Exhibit 4.1
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LUMENIS LTD.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
Rights Agent
Bonus Rights Agreement
Dated as of April 11, 2002
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions................................................................ 4
Section 2 Appointment of Rights Agent........................................................ 9
Section 3. Issue of Right Certificates........................................................ 9
Section 4. Form of Right certificates......................................................... 11
Section 5. Countersignature and Registration.................................................. 12
Section 6. Transfer, Split-up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates........................... 12
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...................... 13
Section 8. Cancellation and Destruction of Right Certificates................................. 15
Section 9. Reservation and Availability of Ordinary Shares.................................... 16
Section 10. Ordinary Shares Record Date........................................................ 17
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights................. 17
Section 12. Certificate of Adjusted Purchase Price or Number of Shares......................... 28
Section 13. Consolidation, Merger or Sale or Transfer of assets or Earning Power............... 28
Section 14. Fractional Rights and Fractional Shares............................................ 31
Section 15. Rights of Action................................................................... 32
Section 16. Agreement of Right Holders......................................................... 33
Section 17. Right Certificate holder Not Deemed a Shareholder.................................. 33
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Section 18. Concerning the Rights Agent........................................................ 34
Section 19. Merger or Consolidation or Change of Name of Rights Agent.......................... 34
Section 20. Duties of Rights Agent............................................................. 35
Section 21. Change of Right Agent.............................................................. 38
Section 22. Issuance of New Right Certificates................................................. 39
Section 23. Redemption and Exchange............................................................ 39
Section 24. Notice of Certain Events........................................................... 42
Section 25. Notices............................................................................ 43
Section 26. Supplements and Amendments......................................................... 44
Section 27. Successors......................................................................... 45
Section 28. Benefits of this Agreement......................................................... 45
Section 29. Severability....................................................................... 45
Section 30. Governing Law...................................................................... 45
Section 31. Counterparts....................................................................... 46
Section 32. Descriptive Headings............................................................... 46
Section 33. Determination and Actions by the Board of Directors................................ 46
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BONUS RIGHTS AGREEMENT
Bonus Rights Agreement, dated as of April 11, 2002, (the "Rights
Agreement") between Lumenis Ltd., an Israeli corporation (the "Company"), and
American Stock Transfer & Trust Company, as Rights Agent (the "Rights Agent").
The Board of Directors of the Company (the "Board of Directors") has
authorized the distribution of one bonus right (a "Right") for each Ordinary
Share (as defined in Section 1(h) hereof) of the Company outstanding on April
11, 2002 (the "Record Date"), and has authorized the issuance of one Right (as
such number may be hereinafter adjusted pursuant to the terms hereof) with
respect to each Ordinary Share that shall be issued (whether originally issued
or delivered from the Company's treasury) between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date (as such terms are defined in Sections 3 and 7 hereof) and, in certain
circumstances provided in Section 22 hereof, after the Distribution Date, each
Right initially representing the right to purchase one Ordinary Share.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Rights Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 15% or more of the Ordinary Shares of the
Company then outstanding but shall not include (i) the Company, in pursuance to
Section 308 of the Companies Law (as defined hereunder), (ii) any wholly-owned
Subsidiary of the Company, in pursuance to Section 309 of the Companies Law, or
otherwise, (iii) any employee benefit plan of the Company or of any subsidiary
or Affiliate of the Company, (iv) any entity holding shares of share capital of
the Company for or pursuant to the terms of any such plan, (v) Coherent, Inc., a
Delaware corporation ("Coherent"),
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so long as Coherent shall not purchase or otherwise become (as a result of the
actions of Coherent or its Affiliates or Associates) the Beneficial Owner of
more than 23% of the Ordinary Shares then outstanding or, if applicable, such
greater percentage as may be contemplated by Section 5.18 of the Asset Purchase
Agreement by and among the Company, Energy Systems Holdings Inc. and Coherent
dated as of February 25, 2001, (vi) any Person who, along with such Person's
Affiliates and Associates, becomes an Acquiring Person (as defined in the
preceding clauses of this Section 1(a)) as a result of a Qualified Offer (as
defined in Section 11(a)(ii) hereof), (vii) any Person who becomes an Acquiring
Person (as defined in the preceding clauses of this Section 1(a)) by virtue of
acquiring Ordinary Shares as a result of participation by such Person and such
Person's Affiliates and Associates in any dividend reinvestment plan, stock
option plan or other similar plan or arrangement of the Company or its
Subsidiaries or Affiliates; provided that such Person, including such Person's
Affiliates and Associates, does not acquire thereafter any additional Ordinary
Shares, exclusive of (x) Ordinary Shares acquired by such Person and such
Person's Affiliates and Associates as a result of stock dividends, stock splits,
recapitalizations or similar transaction in which the Company did not receive
any consideration for issuing the Ordinary Shares; (y) Ordinary Shares acquired
by such Person and such Person's Affiliates and Associates as a result of
devises, bequests and intestate succession; and (z) Ordinary Shares acquired by
such Person and such Person's Affiliates and Associates as a result of
participation by such Person and such Person's Affiliates and Associates in any
dividend reinvestment plan, stock option plan or other similar plan or
arrangement of the Company or its Subsidiaries or Affiliates or (viii) any
Person who becomes an Acquiring Person (as defined in the preceding clauses of
this Section 1(a)) inadvertently or without knowledge of the terms of the Rights
and who or which, together with all Affiliates and Associates, thereafter does
not acquire additional Ordinary Shares while the Beneficial Owner of 15% or more
of the Ordinary Shares then outstanding; provided that if so requested by the
Company, (x) such Person shall certify within 10 Business Days of being so
requested, that such Person had acquired the Ordinary Shares inadvertently or
without knowledge of the terms of the Rights and (y) such Person shall promptly
sell any shares acquired in excess of the applicable threshold that would have
otherwise caused such Person to be an Acquiring Person. Notwithstanding the
foregoing, no
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Person shall become an Acquiring Person as the result of an acquisition of
Ordinary Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned by
such Person to 15% or more of the Ordinary Shares of the Company then
outstanding; provided, however, that if a Person who becomes the Beneficial
Owner of 15% or more of the Ordinary Shares of the Company then outstanding by
reason of share purchases by the Company shall, after such share purchases by
the Company, become the Beneficial Owner of any additional Ordinary Shares of
the Company constituting 1.5% or more of the Ordinary Shares then outstanding,
then such Person shall be deemed to be an Acquiring Person.
(b) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations, as in effect
on the date of this Rights Agreement, under the Securities Exchange Act of 1934,
as amended (the "Exchange Act").
(c) "Audit Committee" shall mean the Audit Committee of the Board of
Directors or, if there is then no such Audit Committee, all of the Company's
outside directors (as such terms is used in the Companies Law), then serving on
the Board of Directors or, if there are then no outside directors serving on the
Board of Directors, the Board of Directors.
(d) A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or has
"Beneficial Ownership" of (as determined pursuant to Rule 13d-3 under the
Exchange Act), including pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulation of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor report);
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(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the exercise
of conversion rights, exchange rights, rights (other than the Rights), warrants
or options, or otherwise; provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own, securities tendered pursuant to
a tender or exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security (1) arises solely
from a revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person or
any of such Person's Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to Section 1(d)(ii)(B))
or disposing of any securities of the Company;
provided, however, that nothing in this paragraph (d) shall cause a Person
engaged in business as an underwriter of securities to be the Beneficial Owner
of, or to "beneficially own", any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition; and provided
further, however, that any shareholder of the Company, with Affiliates(s),
Associate(s) or other Person(s) who may be deemed representatives of it serving
as director(s) of the Company, shall not be deemed to "beneficially own"
securities held by other Persons as a result of (i) Affiliates or Associates of
such shareholder serving as directors or taking any action in connection
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therewith, (ii) discussing the status of its Ordinary Shares with the Company or
other shareholders of the Company similarly situated or (iii) voting or acting
in a manner similar to other shareholders similarly situated, absent a finding
by the Board of Directors of an agreement among such shareholder to act in
concert with one another as shareholders so as to cause, in the good faith
judgment of the Board of Directors, each such shareholder to be the Beneficial
Owner of the Ordinary Shares held by the other shareholder(s).
(e) "Business Day" shall mean any day other than a Friday, Saturday,
Sunday, or a day on which banking institutions in the State of New York or the
State of Israel are authorized or obligated by law or executive order to close.
(f) "Companies Law" shall mean the Israeli Companies Law, 5759-1999, and
the regulations promulgated thereunder.
(g) "Close of Business" or any given date shall mean 5:00 P.M., New York
City time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business
Day.
(h) "Nasdaq Stock Market" The Nasdaq Stock Market, Inc.
(i) "Ordinary Shares" when used with reference to the Company shall mean
the Ordinary Shares, par value NIS 0.10 per share, of the Company. "Ordinary
Shares" when used with reference to any Person other than the Company shall mean
the share capital (or equity interest) with the greatest voting power of such
other Person or, if such Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.
(j) "Person" shall mean any individual, partnership, firm, corporation or
other entity, and shall include any successor (by merger or otherwise) of such
entity.
(k) "Section 11 Event" shall mean any event described in Section 11(a)(ii)
hereof.
(l) "Shares Acquisition Date" shall mean the date of the public
announcement (which, for purposes of this definition, shall include, without
limitation,
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a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or
an Acquiring Person indicating that an Acquiring Person has become such.
(m) "Subsidiary" of any Person shall mean any corporation or other entity
of which a majority of the voting power of the voting equity securities or
equity interests is owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Ordinary Shares) in accordance with the terms and
conditions thereof, and the Rights Agent hereby accepts, such appointment. The
Company may from time to time appoint such Co-Rights Agent, as it may deem
necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier of (i)
the Close of Business on the tenth Business Day after the Shares Acquisition
Date or (ii) the Close of Business on the tenth Business Day (or such later date
as the Board of Directors, with the concurrence of the Audit Committee, shall
determine) after the date of the commencement of (within the meaning of Rule
14d-2 under the Exchange Act), a tender or exchange offer the consummation of
which would result in any Person's becoming an Acquiring Person (including any
such date which is after the date of this Rights Agreement and prior to the
issuance of the Rights; the earlier of such dates referred to in clauses (i) and
(ii) of this Section 3(a) being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of paragraph (b) of
this Section 3) by the certificates for Ordinary Shares registered in the names
of the holders thereof (which certificates for Ordinary Shares shall also be
deemed to be Right Certificates) and not by separate Right Certificates, and (y)
the right to receive Right Certificates will be transferable only in connection
with the transfer of Ordinary Shares. The Board of Directors may defer the date
set forth in clause (ii) of the preceding sentence to a specified later date or
to an unspecified later date, each to be determined by action of the Board of
Directors, with the concurrence of the Audit Committee. As soon as practicable
after the Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, insured, postage-prepaid
mail,
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to each record holder of Ordinary Shares as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit A hereto,
evidencing one Right for each Ordinary Share so held. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) At the request of any holder of Ordinary Shares, the Company will send
or cause to be sent a copy of a Summary of Rights to Purchase Ordinary Shares,
in substantially the form attached hereto as Exhibit B (the "Summary of
Rights"), by first-class, postage-prepaid mail, to the address of such holder
shown on the records of the Company. With respect to certificates for Ordinary
Shares outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for Ordinary Shares registered in
the names of the holders thereof. Until the Distribution Date (or the earlier
Redemption Date or Final Expiration Date), the surrender for transfer of any
certificate for Ordinary Shares outstanding on the Record Date shall also
constitute the transfer of the Rights associated with the Ordinary Shares
represented thereby.
(c) Certificates issued for Ordinary Shares (including, without limitation,
certificates issued upon transfer or exchange of Ordinary Shares) after the
Record Date but prior to the earliest of the Distribution Date, the Redemption
Date or the Final Expiration Date shall have impressed on, printed on, or
written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Bonus Rights Agreement between Lumenis
Ltd. and the Rights Agent thereunder (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of Lumenis Ltd. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
Certificate. Lumenis Ltd. will mail to the holder of this certificate a
copy of the Rights Agreement without charge after receipt of a written
request thereof. Under certain
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circumstances, Rights issued to Acquiring Persons or any Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement) may
become null and void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Ordinary Shares
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Ordinary Shares represented thereby.
Section 4. Form of Right Certificates. Each Right Certificate (and the
forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially the same as Exhibit A hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Rights Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Each Right Certificate
shall entitle the holder thereof to purchase such number of Ordinary Shares as
shall be set forth therein at the price per share set forth therein (such price
per whole Ordinary Share, the "Purchase Price"), but the number and kind of such
shares and the Purchase Price shall be subject to adjustment as provided herein.
In addition, the Company shall have the right to attach a certificate to any
Right Certificate providing for the holder thereof to certify whether or not
such Person is or was an Acquiring Person or an Affiliate or Associate thereof
or whether such Person acquired the Rights evidenced by such Right Certificate
from any such Person. In the event the Company attaches such a certificate to
any Right Certificate, proper execution of such certificate shall be a
prerequisite to the exercise of the Rights associated therewith as set fort in
the applicable provisions of this Rights Agreement.
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Section 5. Countersignature and Resignation. The Right Certificates shall
be executed on behalf of the Company by its Chief Executive Officer or its
President either manually or by facsimile signature, shall have affixed thereto
the Company's seal or a facsimile thereof and shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and issued and delivered
by the Company with the same force and effect as though the Person who signed
such Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any Person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
execution of this Rights Agreement any such Person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its principal offices, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject to the
provisions of Section 14 hereof, any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the earlier of
the Redemption Date or the Final Expiration Date, any Right Certificate or Right
Certificates (other than Rights Certificates representing Rights that may have
been exchanged pursuant to Section 23(c) hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of Ordinary Shares as
the Right Certificate or Right Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split
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up, combine or exchange any Right certificate shall make such request in writing
delivered to the Rights Agent and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the principal
office of the Rights Agent. Thereupon the Rights Agent shall countersign and
deliver to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment from the holder of Right Certificates of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of such Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's or the Rights
Agent's request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the principal office of the Rights Agent, together with
payment of the Purchase Price for each Ordinary Share as to which the Rights are
exercised, at or prior to the earlier of (i) the Close of Business on April 11,
2003 (the "Final Expiration Date"), or (ii) the time at which the Rights are
redeemed or exchanged as provided in Section 23 hereof (the "Redemption Date").
(b) The Purchase Price payable pursuant to the exercise of Rights shall
initially be $38.00, shall be subject to adjustment from time to time as
provided in
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Sections 11 and 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof, in cash, or by certified check
or bank draft payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) requisition from any transfer agent of the Ordinary
Shares (or make available, if the Rights Agent is the transfer agent)
certificates for the number of Ordinary Shares to be purchases, and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, (ii) when appropriate, requisition from the Company the amount of
funds to be paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) promptly after receipt of such certificates, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and (iv) when appropriate, after receipt, promptly deliver such funds to
or upon the order of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11 Event on which the consideration to be delivered by the Company upon exercise
of the Rights has been determined pursuant to this Rights Agreement (including
in accordance with Section 11(a)(iii) hereof), or as soon as is required by law
following the Distribution Date, as the case may be, a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Ordinary Shares or other securities purchasable upon exercise of
the Rights on an appropriate form, (ii) cause such
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registration statement to become effective as soon as practicable after such
filing and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable for
such Ordinary Shares or other securities and (B) the Expiration Date. The
Company will also take such actions as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various states and
non-U.S. jurisdictions in connection with the exercise of the Rights. The
Company may temporarily suspend, for a period of time not to exceed one hundred
twenty (120) days after the date set forth in clause (i) of the first sentence
of this Section 7(e), the exercisability of the Rights in order to prepare and
file such registration statement and permit it to become effective or to comply
with applicable securities law requirements of other jurisdictions. Upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. In addition,
if the Company shall determine that a registration statement or foreign
equivalent is required following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights until such time as a
registration statement has been declared effective and any applicable foreign
requirements have been satisfied. Notwithstanding any provision of this Rights
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not have
been obtained or the exercise thereof shall not be permitted under applicable
law or a registration statement shall not have been declared effective.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate acquired by the Company otherwise
then upon the exercise thereof. The Rights Agent shall deliver all
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cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Ordinary Shares. The Company
covenants and agrees that it will use its best efforts to cause to be reserved
and kept available out of its authorized and unissued Ordinary Shares, or any
authorized and issued Ordinary Shares held in its treasury, the number of
Ordinary Shares that will be sufficient to permit the exercise in full of all
outstanding Rights.
So long as the Ordinary Shares issuable upon the exercise of Rights may be
listed on any national securities exchange or quoted on the Nasdaq Stock Market,
the Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to be listed on
such exchange or the Nasdaq Stock Market upon official notice of issuance upon
such exercise.
The Company covenants and agrees that it will take all such action as may
be necessary to ensure that all Ordinary Shares delivered upon exercise of
Rights shall at the time of delivery of the certificates for such shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and non-assessable.
The Company further covenants and agrees that it will pay when due and
payable any and all transfer taxes and charges which may be payable by the
Company in respect of the issuance or delivery of the Right Certificates or of
any Ordinary Shares upon the exercise of Rights. The Company shall not, however,
be required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates for the Ordinary Shares in a name other
than that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or deliver any certificates for Ordinary
Shares upon the exercise of any Rights until any such tax shall have been paid
(any such tax being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company's satisfaction
that no such tax is due.
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Section 10. Ordinary Shares Record Date. Each Person in whose name any
certificate for Ordinary Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Ordinary
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Ordinary Shares 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
Ordinary Shares transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Right Certificate, as such, shall
not be entitled to any rights of a shareholder of the Company with respect to
shares for which the Rights shall be exercisable, including, without limitation,
the right to vote or to receive dividends or other distributions, and shall not
be entitled to receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Ordinary Shares or fraction of an
Ordinary Share covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of this
Rights Agreement (A) declare a dividend on the Ordinary Shares payable in
Ordinary Shares, (B) subdivide the outstanding Ordinary Shares, (C) combine the
outstanding Ordinary Shares into a smaller number of shares or (D) issue any
shares of its share capital in a reclassification of the Ordinary Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of share capital issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number
-17-
and kind of shares of share capital which, if such Right had been exercised
immediately prior to such date and at a time when the Ordinary Shares transfer
books of the Company were open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that if the record date for any such
dividend, subdivision, combination or reclassification shall occur prior to the
Distribution Date, the Company shall make an appropriate adjustment to the
Purchase Price (taking into account any additional Rights which may be issued as
a result of such dividend, subdivision, combination or reclassification), in
lieu of adjusting (as described above) the number of Ordinary Shares (or other
capital stock, as the case may be) issuable upon exercise of the Rights. If an
event occurs which would require an adjustment under both Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) In the event any Person, at any time after the date hereof, shall
become an Acquiring Person, unless the event causing such Person to become an
Acquiring Person is an acquisition of Ordinary Shares pursuant to a tender offer
or an exchange offer for all outstanding Ordinary Shares at a price and on terms
determined by the Board of Directors, with the concurrence of the Audit
Committee, to be (x) at a price that is fair to shareholders (taking into
account all factors which such members of the Board of Directors deem relevant
including, without limitation, prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to realize maximum
value) and not inadequate and (y) otherwise in the best interests of the Company
and its shareholders (a "Qualified Offer"), then, and in each such case, proper
provision shall be made so that each holder of a Right, except as provided
below, shall thereafter have a right to receive, upon exercise thereof in
accordance with the terms of this Rights Agreement, such number of Ordinary
Shares as shall equal the result obtained by (x) multiplying the then-current
Purchase Price by the number of Ordinary Shares for which a Right is then
exercisable and (y) dividing that product by 50% of the current per share market
price of the Ordinary Shares (such number of Ordinary Shares is herein called
the "Adjustment Shares"); provided, however, that if the transaction that would
otherwise give rise to the foregoing
-18-
adjustment is also subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii). (To illustrate the adjustment in the
immediately proceeding sentence: If (i) the "then-current Purchase Price" is
$38.00, (ii) the "number of Ordinary Shares for which a Right is then
exercisable" is one and (iii) the "current per share market price of the
Ordinary Shares" is $10.00, then the Adjustment Shares per Right equals 7.6
Ordinary Shares.) Notwithstanding the foregoing, upon the occurrence of any of
the events listed above in this subparagraph (ii), any Rights that are or were
on or after the earlier of the Distribution Date or Shares Acquisition Date
beneficially owned by the Acquiring Person or any Associate or Affiliate of the
Acquiring Person shall become null and void without any further action and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Rights Agreement or otherwise. Any
Right Certificate issued pursuant to Section 3 hereof that represents Rights
beneficially owned by an Acquiring Person or any Associate or Affiliate thereof
and any Right Certificate issued at any time upon the transfer of any Rights to
an Acquiring Person or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate, and any Right Certificate issued
pursuant to Section 6, 7(d) or 22 hereof or this Section 11 upon transfer,
exchange, replacement or adjustment of any other Right Certificate referred to
in this sentence, shall contain the following legend (provided, however, that
the Rights Agent shall not be responsible for affixing such legend unless a
responsible officer of the Rights Agent has actual knowledge as to the foregoing
circumstances or the Company has notified the Rights Agent in writing thereof):
The Rights represented by this Right Certificate were issued to a Person
who was an Acquiring Person or an Affiliate or any Associate of an
Acquiring Person or a nominee thereof. This Right Certificate and the
Rights represented hereby may become void in the circumstances specified in
Section 11(a)(ii) of the Rights Agreement.
The term "Responsible Officer", when used with respect to the Rights Agent
herein, shall mean the chairman of the Board of Directors, the vice chairman of
the Board of Directors, the president, each vice president, the secretary, the
treasurer, each assistant
-19-
vice president, each corporate trust officer or any other officer of the Rights
Agent customarily performing functions similar to those performed by the Persons
who at the time shall be such officers, respectively, or to whom any corporate
trust matter is referred because of his knowledge of and familiarity with the
particular subject.
(iii) In the event that the number of Ordinary Shares which is
authorized by the Company's articles of association but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii), the Company shall: (A) determine the excess of (1) the value
of the Adjustment Shares issuable upon the exercise of a Right (the "Current
Value") over (2) the Purchase Price (such excess is herein called the "Spread"),
and (B) with respect to each Right and to the extent permitted by applicable
law, make adequate provision to substitute for the Adjustment Shares, upon
exercise of the Rights, (1) cash, (2) a reduction in the Purchase Price, (3)
Ordinary Shares or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock which the Board of
Directors, with the concurrence of the Audit Committee, has deemed to have the
same value as Ordinary Shares (such shares or units of shares of preferred stock
are referred to herein as "Ordinary Share equivalents"), (4) debt securities of
the Company, (5) other assets, or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate value has
been determined by the Board of Directors, with the concurrence of the Audit
Committee; provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (30) days
following the later of (x) the first occurrence of a Section 11 Event and (y)
the date on which the Company's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company, to the extent permitted by
applicable law, shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, Ordinary Shares
(to the extent available) and then, if necessary, cash, which Ordinary Shares
and/or cash have an aggregate value (to the extent of the Company's cash
resources then available) equal to the Spread. If the Board of Directors shall
determine in good faith that it is likely that sufficient additional Ordinary
Shares could be authorized for issuance upon exercise in full of the Rights, the
thirty (30) day
-20-
period set forth above may be extended to the extent necessary, but not more
than one hundred twenty (120) days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek shareholder approval for the authorization of
such additional Ordinary Shares (such period, as it may be extended, the
"Substitution Period"). To the extent that the Company determines that some
action should be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii) the Company (x) shall provide (except as otherwise provided
herein), that such action shall apply uniformly to all outstanding Rights, and
(y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional securities
and/or to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Ordinary Shares shall be the
Current Market Price per share of the Ordinary Shares on the Section 11(a)(ii)
Trigger Date and the value of any "Ordinary Share equivalents" shall be deemed
to have the same value as the Ordinary Shares on such date.
(b) In case the Company shall fix a record date for the issuance of Rights
or warrants to all holders of Ordinary Shares entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or
purchase Ordinary Shares (or securities convertible into Ordinary Shares) at a
price per Ordinary Share (or having a conversion price per Ordinary Share, if a
security convertible into Ordinary Shares) less than the current per share
market price of the Ordinary Shares (as defined in Section 11(d) hereof) on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Ordinary Shares outstanding on such record date plus the number of Ordinary
Shares which the aggregate offering price of the total number of Ordinary Shares
so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market
price and the denominator of which shall be the number of Ordinary Shares
outstanding on such record date plus the number
-21-
of additional Ordinary Shares to be offered for subscription or purchase (or
into which the securities so to be offered are initially convertible). In case
such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors, with the concurrence of the
Audit Committee, whose determination shall be described in a statement delivered
to the Rights Agent. Ordinary Shares owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustments shall be made successively whenever such a record date is
fixed; and in the event such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Ordinary Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend out of the earnings or
retained earnings of the Company) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the current per share market price of the Ordinary Shares (as
defined in Section 11(d) hereof) on such record date, less the fair market value
(as determined in good faith by the Board of Directors, with the concurrence of
the Audit Committee, whose determination shall be described in a statement filed
with the Rights Agent) of the portion of the assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants applicable to
one Ordinary Share and the denominator of which shall be such current per share
market price of the Ordinary Shares. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution is
not so made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
-22-
(d) For the purpose of any computation hereunder, other than computations
made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" of the
Ordinary Shares on any date shall be deemed to be the average of the daily
closing prices per share of such Ordinary Shares for the thirty (30) consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date, and for purposes of computations made pursuant to Section 11(a)(iii)
hereof, the Current Market Price per share of the Ordinary Shares on any date
shall be deemed to be the average of the daily closing prices per share of such
Ordinary Shares for the ten (10) consecutive Trading Days immediately following
such date; provided, however, that in the event that the Current Market Price
per share of the Ordinary Shares is determined during a period following the
announcement by the issuer of the Ordinary Shares of (i) any dividend or
distribution on such Ordinary Shares, payable in shares of such Ordinary Shares
or securities convertible into shares of such Ordinary Shares (other than the
Rights), or (ii) any subdivision, combination or reclassification of such
Ordinary Shares, and the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification shall not
have occurred prior to the expiration of the requisite thirty (30) Trading Day
period or ten (10) Trading Day period, as set forth above, then, and in each
such case, the Current Market Price shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Ordinary Shares are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Ordinary Shares are listed or admitted to trading or, if
the Ordinary Shares are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported on
the Nasdaq Stock Market or, if on any such date the Ordinary Shares are not
quoted on the Nasdaq Stock Market, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Ordinary Shares selected by the
-23-
Board. If on any such date no market maker is making a market in the Ordinary
Shares, the fair value of such Ordinary Shares on such date as determined in
good faith by the Board of Directors shall be used. The term "Trading Day" shall
mean a day on which the principal stock market on which the Ordinary Shares are
listed or admitted to trading is open for the transaction of business or, if the
Ordinary Shares are not listed or admitted to trading on any stock market, a
Business Day. If the Ordinary Shares are not publicly held or not so listed or
traded, "Current Market Price" per share shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a), the
holder of any Right thereafter exercised shall become entitled to receive any
shares of share capital of the Company other than Ordinary Shares, thereafter
the number of such other shares so receivable upon exercise of any Right shall
be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Ordinary Shares
contained in Section 11(a) through (c), inclusive, and the provisions of
Sections 7, 9, 10 and 13 hereof with respect to the Ordinary Shares shall apply
on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Ordinary Shares or
fraction of an Ordinary
-24-
Share purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of Ordinary Shares or
fraction of an Ordinary Share (calculated to the nearest ten-thousandth)
obtained by (i) multiplying (x) the number of Ordinary Shares or fraction of an
Ordinary Share covered by a Right immediately prior to this adjustment by (y)
the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Ordinary Shares or fraction of an Ordinary Share
issuable upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of
Ordinary Shares for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
that number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such
-25-
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the option of
the Company, the adjusted Purchase Price) and shall be registered in the names
of the holders of record of Right Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of Ordinary Shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the Ordinary Shares issuable
upon exercise of the Rights, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable Ordinary Shares at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date the Ordinary
Shares and other share capital or securities of the Company, if any, issuable
upon such exercise over and above the Ordinary Shares and other share capital or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
-26-
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Ordinary Shares, issuance
wholly for cash of any of the Ordinary Shares at less than the current market
price, issuance wholly for cash of Ordinary Shares or securities which by their
terms are convertible into or exchangeable for Ordinary Shares, stock dividends
or issuance of rights, options or warrants referred to hereinabove in this
Section 11, hereafter made by the Company to holders of its Ordinary Shares
shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any time after
the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Section 23 or Section 26 hereof, take (or
permit any Subsidiary to take) any action if at the time such action is taken it
is reasonably
-27-
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Ordinary Shares
a copy of such certificate and (c) if after the Distribution Date, mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section
25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event that, following the Shares Acquisition Date, directly or
indirectly, (i) the Company shall consolidate with, or merge with and into, any
other Person, (ii) any Person shall consolidate with the Company, or merge with
and into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part of
the Ordinary Shares of the Company shall be changed into or exchanged for stock
or other securities of any other Person (or the Company) or cash or any other
property, or (iii) the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person, then, and in each such case, and except as contemplated by Section
13(d), proper provision shall be made so that (A) each holder of a Right (except
as otherwise provided herein) shall thereafter have the right to receive, upon
the exercise thereof in accordance with the terms of this Rights Agreement, such
number of validly authorized and fully paid, non-assessable and freely tradable
Ordinary Shares of the Principal Party (as such term is hereinafter defined) as
shall be equal to the result obtained by (x) multiplying the then-current
Purchase Price by the number of Ordinary Shares for which a Right is then
exercisable (without taking into account any adjustment previously made pursuant
to Section 11(a)(ii)) and (y) dividing that product by 50% of the current per
share market price of the Ordinary Shares of such Principal Party
-28-
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; (B) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company pursuant
to this Rights Agreement; (C) the term "Company" shall thereafter be deemed to
refer to such Principal Party; and (D) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
its Ordinary Shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
Ordinary Shares thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean (i) in the case of any transaction
described in Section 13(a)(i) or (ii), the Person that is the issuer of any
securities into which Ordinary Shares are converted in such merger or
consolidation, and if no securities are so issued, the Person that is the other
party to such merger or consolidation, and (ii) in the case of any transaction
described in Section 13(a)(iii) the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions; provided, however, that in any such case, (A) if
the Ordinary Shares of such Person are not at such time and have not been
continuously over the preceding 12-month period registered under Section 12 of
the Exchange Act and such Person is a direct or indirect Subsidiary of another
Person the Ordinary Shares of which are and have been so registered, "Principal
Party" shall refer to such other Person and (B) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Ordinary Shares
of two or more of which are and have been so registered, "Principal Party" shall
refer to whichever of such Persons is the issuer of the Ordinary Shares having
the greatest aggregate market value.
(c)(i) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized Ordinary Shares which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in Section 13(a) and
-29-
(b) and further providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer of assets mentioned in Section 13(a),
such Principal Party will (A) prepare and file a registration statement under
the Securities Act, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (1) become effective as soon as
practicable after such filing and (2) remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the earlier of the
Expiration Date or the Redemption Date, and (B) will deliver to holders of the
Rights historical financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements for registration on
Form 10 under the Exchange Act. The Company shall not enter into any transaction
of the kind referred to in this Section 13 if at the time of such transaction
there are any rights, warrants, instruments or securities outstanding or any
agreements or arrangements which, as a result of the consummation of such
transaction, would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
(ii) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that an event described in Section 13(a) shall occur at any time after the
occurrence of an event described in Section 11(a)(ii), the Rights which have not
theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a).
(c) Notwithstanding anything in this Rights Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in Section
13(a)(i) or (ii) if (i) such transaction is consummated with a Person or Persons
(or a Subsidiary of any such Person or Persons) who acquired Ordinary Shares
pursuant to a tender offer or exchange offer for all outstanding Ordinary Shares
which complies with the provisions of Section 11(a)(ii) hereof, (ii) the price
per Ordinary Share offered in such transaction is not less that the price per
Ordinary Share paid to all holders of Ordinary Shares whose shares were
purchased pursuant to such tender
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offer or exchange offer, and (iii) the form of consideration being offered to
the remaining holders of Ordinary Shares pursuant to such transaction is the
same as the form of consideration paid pursuant to such tender offer or exchange
offer. Upon consummation of any such transaction contemplated by this Section
13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares. (a) The Company shall
not be required to issue fractions of Rights or to distribute or cause the
Rights Agent to distribute Right Certificates which evidence fractional Rights.
In lieu of such fractional Rights, to the extent permitted by applicable law,
the Company may, at its option, pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported on the Nasdaq Stock Market or
such other system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights selected
by the Board of Directors. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors shall be used.
(b) The Company shall not be required to issue fractions of Ordinary Shares
upon exercise or redemption of the Rights or to distribute certificates which
evidence fractional Ordinary Shares. In lieu of fractional Ordinary Shares, to
the extent permitted by applicable law, the Company may, at its option, pay to
the registered holders of
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Right Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of one
Ordinary Share. Prior to the Shares Acquisition Date, a number of Rights must be
exercised so that only whole Ordinary Shares will be issued. For purposes of
this Section 14(b), the current market value of an Ordinary Share shall be the
closing price of an Ordinary Share (as determined pursuant to the second
sentence of Section 11(d) hereof) for the Trading Day immediately prior to the
date of such exercise.
(c) The holder of a Right by the acceptance of the Rights expressly waives
his right to receive any fractional Rights or any fractional Ordinary Shares
upon exercise or redemption of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Rights Agreement, except the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Ordinary Shares); and any registered holder of any Right Certificate (or, prior
to the Distribution Date, of any Ordinary Shares), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of any Ordinary Shares), may, in his own behalf and for his
own benefit, enforce this Rights Agreement, and may institute and maintain any
suit, action or proceeding against the Company to enforce this Rights Agreement,
or otherwise enforce or act in respect of his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Rights Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Rights Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person (including, without limitation, the
Company) subject to this Rights Agreement.
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Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) Prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Ordinary Shares;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer; and
(c) the Company may, and, upon appropriate instruction by the Company, the
Rights Agent shall, deem and treat the Person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Ordinary Shares
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Ordinary Shares certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any notice to the
contrary.
Section 17. Rights Certificate Holder Not Deemed a Shareholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Ordinary Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
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Section 18. Concerning the Rights Agent. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
in accordance with a fee schedule to be mutually agreed upon and, from time to
time, its reasonable expenses and reasonable counsel fees and other reasonable
and customary disbursements incurred in the administration and execution of this
Rights Agreement and the exercise and performance of its duties hereunder,
provided that the incurrence of any such expenses shall be subject to the prior
written approval of the Company, which approval shall not be unreasonably
withheld. The Company also agrees to indemnify the Rights Agent for, and to hold
it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Rights Agreement, including the costs and expenses
(including reasonable attorney's fees) of defending against any claim of
liability in the premises, provided that the Company shall be entitled to
control the defense of any such claim and shall not be liable for any settlement
entered into without its prior written consent.
The Rights Agent shall be protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection with its
administration of this Rights Agreement in reliance upon any Right Certificate
or certificate for Ordinary Shares or other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, instruction, direction, consent, certificate, statement, or
other paper or document believed by it to be genuine and to be signed, executed
and, where necessary, verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Rights Agreement without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for
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appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Rights Agreement, any of the Right Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Rights Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign much Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates in this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes only the
duties and obligations imposed by this Rights Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent (excepting negligence,
bad faith or willful misconduct of 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 Rights Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact
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or matter (unless other evidence in respect thereof be herein specifically
prescribed) shall be deemed to be conclusively proved and established by a
certificate signed by any one of the chief executive officer, chief operating
officer or chief financial officer of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it in conformity with such
certificate under the provisions of this Rights Agreement.
(c) The Rights Agent shall be liable hereunder only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Rights Agreement or in the
Right Certificates (except as to its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Rights Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Sections 11 or 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any Ordinary Shares to be issued
pursuant to this Rights Agreement or any Right Certificate or as to whether any
Ordinary Shares will, when so issued, be validly authorized and issued, fully
paid and non-assessable.
(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 Right
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Agent for the carrying out or performing by the Rights Agent of the provisions
of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chief Executive Officer or the President of the Company, and to apply
to any such officers for advice or instructions in connection with its duties
under this Rights Agreement, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Rights Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) At any time and from time to time after the Distribution Date, upon the
request of the Company, the Rights Agent shall promptly deliver to the Company a
list, as of the most recent practicable date (or as of such earlier date as may
be specified by the Company), of the holders of record of Rights.
(k) Except as otherwise provided herein, the Rights Agent shall not be
required to expend or risk its own funds in the performance of its duties or in
the exercise of its rights hereunder.
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Section 21. Change of Rights Agent The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Rights Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Ordinary Shares by registered or certified mail. The Company shall
promptly notify the holders of the Right Certificates by first class mail of any
such resignation. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Ordinary
Shares and to the holders of the Right Certificates. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to such Rights Agent. If the Company shall fail to
make such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the Rights Agent or the registered holder of
any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of the State of New York (or of
any other state of the United States so long as such corporation is authorized
to do business in the State of New York), in good standing, which is authorized
under applicable laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Ordinary Shares, and mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect
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therein, shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Rights Agreement. In addition, in
connection with the issuance or sale of Ordinary Shares following the
Distribution Date and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to Ordinary Shares so issued or sold pursuant to
the exercise of stock options or under any employee plan or arrangement of the
Company or a Subsidiary or Affiliate thereof, granted or awarded as of the
Distribution Date, or other securities hereinafter issued by the Company, and
(b) may, in any other case, if deemed necessary or appropriate by the Board,
issue Right Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) no such
Rights Certificate shall be issued if, and to the extent that, the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Right Certificate would be issued, and (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption and Exchange. (a) The Board of Directors, with the
concurrence of the Audit Committee, may, at its option, at any time prior to the
Close of Business on the earlier of (x) the tenth Business Day following the
Shares Acquisition Date (or such later date as the Board of Directors, with the
concurrence of the Audit Committee, shall determine, which determination to be
made prior to the Close of Business on the tenth Business Day following the
Shares Acquisition Date) and (y) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of $.001 per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption
-39-
price per Right being hereinafter referred to as the "Redemption Price").
Notwithstanding anything contained in this Rights Agreement to the contrary, the
Rights shall not be exercisable after the first occurrence of an event described
in Section 11(a)(ii) until such time as the Company's right of redemption
hereunder has expired. The Company may, at its option, pay the Redemption Price
in cash, Ordinary Shares of the Company (based on the current share market price
of such Ordinary Shares at the time of redemption, provided, however, that,
unless permitted by applicable law, the effective consideration per Ordinary
Share paid to the Company shall not be less than the par value thereof) or any
other form of consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights, and without any further action and without any notice,
the right to exercise the Rights will terminate and the holders of Rights shall
have not further rights other than the right to receive the Redemption Price.
Promptly after the action of the Board of Directors ordering the redemption of
the Rights, the Company shall give notice of such redemption to the Rights Agent
and the holders of the then outstanding Rights by mailing such notice to all
such holders at their last addresses as they appear upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent for the Ordinary Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
(c) The Board of Directors may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for Ordinary Shares at
an exchange ratio of one Ordinary Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person (other
than the Company, any Subsidiary, any employee benefit plan of the
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Company or any such Subsidiary, or any entity holding Ordinary Shares for or
pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Ordinary Shares then outstanding.
(d) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to subsection (c) of this Section 23 and without
any further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of Ordinary Shares equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall promptly
give public notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange to all
of the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Ordinary Shares for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.
(e) In the event that there shall not be sufficient shares of Ordinary
Shares issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 23, the
Company shall take all such action as may be necessary to authorize additional
shares of Ordinary Shares for issuance upon exchange of the Rights.
(f) The Company shall not be required to issue fractions of Ordinary Shares
or to distribute certificates which evidence fractions of Ordinary Shares. In
lieu of such fractions Ordinary Shares, there shall be paid to the registered
holders of the Right Certificates with regard to which such fractional shares of
Ordinary Shares would otherwise be issuable, an amount in cash equal to the same
fraction of the current
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market value of an Ordinary Share. For the purposes of this subsection (f), the
current market value of an Ordinary Share shall be the closing price of an
Ordinary Share (as determined pursuant to the second sentence of Section 11(d)
hereof) for the Trading Day immediately prior to the date of exchange pursuant
to this Section 23.
Section 24. Notice of Certain Events. In case the Company shall propose at
any time after the Distribution Date (a) to pay any dividend payable in share
capital of any class to the holders of Ordinary Shares or to make any other
distribution to the holders of Ordinary Shares (other than a regularly quarterly
cash dividend out of the earnings or retained earnings of the Company), or (b)
to offer to the holders of Ordinary Shares rights or warrants to subscribe for
or to purchase any additional Ordinary Shares or shares of share capital of any
class or any other securities, rights or options, or (c) to effect any
reclassification of its Ordinary Shares other than a reclassification involving
only the subdivision of outstanding Ordinary Shares, or (d) to effect any
consolidation or merger into or with, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person, or (e) to effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to the Rights Agent and
to each holder of a Right Certificate, in accordance with Section 25 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Ordinary Shares, if any such date is
to be fixed, and such notice shall be so given in the case of any action covered
by clause (a) or (b) above at least 10 days prior to the record date for
determining holders of the Ordinary Shares for purposes of such action, and in
the case of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Ordinary Shares whichever shall be the earlier.
In case any of the events set forth in Section 11(a)(ii) of this Rights
Agreement shall occur, then, in any such case, the Company shall as soon as
practicable thereafter
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give to the Rights Agent and to each holder of a Right Certificate, in
accordance with Section 25 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) hereof.
Section 25. Notices. Notices or demands authorized by this Rights Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
hand delivery, courier, first-class mail, postage prepaid, or facsimile
transmission addressed (until another address is delivered in writing to the
Rights Agent) as follows:
Lumenis Ltd.
Industrial Park, Yokneam
X.X. Xxx 000
Xxxxxxx, 00000
Israel
Attention: President
Fax no.: x000-0-000-0000
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Rights Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by hand delivery, courier, facsimile transmission,
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
American Stock Transfer & Trust Company
0 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Fax no.: x0-000-000-0000
Notices or demands authorized by this Rights Agreement to be given or made
by the Company or the Rights Agent to the holder of any Right Certificate (or,
prior to the Distribution Date, to holders of Ordinary Shares) shall be
sufficiently given or made if
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sent by first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. (a) Prior to the Distribution Date
subject to the provisions of Section 26(b), the Company and the Rights Agent
shall, if the Company (upon approval of the Board of Directors and the Audit
Committee) so directs, supplement or amend any provision of this Rights
Agreement in any manner without the approval of any holders of certificates
representing Ordinary Shares and the Rights; provided, however, that if the
effect of such supplement or amendment would be to alter, amend or enlarge the
scope or extent of the Rights Agent's duties, liabilities or obligations under
Section 18, 19, 20, 21 or this provision of this Section 26 hereof, such
supplement or amendment shall only become effective with the prior written
consent of the Rights Agent. From and after the Distribution Date and subject to
the provisions of Section 26(b), the Company and the Rights Agent shall, if the
Company (upon approval of the Board of Directors and the Audit Committee) so
directs, supplement or amend this Rights Agreement without the approval of any
holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder, or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem desirable but which does not adversely
affect the interests of holders of Rights (other than an Acquiring Person). Upon
the delivery of a certificate from an officer of the Company which states that
the proposed supplement or amendment is in compliance with the terms of this
Section 26, the Rights Agent shall execute such supplement or amendment. Prior
to the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Ordinary Shares,
(b) Notwithstanding anything herein to the contrary, no supplement or
amendment shall be made to this Rights Agreement at a time when the Rights are
not redeemable, except as contemplated by clause (i) or (ii) of the second
sentence of Section 26(a) hereof.
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Section 27. Successors. All the covenants and provisions of this Rights
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. Benefits of this Rights Agreement. Nothing in this Rights
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Ordinary Shares) any legal or equitable right, remedy
or claim under this Rights Agreement; but this Rights Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Ordinary Shares).
Section 29. Severability. If any term, provision, covenant or restriction
of this Rights Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Rights Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidate;
provided, however, that notwithstanding anything in this Rights Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors determines in its good faith judgment that severing the invalid
language from this Rights Agreement would adversely affect the purpose or effect
of this Rights Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the Close of Business on the
tenth Business Day following the date of such determination by the Board of
Directors.
Section 30. Governing Law. This Rights Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Israel and for all purposes shall be governed by and construed
exclusively in accordance with the laws of such State. The courts of Tel Aviv,
Israel shall have exclusive jurisdiction for any disputes arising out of or in
connection with this Rights Agreement.
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Section 31. Counterparts. This Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 32. Descriptive Headings. Descriptive headings of the several
Sections of this Rights Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 33. Determination and Actions by the Board of Directors. The Board
of Directors (where specifically provided herein, with the concurrence of the
Audit Committee) shall have the exclusive power and authority to administer this
Rights Agreement and to exercise all rights and powers specifically granted to
the Board of Directors or to the Company, or as may be necessary or advisable in
the administration of this Rights Agreement, including, without limitation, the
right and power to (a) interpret the provisions of this Rights Agreement, and
(b) make all calculations and determinations deemed necessary or advisable for
the administration of this Rights Agreement (including a determination to redeem
or not redeem the Rights or to amend the Rights Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (ii) below, all omissions with respect to the foregoing) which are done,
taken or made by the Board of Directors (where specifically provided for herein,
with the concurrence of the Audit Committee) in good faith, shall (i) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (ii) not subject the members of the Board of
Directors or Audit Committee to any liability to the holders of the Rights.
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IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to
be duly executed, all as of the day and year first above written.
LUMENIS LTD.
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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Exhibit A
[Form of Bonus Right Certificate]
Certificate No. R- ______ Bonus Rights
NOT EXERCISABLE AFTER April 11, 2003 OR EARLIER IF NOTICE OF REDEMPTION OR
EXCHANGE IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, AT $.001 PER RIGHT, ON THE TERMS SET FORTH IN THE BONUS RIGHTS
AGREEMENT. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE WERE ISSUED TO A
PERSON WHO WAS AN "ACQUIRING PERSON" OR AN ASSOCIATE OR AFFILIATE OF AN
"ACQUIRING PERSON" OR A NOMINEE THEREOF. THIS RIGHT CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 11(a)(ii) OF THE RIGHTS AGREEMENT.]
Bonus Right Certificate
LUMENIS LTD.
This certifies that, or registered assigns, is the registered owner of
the number of bonus rights (the "Rights") set forth above, each of which
entities the owner thereof, subject to the terms, provisions and conditions of
the Bonus Rights Agreement dated as of April 11, 2002 (the "Rights Agreement")
between Lumenis Ltd., an Israeli corporation (the "Company"), and American Stock
Transfer & Trust Company, as Rights Agent (the "Rights Agent"), to purchase from
the Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M. (New York City time) April 11,
2003, at the principal office of the Rights Agent, or its successors as Rights
Agent, one fully paid, non-assessable Ordinary Share, par value NIS 0.10 per
share (the "Ordinary Shares"), of the Company, at a purchase price of $38.00 per
share (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number of
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Rights evidenced by this Right Certificate (and the number of shares which maybe
purchased upon exercise thereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of April 11, 2002, based on
the Ordinary Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number of
Ordinary Shares which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon the
happening of certain events.
----------
* The portion of the legend in brackets shall be inserted only if
applicable as provided under the Rights Agreement.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal offices of the Company and of
the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Ordinary Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.001 per Right. In addition, under certain circumstances at
any time after any
-49-
Person becomes an Acquiring Person, the Rights may be exchanged, in whole or in
part, for Ordinary Shares having essentially the same value or economic rights
as such shares. Immediately upon the action of the Board of Directors of the
Company authorizing any such exchange, and without any further action or any
notice, the Rights (other than Rights which are not subject to such exchange)
will terminate and the Rights will only enable holders to receive the Ordinary
Shares issuable upon such exchange.
The Company shall not be required to issue fractional Ordinary Shares
upon the exercise of any Right or Rights evidenced hereby.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Ordinary
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of _____________
ATTEST: LUMENIS LTD.
By: ____________________________
Name:
Title:
Countersigned:
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AMERICAN STOCK TRANSFER
& TRUST COMPANY
By: _____________________
Authorized Signature
Date: ______________________
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
[To be executed by the registered holder if such holder
desires to transfer the Right Certificates.]
FOR VALUE RECEIVED ________________________________ hereby sells, assigns
and transfers unto _____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
[Please print name and address of transferee]
this Right Certificate and the Rights evidenced thereby, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint ________________ Attorney, to transfer the within Right Certificate on
the books of the within-named Company, with full power of substitution.
Dated: _____________________
__________________________________
Signature
Signature Guaranteed:
__________________________________
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The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
beneficially owned by an "Acquiring Person" or an Affiliate or an Associate
thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any person who is or was an "Acquiring Person" or an Affiliate
or Associate thereof
Dated: _____________________
__________________________________
Signature
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: LUMENIS LTD.
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the Ordinary Shares
issuable upon the exercise of such Rights and requests that certificates for
such shares be issued in the name of:
Please insert social security or other identifying number
_____________________________________________________________
(Please print name and address)
_____________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new
Right Certificate for the balance remaining of such Rights shall he registered.
in the name of and delivered to:
Please insert social security
or other identifying number
_____________________________________________________________
(Please print name and address)
_____________________________________________________________
Dated: _____________________
__________________________________
Signature
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Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
beneficially owned by an "Acquiring Person" or an Affiliate or an Associate
thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any person who is or was an "Acquiring Person" or an Affiliate
or Associate thereof.
Dated: _____________________
__________________________________
Signature
__________________________________
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NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Forms of
Assignment and Election is not completed, the Company will deem the "Beneficial
Owner" of the Rights evidenced by this Right Certificate to bean "Acquiring
Person" or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and, in the case of an Assignment, will affix a legend to that effect
on any Right Certificates issued in exchange for this Right Certificate.
-56-
Exhibit B
SUMMARY OF BONUS RIGHTS
TO PURCHASE ORDINARY SHARES OF LUMENIS LTD.
On April 4, 2002, the Board of Directors of Lumenis Ltd. (the "Company")
declared a distribution of one bonus right (a "Right") for each outstanding
Ordinary Share, par value NIS 0.10 per share (the "Ordinary Shares"), of the
Company. The distribution is payable on April 11, 2002 (the "Record Date") to
shareholders of record on that date. Each Right entitles the registered holder
to purchase from the Company one Ordinary Share at a price of $38 per share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Bonus Rights Agreement, dated as of April 11, 2002
(the "Rights Agreement"), between the Company and American Stock Transfer &
Trust Company, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) ten business days following a public
announcement that a person or group of affiliated or associated persons
acquired, or obtained the right to acquire, "Beneficial Ownership" of 15% or
more of the Ordinary Shares (an "Acquiring Person"; the date of such public
announcement being called the "Shares Acquisition Date") or (ii) ten business
days following the commencement of a tender offer or exchange offer the
consummation of which would result in any person's becoming an Acquiring Person
(the earlier of such days being called the "Distribution Date"), the Rights will
be evidenced, with respect to any of the Ordinary Share certificates outstanding
as of the Record Date, by such Ordinary Share certificate. Among certain other
exemptions, a person who becomes the Beneficial Owner of 15% or more of the
Ordinary Shares as a result of repurchases of Ordinary Shares by the Company
will not become an Acquiring Person unless and until such person thereafter
acquires additional Ordinary Shares representing 1.5% or more of the Ordinary
Shares of the Company then outstanding. Additionally, Coherent, Inc.
("Coherent"), a shareholder of the Company, is exempted from the definition of
an Acquiring Person so long as Coherent shall not purchase or otherwise become
(as a result of the actions of Coherent or its affiliates or associates) the
Beneficial Owner of more than 23% of the Ordinary Shares then outstanding or, if
applicable, such greater percentage as may be contemplated by Section 5.18 of
the Asset Purchase Agreement by and among the
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Company, Energy Systems Holdings Inc. (now known as Lumenis Holdings Inc.) and
Coherent, dated as of February 25, 2001.
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Ordinary Shares. Until the
Distribution Date (or earlier redemption, exchange or expiration of the Rights),
new Ordinary Share certificates issued after the Record Date upon transfer or
new issuance of the Ordinary Shares will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption, exchange or expiration of the Rights), the surrender for transfer of
any certificates for Ordinary Shares will also constitute the transfer of the
Rights associated with the Ordinary Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Ordinary Shares as of the Close of Business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on April 11, 2003, unless earlier redeemed or exchanged by the Company as
described below.
The Purchase Price payable, and the number of Ordinary Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Ordinary
Shares, (ii) upon the grant to all holders of the Ordinary Shares of certain
rights or warrants to subscribe for Ordinary Shares or convertible securities at
less than the current market price of the Ordinary Shares or (iii) upon the
distribution to holders of the Ordinary Shares of evidences of indebtedness or
assets (excluding regular quarterly cash dividends out of earnings or retained
earnings or dividends payable in Ordinary Shares) or of subscription rights or
warrants (other than those referred to above).
In the event that a Person becomes an Acquiring Person, except pursuant to
an offer for all outstanding Ordinary Shares which the Board of Directors, with
the concurrence of the Audit Committee, determines to be fair and not inadequate
and to otherwise be in the best interests of the Company and its shareholders (a
"Qualified
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Offer"), proper provision shall be made so that each holder of a Right, other
than Rights that were beneficially owned by the Acquiring Person (or any
Associate or Affiliate thereof) on the earlier of the Distribution Date or the
Shares Acquisition Date (which Rights will thereafter be void), shall thereafter
have the right to receive, upon the exercise thereof at the then current
Purchase Price, that number of Ordinary Shares having a market value of two
times the Purchase Price. If the Company does not have sufficient Ordinary
Shares for this purpose, the Company may, to the extent permitted by applicable
law, substitute cash, a reduction in the exercise price, other equity securities
of the Company, debt securities of the Company, other assets, or any combination
of the foregoing, having an aggregate value equal to the value which would have
been realized if the Company had sufficient Ordinary Shares. In addition, in the
event that, at any time following the Shares Acquisition Date, (i) the Company
engages in a merger or other business combination transaction in which the
Company is not the surviving corporation (other than with an entity which
acquired the shares pursuant to a Qualified Offer), (ii) the Company engages in
a merger or other business combination transaction in which the Company is the
surviving corporation and the Ordinary Shares are changed or exchanged, or (iii)
50% or more of the Company's assets or earning power is sold or transferred,
proper provision shall be made so that each holder of a Right (except Rights
which have previously been voided as set forth above) shall thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price,
that number of shares of the acquiring company which at the time of such
transaction would have a market value of two times the Purchase Price. For
example, at a Purchase Price of $38 per Right, each Right not owned by an
Acquiring Person (or by certain related parties) following an event set forth in
this paragraph would entitle its holder to purchase $76 worth of shares.
Assuming that the shares had a per share value of $10.00 at such time, the
holder of each valid Right would be entitled to purchase 7.6 shares for $38.
At any time until ten business days following the Shares Acquisition Date,
the Company may redeem the Rights in whole, but not in part, at a price of $.001
per Right. Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.001 redemption price. In addition, at
any time after a person
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becomes an Acquiring Person and prior to the acquisition by such person or group
of fifty percent (50%) or more of the outstanding Ordinary Shares, the Board may
exchange the Rights (other than Rights owned by such person or group which have
become void), in whole or in part, at an exchange ratio of one Ordinary Share
per Right (subject to adjustment).
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the rights become
exercisable for Ordinary Shares (or other consideration) of the Company or for
shares of the acquiring company or in the event of the redemption of the Rights
as set forth above.
Any of the provisions of the Rights Agreement may be amended by the Board
of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, to correct or supplement any provision
which may be defective or inconsistent with any other provision therein, to
shorten or lengthen any time period thereunder, or to make changes which do not
adversely affect the interests of holders of Rights (other than an Acquiring
Person). The foregoing notwithstanding, no amendment may be made to the Rights
Agreement when the Rights are not redeemable, except to cure any ambiguity or
correct or supplement any provision contained in the Rights Agreement that may
be defective or inconsistent with any other provision therein.
A copy of the Rights Agreement is being filed with the Securities and
Exchange Commission. A copy of the Rights Agreement is available free of charge
from the Rights Agent. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.
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