EXHIBIT 4.1
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RIGHTS AGREEMENT
FLOW INTERNATIONAL CORPORATION
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
AS RIGHTS AGENT
DATED AS OF SEPTEMBER 1, 1999
TABLE OF CONTENTS
Page
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . 4
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . . . 4
Section 4. Form of Right Certificates. . . . . . . . . . . . . . . . . . 6
Section 5. Countersignature and Registration . . . . . . . . . . . . . . 6
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates. . . . . . . . . . . . . . . . . . . . . . 7
Section 7. Exercise of Rights, Purchase Price; Expiration Date of
Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 8. Cancellation and Destruction of Right Certificates. . . . . . 9
Section 9. Availability of Preferred Shares. . . . . . . . . . . . . . . 9
Section 10. Preferred Shares Record Date. . . . . . . . . . . . . . . . . 10
Section 11. Adjustment of Purchase Price, Number of Shares and
Number of Rights. . . . . . . . . . . . . . . . . . . . . . . 11
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earnings Power. . . . . . . . . . . . . . . . . . . . . . . . 17
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . . 21
Section 15. Rights of Action. . . . . . . . . . . . . . . . . . . . . . . 22
Section 16. Agreement of Right Holders. . . . . . . . . . . . . . . . . . 22
Section 17. Right Certificate Holder Not Deemed a Shareholder . . . . . . 23
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . 23
Section 19. Merger or Consolidation or Change of Name of Rights
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . 24
Section 21. Change of Rights Agent. . . . . . . . . . . . . . . . . . . . 26
Section 22. Issuance of New Right Certificates. . . . . . . . . . . . . . 27
Section 23. Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 24. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 25. Notice of Certain Events. . . . . . . . . . . . . . . . . . . 29
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 27. Supplements and Amendments. . . . . . . . . . . . . . . . . . 00
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Xxxxxxx 00. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 29. Benefits of this Amendment. . . . . . . . . . . . . . . . . . 31
Section 30. Severability. . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 32. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 33. Descriptive Headings. . . . . . . . . . . . . . . . . . . . . 32
EXHIBITS
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Exhibit A Form of Certificate of Designations of Series B Junior
Participating Perferred Stock
Exhibit B Form of Right Certificate
Exhibit C Form of Summary of Rights to Purchase Preferred Shares
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AMENDED AND RESTATED RIGHTS AGREEMENT
THIS AMENDED AND RESTATED RIGHTS AGREEMENT (the "AMENDMENT"), dated as
of September 1, 1999, between Flow International Corporation, a Washington
corporation (the "COMPANY"), and ChaseMellon Shareholder Services, L.L.C., a
New Jersey limited liability company (the "RIGHTS AGENT").
RECITALS
WHEREAS, the Company and First Interstate Bank, Ltd. (the predecessor in
interest to the Rights Agent) are parties to a certain Rights Agreement dated
as of June 7, 1990 (the "AGREEMENT").
WHEREAS, the Company and the Rights Agent have heretofore entered into a
Rights Agreement dated as of June 7, 1990 (as amended, the "Agreement"). In
connection therewith, the Board of Directors of the Company authorized and
declared a dividend of one common share purchase right (the "Original Right")
for each share of Common Stock (as hereinafter defined) of the Company
outstanding as of the close of business on June 7, 1990 (the "Record Date"),
and the Board of Directors further authorized and directed the issuance of
one Original Right (subject to adjustment) with respect to each share of
Common Stock that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the Final
Expiration Date (as such terms were defined in the Agreement), with each
Original Right having the rights assigned to it under the Agreement.
Pursuant to Section 27 of the Original Rights Agreement, the parties hereto
hereby amend and restate the Original Rights Agreement to read in its
entirety in the form hereof. The Board of Directors of the Company has
approved the amendment and restatement such that as of September 1, 1999,
each Original Right shall be deemed to be a common share purchase right (a
"Right") having the rights assigned to it pursuant to this Amendment. As
used herein the term "adoption of this Amendment" shall refer to the adoption
of the Amended and Restated Rights Agreement and the term "after the date of
this Agreement" or "after the date hereof" shall mean after September 1,
1999. The Board of Directors has also authorized the issuance of one Right
(as such number may be adjusted hereafter pursuant to the terms of this
Agreement) with respect to each share of Common Stock that shall become
outstanding between the date of this Agreement and the earliest to occur of
the Distribution Date, the Redemption Date or the Final Expiration Date (as
such terms are hereinafter defined). Each Right shall represent the right to
purchase one share of Common Stock.
AGREEMENT
In consideration of the premises and the mutual agreements herein set
forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
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For purposes of this Amendment, the following terms have the meaning
indicated:
"ACQUIRING PERSON" shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of the
Threshold Percentage or more of the Common Stock then outstanding other than as
a result of a Permitted Offer, but shall not include any Exempt Person.
Notwithstanding the foregoing, no Person shall become an "ACQUIRING PERSON" as
the result of an acquisition of Common Stock by the Company which, by reducing
the number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to the Threshold Percentage or more of the
Common Stock of the Company then outstanding; PROVIDED, HOWEVER, that if a
Person shall become the Beneficial Owner of the Threshold Percentage or more of
the Common Stock of the Company then outstanding by reason of share purchases by
the Company and shall, after such share purchases by the Company, increase the
number of Common Stock of the Company beneficially owned by such Person above
the number of Common Stock of the Company beneficially owned by such Person at
the time of the last such share purchase by the Company, then such Person shall
be deemed to be an "ACQUIRING PERSON." Notwithstanding the foregoing, if the
Board of Directors of the Company determines in good faith that 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 Stock 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 Amendment.
"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 Amendment.
A Person shall be deemed the "BENEFICIAL OWNER" of, shall be deemed to have
"BENEFICIAL OWNERSHIP" of and shall be deemed to "BENEFICIALLY OWN" any
securities:
(i) which such Person or any of such Person's Affiliates or
Associates is deemed to beneficially own, directly or indirectly, within the
meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange
Act as in effect on the date of this Amendment;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (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, rights, warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own,
(1) securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase, (2) securities which such
Person has a right to acquire on the exercise of Rights at any time prior to the
time a Person
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becomes an Acquiring Person, or (3) securities issuable upon exercise of
Rights from and after the time a Person becomes an Acquiring Person if such
Rights were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof ("ORIGINAL RIGHTS") or pursuant to Section 11(i) or Section
11(n) with respect to an adjustment to original Rights; or (B) the right to
vote pursuant to any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security by reason of such agreement, arrangement or
understanding if the agreement, arrangement or understanding to vote such
security arises solely from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation made pursuant to, and
in accordance with, the applicable rules and regulations promulgated under
the Exchange Act and is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has 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) for the purpose of acquiring, holding, voting (except to the
extent contemplated by the proviso to subparagraph (ii)(B) above) or
disposing of any securities of the Company.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday, or a
day on which banking or trust institutions in the State of Washington, or the
State in which the principal office of the Rights Agent is located, are
authorized or obligated by law or executive order to close.
"CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., Seattle time,
on such date; provided, however, that if such date is not a Business Day it
shall mean 5:00 P.M., Seattle time, on the next succeeding Business Day.
"COMMON STOCK" when used with reference to the Company shall mean the
common stock, $.01 par value, of the Company. "Common Stock" when used with
reference to any Person other than the Company shall mean the capital stock
(or, in the case of an unincorporated entity, the equivalent equity interest)
with the greatest voting power of such other Person or, if such other Person
is a subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person.
"DISTRIBUTION DATE" shall have the meaning set forth in Section 3 hereof.
"EXEMPT PERSON" shall mean (i) the Company, (ii) any Subsidiary (as such
term is hereinafter defined) of the Company, (iii) any employee benefit plan of
the Company or of any Subsidiary of the Company, and (iv) any entity or trustee
holding Common Stock for or pursuant to the terms of any such plan or for the
purpose of funding any such plan or funding other employee benefits for
employees of the Company or of any Subsidiary of the Company.
"FINAL EXPIRATION DATE" shall have the meaning set forth in Section 7
hereof.
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"NASDAQ STOCK MARKET" shall mean the stock market operated by The Nasdaq
Stock Market, Inc.
"PERSON" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such entity.
"PERMITTED OFFER" shall mean a tender offer or an exchange offer for all
outstanding shares of Common Stock of the Company at a price and on terms
determined by the Board of Directors of the Company, after receiving advice
from one or more investment banking firms, to be (a) fair to shareholders
(taking into account all factors which the Board of Directors deems relevant)
and (b) otherwise in the best interests of the Company and its shareholders
and which the Board of Directors determines to recommend to the shareholders
of the Company.
"PREFERRED SHARES" shall mean shares of a Series B Junior Participating
Preferred Stock, no par value per share, of the Company having the rights and
preferences set forth in the form of Articles of Amendment attached to this
Amendment as EXHIBIT A.
"REDEMPTION DATE" shall have the meaning set forth in Section 7 hereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"STOCK ACQUISITION DATE" shall mean the first date of public
announcement (which for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such
or such earlier date as a majority of the Board of Directors shall become
aware of the existence of an Acquiring Person.
"SUBSIDIARY" of any Person shall mean any corporation or other entity of
which securities or other ownership interests having ordinary voting power
sufficient to elect a majority of the board of directors or other persons
performing similar functions are beneficially owned, directly or indirectly,
by such Person, and any corporation or other entity that is otherwise
controlled by such Person.
"THRESHOLD PERCENTAGE" shall mean 10%.
SECTION 2. APPOINTMENT OF RIGHTS AGENT.
The Company hereby appoints the Rights Agent to act as agent for the
Company in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time
appoint such co-Rights Agents as it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
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(a) Until the earlier of (i) the tenth day after the Stock Acquisition
Date or (ii) the tenth Business Day (or such later date as may be determined
by action of the Board of Directors prior to such time as any Person becomes
an Acquiring Person) after the date of the commencement by any Person (other
than an Exempt Person) of, or of the first public announcement of the
intention of such Person (other than an Exempt Person) to commence, a tender
or exchange offer the consummation of which would result in any Person
becoming, or after the consummation of which any Person would be, an
Acquiring Person (including any such date which is after the date of this
Amendment and prior to the issuance of the Rights; the earlier of such dates
being herein referred to as the "DISTRIBUTION DATE"), (1) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Stock registered in the names of the holders thereof
and not by separate Right Certificates, and (2) the Rights and the right to
receive Right Certificates will be transferable only in connection with the
transfer of Common Stock. As soon as practicable after the Distribution
Date, the Company will promptly notify the Rights Agent thereof, will prepare
and execute, the Rights Agent will countersign, and the Company will send or
cause to be sent (and the Rights Agent, if requested and provided with a
shareholder list by the transfer agent of the Common Stock, will send) by
first-class, postage-prepaid mail, to each record holder of Common Stock as
of the close of business on the Distribution Date (other than any Acquiring
Person or any Associate or Affiliate of an Acquiring Person), at the address
of such holder shown on the records of the Company, a Right Certificate, in
substantially the form of EXHIBIT B hereto (a "RIGHT CERTIFICATE"),
evidencing one Right (subject to adjustment as provided herein) for each
share of Common Stock so held. As of the Distribution Date, the Rights will
be evidenced solely by such Right Certificates.
(b) On the Record Date, the date of this Amendment, 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 Stock as of the close of business on the Record Date
(other than any Acquiring Person or any Associate or Affiliate of any
Acquiring Person), at the address of such holder shown on the records of the
Company. With respect to certificates for Common Stock outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced by
such certificates registered in the names of the holders thereof. 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
Stock outstanding on the Record Date, also shall constitute the transfer of
the Rights associated with the Common Stock represented thereby.
(c) Certificates issued for Common Stock (including, without
limitation, upon transfer of outstanding Common Stock, disposition of Common
Stock out of treasury stock or issuance or reissuance of Common Stock out of
authorized but unissued shares) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date shall have impressed on, printed on, 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 an Amended and Restated Rights
Agreement, dated as of September 1,
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1999, between Flow International Corporation and ChaseMellon
Shareholder Services, L.L.C., may be amended from time to time (the
"Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal executive
offices of Flow International Corporation. Under certain circumstances,
as set forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this certificate.
Flow International Corporation will mail to the holder of this
certificate a copy of the Rights Agreement without charge after receipt of
a written request therefor. Under certain circumstances, as set forth in
the Rights Agreement, Rights owned by or issued or transferred to any
Person who becomes an Acquiring Person or an Associate or Affiliate
thereof (as defined in the Rights Agreement) and certain transferees
thereof may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby. In the event that the Company purchases or
otherwise acquires any Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock shall be deemed
canceled and retired so that the Company shall not be entitled to exercise any
Rights associated with the Common Stock which are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend shall not
affect the enforceability of any part of this Amendment or the rights of any
holder of the Rights.
SECTION 4. FORM OF RIGHT CERTIFICATES.
The Right Certificates (and the forms of election to purchase shares and of
assignment to be printed on the reverse thereof) shall be substantially in the
form set forth in EXHIBIT B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and which do not increase the duties or
responsibilities of the Rights Agent and as are not inconsistent with the
provisions of this Amendment, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of the Nasdaq Stock Market or of any other stock exchange on
which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Sections 11 and 22 hereof, the Right Certificates
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 number of such one one-hundredths of a Preferred Share and the Purchase
Price shall be subject to adjustment as provided herein.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
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(a) The Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President, any of its Vice Presidents or
its Treasurer either manually or by facsimile signature and shall be attested
by the Secretary or an Assistant Secretary of the Company, either manually or
by facsimile signature. The Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose
unless countersigned. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery
by the Company, such Right Certificates, nevertheless, may be countersigned
by the Rights Agent and issued and delivered by the Company with the same
force and effect as though the Person who signed such Right Certificates had
not ceased to be such officer of the Company; and any Right Certificate may
be signed on behalf of the Company by any Person who, at the actual date of
the execution of such Right Certificate, shall be a proper officer of the
Company to sign such Right Certificate, although at the date of the execution
of this Amendment any such Person was not such an officer.
(b) Following the Distribution Date and receipt by the Rights Agent of
the list of record holders of the Rights, the Rights Agent will keep or cause
to be kept, at an office or agency designated for such purpose, books for
registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 7(e), 11(a)(ii) and 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 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 to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Right Certificate or Right 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 agency of the Rights Agent designated for such purpose. Thereupon
the Rights Agent shall countersign and deliver to the Person entitled thereto
a Right Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment 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. The
Rights Agent shall have no duty or obligation under this Section unless and
until it is satisfied that all such taxes and/or charges have been paid.
(b) Subject to the provisions of Section 11(a)(ii) hereof, at any time
after the Distribution Date and prior to the close of business on the earlier
of the Redemption Date or the Final Expiration Date, upon receipt by the
Company and the Rights Agent of evidence
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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 satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation
of the Right Certificate if mutilated, the Company will make and deliver a
new Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed
or mutilated.
SECTION 7. EXERCISE OF RIGHTS, PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered holder of
any Right Certificate may, subject to Section 11(a)(ii) hereof and except as
otherwise provided herein, exercise the Rights evidenced thereby in whole or
in part upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at
the office or agency 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 any time which is
both after the Distribution Date and prior to the earliest of (i) the close
of business on September 1, 2009 (the "FINAL EXPIRATION DATE"), (ii) the time
at which the Rights are redeemed as provided in Section 23 hereof (the
"REDEMPTION DATE") or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a Preferred Share
purchasable pursuant to the exercise of a Right shall initially be $45.00,
shall be payable in lawful money of the United States of America in
accordance with paragraph (c) of this Section 7.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase
Price for the Preferred Shares to be purchased and an amount equal to any
applicable tax or governmental charge required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof, in cash or by
certified check, cashier's check or money order payable to the order of the
Company, the Rights Agent shall thereupon promptly (i) requisition from (A)
any transfer agent for the Preferred Shares certificates for the number of
shares of Preferred Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) the
Company or the depositary agent, as the case may be, scrip or depositary
receipts representing interests in such number of Preferred Shares 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) promptly after receipt of such certificates, scrip 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 (iii) when appropriate, after
receipt, promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate.
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(d) Except as otherwise provided herein, 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
exercisable Rights remaining unexercised shall be issued by the Rights Agent
to the registered holder of such Right Certificate or to his 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 of Rights upon the occurrence of any
purported transfer or exercise of Rights pursuant to Section 6 hereof or this
Section 7 unless such registered holder shall have (i) properly completed and
signed the certificate contained in the form of assignment or election to
purchase set forth on the reverse side of the Rights Certificate surrendered
for such transfer or exercise and (ii) provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) thereof as
the Company or Rights Agent 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 canceled form, or, if surrendered to the Rights Agent,
shall be canceled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Amendment. 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 canceled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
SECTION 9. AVAILABILITY OF PREFERRED SHARES.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Preferred Shares or any
Preferred Shares held in its treasury, the number of Preferred Shares (to the
extent available and subject to Section 11(a)(iii) herein) that will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) At such time, if any, as the Preferred Shares issuable upon the
exercise of Rights may be listed or admitted to trading on the Nasdaq Stock
Market or listed on any national securities exchange, the Company shall use
its best efforts to cause, from and after such time as the Rights become
exercisable (but only to the extent that the Board of Directors determines
that it is reasonably likely that the Rights will be exercised), all shares
reserved for such issuance to be listed or admitted to trading on the Nasdaq
Stock Market or listed on any other exchange upon official notice of issuance
upon such exercise.
(c) The Company may prepare and file, as soon as practicable after the
Distribution Date, a registration statement under the Securities Act of 1933, as
amended (the "Act"), with
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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 (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, the exercisability of the Rights in order to prepare and file
a registration statement under the Securities Act and permit it 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. The Company shall provide promptly a copy
of all such announcements to the Rights Agent. Notwithstanding any provision
of this Amendment to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall
have been obtained and until a registration statement under the Securities
Act (if required) shall have been declared effective.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares (and, following the
time that a Person becomes an Acquiring Person, other securities, as the case
may be) delivered upon exercise of Rights shall, at the time of delivery of
the certificates therefor (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable shares.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all taxes and charges which may be payable in respect of
the issuance or delivery of the Right Certificates or of any Preferred Shares
(or other securities) upon the exercise of Rights. The Company shall not,
however, be required to pay any tax or charge which may be payable in respect
of any transfer or delivery of Right Certificates to a Person other than, or
the issuance or delivery of certificates or depositary receipts for the
Preferred Shares (or other securities) in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered for
exercise or to issue or deliver any certificates, scrip or depositary
receipts for Preferred Shares (or other securities) upon the exercise of any
Rights until any such tax shall have been paid (any such tax being payable by
that holder of such Right Certificate at the time of surrender) or until it
has been established to the Company's reasonable 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 taxes or charges) was made; provided, however, that if
the date of such surrender and payment is a date upon which the Preferred
Share transfer books of the Company are closed, such Person shall be deemed
to have become the record holder of such shares on, and
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such certificate shall be dated, the next succeeding Business Day on which
the Preferred Share transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate
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 or to receive dividends or other distributions, and shall not be
entitled to receive any notice of any proceedings of the Company, except as
provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES AND NUMBER OF
RIGHTS.
The Purchase Price, the number of Preferred Shares or other securities
or property purchasable upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this
Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Amendment (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 or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification,
and the number and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive the aggregate number 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 Share transfer books of
the Company were open, the holder would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision, combination
or reclassification. If an event occurs which would require an adjustment
under both 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 and except as otherwise provided in
this Section 11(a)(ii), in the event any Person becomes an Acquiring Person,
each holder of a Right shall thereafter have the right to receive, upon
exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for which
a Right is then exercisable, in accordance with the terms of this Amendment,
and, in lieu of Preferred Shares, such number of shares of Common Stock as
shall equal the result obtained by (A) multiplying the then current Purchase
Price by the number of one one-hundredths of a Preferred Share for which a
Right is then exercisable and dividing that product by (B) 50% of the then
current per share market price of the Company's Common Stock (determined
pursuant to Section 11(d) hereof) on the date of the occurrence of such
event. Notwithstanding anything in this Amendment to the contrary, however,
from and after the time (the "INVALIDATION TIME") when any Person first
becomes an Acquiring Person, any Rights that are beneficially owned by (C)
any Acquiring Person (or any Affiliate or Associate of any Acquiring Person),
(D) a
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transferee of any Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the invalidation time or (E) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who became a transferee
prior to or concurrently with the invalidation time pursuant to either (1) a
transfer from the Acquiring Person to holders of its equity securities or to
any Person with whom it has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (2) a transfer which the
Board of Directors has determined is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the provisions of
this paragraph, and subsequent transferees of such Persons, shall be null and
void without any further action and any holder of such Rights shall
thereafter have no rights whatsoever with respect to such Rights under any
provision of this Amendment. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 11(a)(ii) are complied with, but
neither the Company nor the Rights Agent shall have any liability to any
holder of Right Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder. From and after the
invalidation time, no Right Certificate shall be issued pursuant to Section 3
or Section 6 hereof that represents Rights that are or have become null and
void pursuant to the provisions of this paragraph, and any Right Certificate
delivered to the Rights Agent that represents Rights that are or have become
null and void pursuant to the provisions of this paragraph (and of which the
Rights Agent has been notified) shall be canceled. From and after the
occurrence of an event specified in Section 13(a) hereof, any Rights that
theretofore have not been exercised pursuant to this Section 11(a)(ii) shall
thereafter be exercisable only in accordance with Section 13 and not pursuant
to this Section 11(a)(ii).
(iii) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit
the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) the Company shall take all such action as may be necessary
to authorize additional shares of Common Stock for issuance upon exercise of
the Rights. In the event the Company shall, after good faith effort, be
unable to take all such action as may be necessary to authorize such
additional shares of Common Stock, the Company shall substitute, for each
share of Common Stock that would otherwise be issuable upon exercise of a
Right, a number of Preferred Shares or fraction thereof such that the current
per share market price of one Preferred Share multiplied by such number or
fraction is equal to the current per share market price of one share of
Common Stock as of the date of issuance of such Preferred Shares or fraction
thereof.
(b) In case the Company shall fix a record date for the issuance of
rights (other than the 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 Common
Stock ("PREFERRED SHARE EQUIVALENTS")) or securities convertible into
Preferred Shares or preferred share equivalents at a price per Preferred
Share or preferred share equivalent (or having a conversion price per share,
if a security convertible into Preferred Shares or preferred share
equivalents) less than the then current per share market price of the
Preferred Shares (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
-12-
prior to such record date by a fraction, the numerator of which shall be the
number of Preferred Shares and preferred share equivalents outstanding on
such record date plus the number of Preferred Shares and preferred share
equivalents which the aggregate offering price of the total number of
Preferred Shares and/or preferred share equivalents so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price, and the denominator of
which shall be the number of Preferred Shares and preferred share equivalents
outstanding on such record date plus the number of additional Preferred
Shares and/or preferred share equivalents to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Directors 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 and preferred share
equivalents 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, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or 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 (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 assets or
evidences of indebtedness so to be distributed or of such subscription rights
or warrants applicable to one Preferred Share , and the denominator of which
shall be such current per Preferred Share market price (determined pursuant
to Section 11(d) hereof). Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution
is not so made, the Purchase Price shall again be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(d) Except as otherwise provided herein, 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)) 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 but not including such date; provided, however,
that in the event that the current per share market price of the Security is
determined during a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security payable in shares
of such Security or securities convertible into such shares, or (B) any
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subdivision, combination or reclassification of such Security, and prior to
the expiration of 30 Trading Days after but not including 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 by the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the Nasdaq Stock Market or, if the Security is not listed or
admitted to trading on the Nasdaq Stock Market, 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 Nasdaq Stock Market or such other
system then in use, or, if on any such date 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. The term "TRADING DAY"
shall mean a day on which the Nasdaq Stock Market or 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 the Nasdaq Stock Market or any national securities
exchange, a Business Day. If the Common Stock is not publicly traded,
"current per share market price" 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.
For the purposes of any computation hereunder, the "current per share
market price" of the Preferred Shares shall be determined in accordance with
the method set forth in this Section 11(d). If the Preferred Shares are not
publicly traded, the "current per share market price" of the Preferred Shares
shall be conclusively deemed to be the current per share market price of the
Common Stock as determined pursuant to this Section 11(d) (appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by one hundred. If neither the
Common Stock nor the Preferred Shares are publicly held or so listed or
traded, "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) 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 share or
other security as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be made
no later than the earlier of (i) three years from the date of the transaction
which requires such adjustment or (ii) the date of the expiration of the
right to exercise any Rights.
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(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other
than the Preferred Shares, thereafter the number of such other shares so
receivable upon exercise of a 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 Sections 11(a)
through (c) and 11(h) hereof, and the provisions of Sections 7, 9, 10, 13 and
14 hereof 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 hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of
a Preferred Share purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), subject to the provisions of Sections 11(a) and 13, upon each
adjustment of the Purchase Price as a result of the calculations made in
Sections 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 (A) the number of one one-hundredths of a share
covered by a Right immediately prior to such adjustment by (B) 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 (and promptly
deliver a copy of such announcement to the Rights Agent) of its election to
adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be at
least 10 days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company may, 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
-15-
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and 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 and thereafter
issued may continue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of
the Preferred Shares or other shares of capital stock issuable upon exercise
of the Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable Preferred Shares or other such
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 (and shall provide the Rights Agent
with notice of such election) 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 it in its sole discretion shall determine to be advisable
in order that any consolidation or subdivision of the Preferred Shares,
issuance wholly for cash of any Preferred Shares at less than the current
market price, issuance wholly for cash or Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred
Shares, dividends on Preferred Shares payable in Preferred Shares or issuance
of rights, options or warrants referred to hereinabove in Section 11(b),
hereafter made by the Company to holders of its Preferred Shares Stock shall
not be taxable to such shareholders.
(n) Anything in this Amendment to the contrary notwithstanding, in the
event that at any time after the date of this Amendment and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the
Common Stock payable in Common Stock or (ii) effect a subdivision,
combination or consolidation of the Common Stock (by reclassification or
otherwise
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than by payment of a dividend payable in Common Stock) into a greater or
lesser number of shares of Common Stock, then in any such case, (i) 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 shares of Common Stock outstanding immediately before such event
and the denominator of which is the number of shares of Common Stock
outstanding immediately after such event, and (ii) each share of Common Stock
outstanding immediately after such event shall have issued with respect to it
that number of Rights which each share of Common Stock outstanding
immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(n) shall be made successively
whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected. If an event occurs which would
require an adjustment under Section 11(a)(ii) and this Section 11(n), the
adjustments provided for in this Section 11(n) shall be in addition and prior
to any adjustment required pursuant to Section 11(a)(ii).
(o) The Company agrees that, after the earlier of the Distribution Date
or the Stock Acquisition Date, it will not, except as permitted by Sections
23, 24 or 27 hereof, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such action
will diminish substantially or otherwise eliminate the benefits intended to
be afforded by the Rights, unless such action is approved by the Board of
Directors.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts and computation accounting for
such adjustment, (b) file with the Rights Agent and with each transfer agent
for the Common Stock or the Preferred Shares a copy of such certificate and
(c) mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 25 hereof (if so required under Section 25 hereof).
The Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained and shall neither have any duty with
respect to nor be deemed to have knowledge of any such adjustment unless and
until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNINGS POWER.
(a) In the event, directly or indirectly, at any time after any Person
has become an Acquiring Person, (i) the Company shall consolidate with, or
merge with and into any other Person and the Company shall not be the
continuing or surviving corporation of such consolidation or merger; (ii) any
Person shall consolidate with the Company, or any Person shall merge with and
into the Company and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the Common Stock shall be changed
into or exchanged for stock or other securities of any other Person (or of
the Company) or cash or any other property; (iii) the Company shall effect a
statutory share exchange with the outstanding shares of Common Stock
-17-
of the Company being exchanged for stock or other securities of any other
Person, cash or property; or (iv) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating
50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person (other than the Company
or one or more of its wholly owned Subsidiaries); or, if upon the
consummation of any of the events set forth in the preceding clauses (i)
through (iv) there is an Acquiring Person, then upon the first occurrence of
any such event (a "Section 13 Event"), proper provision shall be made so
that: (1) each holder of record of a Right (other than Rights which have
become void pursuant to Section 11(a)(ii)) shall thereafter have the right to
receive, upon the exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance with the terms of
this Amendment and in lieu of Preferred Shares, such number of validly
issued, fully paid and non-assessable and freely tradable shares of Common
Stock of the Principal Party (as defined herein) not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be
equal to the result obtained by (A) multiplying the then current Purchase
Price by the number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to the first occurrence of a Section
13 Event and (B) dividing that product by 50% of the then current per share
market price of the Common Stock of such Principal Party (determined pursuant
to Section 11(d) hereof) on the date of consummation of such Section 13
Event; provided, however, that the Purchase Price and the number of shares of
Common Stock of such Principal Party issuable upon exercise of each Right
shall be further adjusted as provided in Section 11(f) of this Amendment to
reflect any events occurring in respect of such Principal Party after the
date of such Section 13 Event; (2) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such consolidation, merger, sale
or transfer, all the obligations and duties of the Company pursuant to this
Amendment; (3) the term "COMPANY" shall thereafter be deemed to refer to such
Principal Party; and (4) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock in accordance with Section 9 hereof) in connection
with such 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 the shares of its Common Stock thereafter
deliverable upon the exercise of the Rights; provided that, upon the
subsequent occurrence of any consolidation, merger, sale or transfer of
assets or other extraordinary transaction in respect of such Principal Party,
each holder of a Right shall thereupon be entitled to receive, upon exercise
of a Right and payment of the Purchase Price as provided in this Section
13(a), such cash, shares, rights, warrants and other property which such
holder would have been entitled to receive had such holder, at the time of
such transaction, owned the Common Stock of the Principal Party receivable
upon the exercise of a Right pursuant to this Section 13(a), and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property.
(b) "PRINCIPAL PARTY" shall mean
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(i) in the case of any transaction described in (i), (ii) or
(iii) of the first sentence of Section 13(a) hereof: (A) the Person that is
the issuer of the securities into which the shares of Common Stock of the
Company are converted in such merger, consolidation or exchange, or, if there
is more than one such issuer, the issuer the shares of Common Stock of which
have the greatest aggregate market value of shares outstanding, or (B) if no
securities are so issued, (1) the Person that is the other party to the
merger, if such Person survives said merger, or, if there is more than one
such Person, the Person the shares of Common Stock of which have the greatest
aggregate market value of shares outstanding or (2) if the Person that is the
other party to the merger does not survive the merger, the Person that does
survive the merger (including the Company if it survives) or (3) the Person
resulting from the consolidation; and
(ii) in the case of any transaction described in clause (iv) of
the first sentence in Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person receiving the
greatest portion of the assets or earning power cannot be determined,
whichever of such Persons as is the issuer of Common Stock having the
greatest aggregate market value of shares outstanding; provided, however,
that in any such case described in the foregoing clause (b)(i) or (b)(ii),
(1) if the Common Stock of such Person is not at such time or has not been
continuously over the preceding 12-month period registered under Section 12
of the Exchange Act, and if such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered, the
term "Principal Party" shall refer to such other Person, or (2) if such
Person is a Subsidiary, directly or indirectly, of more than one Person, the
Common Stock of all of which is and has been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the issuer of
Common Stock having the greatest aggregate market value, or (3) if such
Person is owned, directly or indirectly, by a joint venture formed by two or
more Persons that are not owned, directly or indirectly, by the same Person,
the rules set forth in clauses (1) and (2) above shall apply to each of the
owners having an interest in the venture as if the Person owned by the joint
venture was a Subsidiary of both or all of such joint venturers, and the
Principal Party in each such case shall bear the obligations set forth in
this Section 13 in the same ratio as its interest in such Person bears to the
total of such interests.
(c) The Company shall not consummate any Section 13 Event unless prior
thereto the Company and the Principal Party involved therein shall have
executed and delivered to the Rights Agent an agreement confirming that the
requirements of Sections 13(a) and (b) hereof shall promptly be performed in
accordance with their terms and that such consolidation, merger, exchange,
sale or transfer of assets shall not result in a default by the Principal
Party under this Amendment as the same shall have been assumed by the
Principal Party pursuant to Sections 13(a) and (b) hereof and providing that,
as soon as practicable after executing such agreement pursuant to this
Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become
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effective as soon as practicable after such filing and use its best efforts
to cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Securities Act) until the
earlier of the close of business on the Redemption Date or the Final
Expiration Date, and similarly comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the Principal
Party shall be listed or admitted to trading on the Nasdaq Stock Market or on
a national securities exchange, to list or admit to trading (or continue the
listing of) the Rights and the securities purchasable upon exercise of the
Rights on the Nasdaq Stock Market or such securities exchange or, if the
Common Stock of the Principal Party shall not be listed or admitted to
trading on the Nasdaq Stock Market or a national securities exchange, to
cause the Rights and the securities receivable upon exercise of the Rights to
be reported by such other system then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the Common Stock of the Principal Party subject to
purchase upon exercise of outstanding Rights.
(d) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has a provision in any of its authorized
securities or in its articles or certificate of incorporation or by-laws or
other instrument governing its corporate affairs, which provision would have
the effect of (i) causing such Principal Party to issue (other than to
holders of Rights pursuant to this Section 13), in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then
current market price per share thereof (determined pursuant to Section 11(d)
hereof) or securities exercisable for, or convertible into, Common Stock of
such Principal Party at less than such then current market price, or (ii)
providing for any special payment, tax or similar provision in connection
with the issuance of the Common Stock of such Principal Party pursuant to the
provisions of Section 13, then, in such event, the Company hereby agrees with
each holder of Rights that it shall not consummate any such transaction
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been canceled,
waived or amended, or that the authorized securities shall be redeemed, so
that the applicable provision will have no effect in connection with, or as a
consequence of, the consummation of the proposed transaction.
(e) The Company covenants and agrees that it shall not, at any time
after a Person first becomes an Acquiring Person, enter into any transaction
of the type contemplated by clauses (i) - (iv) of Section 13(a) hereof if (i)
at the time of or immediately after such consolidation, merger, exchange,
sale, transfer or other transaction there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights, (ii) prior to,
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simultaneously with or immediately after such consolidation, merger, sale,
transfer of other transaction, the shareholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates or (iii) the form or
nature of organization of the Principal Party would preclude or limit the
exercisability of the Rights.
(f) The provisions of this Section 13 shall similarly apply to
successive mergers, consolidations, statutory share exchanges or sale 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 shall 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 Nasdaq Stock Market or, if the Rights are not listed or
admitted to trading on the Nasdaq Stock Market, as reported in the principal
consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which the Rights are listed
or admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the Nasdaq Stock Market or such other
system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by the Board of Directors 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.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other
than fractions which are integral multiples of one one-hundredth of a
Preferred Share). Fractions of Preferred Shares in integral multiples of one
one-hundredth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts pursuant to an appropriate agreement between
the Company and a depositary selected by it, or by scrip; provided, however,
that (i) if the Company issues such scrip, then such scrip shall not confer
upon the holder any voting or other rights of a shareholder of the Company,
but the Company shall from time to time, upon demand of any holder of such
scrip and the surrender of scrip for fractional Preferred Shares aggregating
one whole Preferred Share, issue one whole Preferred
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Share to such holder and (ii) if the Company issues depositary receipts
pursuant to any such agreement, 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, the Company shall 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 the 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)) for the Trading Day immediately
prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
SECTION 15. RIGHTS OF ACTION.
All rights of action in respect of this Amendment, excepting the rights
of action given to the Rights Agent under Section 18 hereof, are vested in
the respective registered holders of the Right Certificates (and, prior to
the Distribution Date, the registered holders of the Common Stock); and any
registered holder of any Right Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distribution Date, of
the Common Stock), on his own behalf and for his own benefit, may enforce,
and may institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, his right to exercise the
Rights evidenced by such Right Certificate in the manner provided therein and
in this Amendment. 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
Amendment 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 Amendment.
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 Stock;
(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
agency of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer; and
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(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
Common Stock certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
SECTION 17. 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 herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors
or upon any matter submitted to shareholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in this
Amendment), or to receive dividends or subscription rights, or otherwise,
until the Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay in a timely manner to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the preparation, delivery,
administration, execution and any amendment of this Amendment and the
exercise and performance of its duties hereunder, which shall include, but
not be limited to, reasonable compensation for services rendered by officers
and employees of the Rights Agent which are in addition to the ministerial
and administrative services performed by the Rights Agent under this
Amendment. The Company also agrees to indemnify the Rights Agent, its
officers, employees, agents and directors for, and to hold them harmless
against, any loss, liability, damage, judgment, fine, penalty, claim, demand,
settlement, cost or expense incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for any action taken,
suffered or omitted by the Rights Agent in connection with the acceptance and
administration of this Amendment, including without limitation the costs and
expenses of defending against any claim of liability arising therefrom,
directly or indirectly against the Rights Agent, its officers, employees,
agents and directors. Anything to the contrary notwithstanding, in no event
shall the Rights Agent be liable for special, indirect, consequential or
incidental loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Rights Agent has been advised of the likelihood
of such loss or damage.
(b) The Rights Agent shall be authorized and protected by the Company
and shall incur no liability for, or in respect of any action taken, suffered
or omitted by it in connection with, its acceptance and administration of
this Amendment in reliance upon any Right Certificate or certificate for the
Preferred Shares (or for scrip or depositary receipts evidencing fractional
-23-
interests in Preferred Shares) or Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it 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 counsel as set
forth in Section 20 hereof. The Rights Agent shall not be deemed to have
notice of any action or event unless such notice was given as provided above.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
stock transfer or corporate trust powers of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Amendment
without the execution or filing of any paper or any further act on the part
of any of the parties hereto; provided, that such Person would be eligible
for appointment as a successor Rights Agent under the provisions of Section
21 hereof. In case at the time such successor Rights Agent shall succeed to
the agency created by this Amendment, 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 Amendment.
(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
Amendment.
SECTION 20. DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes only the duties and obligations expressly
imposed by this Amendment upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel of its choice (who
may be legal counsel for the Company), and the advice or opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent and the Rights Agent shall incur no liability for
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or in respect of any action taken, suffered or omitted by it in good faith
and in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this Amendment the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including without limitation the identity of any Acquiring Person and the
determination of current market price) be proved or established by the
Company prior to taking, suffering or omitting any action hereunder, such
fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
the President, any Vice President, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization and protection to the Rights Agent and the Rights Agent shall
incur no liability for or in respect of any action taken, suffered or omitted
in good faith by it under the provisions of this Amendment in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Amendment 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 have any liability for, nor be under any
responsibility in respect of, the validity of this Amendment or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or
in respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Amendment or in any
Right Certificate; nor shall it be responsible for any transfer to an
Acquiring Person (unless the Company has delivered written notice of such
Acquiring Person prior to such transfer) or any change in the exercisability
of the Rights (including the Rights becoming null and 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 Sections 3,
11, 13, 23 and 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 receipt of a certificate
furnished pursuant to Section 12, describing such change or adjustment); nor
shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Preferred
Shares or other securities to be issued pursuant to this Amendment or any
Right Certificate or as to whether any Preferred Shares or other securities
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Amendment.
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(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person reasonably believed by the Rights Agent to be one of the Chairman of
the Board, the President, 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,
suffered or omitted by it in good faith in accordance with instructions of
any such officer or for any delay in acting while waiting for those
instructions.
(h) The Rights Agent and any shareholder, affiliate, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Amendment. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other Person or legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company or any other Person
resulting from any such act, default, neglect or misconduct absent gross
negligence, bad faith or willful misconduct.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form
of assignment or the form of election to purchase set forth on the reverse
thereof, as the case may be, has not been completed to certify the holder is
not an Acquiring Person (or an Affiliate or Associate thereof), the Rights
Agent shall not take any further action with respect to such requested
exercise of 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 Amendment upon 30 days' notice in
writing mailed to the Company and to each transfer agent of the Common Stock
and Preferred Shares by registered or certified mail, and, following the
Distribution Date, to the holders of the Right Certificates by United States
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
Stock by registered or certified mail, and following the Distribution Date,
to the holders of the Right Certificates by United States 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
his Right
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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 either (a) a
corporation or other entity organized and doing business under the laws of
the United States or the State of Washington or New York (or of any other
state of the United States so long as such corporation is authorized to do
business in the State of Washington or New York), in good standing, having an
office or depositary drop in the State of Washington or New York, which is
authorized to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state authority and which
has or is a subsidiary of a corporation 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 or other entity described in
clause (a) of this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as
if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Stock and Preferred Shares, and,
following 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 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Amendment or of the Rights
to the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such forms 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 Amendment.
In addition, in connection with the issuance or sale of Common Stock
following the Distribution Date and prior to the earlier of the Redemption
Date and the Final Expiration Date, the Company may with respect to shares of
Common Stock so issued or sold pursuant to (i) the exercise of stock options,
(ii) under any employee plan or arrangement, (iii) upon the exercise,
conversion or exchange of securities notes or debentures issued by the
Company or (iv) a contractual obligation of the Company in each case existing
prior to the Distribution Date, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale.
SECTION 23. REDEMPTION.
(a) The Board of Directors of the Company may, at any time prior to the
earlier of (i) the close of business on the tenth day following the Stock
Acquisition Date, subject to extension by the Board of Directors as provided
in Section 27 hereof, or (ii) the close of business on the Final Expiration
Date, redeem all but not less than all the then outstanding Rights at a
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redemption price of $0.0001 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (the redemption price being hereinafter referred to as the "REDEMPTION
PRICE"). The redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish. The Company may, at its option, pay the Redemption
Price in cash, shares of Common Stock (based on the current market price of
the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights pursuant to paragraph (a) of this Section 23 (or at
such later time as the Board of Directors may establish for the effectiveness
of such redemption), 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. The
Company shall promptly give public notice (including prompt notice thereof to
the Rights Agent) of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice shall not affect the validity of
such redemption. Within 10 days after such action of the Board of Directors
ordering the redemption of the Rights (or such later time as the Board of
Directors may establish for the effectiveness of such redemption), the
Company shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption shall state the
method by which the payment of the Redemption Price will be made.
SECTION 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at any
time after any Person first becomes an Acquiring Person, exchange all or part
of the then outstanding and exercisable Rights (which shall not include
Rights that have become null and void pursuant to the provisions of Section
11(a)(ii) hereof) for shares of Common Stock at an exchange ratio of one
share of Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
and subject to adjustment as set forth in clause (c) below (such exchange
ratio being hereinafter referred to as the "EXCHANGE RATIO").
Notwithstanding the foregoing, the Board of Directors shall not be empowered
to effect such exchange at any time after any Person (other than an Exempt
Person), together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of shares of Common Stock aggregating 50% or more of the
shares of Common Stock 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 shares of Common
Stock 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 (and prompt notice thereof to the Rights Agent); provided,
however, that the failure to give, or any defect in, such notice shall
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not affect the validity of such exchange. The Company shall promptly mail a
notice of any such exchange to the Rights Agent and to all of the holders of
such Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of exchange will state the method by which the exchange of the
shares of Common Stock 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 shares of Common
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company may, in its discretion, take such action as may be necessary to
authorize additional shares of Common Stock for issuance upon exchange of the
Rights. In the event that the Company shall determine not to take such
action or shall, after good faith effort, be unable to take such action as
may be necessary to authorize such additional shares of Common Stock, the
Board of Directors, at its option shall (i) adjust the Exchange Ratio to
permit the Company to use all of its issued but not outstanding and its
authorized but unissued Common Stock to effectuate a full exchange of all of
the then outstanding and exercisable Rights or (ii) substitute, for each
Common Share that would otherwise be issuable upon exchange of a Right, a
number of Preferred Shares or fraction thereof such that the current per
share market price of one Preferred Share multiplied by such number or
fraction is equal to the current per share market price of one Common Share
as of the date of issuance of such Preferred Shares or fraction thereof.
(d) The Company shall not, in connection with any exchange pursuant to
this Section 24, be required to issue fractions of shares of Common Stock or
to distribute certificates which evidence fractional shares of Common Stock.
In lieu of such fractional shares of Common Stock, there shall be paid to the
registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a whole Common
Share. For the purposes of this paragraph (d), 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)) for the
Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall at any time after the earlier of the
Distribution Date or the Stock Acquisition Date propose (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), (ii) to offer to the holders
of its Preferred Shares rights or warrants to subscribe for or to purchase
any additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares) or (iv) to effect any
consolidation or merger into or with, or to effect any sale
-29-
or other transfer (or permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect any statutory share exchange with
the outstanding Common Stock of the Company being exchanged for stock or
other securities of any other corporation or cash or other property, (vi) to
effect the liquidation, dissolution or winding up of the Company or (vii) to
declare or pay any dividend on the Common Stock payable in Common Stock or to
effect a subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock),
then, in each such case, the Company shall give to the Rights Agent and to
each holder of a Right Certificate, in accordance with Section 26 hereof, 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 liquidation, dissolution or winding up is to take
place and the date of participation therein by the holders of the Common
Stock 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 Stock and/or Preferred Shares, whichever shall be the earlier.
(b) In case any event described in Section 11(a)(ii) or Section 13
shall occur then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate (or if occurring prior to the Distribution
Date, the holders of the Common Stock) in accordance with Section 26 hereof,
a notice of the occurrence of such event, which notice shall describe such
event and the consequences of such event to holders of Rights under Section
11(a)(ii) and Section 13 hereof.
SECTION 26. NOTICES.
Notices or demands authorized by this Amendment 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:
Flow International Corporation
00000 - 00xx Xxxxxx Xxxxx
Xxxx, Xxxxxxxxxx 00000
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Amendment 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:
ChaseMellon Shareholder Services, L.L.C.
-30-
Seattle Administration
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxx Xxxxxxxxx
Notices or demands authorized by this Amendment 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 United States 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 from time to time supplement or amend this Amendment
without the approval of the Rights Agent or any holders of 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, (ii) to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions of this Amendment, (iii) prior to
the time that any Person becomes an Acquiring Person, to otherwise change or
supplement any provision in this Amendment in any manner which the Company
may deem necessary or desirable, or (iv) subject to clause (i) of this
Section 27, from and after the time that any Person become an Acquiring
Person, to otherwise change or supplement any provision in this Amendment in
any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the Rights Agent or holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person). Upon the delivery of a certificate from an appropriate
officer of the Company and, if requested by the Rights Agent, an opinion of
counsel, which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment.
SECTION 28. SUCCESSORS.
All the covenants and provisions of this Amendment 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 AMENDMENT.
Nothing in this Amendment 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 Common Stock) any
legal or equitable right, remedy or claim under this Amendment; but this
Amendment 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 Common Stock).
-31-
SECTION 30. SEVERABILITY.
If any term, provision, covenant or restriction of this Amendment or
applicable to this Amendment 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 Amendment shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated. In the event the Amendment to the Original Rights is deemed to
be invalid, this Amendment shall be deemed to create a new right (the "NEW
RIGHT"). Such New Rights shall be deemed to have been issued as set forth
herein and shall possess all of the rights and preferences set forth herein.
SECTION 31. GOVERNING LAW.
This Amendment and each Right Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Washington and
for all purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts to be made and performed entirely
within such State; provided, however, that the effect of any provision on the
rights, duties and obligations of the Rights Agent shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts to be made and performed entirely within such State.
SECTION 32. COUNTERPARTS.
This Amendment 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 Amendment are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
[the remainder of this page intentionally left blank]
-32-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and attested, all as of the day and year first above written.
FLOW INTERNATIONAL CORPORATION
By: _____________________________________
Name: _____________________________________
Title:_____________________________________
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By: _____________________________________
Name: _____________________________________
Title:_____________________________________
-33-
EXHIBIT A
FORM
OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
OF
FLOW INTERNATIONAL CORPORATION
Flow International Corporation, a corporation organized and existing under the
laws of the state of Washington (hereinafter called the "Corporation"), hereby
certifies that the following was adopted by the Board of Directors of the
Corporation:
Series B Junior Participating Preferred Stock:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series B Junior Participating Preferred Stock" (the "Series B
Preferred Stock"), and the number of shares constituting the Series B Preferred
Stock shall be 200,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided that no decrease shall reduce the
number of shares of Series B Preferred Stock to a number less than the number of
shares then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible into Series B
Preferred Stock.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Series B Preferred Stock with respect to dividends, the holders of shares of
Series B Preferred Stock, in preference to the holders of Common Stock, par
value $.01 per share (the "Common Stock"), of the Corporation and of any other
junior stock, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series B Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (i) $1 or (ii) subject to the provision for adjustment hereinafter set forth,
100 times the aggregate per share amount of all cash dividends and 100 times the
aggregate per share amount (payable in kind) of all noncash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series B Preferred Stock. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock
-1-
(by reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of Series B Preferred Stock
were entitled immediately prior to such event under clause (ii) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series B Preferred Stock as provided in paragraph (A) of this Section 2
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the
Series B Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series B Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series B Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series B Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof
Section 3. VOTING RIGHTS. The holders of shares of Series B Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series B Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the number of votes per share to which holders of shares of
Series B Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction, the numerator of which
-2-
is the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series B Preferred Stock and the
holders of shares of Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series B Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series B Preferred Stock
outstanding shall have been paid in full, the Corporation shall not: (i) declare
or pay dividends, or make any other distributions, on any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series B Preferred Stock; (ii) declare or pay dividends, or
make any other distributions, on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
B Preferred Stock except dividends paid ratably on the Series B Preferred Stock
and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then
entitled; (iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series B Preferred Stock; or (iv) redeem or purchase or otherwise
acquire for consideration any shares of Series B Preferred Stock, or any
shares of stock ranking on a parity with the Series B Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
-3-
Section 5. REACQUIRED SHARES. Any shares of Series B Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (i) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series B
Preferred Stock unless, prior thereto, the holders of shares of Series B
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series B
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (ii) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series B Preferred Stock, except distributions made ratably on the Series B
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series B Preferred Stock were entitled immediately prior to
such event under the proviso in clause (i) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Shares B Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding
-4-
sentence with respect to the exchange or change of shares of Series B Preferred
Stock shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 8. NO REDEMPTION. The shares of Series B Preferred Stock shall
not be redeemable.
Section 9. RANK. The Series B Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to all series
of any other class of the Corporation's Preferred Stock.
Section 10. AMENDMENT. The Articles of Incorporation of the Corporation
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series B Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series B Preferred Stock, voting
together as a single class.
IN WITNESS WHEREOF, THIS CERTIFICATE OF DESIGNATIONS IS EXECUTED ON BEHALF OF
THE CORPORATION BY ITS CHAIRMAN OF THE BOARD AND ATTESTED BY ITS SECRETARY THIS
1ST DAY OF SEPTEMBER, 1999
Chairman of the Board
Attest:
Secretary
-5-
EXHIBIT B
Form of Right Certificate
Certificate No. R-________ ______Rights
NOT EXERCISABLE AFTER SEPTEMBER 1, 2009 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AS $.0001 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
FLOW INTERNATIONAL CORPORATION
This certifies that ____________________ , or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions
of the Amended and Restated Rights Agreement, dated as of September 1, 1999
(the "Rights Agreement"), between Flow International Corporation, a
Washington corporation (the "Company"), and ChaseMellon Shareholder Services,
L.L.C. (the "Rights Agent"), to purchase from the Company at any time after
the Distribution Date (such term is defined in the Rights Agreement) and
prior to 5:00 p.m., Pacific Standard time, on September 1, 2009, at the
principal office of the Rights Agent, or at the office of its successor as
Rights Agent, one one-hundredth of a fully paid nonassessable share of Series
B Junior Participating Preferred Stock, par value $.01 per share (the
"Preferred Shares"), of the Company, at a purchase price of $45 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 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 hereof) set forth above and the Purchase Price as of September
1, 1999, 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.
-1-
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$.0001 per Right or (ii) may be exchanged in whole or in part for Preferred
Shares or shares of the Company's Common Stock, par value $ .01 per share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate 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
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this 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.
-2-
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of the _____ day of September, 1999.
ATTEST: FLOW INTERNATIONAL CORPORATION
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title: Chairman, President and CEO
----------------------------------
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By:
---------------------------
Name:
------------------------
Title:
-------------------------
-3-
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: _____________________________________, 1999.
____________________________
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.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
___________________________
Signature
-4-
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Rights represented by the
Right Certificate.)
To: FLOW INTERNATIONAL CORPORATION
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 and requests that certificates for
such Preferred 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: _____________________________________, 19___
_____________________________
Signature
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Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
Form of Reverse Side of Right Certificate - continued
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
_____________________________
Signature
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NOTICE
The signature in the Form of Assignment or Form of Election to Purchase, as
the case may be, must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
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EXHIBIT C
FLOW INTERNATIONAL CORPORATION
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT AMENDMENT,
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON (AS
DEFINED IN THE RIGHTS AGREEMENT AMENDMENT) AND CERTAIN TRANSFEREES THEREOF WILL
BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On June 7, 1990, the Board of Directors of Flow International
Corporation (the "Company") adopted a Preferred Share Purchase Rights Plan
which was designated to maximize stockholder value, and declared a dividend
of one preferred shares purchase right (the "Original Rights") for each
outstanding share of common stock, no par value per share, of the Company
(the "Common Stock"). The Original Rights contain provisions to protect
stockholders in the event of an unsolicited attempt to acquire the Company,
including a gradual accumulation of shares in the open market, a partial or
two-tier tender offer that does not treat all stockholders equally, or a
squeeze-out merger and other abusive takeover tactics which the Board
believes are not in the best interests of our stockholders.
By their terms, the Original Rights expire June 17, 2000. The term of
the Original Rights has been extended, however, for another ten year period,
expiring September 1, 2009 (the "Rights"). In addition, the Board has authorized
other changes to the Original Rights. Such changes are set forth in an Amended
and Restated Rights Agreement (the "Rights Agreement Amendment") between the
Company and ChaseMellon Shareholder Services, LLC, as Rights Agent (the "Rights
Agent").
Each Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of Series B Junior Participating Preferred Stock,
no par value per share, of the Company (the "Preferred Stock") at a price of
$45.00 per one one-hundredth of a share of Preferred Stock (the "Purchase
Price"), subject to adjustment. This amount differs from the initial "strike"
price of $15.00 for the Original Right. The difference represents proportional
increase in the Company's common stock price over the past eight years and, in
the opinion of the Board, represents the fair and proper price for which the
Rights may be exercised.
Until the earlier to occur of (i) 10 days following a public
announcement or awareness by the Board of Directors that a person or group of
affiliated or associated persons (an "Acquiring Person") have acquired
beneficial ownership of 10% or more of the outstanding shares of Common Stock,
other than pursuant to a Permitted Offer (as defined below) or (ii) 10 business
days (or such later date as may be determined by action of the Board of
Directors prior to such time as any person or group of affiliated persons
becomes an Acquiring Person) following the commencement of, or announcement of
an intention to make, a tender offer or exchange offer the
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consummation of which would result in the beneficial ownership by a person or
group of 10% or more of the outstanding shares of Common Stock, other than
pursuant to a Permitted Offer (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Common Stock certificates outstanding as of the Record Date, by such Common
Stock certificate. The Original Rights provided for a 20% threshold as opposed
to a 10% threshold for the Right. The Board of Directors feels that because of
the Company's current capitalization (and lack of large shareholder), it is
reasonable to allow the Board to take action at the 10% level.
A "Permitted Offer" is a tender offer or an exchange offer for all
outstanding shares of Common Stock of the Company at a price and on terms
determined by the Board of Directors of the Company, after receiving advice from
one or more investment banking firms, to be (i) fair to shareholders (taking
into account all factors which the Board of Directors deems relevant) and (ii)
otherwise in the best interests of the Company and its shareholders and which
the Board of Directors determines to recommend to the shareholders of the
Company.
The Rights Agreement Amendment provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Stock. Until the Distribution Date (or
earlier redemption or expiration of the Rights), new Common Stock certificates
issued after the Record Date upon transfer or new issuances of Common Stock will
contain a notation incorporating the Rights Agreement Amendment by reference.
Until the Distribution Date (or earlier redemption or expiration of the Rights),
the surrender for transfer of any certificates for shares of Common Stock
outstanding as of the Record Date, will also constitute the transfer of the
Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on September 1, 2009 (the "Final Expiration Date") unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of shares of Preferred Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or purchase Preferred Stock at a
price, or securities convertible into Preferred Stock with a conversion price,
less than the then-current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above). With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in the Purchase Price.
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No fraction of a share of Preferred Stock (other than fractions in
integral multiples of one one-hundredth of a share) will be issued and, in lieu
thereof, an adjustment in cash with be made based on the closing price on the
last trading date prior to the date of exercise.
The number of outstanding Rights and the number of one one-hundredths
of a share of Preferred Stock issuable upon exercise of each Right are also
subject to adjustment in the event of a stock split of the Common Stock or a
stock dividend on the Common Stock payable in shares of Common Stock or
subdivisions, consolidations or combinations of the Common Stock occurring, in
any such case, prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights will
not be redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment of $1.00 per share but will be entitled
to an aggregate dividend of 100 times the dividend declared per share of Common
Stock. In the event of liquidation, the holder of shares of Preferred Stock will
be entitled to a minimum preferential liquidation payment of $100.00 per share
but will entitled to an aggregate payment of 100 times the payment made per
share of Common Stock. Each share of Preferred Stock will have 100 votes, voting
together with the shares of Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Preferred Stock will be entitled to receive 100 times
the amount received per share of Common Stock. These rights are subject to
adjustment in the event of a stock dividend on the shares of Common Stock or a
subdivision, combination or consolidation of the shares of Common Stock.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become void),
will thereafter have the right to receive upon exercise of a Right at the then
current exercise price of the Right, that number of shares of Common Stock (or,
in lieu of Common Stock, such number or fraction of shares of Preferred Stock
equivalent in value to such number of shares of Common Stock) having a market
value of two times the exercise price of the Right.
In the event that, after a person or group has become an Acquiring
Person, the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold,
proper provision will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person which will have become void) will
thereafter have the right to receive, upon the exercise of the Right at the then
current exercise price of the Right, that number of shares of common stock of
the person with whom the Company has engaged in the foregoing transaction which
number of shares at the time of such transaction will have a market value of two
times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding shares of Common Stock or the occurrence of an event described in
the prior paragraph, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group which will
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have become void), in whole or in part, at an exchange ratio of one share of
Common Stock per Right (subject to adjustment).
At any time prior to the close of business on the day 10 days after an
Acquiring Person becomes such, the Board of Directors of the Company may
redeem the Rights in whole, but not in part, at a price of $.0001 per Right
(the "Redemption Price"). The redemption of the Rights may be made effective
at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.
For so long as no person has become an Acquiring Person, the Company
may amend the Rights in any manner. After a person has become an Acquiring
Person, the Company may amend the Rights in any manner that does not adversely
affect the interests of holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A copy of the Rights Agreement Amendment has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A. A copy of the Rights Agreement Amendment is available free of charge
from the Company.
FLOW INTERNATIONAL CORPORATION
00000 - 00XX XXXXXX XXXXX
XXXX, XXXXXXXXXX 00000
ATTN: SECRETARY
(000) 000-0000
This summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement Amendment, as the
same may be amended from time to time, which is hereby incorporated herein by
reference.
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