FIRST AMENDMENT TO RIGHTS AGREEMENT
EXECUTION
COPY
FIRST
AMENDMENT TO RIGHTS AGREEMENT
THIS
FIRST AMENDMENT, dated as of March 17, 2008, to the Rights Agreement, dated
as
of March 24, 1998 (the “Rights Agreement”), is between PERCEPTRON, INC., a
Michigan corporation (the “Company”), and AMERICAN STOCK TRANSFER & TRUST
COMPANY (the “Rights Agent”).
WHEREAS,
the Company and the Rights Agent have entered into the Rights Agreement
specifying the terms of the Rights (as defined therein);
WHEREAS,
the Company and the Rights Agent desire to amend the Rights Agreement in
accordance with Section 26 of the Rights Agreement.
NOW,
THEREFORE, in consideration of the premises and mutual agreements set forth
in
the Rights Agreement and this Amendment, the parties hereby agree as follows:
1. Section
7(a)(i) is amended by deleting the reference to “March 23, 2008” and inserting
“March 23, 2018.”
2. Section
7(b) is amended by deleting the reference to “$135.00” and inserting
“$73.00.”
3. Section
11(a)(ii)(B) is amended and restated in its entirety as follows:
(B) any
Person, alone or together with its Affiliates and Associates, shall become
an
Acquiring Person, unless the event causing the Person to become an Acquiring
Person (1) is a transaction set forth in Section 13(a) hereof, or (2) is an
acquisition of shares of Common Stock pursuant to a tender offer or an exchange
offer for all outstanding shares of Common Stock at a price and on terms
determined by a majority of the Continuing Directors (prior to the consummation
of the Permitted Offer), after receiving advice from one or more investment
banking firms selected by a majority of the Continuing Directors, to be (x)
at a
price that is fair to shareholders (taking into account all factors that the
Continuing Directors deem relevant including, without limitation, prices that
could reasonably be achieved if the Company or its assets were sold on an
orderly basis designed to realize maximum value) and (y) otherwise in the best
interests of the Company and its shareholders (other than the Person or any
Affiliate or Associate thereof on whose behalf the offer is being made), (such
tender offer or exchange offer being referred to herein as a “Permitted Offer”)
(provided that this clause (2) shall cease to apply if such Acquiring Person
thereafter becomes the Beneficial Owner of any additional shares of Common
Stock
other than pursuant to such Permitted Offer or a transaction set forth in
Section 13(a) or 13(d) hereof), or
4. Section
23(a) is amended and restated in its entirety as follows:
(a) The
Board
of Directors of the Company may, at its option, at any time prior to the earlier
of (i) the time any Person becomes an Acquiring Person (or, if such event
results from the consummation of a Permitted Offer such later date as may be
determined by action of the Board of Directors but only if Continuing Directors
constitute a majority of the Board of Directors at the time thereof and such
later date is approved by a majority of the Continuing Directors), or (ii)
5:00
P.M., Detroit, Michigan time on the Final Expiration Date, redeem all but not
less than all of the then outstanding Rights at a redemption price of $0.001
per
Right appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price
being
hereinafter referred to as the “Redemption Price”), provided,
however,
that if
such redemption occurs on or after the Shares Acquisition Date the Board of
Directors of the Company shall be entitled to so redeem the Rights only if
Continuing Directors constitute a majority of the Board of Directors at the
time
of such redemption and such redemption is approved by a majority of the
Continuing Directors; provided,
however,
that if
such redemption, or vote to delay the date set forth in (i) above, occurs on
or
after the date of a change (resulting from a proxy or consent solicitation
effected in compliance with applicable law and the requirements of any national
securities exchange on which the Common Stock of the Company is listed or the
Nasdaq Stock Market if the Common Stock is listed thereon) in a majority of
the
directors in office at the commencement of such solicitation if any Person
who
is a participant in such solicitation has stated (or, if upon the commencement
of such solicitation, a majority of the Board of Directors has determined in
good faith) that such Person (or any of its Affiliates or Associates) intends
to
take, or may consider taking, any action which would result in such Person
becoming an Acquiring Person or which would cause the occurrence of a Triggering
Event, unless, concurrent with such solicitation, such Person (or one or more
of
its Affiliates or Associates) is making a tender offer or exchange offer in
compliance with Section 11(a)(ii)(B)(2), (a “Special Proxy Contest”), the Board
of Directors of the Company shall be entitled to so redeem the Rights or delay
the date set forth in (i) above only if Continuing Directors who were members
of
the Board of Directors prior to the proxy or consent solicitation referred
to
above (or subsequently became a member of the Board of Directors and whose
nomination for election or election thereto was recommended or approved by
a
majority of the Redemption Continuing Directors) (the “Redemption Continuing
Directors”) constitute a majority of the Board of Directors at the time of such
redemption or vote to delay the date set forth in (i) above and such redemption
or vote to delay the date set forth in (i) above is approved by a majority
of
the Redemption Continuing Directors; provided,
further,
however, that if, following the occurrence of a Shares Acquisition Date and
following the expiration of the right of redemption hereunder but prior to
any
Triggering Event, each of the following shall have occurred and remain in
effect: (A) a Person who is an Acquiring Person shall have transferred or
otherwise disposed of a number of shares of Common Stock in a transaction,
or
series of transactions, which did not result in the occurrence of a Triggering
Event such that such Person is thereafter a Beneficial Owner of less than 15%
of
the outstanding shares of Common Stock, (B) there are no other Persons,
immediately following the occurrence of the event described in clause (A),
who
are Acquiring Persons, and (C) the transfer or other disposition described
in
clause (A) above was other than pursuant to a transaction, or series of
transactions, which directly or indirectly involved the Company or any of its
Subsidiaries; then the right of redemption shall be reinstated and thereafter
be
subject to the provisions of this Section 23. Notwithstanding anything contained
in this Agreement to the contrary, the Rights shall not be exercisable pursuant
to Section 11(a)(ii) prior to the expiration of the Company’s right of
redemption pursuant to this Section 23(a) without regard to the last
proviso.
2
5. Section
23(b) is amended and restated in its entirety as follows:
(b) During
the period commencing at the close of business on the Shares Acquisition Date
and terminating on the earlier of (i) the occurrence of a Triggering Event
and
(ii) the Final Expiration Date, the Board of Directors of the Company may,
at
its option, redeem all but not less than all of the then outstanding Rights
at
the Redemption Price, provided that (A) such redemption is in connection with
the consummation of an event set forth in clause (i) or (ii) of Section 13(a),
(B) no Acquiring Person, and no Affiliate or Associate of an Acquiring Person
(other than the Company or its subsidiaries) is a constituent corporation to
such event; and (C) such redemption is approved by a majority of the Continuing
Directors as being in their judgment in the best interest of the Company and
its
stockholders and the Continuing Directors constitute a majority of the Board
of
Directors at the time of such redemption.
6. Exhibit
B
is amended and restated in its entirety as set forth in the attached
Exhibit
B.
7. Exhibit
C
is amended and restated in its entirety as set forth in the attached
Exhibit
C.
8. The
term
“Agreement” as used in the Rights Agreement shall be deemed to refer to the
Rights Agreement as amended hereby.
9. The
Amendment may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
10. This
Amendment may be executed by facsimile signature.
11. This
Amendment shall be deemed to be a contract made under the laws of the State
of
Michigan 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.
[Signature
Page Follows]
3
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed, all as of the day and year first above written.
PERCEPTRON,
INC.
|
AMERICAN
STOCK TRANSFER &
TRUST
COMPANY
|
||
By:
|
/s/
Xxxxx X.
Xxxxx
|
By:
|
/s/
Xxxxxxx X.
Xxxxxx
|
Xxxxx
X. Xxxxx
|
Name:
|
Xxxxxxx
X. Xxxxxx
|
|
Vice
President and General Counsel
|
Title:
|
Vice
President
|
4
EXHIBIT B
[Form
of Rights Certificate]
Certificate No. R |
______________
Rights
|
NOT
EXERCISABLE AFTER MARCH 23, 2018 OR EARLIER IF NOTICE OF REDEMPTION OR EXCHANGE
IS GIVEN OR UPON THE CONSUMMATION OF CERTAIN OTHER TRANSACTIONS SPECIFIED IN
SECTION 13(d) OF THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION,
AT
THE OPTION OF THE COMPANY, AT $.001 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN
SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
Right
Certificate
PERCEPTRON,
INC.
This
certifies that ,
or
registered assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement dated as of March 24, 1998,
as
amended on March 17, 2008 (the “Rights Agreement”), between Perceptron, Inc., a
Michigan corporation (the “Company”), and American Stock Transfer & Trust
Company (the “Rights Agent”), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to
5:00 P.M. (Detroit, Michigan time) on March 23, 2018 at the office of the Rights
Agent, or its successors as Rights Agent, in New York, New York, one
one-hundredth of a fully paid non-assessable share of the Series A Preferred
Stock, no par value (the “Preferred Stock”), of the Company, at a purchase price
of $73.00 per one one-hundredth of a 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 shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth above,
are
the number and Purchase Price as of March 17, 2008 based on the Preferred Stock
of the Company as constituted at such date.
* The
portion of the legend in brackets shall be inserted only if
applicable.
B-1
Upon
the
occurrence of a Triggering Event (as such term is defined in the Rights
Agreement), if the Rights evidenced by this Rights Certificate are beneficially
owned by (i) an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights Agreement), (ii)
a
transferee of any such Acquiring Person, Associate or Affiliate, or (iii) under
certain circumstances specified in the Rights Agreement, a transferee of a
person who, after such transfer, became an Acquiring Person, or an Affiliate
or
Associate of an Acquiring Person, such Rights shall become null and void and
no
holder hereof shall have any right with respect to such Rights from and after
the occurrence of such Triggering Event.
As
provided in the Rights Agreement, the Purchase Price and the number and kind
of
shares of Preferred Stock or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This
Right Certificate is subject to all of the terms, provisions and conditions
of
the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and 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 above-mentioned office 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 one one-hundredths
of a share of Preferred Stock as the Rights evidenced by the Right Certificate
or Right Certificates surrendered shall have entitled such holder to purchase.
If this Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Company at its option at a redemption price
of $.001 per Right or may be called for exchange for newly issued shares of
Common Stock or Preferred Stock.
No
fractional shares of Preferred Stock 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 share of Preferred Stock which may, at
the
election of the Company, be evidenced by depository 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 Stock 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.
B-2
This
Right Certificate shall not be valid or obligatory for any purpose until it
shall have been countersigned by the Rights Agent.
WITNESS
the facsimile signature of the proper officers of the Company and its corporate
seal. Dated as of ,
_____.
ATTEST:
Secretary
Countersigned:
By
Authorized
Signature
|
PERCEPTRON,
INC
By
Title:
|
B-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 Certificates.)
FOR
VALUE
RECEIVED hereby
sells, assigns and sells, assigns and transfers unto
(Please
print name and address of transferee)
this
Right Certificate, together with all right, title and interest therein, and
does
hereby irrevocably constitute and appoint
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ,
|
Signature
|
Signature
Guaranteed:
Certificate
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1) the
Rights evidenced by this Right Certificate [ ] are [ ]
are not being sold, assigned and transferred by or on behalf of a Person who
is
or was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after
due
inquiry and to the best knowledge of the undersigned, it [ ] did
[ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ,
|
Signature
|
B-4
NOTICE
The
signature to the foregoing Assignment and Certificate must correspond to the
name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.
FORM
OF ELECTION TO PURCHASE
(To
be
executed if holder desires to exercise the Rights represented by the Right
Certificate.)
To
_______________________:
The
undersigned hereby irrevocably elects to exercise
Rights
represented by this Right Certificate to purchase the shares of the one
one-hundredths of a share of Series A Preferred Stock (or, in certain
circumstances, a combination of cash, other property, Preferred Stock, Common
Stock, and/or other securities) upon the exercise of such Rights and requests
that certificates for such shares be issued in the name of:
Please
insert social security
or
other
identifying number
(Please
print name and address)
If
such
number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please
insert social security
or
other
identifying number
(Please
print name and address)
Dated:
____________, _____
|
Signature
(Signature
must conform in all respects to
name
of holder as specified on the face of
this
Right Certificate)
|
Signature
Guaranteed:
B-5
Certificate
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1) the
Rights evidenced by this Right Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after
due
inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: , | ______________________________
Signature
|
NOTICE
The
signature to the foregoing Election to Purchase and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change
whatsoever.
B-6
EXHIBIT
C
SUMMARY
OF RIGHTS TO PURCHASE
PREFERRED
STOCK
On
March
23, 1998, the Board of Directors of Perceptron, Inc. (the “Company”) declared a
dividend distribution of one Right for each outstanding share of Common Stock,
$.01 par value (the “Common Stock”), of the Company. The distribution was paid
to the Company’s shareholders of record on April 6, 1998 (the “Record Date”) on
April 8, 1998.
Effective
March 17, 2008, the Board of Directors of the Company amended the Rights. This
Summary describes the terms of the Rights, as amended. Each Right entitles
the
registered holder to purchase from the Company one one-hundredth of a share
of
Series A Preferred Stock, no par value (the “Preferred Stock”) at a price of
$73.00 per one one-hundredth of a share (the “Purchase Price”), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the “Rights Agreement”) between the Company and American Stock
Transfer & Trust Company, as Rights Agent (the “Rights Agent”), as
amended.
Until
the
earlier to occur of (i) ten business days following a public announcement that
a
person or group of affiliated or associated persons (an “Acquiring Person”)
acquired, or obtained the right to acquire, beneficial ownership of 15% or
more
of the outstanding shares of the Common Stock (such public announcement date
being the “Shares Acquisition Date”) (or, if pursuant to a Permitted Offer (as
defined below) such later date as fixed by the Board of Directors with the
concurrence of the Continuing Directors) or (ii) ten business days (or such
later date as may be determined by the Board of Directors, with the concurrence
of a majority of the Continuing Directors, prior to such time as any person
becomes an Acquiring Person) following the commencement or announcement of
an
intention to commence a tender offer or exchange offer by any person if, upon
consummation thereof, such person would be an Acquiring Person, other than
as a
result of a Permitted Offer (as defined below), (the earlier of such dates
being
called the “Distribution Date”), the Rights are, with respect to any of the
Common Stock certificates outstanding as of April 6, 1998, evidenced by such
Common Stock certificate. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the Common
Stock. Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), new Common Stock certificates issued after April
6,
1998 upon transfer or new issuance of the Common Stock will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date
(or
earlier redemption, exchange or expiration of the Rights), the surrender for
transfer of any of the Common Stock certificates outstanding as of April 6,
1998
or issued thereafter will also constitute the transfer of the Rights associated
with the 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. Subject to certain
adjustments as may be required by the Rights Agreement, the Company will issue
one Right with each new share of Common Stock issued until the Distribution
Date
so that all shares will have attached Rights. No person shall be deemed to
be an
Acquiring Person on account of shares of Common Stock beneficially owned by
such
person on March 23, 1998 unless thereafter they become the beneficial owner
of
any additional shares of Common Stock.
C-1
A
“Continuing Director” is a member of the Board of Directors of the Company who
is not an Acquiring Person or an affiliated or associated person of an Acquiring
Person and who was a member of the Board prior to the Shares Acquisition Date
(as defined above) or subsequently became a member of the Board and whose
nomination for election or election to the Board was recommended or approved
by
a majority of the Continuing Directors then on the Board. At least two
Continuing Directors must approve of, or concur on, any action requiring the
approval or concurrence of Continuing Directors.
The
Rights are not exercisable until the Distribution Date, and, if later, the
expiration of the Company’s right to redeem the Rights. The Rights will expire
on March 23, 2018, unless earlier redeemed or called for exchange by the Company
as described below or their earlier expiration upon the consummation of certain
transactions as described below.
The
Preferred Stock will be nonredeemable and will be junior to any other class
of
preferred stock. Each share of Preferred Stock will be entitled to receive
when,
as and if declared, a quarterly dividend equal to the greater of $1.00 or 100
times the per share value of any dividend (other than stock dividends) declared
on the Common Stock since the immediately preceding quarterly dividend payment
date. In the event of liquidation, the holders of the Preferred Stock generally
will be entitled to receive a liquidation payment in an amount equal to $100.00
per share of Preferred Stock plus all accrued and unpaid dividends thereon,
and,
after the holders of Common Stock have received a liquidation payment in an
amount equal to $1.00 per share, holders of the Preferred Stock and the Common
Stock shall receive their ratable and proportionate share of the remaining
assets to be distributed, with the holders of Preferred Stock entitled to
receive an aggregate per share amount equal to 100 times the aggregate amount
to
be distributed per share to holders of shares of Common Stock. Each share of
Preferred Stock will be entitled to 100 votes per share voting together with
the
Common Stock. In the event of any merger, consolidation or other transaction
in
which the Common Stock is exchanged, each share of Preferred Stock will be
entitled to receive 100 times the amount received per share of Common Stock.
The
rights of the Preferred Stock as to dividends, voting and liquidation
preferences are protected by anti-dilution provisions.
The
Purchase Price payable, and the number of shares of the 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 shares of the Preferred Stock or convertible
securities at less than the 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 out of
earnings or retained earnings at a rate not in excess of 125% of the rate of
the
last cash dividend theretofore paid or a dividend paid in the 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 such Purchase
Price.
C-2
Prior
to
a Triggering Event, fractional shares of the Preferred Stock will not be issued
(other than fractions which are integral multiples of one one-hundredths of
a
share of Preferred Stock) and, in lieu thereof, an adjustment in cash will
be
made equal to the same fraction of the current market value of one one-hundredth
of a share of Preferred Stock. Following the occurrence of a Triggering Event,
the Company shall not be required to issue fractions of shares of Common Stock
and, in lieu thereof, an adjustment in cash will be made equal to the same
fraction of the current market value of one share of Common Stock.
In
the
event that (i) the Company were the surviving corporation in a merger or other
combination with an Acquiring Person or affiliated or associated persons of
an
Acquiring Person and its Common Stock were not changed or exchanged; or (ii)
an
Acquiring Person engages in one of a number of self-dealing transactions
specified in the Rights Agreement; or (iii) in certain circumstances, an
Acquiring Person becomes the beneficial owner of 15% or more of the outstanding
shares of Common Stock (except pursuant to a tender or exchange offer for all
outstanding shares at a price and on terms determined by a majority of the
Continuing Directors, prior to the consummation of the offer, after receiving
advice from an investment banking firm selected by a majority of such Continuing
Directors, to be a price that is fair to shareholders and in the best interests
of the Company and its shareholders (a “Permitted Offer”)), or (iv) during such
time as there is an Acquiring Person, there shall occur certain failures to
pay,
or reductions in, dividends on outstanding common or preferred stock of the
Company or a recapitalization of the Company which has the effect of increasing
the Acquiring Person’s proportionate share of the outstanding Common Stock by
more than 1%, then proper provision shall be made so that each holder of a
Right, other than Rights that were or are beneficially owned by the Acquiring
Person (which will thereafter be void), shall thereafter have the right to
receive upon exercise that number of shares of the Common Stock (or, in certain
circumstances, a combination of cash, other property, Preferred Stock, Common
Stock and/or other securities) having a market value of two times the exercise
price of the Right.
Following
the Distribution Date, in the event (i) that the Company were acquired in a
merger or other business combination transaction in connection with which the
Company is not the continuing or surviving corporation or in which all or a
part
of the Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property (other than certain
mergers and combinations with an Acquiring Person who becomes such in a
Permitted Offer if the price per share of Common Stock offered in such
transaction is no less than the price per share of Common Stock paid to all
holders in the Permitted Offer tender or exchange offer and the form of
consideration being offered in such transaction is the same as the form of
consideration paid in the Permitted Offer tender or exchange offer (a “Permitted
Combination”)); or (ii) that 50% or more of the Company’s assets or earning
power were sold, then proper provision shall be made so that each holder of
a
Right, other than Rights that were or are beneficially owned by the Acquiring
Person (which will thereafter be void), shall thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the Acquiring Person which
at
the time of such transaction would have a market value of two times the exercise
price of the Right. Upon the consummation of a Permitted Combination, all rights
shall expire. Each of the events described in this paragraph constitutes a
“Triggering Event” under the Rights Agreement.
C-3
At
any
time after any Person becomes an Acquiring Person but prior to the time such
Acquiring Person has acquired 50% or more of the outstanding Common Stock,
the
Board (with the concurrence of a majority of the Continuing Directors) may
cause
shareholders to exchange all or part of their Rights for shares of Common Stock
or Preferred Stock at a ratio of one share of Common Stock or one one-hundredth
of a share of Preferred Stock per Right, subject to adjustment. As soon as
the
Board has determined to make such exchange, the Rights may no longer be
exercised.
At
any
time prior to a person or group of affiliated or associated persons becoming
an
Acquiring Person (or, if pursuant to a Permitted Offer (as defined below) such
later date as fixed by the Board of Directors with the concurrence of the
Continuing Directors), the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.001 per Right (the “Redemption
Price”); provided that if, such redemption occurs on or after the date of a
change (resulting from a proxy or consent solicitation effected in compliance
with applicable law and the requirements of any national securities exchange
on
which the Common Stock of the Company is listed or The Nasdaq Global Market,
if
the Common Stock is listed on such stock market) in a majority of the directors
in office at the commencement of such solicitation if any person who is a
participant in such solicitation has stated (or, if upon the commencement of
such solicitation, a majority of the Board of Directors has determined in good
faith) that such person (or any affiliated or associated persons) intends to
take, or may consider taking, any action which would result in such person
becoming an Acquiring Person or which would cause the occurrence of a Triggering
Event, unless, concurrent with such solicitation, such person is making a
Permitted Offer, (a “Special Proxy Contest”), the Board shall be entitled to
redeem the Rights, or delay the expiration of its right to redeem the Rights
as
set forth above, only if such redemption or delay is approved by a majority
of
the Continuing Directors who were members of the Board of Directors prior to
the
proxy or consent solicitation referred to above (or subsequently became a member
of the Board of Directors and whose nomination for election or election thereto
was recommended or approved by a majority of the Redemption Continuing
Directors) (the “Redemption Continuing Directors”) and the Redemption Continuing
Directors constitute a majority of the Board of Directors. Thereafter, the
Company’s right of redemption may be reinstated, prior to a Triggering Event,
(i) if an Acquiring Person reduces his beneficial ownership to less than 15%
of
the outstanding shares of Common Stock in a transaction or series of
transactions not involving the Company; and (ii) there are no other Persons,
immediately following the event described in clause (i), who are Acquiring
Persons. Additionally, the Board of Directors may at any time prior to the
occurrence of a Triggering Event, redeem the then outstanding Rights in whole,
but not in part, at the Redemption Price, if such redemption is in connection
with the consummation of a merger or other business combination involving the
Company but not involving an Acquiring Person or its Affiliates or Associates
which is determined to be in the best interests of the Company and its
shareholders by a majority of the Continuing Directors. Immediately upon the
action of the Board of Directors of the Company electing to redeem the Rights,
the Company shall make announcement thereof, and upon such election, the right
to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
C-4
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.
The
Rights Agreement may be amended without shareholder approval prior to the
Distribution Date at the Board of Directors’ discretion (and after the Shares
Acquisition Date, only with the concurrence of a majority of the Continuing
Directors and only if the Continuing Directors constitute a majority of the
directors then in office and, after a Special Proxy Contest, only with the
concurrence of a majority of the Redemption Continuing Directors and only if
the
Redemption Continuing Directors constitute a majority of the directors then in
office). After the Distribution Date, the Board of Directors (with the
concurrence of a majority of the Continuing Directors and only if the Continuing
Directors constitute a majority of the directors then in office) generally
may
amend the Rights Agreement without the consent of the Rights holders to cure
any
ambiguity, correct defects or inconsistencies, shorten or lengthen time periods
or supplement or change any other provision which shall not adversely affect
the
Rights holders; provided that the lengthening of any time period is for the
purpose of protecting, enhancing or clarifying the rights of, and/or for the
benefit of the holders of the Rights (other than the Acquiring Person and its
affiliated and associated persons). However, if the Rights are not then
redeemable, the Board may not lengthen a time period relating to when the Rights
may be redeemed.
A
copy of
the Rights Agreement, as amended, has been filed with the Securities and
Exchange Commission as an Exhibit to the report on Form 8-K filed on March
25,
1998, and as an Exhibit to Form 8-A/A, dated March 20, 2008. A copy of the
Rights Agreement is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified
in
its entirety by reference to the Rights Agreement, which is hereby incorporated
herein by reference.
C-5