated share of
42
Common Stock shall be deemed to include such Book-Entry Account Statements
which evidence such shares of Common Stock, (b) if at any time or from time to
time the Company determines that after the Separation Time the Rights shall be
evidenced by Book-Entry Account Statements, then all references in this
Agreement to Rights Certificates shall be deemed to include such Book-Entry
Account Statements which evidence such Rights and (c) if at any time or from
time to time the Company determines that shares of Preferred Stock issued upon
the exercise of Rights shall be evidenced by Book-Entry Account Statements,
then all references in this Agreement to certificates for such shares of
Preferred Stock shall be deemed to include such Book-Entry Account Statements
which evidence such shares of Preferred Stock.
43
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
VARIAN, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
FIRST CHICAGO TRUST COMPANY OF
NEW YORK
By: /s/ Xxxxxx Xxxxxxxxxx
---------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Assistant Vice President
44
EXHIBIT A
---------
[Form of Rights Certificate]
Certificate No. ______Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE OPTION
OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES OR ASSOCIATES THEREOF
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY
OF THE FOREGOING WILL BE VOID.
Rights Certificate
Varian, Inc.
This certifies that _______________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of February 18, 1999 (as amended
from time to time, the "Rights Agreement"), between Varian, Inc., a Delaware
corporation (the "Company"), and First Chicago Trust Company of New York, as
Rights Agent (the "Rights Agent," which term shall include any successor Rights
Agent under the Rights Agreement), to purchase from the Company at any time
after the Separation Time (as such term is defined in the Rights Agreement) and
prior to the close of business on April 2, 2009 (California time) one one-
thousandth of a fully paid share of Participating Preferred Stock, par value
$0.01 per share (the "Preferred Stock"), of the Company (subject to adjustment
as provided in the Rights Agreement) at the Exercise Price referred to below,
upon presentation and surrender of this Rights Certificate with the Form of
Election to Exercise duly executed at the principal office of the Rights Agent
in The City of New York. The Exercise Price
A-1
shall initially be $75.00 per Right and shall be subject to adjustment in
certain events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase
securities of an entity other than the Company or securities or assets of the
Company other than Preferred Stock, all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available without cost upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor evidencing an aggregate number of Rights equal to the aggregate number of
Rights evidenced by the Rights Certificate or Rights Certificates surrendered.
If this Rights Certificate shall be exercised in part, the registered holder
shall be entitled to receive, upon surrender hereof, another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, each Right
evidenced by this Certificate may be (a) redeemed by the Company under certain
circumstances, at
A-2
its option, at a redemption price of $0.001 per Right, or (b) exchanged by the
Company under certain circumstances, at its option, for one share of Common
Stock or one-thousandth of a share of Preferred Stock per Right (or, in
certain cases, other securities or assets of the Company), subject in each
case to adjustment in certain events as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of any
securities which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a Stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
Stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
the Stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Rights evidenced by
this Rights Certificate shall have been exercised or exchanged as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
A-3
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Date: ___________ ___, _______
ATTEST: VARIAN, INC.
______________________________ By:______________________________
Secretary Title:
Countersigned:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By: ______________________________
Authorized Signature
A-4
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
this Rights Certificate.)
FOR VALUE RECEIVED _________________________ hereby sells, assigns
and transfers unto __________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: ________________, _______
Signature Guaranteed: ________________________________________
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular,
without alteration or enlargement or
any change whatsoever)
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
A-5
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
______________________________________
Signature
-------------------------------------------------------------------------------
NOTICE
------
In the event the certification set forth above is not completed in
connection with a purported assignment, the Company will deem the Beneficial
Owner of the Rights evidenced by the enclosed Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced by such Rights Certificate to be void and not transferable or
exercisable.
A-6
(To be attached to each Rights Certificate)
FORM OF ELECTION TO EXERCISE
----------------------------
(To be executed if holder desires to exercise the Rights
Certificate.)
TO: [ ]
The undersigned hereby irrevocably elects to exercise
____________________ whole Rights represented by the attached Rights Certificate
to purchase the shares of Common or Participating Preferred Stock issuable upon
the exercise of such Rights and requests that certificates for such shares be
issued in the name of:
_____________________________________________________
Address:
_____________________________________________________
_____________________________________________________
Social Security or Other Taxpayer
Identification Number: ______________________________
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
_____________________________________________________
Address:
_____________________________________________________
_____________________________________________________
Social Security or Other Taxpayer
Identification Number: ______________________________
Dated: ________________, _______
Signature Guaranteed: ________________________________________
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
A-7
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank of trust company having an office or
correspondent in the United States.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of
Rights and shares of Common Stock, that the Rights evidenced by this Rights
Certificate are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
________________________________________
Signature
--------------------------------------------------------------------------------
NOTICE
------
In the event the certification set forth above is not completed in
connection with a purported exercise, the Company will deem the Beneficial Owner
of the Rights evidenced by the attached Rights Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
or a transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
A-8
EXHIBIT B
---------
FORM OF CERTIFICATE OF DESIGNATION AND TERMS
OF PARTICIPATING PREFERRED STOCK OF VARIAN, INC.
------------------------------------------------
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
----------------------------------------
We, the undersigned, Xxxxx X. Xxxxx and Xxxxxx X. Xxxxx, the President and Chief
Executive Officer, and the Secretary, respectively, of Varian, Inc., a Delaware
corporation (the "Corporation"), do hereby certify as follows:
Pursuant to authority granted by Article IV of the Restated
Certificate of Incorporation of the Corporation and in accordance with the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors of the Corporation has adopted the following
resolutions fixing the designation and certain terms, powers, preferences and
other rights of a new series of the Corporation's Preferred Stock, par value
$0.01 per share, and certain qualifications, limitations and restrictions
thereon:
RESOLVED, that there is hereby established a series of Preferred
Stock, par value $0.01 per share, of the Corporation, and the designation and
certain terms, powers, preferences and other rights of the shares of such
series, and certain qualifications, limitations and restrictions thereon, are
hereby fixed as follows:
(i) The distinctive serial designation of this series shall be
"Participating Preferred Stock" (hereinafter called "this Series"). Each
share of this Series shall be identical in all respects with the other
shares of this Series except as to the dates from and after which dividends
thereon shall be cumulative.
(ii) The number of shares in this Series shall initially be
50,000, which number may from time to time be increased or decreased (but
not below the number then outstanding) by the Board of Directors. Shares of
this Series purchased by the Corporation shall be cancelled and shall
revert to authorized but unissued shares of Preferred Stock undesignated as
to series. Shares of this Series may be issued in fractional shares, which
fractional shares shall entitle the holder, in proportion to such holder's
fractional share, to all rights of a holder of a whole share of this
Series.
B-1
(iii) The holders of full or fractional shares of this Series
shall be entitled to receive, when and as declared by the Board of
Directors, but only out of funds legally available therefor, dividends,
(A) on each date that dividends or other distributions (other than
dividends or distributions payable in Common Stock of the Corporation)
are payable on or in respect of Common Stock comprising part of the
Reference Package (as defined below), in an amount per whole share of
this Series equal to the aggregate amount of dividends or other
distributions (other than dividends or distributions payable in Common
Stock of the Corporation) that would be payable on such date to a holder
of the Reference Package (as hereinafter defined) and (B) on the last day
of March, June, September and December in each year, in an amount per
whole share of this Series equal to the excess (if any) of $2.50 over the
aggregate dividends paid per whole share of this Series during the three-
month period ending on such last day. Each such dividend shall be paid to
the holders of record of shares of this Series on the date, not exceeding
sixty days preceding such dividend or distribution payment date, fixed
for the purpose by the Board of Directors in advance of payment of each
particular dividend or distribution. Dividends on each full and each
fractional share of this Series shall be cumulative from the date such
full or fractional share is originally issued; provided that any such
full or fractional share originally issued after a dividend record date
and on or prior to the dividend payment date to which such record date
relates shall not be entitled to receive the dividend payable on such
dividend payment date or any amount in respect of the period from such
original issuance to such dividend payment date.
The term "Reference Package" shall initially mean 1,000 shares of
Common Stock, $0.01 par value per share ("Common Stock"), of the
Corporation. In the event the Corporation shall at any time after 5:00
p.m., California time, on April 2, 1999 (A) declare or pay a dividend on
any Common Stock payable in Common Stock, (B) subdivide any Common Stock or
(C) combine any Common Stock into a smaller number of shares, then and in
each such case the Reference Package after such event shall be the Common
Stock that a holder of the Reference Package immediately prior to such
event would hold thereafter as a result thereof.
Holders of shares of this Series shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of full
cumulative dividends, as herein provided on this Series.
So long as any shares of this series are outstanding, no dividends
(other than a dividend in Common Stock or in any other stock ranking junior
to this Series as to dividends and upon liquidation) shall be declared or
paid or set aside for payment or other distribution declared or made upon
the Common Stock or upon any other stock ranking junior to this Series as
to dividends or upon liquidation, nor shall any Common Stock nor any other
stock of the Corporation ranking junior to or on a parity with this Series
as to dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available
for a sinking fund for the redemption of any
B-2
shares of any such stock) by the Corporation (except by conversion into
or exchange for stock of the Corporation ranking junior to this Series as
to dividends and upon liquidation), unless, in each case, the full
cumulative dividends (including the dividend to be due upon payment of
such dividend, distribution, redemption, purchase or other acquisition)
on all outstanding shares of this Series shall have been, or shall
contemporaneously be, paid.
(iv) In the event of any merger, consolidation,
reclassification or other transaction in which the shares of Common Stock
are exchanged for or changed into other stock or securities, cash and/or
any other property, then in any such case the shares of this Series shall
at the same time be similarly exchanged or changed in an amount per whole
share equal to the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, that a holder of
the Reference Package would be entitled to receive as a result of such
transaction.
(v) In the event of any liquidation, dissolution or winding
up of the affairs of the Corporation, whether voluntary or involuntary,
the holders of full and fractional shares of this Series shall be
entitled, before any distribution or payment is made on any date to the
holders of the Common Stock or any other stock of the Corporation ranking
junior to this Series upon liquidation, to be paid in full an amount per
whole share of this Series equal to the greater of (A) $100 or (B) the
aggregate amount distributed or to be distributed prior to such date in
connection with such liquidation, dissolution or winding up to a holder
of the Reference Package (such greater amount being hereinafter referred
to as the "Liquidation Preference"), together with accrued dividends to
such distribution or payment date, whether or not earned or declared. If
such payment shall have been made in full to all holders of shares of
this Series, the holders of shares of this Series as such shall have no
right or claim to any of the remaining assets of the Corporation.
In the event the assets of the Corporation available for distribution
to the holders of shares of this Series upon any liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, shall
be insufficient to pay in full all amounts to which such holders are
entitled pursuant to the first paragraph of this Section (v), no such
distribution shall be made on account of any shares of any other class or
series of Preferred Stock ranking on a parity with the shares of this
Series upon such liquidation, dissolution or winding up unless
proportionate distributive amounts shall be paid on account of the shares
of this Series, ratably in proportion to the full distributable amounts for
which holders of all such parity shares are respectively entitled upon such
liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the Corporation,
the holders of shares of this Series then outstanding shall be entitled to
be paid out of assets of the Corporation available for distribution to its
stockholders all amounts to which such holders are entitled pursuant to the
first paragraph of this Section
B-3
(v) before any payment shall be made to the holders of Common Stock or
any other stock of the Corporation ranking junior upon liquidation to
this Series.
For the purposes of this Section (v), the consolidation or merger of,
or binding share exchange by, the Corporation with any other corporation
shall not be deemed to constitute a liquidation, dissolution or winding up
of the Corporation.
(vi) The shares of this Series shall not be redeemable.
(vii) In addition to any other vote or consent of stockholders
required by law or by the Restated Certificate of Incorporation, as
amended, of the Corporation, each whole share of this Series shall, on
any matter, vote as a class with any other capital stock comprising part
of the Reference Package and voting on such matter and shall have the
number of votes thereon that a holder of the Reference Package would
have.
IN WITNESS WHEREOF, the undersigned have signed and attested this
certificate on the ___ day of March, 1999.
_________________________________
Xxxxx X. Xxxxx
President and
Chief Executive Officer
Attest:
_________________________________
Xxxxxx X. Xxxxx
Secretary
B-4
