-------------------------------------------------------------------------------
MEDTRONIC, INC.
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Rights Agent
Rights Agreement
Dated as of June 27, 1991
-------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Section 1. Certain Definitions............................................... 2
Section 2. Appointment of Rights Agent....................................... 7
Section 3. Issue of Right Certificates....................................... 7
Section 4. Form of Right Certificates........................................ 11
Section 5. Countersignature and Registration................................. 12
Section 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Lost, Stolen, Destroyed or Mutilated
Right Certificates................................................ 13
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.................................................... 14
Section 8. Cancellation and Destruction of Right Certificates................ 16
Section 9. Reservation and Availability of Preferred Shares.................. 17
Section 10. Preferred Shares Record Date...................................... 19
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights........................................ 19
Section 12. Certificate of Adjusted Purchase Price or Number of Shares........ 36
Section 13. Consolidation, Merger, Statutory Share Exchange
Sale or Transfer of Assets........................................ 37
Section 14. Fractional Rights and Fractional Shares........................... 41
Section 15. Rights of Action.................................................. 43
Section 16. Agreement of Right Holders........................................ 44
Section 17. Right Certificate Holder Not Deemed a Shareholder................. 45
Section 18. Concerning the Rights Agent....................................... 46
Section 19. Merger or Consolidation or Change of Name of
Rights Agent...................................................... 47
Section 20. Duties of Rights Agent............................................ 48
Section 21. Change of Rights Agent............................................ 51
Section 22. Issuance of New Right Certificates................................ 53
Section 23. Redemption........................................................ 53
Section 24. Exchange.......................................................... 55
Section 25. Notice of Certain Events.......................................... 57
Section 26. Notices........................................................... 59
Section 27. Supplements and Amendments........................................ 60
Section 28. Successors........................................................ 61
Section 29. Benefits of this Agreement........................................ 61
Section 30. Severability...................................................... 62
Section 31. Governing Law..................................................... 62
Section 32. Counterparts...................................................... 62
Section 33. Descriptive Headings.............................................. 62
Exhibit A -- Form of Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Shares
Exhibit B -- Form of Right Certificate
Exhibit C -- Summary of Rights to Purchase Preferred Shares
RIGHTS AGREEMENT
Agreement, dated as of June 27, 1991, between MEDTRONIC, INC.,
a Minnesota corporation (the "Company"), and NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, a national banking association (the "Rights Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (individually a
"Right" and collectively the "Rights") for each Common Share (as defined in this
Agreement) of the Company outstanding on July 10, 1991 (the "Record Date"), each
Right initially representing the right to purchase one one-hundredth of a
Preferred Share (as defined in this Agreement), upon the terms and subject to
the conditions set forth in this Agreement, and has further authorized the
issuance of one Right (as such number may hereafter be adjusted pursuant to the
provisions of Section 11) with respect to each Common Share that shall become
outstanding (i) at any time between the Record Date and the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date (as such
terms are defined in this Agreement) or (ii) upon the exercise or conversion,
prior to the earlier of the Redemption Date or the Final Expiration Date, of any
option or other security exercisable for or convertible into Common Shares,
which option or other such security is outstanding on the Distribution Date.
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
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
defined in this Agreement) who or which, together with all Affiliates and
Associates (as such terms are defined in this Agreement) of such Person, shall
be the Beneficial Owner (as such term is defined in this Agreement) of 15% or
more of the Common Shares of the Company then outstanding, but shall not include
(i) the Company, (ii) any Subsidiary (as such term is defined in this Agreement)
of the Company, (iii) any employee benefit plan of the Company or of any
Subsidiary of the Company, or (iv) any entity holding Common Shares for or
pursuant to the terms of any such plan described in clause (iii) of this
sentence. Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition of Common Shares by the Company which,
by reducing the number of Common Shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 15% or more of the Common
Shares of the Company then outstanding; provided, however, that if a Person
shall, together with all Affiliates or Associates of such Person, become the
Beneficial Owner of 15% or more of the Common Shares of the Company then
outstanding by reason of share acquisitions by the Company and if such Person or
such Person's Affiliates or Associates shall, after such share acquisitions by
the Company, become the Beneficial Owner of any additional Common Shares of the
Company, and, immediately after becoming the Beneficial Owner of such additional
Common Shares, such Person shall, together with all Affiliates and Associates of
such Person, be the Beneficial Owner of 15% or more of the Common Shares of the
Company then outstanding, then such Person (unless such Person shall be (1) the
Company, (2) any Subsidiary of the Company, (3) any employee benefit plan of the
Company or of any Subsidiary of the Company, or (4) any entity holding Common
Shares for or pursuant to the terms of any such plan described in clause (3) of
this sentence) shall be deemed an "Acquiring Person". An entity other than the
Company or any Subsidiary of the Company holding Common Shares for or pursuant
to the terms of an employee benefit plan of the Company or of any Subsidiary of
the Company and in addition being the Beneficial Owner of Common Shares that are
not held for or pursuant to the terms of any such plan shall be deemed to
constitute an Acquiring Person, notwithstanding anything herein stated, if, but
only if, it, together with its Affiliates and Associates, shall be the
Beneficial Owner of 15% or more, exclusive of those Common Shares held by it for
or pursuant to the terms of any such plan, of the Common Shares then
outstanding. Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a Person who would otherwise be an
"Acquiring Person", as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of Common Shares so that such Person
would no longer be an Acquiring Person, as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own" or have "beneficial ownership" of, any
securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, including without
limitation securities with respect to which such Person or any of such
Person's Affiliates or Associates has "beneficial ownership" pursuant
to Rule 13d-3 of the General Rules and Regulations under the Exchange
Act;
(ii) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, (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 (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, other 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, or to have beneficial ownership of, any securities
pursuant to subparagraph (i), (ii) or (iii) of this paragraph (c)
solely because such securities are 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 or dispose
of (including without limitation pursuant to any agreement, arrangement
or understanding (whether or not in writing)); provided, however, that
a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, or to have beneficial ownership of, any securities
pursuant to subparagraph (i), (ii) or (iii) of this paragraph (c)
solely because of the right to vote such securities pursuant to an
agreement, arrangement or understanding if the agreement, arrangement
or understanding to vote such securities (1) arises solely from a
revocable proxy or consent given to such Person or any of such Person's
Affiliates or Associates in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
rules and regulations under the Exchange Act and (2) is not also then
reportable by such Person on Schedule l3D under the Exchange Act (or
any comparable or successor report) as being beneficially owned by such
Person; or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the purpose
of acquiring, holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this paragraph (c)) or
disposing of any voting securities of the Company.
Notwithstanding anything in these definitions of Beneficial Owner, beneficially
own or beneficial ownership to the contrary, the phrase "then outstanding," when
used with reference to a Person's beneficial ownership of securities of the
Company, shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to beneficially own under this
Agreement.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York or
Minnesota are authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00
P.M., Minneapolis, Minnesota time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., Minneapolis, Minnesota time,
on the next succeeding Business Day.
(f) "Common Shares", when used with reference to the Company,
shall mean Common Shares of the par value of $.10 per share (as such par value
may be changed from time to time) of the Company. "Common Shares", when used
with reference to any Person other than the Company, shall mean the capital
stock (or equity interest) with the greatest voting power of such other Person.
(g) "Distribution Date" shall have the meaning set forth in
Section 3.
(h) "Final Expiration Date" shall have the meaning set forth
in Section 7.
(i) "Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor (by merger or
otherwise) of any such entity.
(j) "Preferred Shares" shall mean Series A Junior
Participating Preferred Shares of the par value of $1.00 per share (as such par
value may be changed from time to time) of the Company having the rights and
preferences set forth in the "Form of Certificate of Designation, Preferences
and Rights" attached to this Agreement as Exhibit A hereto.
(k) "Redemption Date" shall have the meaning set forth in
Section 7.
(l) "Section 11(a)(ii) Event" shall mean an event described in
the first sentence of Section 11(a)(ii).
(m) "Section 13 Event" shall mean any event described in
clauses (w), (x), (y) or (z) of Section 13(a).
(n) "Shares Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such.
(o) "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 other equity interests entitled to vote in the election of
directors (or Persons with comparable responsibilities if the entity has no
directors) is beneficially owned, directly or indirectly, by such Person, or
otherwise controlled 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, shall prior to the Distribution Date
also be the holders of the Common Shares) in accordance with the terms and
conditions of this Agreement, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents as
it may deem necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier
of (i) the Close of Business on the 15th day after the Shares Acquisition Date
or (ii) the Close of Business on the 15th day (or such later date as may be
determined by action of the Board of Directors of the Company prior to such time
as any Person becomes an Acquiring Person) after the date of the commencement by
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such plan) of, or of
the first public announcement of the intention of any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such plan) to commence (which intention shall not
have been withdrawn within five business days (as defined in Rule 14d-1 of the
General Rules and Regulations under the Act) after such public announcement), a
tender or exchange offer the consummation of which would result in beneficial
ownership by a Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company or
any entity holding Common Shares for or pursuant to the terms of any such plan)
of 15% or more of the then outstanding Common Shares (including any such date
that is after the date of this Agreement and prior to the issuance of the
Rights, the earlier of such dates being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the provisions of Section
3(b) hereof) by the certificates for Common Shares registered in the names of
the holders thereof (which certificates shall also be deemed to be Right
Certificates where the context so requires) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, one or more Right Certificates, in substantially the form of Exhibit B
hereto (the "Right Certificates"), evidencing one Right for each Common Share so
held, subject to adjustment pursuant to Section 11(i). In the event that an
adjustment in the number of Rights per Common Share has been made pursuant to
Section 11(i), at the time Right Certificates are distributed, the Company may,
to the extent provided in Section 14(a), make the necessary and appropriate
rounding adjustments (as set forth in Section 14(a)) so that Right Certificates
are distributed representing only whole numbers of Rights and pay cash in lieu
of fractional Rights pursuant to Section 14(a). As of and after the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Preferred
Shares, in substantially the form of Exhibit C hereto (the "Summary of Rights"),
by first-class, postage-prepaid mail, to each record holder of Common Shares as
of the Close of Business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for Common Shares
outstanding as of the Record Date, until the Distribution Date, the Rights will
be evidenced by such certificates registered in the names of the holders thereof
together with a copy of the Summary of Rights attached thereto, and the
registered holders of the Common Shares shall also be the registered holders of
the associated Rights. Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding on the Record Date, with or without a
copy of the Summary of Rights attached thereto, shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding
after the Record Date and (i) prior to the earliest of the Distribution Date,
the Redemption Date or the Final Expiration Date or (ii) upon the exercise or
conversion, prior to the earlier of the Redemption Date or the Final Expiration
Date, of any option or other security exercisable for or convertible into Common
Shares, which option or other security is outstanding on the Distribution Date,
shall have impressed on, printed on, 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 Rights Agreement between Medtronic,
Inc. and Norwest Bank Minnesota, National Association, dated as of June
27, 1991 (the "Rights Agreement"), the terms of which (including
restrictions on the transfer of such Rights) are hereby incorporated
herein by reference and a copy of which is on file with the Secretary
at the principal executive offices of Medtronic, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
by this certificate. Medtronic, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement without charge after receipt
of a written request therefor to its Secretary from such holder. Under
certain circumstances, as set forth in the Rights Agreement, Rights
that are or were acquired or beneficially owned by an Acquiring Person
or any Associate or Affiliate thereof (as such terms are defined in the
Rights Agreement), may become null and void.
With respect to certificates containing the foregoing legend, until the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date, the
Rights associated with the Common Shares represented by such certificates shall
be evidenced by such certificates alone, the registered holders of the Common
Shares shall also be the registered holders of the associated Rights and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any rights associated with such
Common Shares shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the Common Shares which
are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase Preferred Shares and of assignment to be
printed on the reverse thereof) shall be in substantially the form of Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law, rule or regulation
(including, without limitation, any rule or regulation of any stock exchange on
which the Rights may from time to time be listed) or to conform to usage or to
reflect adjustments to the Rights made pursuant to this Agreement. Subject to
the provisions of Section 11 and Section 22, the initial Right Certificates,
whenever distributed, shall entitle the holders thereof to purchase such number
of one one-hundredths of a Preferred Share as shall be set forth therein at the
price per one one-hundredth of a Preferred Share set forth therein (the
"Purchase Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price shall be subject to adjustment as
provided in this Agreement.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its
President, its Chief Financial Officer or any of its Vice Presidents, either
manually or by facsimile signature. The Right Certificates shall be
countersigned, either manually or by facsimile signature, 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 signing of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or the office or offices
designated as the appropriate place for surrender of Right Certificates upon
exercise or transfer, books for registration and transfer of the Right
Certificates. 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
Right Certificates; Lost, Stolen, Destroyed or Mutilated Right Certificates. (a)
Subject to the provisions of Section 14 hereof, at any time after the Close of
Business on the Distribution Date, and at or prior to the Close of Business on
the earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 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 one one-hundredths
of a Preferred Share as the Right Certificate or Right Certificates surrendered
then entitled such holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Rights Certificates 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
office or offices of the Rights Agent designated for such purpose. Thereupon the
Rights Agent shall, subject to Section 14 hereof, 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 by the registered
holder of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split-up, combination or exchange of
Right Certificates. Neither the Rights Agent nor the Company shall be obligated
to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall have duly
completed and executed the form of assignment on the reverse side of such Right
Certificate and shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) of such Right Certificate or
Affiliates or Associates thereof as the Company shall reasonably request.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of a11 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) Subject to Section 11(a)(ii) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as otherwise
provided in this Agreement) 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 completed and executed, to
the Rights Agent at the office or offices of the Rights Agent designated for
such purpose, together with payment of the Purchase Price for each one
one-hundredth of a Preferred Share as to which the Rights are exercised, at or
prior to the earliest of (i) the close of business on July 10, 2001 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 (the "Redemption Date"), or (iii) the time at which such Rights are
exchanged as provided in Section 24.
(b) The Purchase Price for each one one-hundredth of a
Preferred Share purchaseable pursuant to the exercise of a Right shall initially
be $600, shall be subject to adjustment from time to time as provided in
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 completed and
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 in cash, or
by certified check or bank cashier's check or money order payable to the order
of the Company, the Rights Agent shall, subject to Section 20(k), thereupon
promptly (i) (A) requisition from any transfer agent of the Preferred Shares (or
make available, if the Rights Agent is the transfer agent for such shares)
certificates for the number of Preferred Shares to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the total number
of Preferred Shares issuable upon exercise of the Rights under this Agreement
with a depositary agent, requisition from the depositary agent depositary
receipts representing such number of one one-hundredths of a Preferred Share as
are to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary agent to comply
with such request, (ii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional interests in shares
in accordance with Section 14, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder and (iv) when appropriate, after receipt,
deliver such cash for fractional interests in shares 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 such holder's duly authorized assigns, subject to
the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section unless such registered
holder shall have (i) duly completed and executed the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) of such Right Certificate or
Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer,
split-up, combination or exchange shall, if surrendered to the Company or to any
of its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates after any
retention period required by the Securities and Exchange Commission has lapsed,
and in such case shall deliver a certificate of destruction thereof to the
Company.
Section 9. Reservation and Availability of Preferred Shares.
(a) The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Shares, the number of
Preferred Shares that will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) The Company will prepare and file, as soon as practicable
following expiration of the Company's right of redemption pursuant to Section
23, a registration statement under the Securities Act of 1933, as amended (the
"Act"), with respect to the Rights and the Company's securities purchasable upon
exercise of the Rights on an appropriate form, and use its best efforts to cause
such registration statement to (i) become effective as soon as practicable after
such filing, and (ii) remain effective (with a prospectus at all times meeting
the requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities or (B) the Final Expiration
Date. The Company will also take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the various states
in connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed 90 days after the date the
registration statement is filed, the exercisability of the Rights in order to
permit the registration statement to become effective. Upon any such suspension,
the Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained or the exercise thereof is not permitted under applicable
law.
(c) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred Shares delivered
upon exercise of Rights shall, at the time of delivery of the certificates for
such Preferred Shares (subject to payment of the Purchase Price and any
applicable transfer taxes), be duly and validly authorized and issued and fully
paid and nonassessable shares.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
that may be payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax that may be payable in
respect of any transfer or delivery of Right Certificates to a person other
than, or the issuance or delivery of certificates or depositary receipts for the
Preferred Shares in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise, or to issue or to
deliver any certificates or depositary receipts for Preferred 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.
Section 10. Preferred Shares Record Date. Each person in whose
name any certificate for Preferred Shares is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred 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 Preferred 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 Preferred 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 holder of Preferred Shares for
which the Rights shall be exercisable, including without limitation, the right
to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares
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 Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation,
merger or statutory share exchange in which the Company is the continuing,
surviving or acquiring 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 capital stock issuable on
such date pursuant to the exercise of the Rights, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive, upon payment of the Purchase Price then in effect (and any
applicable transfer taxes), the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately prior to such date and
at a time when the Preferred Shares transfer books of the Company were open,
such holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock
of the Company issuable upon exercise of one Right. 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) Subject to Section 24 of this Agreement, in the event any
Person shall become an Acquiring Person, other than pursuant to any transaction
set forth in Section 13(a), proper provision shall be made so that each holder
of a Right, subject to paragraph 11(a)(iii), shall thereafter have a right to
receive, upon exercise thereof by payment of the amount equal to the product of
the number of one one-hundredths of a Preferred Share which would otherwise be
issuable upon exercise of a Right and the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of Preferred Shares, such
number of Common Shares of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of one one-hundredths
of a Preferred Share for which a Right is exercisable immediately prior to the
occurrence of the Section 11(a)(ii) Event and (y) dividing that product by 50%
of the current per share market price of the Company's Common Shares (determined
pursuant to Section 11(d) hereof) on the date of such occurrence.
From and after the first occurrence of a Section 11(a)(ii)
Event, any Rights that are or were acquired or beneficially owned by any
Acquiring Person or any Associate or Affiliate of such Acquiring Person shall
become null and void without any further action and no holder of such Rights
shall thereafter have any rights to exercise such Rights or any other rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. No Right Certificate shall be issued pursuant to Section
3 that represents Rights that would be void pursuant to the preceding sentence;
no Right Certificate shall be issued at any time upon the transfer of any Rights
to an Acquiring Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate of such an Acquiring Person or to any
nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be void pursuant to the preceding sentence shall be
cancelled. The Company shall use all reasonable efforts to insure that the
provisions hereof are complied with, but shall have no liability to any holder
of a Right Certificate or other Person as a result of its failure in good faith
to make any determinations with respect to an Acquiring Person or its Affiliates
or Associates.
(iii) If, on the date of the occurrence of a Section 11(a)(ii)
Event (the "Adjustment Date"), the Company does not have sufficient authorized,
unissued and unreserved Common Shares available to permit the exercise in full
of all Rights that are exercisable on the Adjustment Date for the number of
Common Shares per Right provided for in Section 11(a)(ii), then the Exercise
Price (as defined below) and the number of Common Shares to be delivered by the
Company upon exercise of a Right shall be further adjusted as provided in this
subparagraph (iii).
(1) Definitions:
(A) The "Aggregate Market Value" is the product
of (i) the number of Available Shares and
(ii) the current per share market price of
the Common Shares on the Adjustment Date,
determined as provided in Section 11(d)
hereof.
(B) The "Available Shares" are all unreserved
Common Shares which are authorized and
unissued immediately prior to the Adjustment
Date.
(C) The "Exercise Price" is the amount of the
payment that must be made by the holder of a
Right in connection with the exercise of one
Right immediately prior to the Adjustment
Date.
(D) The "Deficiency" is the amount by which (i)
two times the Exercise Price exceeds (ii)
the quotient obtained by dividing the
Aggregate Market Value by the number of
Rights remaining outstanding immediately
prior to the Adjustment Date (the "Remaining
Rights") (which number shall not include the
Rights that are or were beneficially owned
by any Acquiring Person (or any Associate or
Affiliate thereof) that shall have become
void pursuant to Section 11(a)(ii) hereof).
(2) If the Deficiency is less than or equal to the
Exercise Price, then
(A) the number of Common Shares to be delivered
by the Company upon exercise of a Right
shall be adjusted to be equal to the number
of Available Shares divided by the number of
Remaining Rights; and
(B) the amount of cash required to be delivered
by the holder of a Right upon the exercise
thereof shall be adjusted (the "New Exercise
Price") to equal the Exercise Price minus
the Deficiency; provided, however, that in
no event will the New Exercise Price be less
than the aggregate par value of the Common
Shares required to be delivered upon the
exercise of one Right pursuant to
subparagraph (2)(A) above.
(3) If the Deficiency is greater than the Exercise Price,
then
(A) the number of Common Shares to be delivered
by the Company upon exercise of a Right
shall be adjusted to equal the quotient
obtained by dividing the Exercise Price by
the current per share market price of the
Common Shares on the Adjustment Date;
(B) the New Exercise Price shall equal the
aggregate par value of the Common Shares
required to be delivered upon the exercise
of one Right pursuant to subparagraph (3)(A)
above; and
(C) in lieu of issuing Common Shares (in whole
or in part upon the exercise of Rights) the
Company may issue, upon the exercise of
Rights at the New Exercise Price, other
equity securities of the Company (including,
without limitation, shares, or units or
fractions of shares, of preferred stock
which the Board of Directors of the Company
has determined to have substantially the
same value, voting rights and other rights
as Common Shares (such equity securities are
herein called "common share equivalents")).
To the extent that such common share
equivalents (or fractions thereof) are
substituted for Common Shares upon exercise
of the Rights following the occurrence of a
Section 11(a)(ii) Event, they shall be
substituted on a pro-rata basis with respect
to all Rights (other than Rights that are or
were beneficially owned by any Acquiring
Person (or any Associate or Affiliate
thereof) that shall have become void
pursuant to Section 11(a)(ii) hereof). Such
common share equivalents shall not be
included in Available Shares, and all of the
Available Shares shall be reserved, as of
the Adjustment Date, for issuance, on a
pro-rata basis, upon exercise of the Rights
and may not be substituted for with common
share equivalents upon the exercise of any
Right except to the extent that the number
of Common Shares required to be delivered
under subparagraph (3)(A) upon the exercise
of such Right exceeds the quotient of the
number of Available Shares divided by the
number of Remaining Rights.
(4) If, at the time any adjustment is required pursuant
to this Section 11(a)(iii), the Common Shares shall
have no par value, then for the purposes of this
Section 11(a)(iii) the par value of the Common Shares
shall be deemed to be $.10 per share.
(5) In the event that there shall not be sufficient
authorized but unissued and unreserved Common Shares
(or common share equivalents the issuance of which is
permitted under Section 11(a)(iii)(3)(C)) to permit
the exercise in full of the Rights in accordance with
this subparagraph (iii), the Company shall use its
best efforts to cause the authorization of sufficient
additional Common Shares or common share equivalents
to permit such exercise and, if the Board of
Directors of the Company shall determine in good
faith that it is likely that sufficient additional
Common Shares or common share equivalents could be
authorized to permit such exercise, the Company may
suspend the exercisability of the Rights for a period
not to exceed 90 days in order to seek any
authorization of additional Common Shares or other
common share equivalents. 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.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than the
current per share market price of the Preferred Shares (as determined pursuant
to 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 Preferred Shares outstanding on such record date,
plus the number of Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred 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 per share market
price, and the denominator of which shall be the number of Preferred Shares
outstanding on such record date, plus the number of additional Preferred Shares
and/or equivalent preferred shares to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right. In
case such subscription price may be paid 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 of the Company), whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Preferred
Shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such rights or warrants are not so issued, the Purchase Price shall again 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 Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation or in a statutory share
exchange) of evidences of indebtedness or cash or non-cash assets (other than a
regular quarterly cash dividend or a dividend payable in Preferred Shares) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date 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 then current per
share market price of the Preferred Shares (as determined pursuant to Section
11(d) hereof) on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company), whose determination shall
be described in a statement filed with the Rights Agent) of the portion of the
evidences of indebtedness or cash or non-cash assets so to be distributed on, or
of such subscription rights or warrants applicable to, one Preferred Share, and
the denominator of which shall be such then current per share market price of
the Preferred Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such distribution is not so
made, the Purchase Price shall again be adjusted to be the Purchase Price that
would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security" for the purpose
of this Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30 consecutive Trading
Days (as such term is hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current per share market price of
the Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
payable in such Security or securities convertible into such Security (other
than the Rights) or (B) any subdivision, combination or reclassification of such
Security, and prior to the expiration of 30 Trading Days after the ex-dividend
date for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the current per
share market price shall be appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Security is not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or, if on any such day the Security
is not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Security selected by the Board of Directors of the Company). Except as provided
in Section 11(d)(ii) with respect to Preferred Shares, if on any such day the
Security is not publicly held or no market maker is making a market in the
Security, the fair value of such securities on such day as determined in good
faith by the Board of Directors of the Company (whose determination shall be
described in a statement filed with the Rights Agent) shall be used in lieu of
the closing price for such day. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or, if the Security
is not listed or admitted to trading on any national securities exchange, a
Business Day.
(ii) If the Preferred Shares are not publicly held or traded
in a manner described in Section 11(d)(i) hereof, then, notwithstanding anything
to the contrary provided in Section 11(d)(i) hereof, then, notwithstanding
anything to the contrary provided in Section 11(d)(i) hereof, the "current per
share market price" of the Preferred Shares shall be conclusively deemed to be
the current per share market price of the Common Shares as determined pursuant
to Section 11(d)(i) (appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date of this Agreement)
multiplied by one hundred. If neither the Common Shares nor the Preferred Shares
are publicly held or so traded, the "current per share market price" of the
Preferred Shares shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent.
(e) Except as provided in the third sentence of this Section
11(e), no adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments 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 one one-millionth of a
Preferred Share or one ten-thousandth of any other share or security, as the
case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11, but for the first sentence of this
Section 11(e), shall be made no later than the earlier of (i) three years from
the date of the transaction that requires such adjustment or (ii) the Final
Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a) or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Preferred
Shares, thereafter the number of such other shares so receivable upon exercise
of any Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through (c), inclusive and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred 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 under this Agreement shall evidence
the right to purchase, at the adjusted Purchase Price, the number of one
one-hundredths of a Preferred Share (or other securities) purchasable from time
to time under this Agreement upon exercise of the Rights, all subject to further
adjustment as provided in this Agreement.
(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 one
one-hundredths of a Preferred Share (calculated to the nearest one one-millionth
of a Preferred Share) obtained by (i) multiplying (x) the number of one
one-hundredths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of one one-hundredths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company 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 on or after the Distribution Date, shall be at
least 10 days later than the date of the public announcement. If Right
Certificates have been issued on or after the Distribution Date, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of 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 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 in this Agreement, shall
bear 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 one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore issued may continue
to express the Purchase Price and the number of one one-hundredths of a
Preferred Share which were expressed at the time of the issuance of such Right
Certificates under this Agreement.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par value, if
any, of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take such corporate action, if any, which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Preferred Shares at such adjusted Purchase Price.
(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 of
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(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 the Board of Directors of the Company
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Shares, (ii) issuance wholly for cash of any of the
Preferred Shares at less than the current per share market price, (iii) issuance
wholly for cash of Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares, (iv) dividends on
Preferred Shares payable in Preferred Shares or (v) issuance of rights, options
or warrants referred to in Section 11(b) hereof, hereafter made by the Company
to holders of its Preferred Shares shall not be taxable to such shareholders.
(n) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23, 24 or 27,
take (or permit any Subsidiary of the Company to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will
eliminate or diminish substantially the benefits intended to be afforded by the
Rights.
(o) Anything in this Agreement or the Rights to the contrary
notwithstanding, in the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares (including without
limitation the dividend declared on the date of this Agreement that is payable
on August 30, 1991) or (ii) effect a subdivision, combination or consolidation
of the Common Shares (by reclassification or otherwise) into a greater or lesser
number of Common Shares, then in any such case (x) the number of one
one-hundredths of a Preferred Share purchasable after such event upon proper
exercise of each Right shall be determined by multiplying the number of one
one-hundredths of a Preferred Share so purchasable immediately prior to such
event by a fraction, the numerator of which is the number of Common Shares
outstanding immediately before such event and the denominator of which is the
number of Common Shares outstanding immediately after such event and (y) each
Common Share outstanding immediately after such event shall have issued with
respect to it that number of Rights which each Common Share outstanding
immediately prior to such event had issued with respect to it. The adjustments
provided for in this Section 11(o) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or consolidation
is effected. If an event occurs which would require an adjustment under Section
11(a)(ii) and this Section 11(o), the adjustments provided for in this Section
11(o) shall be in addition and prior to any adjustment required pursuant to
Section 11(a)(ii).
(p) If any adjustment in the Purchase Price pursuant to
paragraph (b) or (c) of this Section 11 would not be permitted by law, under the
Company's Articles of Incorporation or under the Certificate of Designation,
Preferences and Rights establishing the Preferred Shares, no such issuance of
securities or distribution of evidences of indebtedness or other assets or
subscription rights or warrants, as the case may be, that would require such an
adjustment but for the limitations established by law, the Company's Articles of
Incorporation or such Certificate of Designation, Preferences and Rights shall
be made by the Company.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Sections 11 and 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Shares or
the Preferred Shares a copy of such certificate and (c) if such adjustment is
made after the Distribution Date, mail a brief summary thereof to each holder of
record of a Right Certificate in accordance with Section 25. The Rights Agent
shall be fully protected in relying on such certificate and on any adjustment
therein contained.
Section 13. Consolidation, Merger, Statutory Share Exchange or
Sale or Transfer of Assets or Earning Power.
(a) In the event, directly or indirectly,
(w) the Company shall consolidate with, or merge with
and into, any other Person (other than a wholly owned
Subsidiary of the Company), and the Company shall not be the
continuing or surviving corporation of such consolidation or
merger,
(x) any Person (other than a wholly owned Subsidiary
of the Company) 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 consolidation or merger, all or part of
the outstanding Common Shares of the Company held by existing
shareholders of the Company shall be changed into or exchanged
for stock or other securities of any other Person (or the
Company) or money or any other property,
(y) the Company shall effect a statutory share
exchange with the outstanding Common Shares of the Company
being exchanged for stock or other securities of any other
Person, money or other property, or
(z) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise
transfer), in one or a series of related transactions, assets
or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company
or one or more of its wholly owned Subsidiaries),
then, and in each such case, proper provision shall be made so that (i) each
holder of a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise thereof by payment of the amount equal
to the product of the number of one one-hundredths of a Preferred Share which
would otherwise be issuable upon exercise of a Right and the then current
Purchase Price in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable Common Shares of the Principal Party (as
hereinafter defined), not subject to any liens, encumbrances, rights of first
refusal or adverse claims, as shall be equal to the result obtained by (x)
multiplying the then current Purchase Price by the number of one one-hundredths
of a Preferred Share for which a Right is, immediately prior to the occurrence
of the Section 13 Event, exercisable and (y) dividing that product by 50% of the
then current per share market price of the Common Shares of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such Section 13 Event; (ii) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such merger, consolidation, statutory share
exchange, sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed
to refer to such Principal Party; and (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
its Common Shares to permit the exercise of all outstanding Rights) in
connection with the consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clauses (w),
(x) or (y) of the first sentence of Section 13(a), the Person
(including, without limitation, the Company as successor thereto or as
the surviving corporation) that is the issuer of any securities into
which Common Shares of the Company are converted in such merger,
consolidation or exchange, or if no securities are so issued, the
Person that is the other party to such merger, consolidation or
exchange; and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of such
Person are not at such time or 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 Common Shares of which are
and have been so registered, "Principal Party" shall refer to such other Person,
and (2) in case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common 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 Common Shares having the greatest aggregate market value.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of authorized,
unreserved Common Shares which have not been issued or are held in treasury 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 paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any Section 13 Event,
the Principal Party will:
(i) prepare and file a registration statement under the Act,
with respect to the Rights and the securities purchasable upon exercise
of the Rights, on an appropriate form, and use its best efforts to
cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
earlier of (1) the date as of which the Rights are no longer
exercisable for such securities or (2) the Final Expiration Date;
(ii) take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
(d) The Company shall not enter into any transaction of the
kind referred to in this Section 13 if at the time of such transaction there are
any rights, warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights.
The provisions of this Section 13 shall similarly apply to
successive mergers, consolidations, statutory share exchanges or sales or other
transfers.
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there may be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(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 by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used in lieu of the closing price
for such day.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions that are integral multiples of one
one-hundredth of a Preferred Share, or, if a Right shall then be exercisable for
a fraction other than one one-hundredth of a Preferred Share, integral multiples
of that fraction,) upon exercise of the Rights or to distribute certificates
which evidence fractions of Preferred Shares (other than fractions that are
integral multiples of one one-hundredth of a Preferred Share or, if a Right
shall then be exercisable for a fraction other than one one-hundredth of a
Preferred Share, integral multiples of that fraction). Fractions of Preferred
Shares in integral multiples of one one-hundredth of a Preferred Share or, if a
Right shall then be exercisable for a fraction other than one one-hundredth of a
Preferred Share, integral multiples of that fraction may, at the election of the
Company, be evidenced by depositary receipts pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided, that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not integral multiples
of one one-hundredth of a Preferred Share, or, if a Right shall then be
exercisable for a fraction other than one one-hundredth of a Preferred Share,
integral multiples of that fraction, the Company may pay to the registered
holders of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of one Preferred Share. For purposes of this Section 14(b), the current
market value of a Preferred Share shall be the closing price of a Preferred
Share (as determined pursuant to Section 11(d)(ii)) 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 such holder's right to receive any fractional Rights or any
fractional shares (except as provided above) upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect
of this Agreement, excepting the rights of action given to the Rights Agent
under Section 18, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of any Common Share), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of any other Common Share), may, in such holder's own behalf
and for such holder's own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise the Rights evidenced by such Right
Certificate (or, prior to the Distribution Date, the associated Common Shares
certificate) in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or offices of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;
(d) the Company may issue Rights after the Record Date as
provided in this Agreement; and
(e) notwithstanding anything in this Agreement or the Rights
to the contrary, the Company, the Rights Agent and the Board of Directors of the
Company shall not have any liability to any holder of a Right or other Person as
a result of the inability of the Company or the Rights Agent to perform any of
its obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation.
Section 17. Right 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 Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained in this
Agreement 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 25), 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 of this Agreement.
Section 18. Concerning the Rights Agent. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it under this Agreement and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and the exercise
and performance of its duties under this Agreement. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability or expense (including the costs and expenses of defending against any
claim of liability), incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration of this
Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of its counsel as set
forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties to this Agreement; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. If at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates (or, prior to the Distribution Date, the Common Shares
certificates), by their acceptance of the Rights, 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 as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of the "current per share market price") be proved or
established by the Company prior to taking or suffering any action under this
Agreement, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Financial Officer, any Vice
President, the Secretary or the Treasurer of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except 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 Agreement or the execution and delivery of this
Agreement (except the due execution 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 Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Section 3, 11, 13 or 23 or 24, or the ascertaining of
the existence of facts that would require any such change or adjustment (except
with respect to the exercise of Rights evidenced by Right Certificates after
actual notice that such change or adjustment is required); nor shall it by any
act under this Agreement be deemed to make any representation or warranty as to
the authorization or reservation of any Preferred Shares or Common Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares or Common Shares will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties under this
Agreement from any one of the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial Officer, any Vice President, the
Secretary or the Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer or for delay in acting while waiting for
those instructions.
(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 or its Subsidiaries may be interested, or contract with or
lend money to the Company or its Subsidiaries or otherwise act as fully and
freely as though it were not Rights Agent under this Agreement. Nothing in this
Agreement shall preclude the Rights Agent from acting in any other capacity for
the Company or its Subsidiaries 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 under this Agreement
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) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties under this Agreement or in the exercise
of its rights or powers if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the form of assignment or form of
election to purchase, as the case may be, has either not been duly completed and
executed or indicates an affirmative response to enumerated clause 1 and/or 2 on
the reverse side of the applicable Right Certificate, the Rights Agent shall not
take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares and Preferred Shares by registered or
certified mail, and, if such notice is mailed after the Distribution Date, to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares and Preferred Shares by
registered or certified mail, and, if such notice is mailed after the
Distribution Date, to the holders of the Right Certificates by first-class mail.
If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the 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 such
holder's Right Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of the State
of Minnesota or New York (or of any other state of the United States so long as
such corporation is authorized to do business as a banking institution in the
State of Minnesota or New York), in good standing, having an office in the State
of Minnesota or New York which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million or (b) an affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it under this Agreement, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment the Company shall file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Common
Shares and Preferred Shares, and, if such notice is filed after the Distribution
Date, mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section, however,
or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this 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 Agreement.
Section 23. Redemption. (a) Subject to the provisions of
Section 27, the Board of Directors of the Company may, at its option, at any
time prior to the earlier of (x) such time as any person becomes an Acquiring
Person or (y) the Close of Business on the Final Expiration Date, redeem all but
not less than all of the then outstanding Rights at a redemption price of $.01
per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date of this Agreement, including
without limitation the dividend declared on the date of this Agreement that is
payable on August 30, 1991, (such redemption price being hereinafter referred to
as the "Redemption Price"). The Redemption Price shall be payable in cash by the
Company. The redemption of the Rights by the Board of Directors of the Company
may be made effective at such time and on such basis and with such conditions as
the Board of Directors of the Company in its sole discretion may establish. The
Board of Directors and the Company shall not have any liability to any Person as
a result of the redemption of Rights pursuant to the terms of this Section 23.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so
held. Promptly after the action of the Board of Directors of the Company
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 Common Shares; provided,
however, that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Any notice which is mailed in the manner
provided in this paragraph shall be deemed given whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase for value
any Rights at any time in any manner except as specifically set forth in this
Section or in Section 24 or in connection with the purchase of Common Shares
prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors of the
Company may, at its option, at any time after the Adjustment Date (as defined in
Section 11(a)(iii)), 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 Common Shares, with
each Right to be exchanged for such number of Common Shares as shall equal the
result obtained by dividing (x) the Exercise Price (as defined in Section
11(a)(iii)) by (y) the current per share market price of the Common Shares
(determined pursuant to Section 11(d) hereof on the Adjustment Date (such number
of shares being hereinafter referred to as the "Exchange Ratio")). The Exchange
Ratio shall be appropriately adjusted to reflect any stock split, stock dividend
or similar transaction affecting the Common Shares that occurs after the
Adjustment Date. Notwithstanding the foregoing, the Board of Directors of the
Company shall not be empowered to effect such exchange at any time after any
Person (other than (1) the Company, (2) any Subsidiary of the Company, (3) any
employee benefit plan of the Company or of any Subsidiary of the Company or (4)
any entity holding Common Shares for or pursuant to the terms of any plan
described in clause (3) of this sentence), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of Common Shares equal to
the number of such Rights held by such holder multiplied by the Exchange 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 shall promptly mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void pursuant to the provisions
of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common
Shares authorized, unissued and unreserved to permit the exchange of Rights as
contemplated in accordance with this Section 24, the Company, at its option, may
substitute Preferred Shares (or equivalent preferred shares, as such term is
defined in Section 11(b), or common share equivalents, as such term is defined
in Section 11(a)(iii)(3)(C) hereof), for Common Shares exchangeable for Rights,
at the initial rate of one one-hundredth of a Preferred Share (or equivalent
preferred share) or one common share equivalent for each Common Share, as
appropriately adjusted to reflect stock splits, stock dividends or similar
transactions affecting the Common Shares that occur after the date of this
Agreement.
(d) In the event that there shall not be sufficient Common
Shares, Preferred Shares, equivalent preferred shares or common share
equivalents, authorized, unissued and unreserved to permit the exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional Common Shares
or Preferred Shares, equivalent preferred shares or common share equivalents for
issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company may pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole Common Share. For the
purposes of this paragraph (e), the current market value of a whole Common Share
shall be the closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section. The Board of Directors
and the Company shall not have any liability to any Person as a result of the
exchange of Rights pursuant to the terms of this Section.
Section 25. Notice of Certain Events. (a) In case the Company
shall propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to make
any other distribution to the holders of its Preferred Shares (other than a
regular quarterly cash dividend), or (ii) to offer to the holders of its
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), or (iv) to effect any consolidation or merger
into or with any other Person (other than a wholly owned Subsidiary of the
Company), 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 a series of
related transactions, of 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person or Persons
(other than the Company and/or any of its wholly owned Subsidiaries), or (v) to
effect any statutory share exchange with the outstanding Common Shares of the
Company being exchanged for stock or other securities of any other corporation
or money or other property, or (vi) to effect the liquidation, dissolution or
winding up of the Company, or (vii) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise), then, in
each such case, the Company shall give to each holder of a Right Certificate, to
the extent feasible and in accordance with Section 26, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, exchange, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the record date
for determining holders of the Preferred Shares for purposes of such action, and
in the case of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares and/or Preferred Shares, whichever shall be the
earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in
any such case, the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which shall specify the event and the consequences
of the event to holders of Rights under Section 11(a)(ii).
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage-prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Medtronic, Inc.
0000 Xxxxxxx Xxxxxx X.X.
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage-prepaid, addressed (until another address is
filed in writing with the Company) as follows:
Norwest Bank Minnesota, National Association
000 Xxxxx Xxxxxxx Xxxxxxxx
Post Xxxxxx Xxx 000
Xxxxx Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Stock Transfer Manager
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage-prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company may and
the Rights Agent shall, if so directed by the Company, from time to time
supplement or amend this Agreement without the approval of any holders of Common
Shares or Right Certificates in order (i) to extend the Final Expiration Date
or, provided that at the time of such amendment no Person has become an
Acquiring Person, the period during which the Rights may be redeemed,
notwithstanding anything to the contrary provided in clause (iv) hereof, (ii) to
cure any ambiguity, or to correct or supplement any provision contained in this
Agreement which may be defective or inconsistent with any other provisions in
this Agreement, (iii) prior to the Distribution Date, to otherwise change or
supplement any provision in this Agreement in any manner which the Company may
deem necessary or desirable, or (iv) following the Distribution Date, to
otherwise change or supplement any provision in this Agreement in any manner
which the Company may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Right Certificates (other than Right
Certificates evidencing Rights that shall have become null and void pursuant to
Section 11(a)(ii)). Without limiting the foregoing, the Company may at any time
prior to such time as any Person becomes an Acquiring Person amend this
Agreement to lower the thresholds set forth in Sections 1(a) and 3(a) hereof
from 15% to not less than the greater of (i) the sum of .001% and the largest
percentage of the outstanding Common Shares then known by the Company to be
beneficially owned by any Person (other than (1) the Company, (2) any Subsidiary
of the Company, (3) any employee benefit plan of the Company or any Subsidiary
of the Company, or (4) any entity holding Common Shares for or pursuant to the
terms of any plan described in clause (3) of this sentence) or (ii) 10%.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Agreement.
(a) Nothing in this Agreement shall be construed to give to
any Person other than the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the registered
holders of Common Shares) any legal or equitable right, remedy or claim under
this Agreement. This Agreement shall be for the sole and exclusive benefit of
the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
Common Shares).
(b) The Board of Directors of the Company shall have the
exclusive power and total and complete authority to administer this Agreement
and to exercise all rights and powers specifically granted to the Board of
Directors or the Company or necessary or advisable in the administration of this
Agreement, including without limitation the right and power to interpret this
Agreement and to make conclusively all determinations deemed necessary or
advisable for the administration of this Agreement. All such acts, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) that are done or made by the Board
of Directors of the Company in good faith shall (x) be final, conclusive and
binding on the Company, the Rights Agent and the holders of the Rights and all
other parties and (y) not subject the Board of Directors to any liability to the
holders of the Rights or any other party.
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Minnesota and for all purposes shall be governed by and
construed in accordance with the laws of the State of Minnesota applicable to
contracts to be made and performed entirely within such state.
Section 32. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
MEDTRONIC, INC.
By /s/ Xxxxxxx X. Xxxxx
------------------------------------
Its Vice President
---------------------------------
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Its Asst. Vice President -- Stock
Transfer Department
---------------------------------
EXHIBIT A
[Form of Right Certificate]
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER JULY 10, 2001 OR SUCH EARLIER DATE AS
THE BOARD OF DIRECTORS ORDERS REDEMPTION OR EXCHANGE OF THE
RIGHTS. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION
OF THE COMPANY, AT $.01 PER RIGHT (SUBJECT TO ADJUSTMENT) AND
TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS THAT ARE OR WERE ACQUIRED OR BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF
AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) MAY BECOME NULL AND VOID.
Right Certificate
MEDTRONIC, INC.
This certifies that _________________ , or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of June 27, 1991 (the "Rights Agreement") between
Medtronic, Inc., a Minnesota corporation (the "Company"), and Norwest Bank
Minnesota, National Association, a national banking association (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.
(Minneapolis, Minnesota time) on July 10, 2001 at the office or offices of the
Rights Agent designated for such purpose, or of its successor as Rights Agent,
one one-hundredth of a fully paid, nonassessable Series A Junior Participating
Preferred Share of the par value of $1.00 per share (the "Preferred Shares") of
the Company, at a purchase price of $ per one one-hundredth of a Preferred Share
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly completed and executed.
The number of Rights evidenced by this Right Certificate (and the number of one
one-hundredths of a Preferred Share which may be purchased upon exercise
thereof) set forth above, and the Purchase Price set forth above, are, except
for adjustments required pursuant to the Rights Agreement, the number and
Purchase Price as of , based on the Preferred Shares as constituted at such
date.
As provided in the Rights Agreement, the Purchase Price and
the number of one one-hundredths of a Preferred Share which may be purchased
upon the exercise of the Rights evidenced by this Right Certificate are subject
to modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and which contains 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 (which limitations of rights include
the voiding of the Rights under certain circumstances specified in the Rights
Agreement). Copies of the Rights Agreement are on file with the Secretary at the
principal executive office of the Company and will be mailed without charge by
the Company or the Rights Agent to the holder of this certificate promptly
following receipt by the Company or the Rights Agent of a written request
therefor.
Upon the occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement), any Rights evidenced by this Right
Certificate that are or were acquired or beneficially owned by an Acquiring
Person or an Associate or Affiliate of such Acquiring Person (as such terms are
defined in the Rights Agreement) shall be null and void from and after the
occurrence of such Section 11(a)(ii) Event.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number of one one-hundredths of a Preferred Share
as the Rights evidenced by the Right Certificate or Right Certificates
surrendered then 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 Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may, but are not required to, be redeemed by
the Company at a redemption price of $.01 per Right, subject to adjustment as
provided in the Rights Agreement, payable in cash and (ii) may, but are not
required to, be exchanged by the Company in whole or in part for Common Shares
or other shares of capital stock of the Company. The Board of Directors of the
Company and the Company shall not have any liability to any person as a result
of the redemption or exchange of the Rights pursuant to the provisions of the
Rights Agreement.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractional shares
which are integral multiples of one one-hundredth of a Preferred Share or, if a
Right shall then be exercisable for a fraction other than one one-hundredth of a
Preferred Share, integral multiples of that fraction, which may, at the election
of the Company, be evidenced by depositary receipts), if in lieu thereof a cash
payment is made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
the Preferred Shares or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a 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 manual or facsimile signature of the proper
officer of the Company.
Dated:
------------------------
MEDTRONIC, INC.
By:
------------------------------------
Title:
----------------------------
Countersigned:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
----------------------------------
Authorized Manual or
Facsimile Signature
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED __________________________ hereby sells,
assigns and transfers unto ____________________________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ____________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated:
------------------------
--------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the
best of its knowledge) by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
[ ] are
or
[ ] are not
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement); and
(2) the undersigned
[ ] did
or
[ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who, at
the time of the acquisition, is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
-------------------------------------
Signature
NOTICE
The signature of the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To MEDTRONIC, INC.:
The undersigned hereby irrevocably elects to exercise
_______________ Rights represented by this Right Certificate to purchase the
Preferred Shares issuable upon the exercise of such Rights (or such other
securities of the Company or of any other person which may be issuable upon
exercise of the Rights) and requests that certificates for such shares be issued
in the name of:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated:
----------------------
-------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the
best of its knowledge) by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
[ ] are
or
[ ] are not
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement); and
(2) the undersigned
[ ] did
or
[ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who, at
the time of the acquisition, is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
-------------------------------------
Signature
NOTICE
The signature of the foregoing Election to Exercise and
Certificate must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
