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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20569
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
VARIAN ASSOCIATES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 94-2359345
- -------------------------------------------------- -----------------------
(State of incorporation or organization) (IRS Employer
Identification No.)
3050 Hansen Way
Palo Alto, CA 94304-1000
- -------------------------------------------------- -----------------------
(Address of principal executive offices) (Zip Code)
If this Form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), please check the following box. [X]
If this Form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), please check the following box. [_]
Securities Act registration statement file number to which this form relates:
N/A
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
To be so registered each class is to be registered
- ------------------- -----------------------------
Preferred Stock Purchase Rights New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
- --------------------------------------------------------------------------------
(Title of Class)
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Item 1. Description of Registrant's Securities to be Registered.
-------------------------------------------------------
On November 20, 1998, the Board of Directors of Varian Associates,
Inc., a Delaware corporation (the "Company"), declared a dividend of one right
(a "Right") for each outstanding share of common stock, par value $1 per share
("Common Stock"), of the Company held of record at the close of business on
December 4, 1998 (the "Record Time"), or issued thereafter and prior to the
Separation Time (as hereinafter defined) and thereafter pursuant to options and
convertible or exchangeable securities outstanding at the Separation Time. The
Rights will be issued pursuant to a Rights Agreement, dated as of November 20,
1998 (the "Rights Agreement"), between the Company and First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agent"). Each Right entitles
its registered holder to purchase from the Company, after the Separation Time,
one one-thousandth of a share of Participating Preferred Stock, par value $1 per
share ("Preferred Stock"), for $180.00 (the "Exercise Price"), subject to
adjustment. The Preferred Stock is designed so that each one one-thousandth of
a share of Preferred Stock has economic and voting terms similar to those of one
share of Common Stock.
The Rights will be evidenced by the Common Stock certificates until
the close of business on the earlier of (either, the "Separation Time") (i) the
tenth business day (or such later date as the Board of Directors of the Company
may from time to time fix by resolution adopted prior to the Separation Time
that would otherwise have occurred) after the date on which any Person (as
defined in the Rights Agreement) commences a tender or exchange offer which, if
consummated, would result in such Person's becoming an Acquiring Person, as
defined below, and (ii) the first date (the "Flip-in Date") of public
announcement by the Company or an Acquiring Person that a Person has become an
Acquiring Person; provided that if the foregoing results in the Separation Time
--------
being prior to the Record Time, the Separation Time shall be the Record Time;
and provided further that if a tender or exchange offer referred to in clause
----------------
(i) is cancelled, terminated or otherwise withdrawn prior to the Separation Time
without the purchase of any shares of stock pursuant thereto, such offer shall
be deemed never to have been made.
An Acquiring Person is any Person having Beneficial Ownership (as
defined in the Rights Agreement) of 15% or more of the outstanding shares of
Voting Stock, which term shall not include (i) the Company, any wholly-owned
subsidiary of the Company or any employee stock ownership or other employee
benefit plan of the Company or any wholly-owned subsidiary of the Company, (ii)
any person who is the Beneficial Owner of 15% or more of the outstanding Voting
Stock as of the date of the Rights Agreement or who shall become the Beneficial
Owner of 15% or more of the outstanding Voting Stock solely as a result of an
acquisition of Voting Stock by the Company, until such time as such Person
acquires additional Voting Stock, other than through a dividend or stock split,
or (iii) any Person who Beneficially Owns shares of Voting Stock consisting
solely of (A) shares of Voting Stock acquired pursuant to the grant or exercise
of an option granted by the Company in connection with an agreement to merge
with, or acquire, the Company at a time at which there is no Acquiring Person,
(B) shares of Voting Stock owned by such Person and its Affiliates and
Associates at the time of such grant and (C) shares of Voting Stock, amounting
to less than 1% of the outstanding Voting Stock, acquired by Affiliates and
Associates of such Person after the time of such grant. Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good faith
that a Person who would otherwise be an "Acquiring Person," as defined pursuant
to the foregoing, has become such inadvertently, and such Person divests as
promptly as practicable a
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sufficient number of shares of Common Stock so that such Person would no longer
be an "Acquiring Person," as defined pursuant to such foregoing, then such
Person shall not be deemed to be an "Acquiring Person" for any purposes of the
Rights Agreement. "Voting Stock" means shares of capital stock of the Company
entitled to vote generally in the election of directors.
The Rights Agreement provides that, until the Separation Time, the
Rights will be transferred with and only with the Common Stock. Common Stock
certificates issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
contain a legend incorporating by reference the terms of the Rights Agreement
(as such may be amended from time to time). Notwithstanding the absence of the
legend, certificates evidencing shares of Common Stock outstanding at the Record
Time shall also evidence one Right for each share of Common Stock evidenced
thereby. Promptly following the Separation Time, separate certificates
evidencing the Rights ("Rights Certificates") will be mailed to holders of
record of Common Stock at the Separation Time.
The Rights will not be exercisable until the Business Day (as defined
in the Rights Agreement) following the Separation Time. The Rights will expire
on the earliest of (i) the Exchange Time (as defined below), (ii) the close of
business on December 4, 2008, (iii) the date on which the Rights are redeemed as
described below and (iv) upon the merger of the Company into another corporation
pursuant to an agreement entered into when there is no Acquiring Person (in any
such case, the "Expiration Time").
The Exercise Price and the number of Rights outstanding, or in certain
circumstances the securities purchasable upon exercise of the Rights, are
subject to adjustment from time to time to prevent dilution in the event of a
Common Stock dividend on, or a subdivision or a combination into a smaller
number of shares of, Common Stock, or the issuance or distribution of any
securities or assets in respect of, in lieu of or in exchange for Common Stock.
In the event that prior to the Expiration Time a Flip-in Date occurs,
the Company shall take such action as shall be necessary to ensure and provide
that each Right (other than Rights Beneficially Owned by the Acquiring Person or
any affiliate or associate thereof, which Rights shall become void) shall
constitute the right to purchase from the Company, upon the exercise thereof in
accordance with the terms of the Rights Agreement, that number of shares of
Common Stock or Preferred Stock of the Company having an aggregate Market Price
(as defined in the Rights Agreement), on the date of the public announcement of
an Acquiring Person's becoming such (the "Stock Acquisition Date") that gave
rise to the Flip-in Date, equal to twice the Exercise Price for an amount in
cash equal to the then current Exercise Price.
In addition, the Board of Directors of the Company may, at its option,
at any time after a Flip-in Date and prior to the time that an Acquiring Person
becomes the Beneficial Owner of more than 50% of the outstanding shares of
Voting Stock, elect to exchange all or part of the then outstanding Rights
(other than Rights Beneficially Owned by the Acquiring Person or any affiliate
or associate thereof, which Rights become void) 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 of the Separation Time (the "Exchange Ratio"). Immediately upon such
action by the Board of Directors (the
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"Exchange Time"), the right to exercise the Rights will terminate and each Right
will thereafter represent only the right to receive a number of shares of Common
Stock equal to the Exchange Ratio.
Whenever the Company shall become obligated to issue shares of Common
Stock upon exercise of or in exchange for Rights, the Company, at its option,
may substitute therefor shares of Preferred Stock, at a ratio of one one-
thousandth of a share of Preferred Stock for each share of Common Stock so
issuable.
In the event that prior to the Expiration Time the Company enters
into, consummates or permits to occur a transaction or series of transactions
after the time an Acquiring Person has become such in which, directly or
indirectly, (i) the Company shall consolidate or merge or participate in a
binding share exchange with any other Person if, at the time of the
consolidation, merger or share exchange or at the time the Company enters into
an agreement with respect to such consolidation, merger or share exchange, the
Acquiring Person controls the Board of Directors of the Company, or (ii) the
Company shall sell or otherwise transfer (or one or more of its subsidiaries
shall sell or otherwise transfer) directly or by sale of stock, assets or
control of assets (A) aggregating more than 50% of the assets (measured by
either book value or fair market value) as of the end of the most recently
completed fiscal year or (B) generating more than 50% of the operating income or
cash flow during the most recently completed fiscal year, 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 to two or more such Persons
which are affiliated or otherwise acting in concert, if, at the time of such
sale or transfer of assets or at the time the Company (or any such subsidiary)
enters into an agreement with respect to such sale or transfer, the Acquiring
Person controls the Board of Directors of the Company, then any such
transactions or events shall constitute a "Flip-over Transaction or Event" under
the Rights Agreement.
The Company shall take such action as shall be necessary to ensure,
and shall not enter into, consummate or permit to occur, such Flip-over
Transaction or Event until it shall have duly entered into a binding and
enforceable supplemental agreement with the Person engaging in such Flip-over
Transaction or Event or the parent corporation thereof (the "Flip-over Entity"),
for the benefit of the holders of the Rights, providing, that upon consummation
or occurrence of the Flip-over Transaction or Event (i) each Right shall
thereafter constitute the right to purchase from the Flip-over Entity, upon
exercise thereof in accordance with the terms of the Rights Agreement, that
number of shares of common stock of the Flip-over Entity having an aggregate
Market Price on the date of consummation or occurrence of such Flip-over
Transaction or Event equal to twice the Exercise Price for an amount in cash
equal to the then current Exercise Price and (ii) the Flip-over Entity shall
thereafter be liable for, and shall assume, by virtue of such Flip-over
Transaction or Event and such supplemental agreement, all the obligations and
duties of the Company pursuant to the Rights Agreement, but the Company's
obligations under the Rights Agreement will not be discharged and will continue
in full. For purposes of the foregoing description, the term "Acquiring Person"
shall include any Acquiring Person and its Affiliates and Associates and others
with whom it is acting in concert counted together as a single Person.
The Board of Directors of the Company may, at its option, at any time
prior to the close of business on the Flip-in Date, redeem all (but not less
than all) the then outstanding
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Rights at a price of $0.001 per Right (the "Redemption Price"), as provided in
the Rights Agreement. Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights, without any further action and
without any notice, the right to exercise the Rights will terminate and each
Right will thereafter represent only the right to receive the Redemption Price
in cash for each Right so held.
The holders of Rights will, solely by reason of their ownership of
Rights, have no rights as stockholders of the Company, including without
limitation, the right to vote or to receive dividends.
The Rights have certain anti-takeover effects and can cause
substantial dilution to a person or group that acquires 15% of more of the
Common Stock on terms not approved by the Board of Directors of the Company.
The Rights should not, however, interfere with any merger or other business
combination that the Board finds to be in the best interests of the Company and
its stockholders because the Rights can be redeemed by the Board on or prior to
the close of business on the Flip-in Date, before the consummation of such
transaction.
As of November 19, 1998, there were approximately 29,892,426 shares of
Common Stock issued and outstanding. As long as the Rights are attached to the
Common Stock, the Company will issue one Right with each new share of Common
Stock so that all such shares will have Rights attached.
The Rights Agreement, the forms of Rights Certificate and Election to
Exercise and the form of Certificate of Designation and Terms of the
Participating Preferred Stock are attached hereto as exhibits and are
incorporated herein by reference. The foregoing description of the Rights is
qualified in its entirety by reference to such exhibits.
Item 2. Exhibits.
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Exhibit No. Description
- ---------- -----------
(1) Rights Agreement, dated as of November 20, 1998 (the "Rights
Agreement"), between Varian Associates, Inc. and First
Chicago Trust Company of New York, as Rights Agent, including
the forms of Rights Certificate and of Election to Exercise,
attached as Exhibit A to the Rights Agreement, and the form
of Certificate of Designation and Terms of Participating
Preferred Stock of the Company, attached as Exhibit B to the
Rights Agreement.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized.
VARIAN ASSOCIATES, INC.
By: /s/ Joseph B. Phair
--------------------------------------
Name: Joseph B. Phair
Title: Vice President, General Counsel
and Secretary
Dated: November 23, 1998
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EXHIBIT INDEX
Exhibit No. Description
- ---------- -----------
(1) Rights Agreement, dated as of November 20, 1998 (the "Rights
Agreement"), between Varian Associates, Inc. and First
Chicago Trust Company of New York, as Rights Agent,
including the forms of Rights Certificate and of Election to
Exercise, attached as Exhibit A to the Rights Agreement and
the form of Certificate of Designation and Terms of
Participating Preferred Stock of the Company, attached as
Exhibit B to the Rights Agreement.
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EXHIBIT 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RIGHTS AGREEMENT
dated as of
November 20, 1998
between
VARIAN ASSOCIATES, INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
as Rights Agent
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
ARTICLE I CERTAIN DEFINITIONS...............................................................2
1.1 Certain Definitions...................................................................2
ARTICLE II THE RIGHTS.......................................................................10
2.1 Summary of Rights....................................................................10
2.2 Legend on Common Stock Certificates..................................................10
2.3 Exercise of Rights; Separation of Rights.............................................11
2.4 Adjustments to Exercise Price; Number of Rights......................................14
2.5 Date on Which Exercise is Effective..................................................16
2.6 Execution, Authentication, Delivery and Dating of Rights Certificates................17
2.7 Registration, Registration of Transfer and Exchange..................................17
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates............................19
2.9 Persons Deemed Owners................................................................20
2.10 Delivery and Cancellation of Certificates............................................20
2.11 Agreement of Rights Holders..........................................................21
ARTICLE III ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS...................22
3.1 Flip-in ............................................................................22
3.2 Flip-over............................................................................25
ARTICLE IV THE RIGHTS AGENT.................................................................27
4.1 General..............................................................................27
4.2 Merger or Consolidation or Change of Name of Rights Agent............................28
4.3 Duties of Rights Agent...............................................................29
4.4 Change of Rights Agent...............................................................32
ARTICLE V MISCELLANEOUS....................................................................33
5.1 Redemption...........................................................................33
5.2 Expiration...........................................................................34
5.3 Issuance of New Rights Certificates..................................................34
5.4 Supplements and Amendments...........................................................35
5.5 Fractional Rights and Fractional Shares..............................................36
5.6 Rights of Action.....................................................................38
5.7 Holder of Rights Not Deemed a Stockholder............................................38
5.8 Notice of Proposed Actions...........................................................39
5.9 Notices..............................................................................39
5.10 Suspension of Exercisability.........................................................40
5.11 Costs of Enforcement.................................................................41
5.12 Successors...........................................................................41
5.13 Benefits of this Agreement...........................................................41
5.14 Determination and Actions by the Board of Directors, Etc.............................41
</TABLE>
-i-
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
Page
<S> <C>
5.15 Descriptive Headings.................................................................42
5.16 Governing Law........................................................................42
5.17 Counterparts.........................................................................42
5.18 Severability.........................................................................42
5.19 Book-Entry Account Statements........................................................43
EXHIBIT A Form of Rights Certificate
(Together with Form of Election to Exercise).....................................A-1
EXHIBIT B Form of Certificate of Designation and
Terms of Participating Preferred Stock of
Varian Associates, Inc...........................................................B-1
</TABLE>
-ii-
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RIGHTS AGREEMENT
RIGHTS AGREEMENT (as amended from time to time, this "Agreement"),
dated as of November 20, 1998, between Varian Associates, Inc., a Delaware
corporation (the "Company"), and First Chicago Trust Company of New York, as
Rights Agent (the "Rights Agent," which term shall include any successor Rights
Agent hereunder).
WITNESSETH:
WHEREAS, the Board of Directors of the Company has (a) authorized and
declared a dividend of one right ("Right") in respect of each outstanding share
of Common Stock (as hereinafter defined) held of record as of the close of
business on December 4, 1998 (the "Record Time") and (b) authorized the issuance
of one Right in respect of each share of Common Stock issued after the Record
Time and prior to the Separation Time (as hereinafter defined) and, to the
extent provided in Section 5.3, each share of Common Stock issued after the
Separation Time;
WHEREAS, subject to the terms hereof, each Right entitles the holder
thereof, after the Separation Time, to purchase securities of the Company (or,
in certain cases, of certain other entities) pursuant to the terms and subject
to the conditions set forth herein; and
WHEREAS, the Company desires to appoint the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing so to act, in connection
with the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein;
<PAGE>
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. For purposes of this Agreement, the following
-------------------
terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is Beneficial Owner of
15% or more of the outstanding shares of Voting Stock (as hereinafter defined);
provided, however, that the term "Acquiring Person" shall not include (i) any
Person who is the Beneficial Owner of 15% or more of the outstanding shares of
Common Stock on the date of this Agreement or who shall become the Beneficial
Owner (as hereinafter defined) of 15% or more of the outstanding shares of
Voting Stock solely as a result of an acquisition by the Company of shares of
Voting Stock, until such time hereafter or thereafter as any of such Persons
shall become the Beneficial Owner (other than by means of a stock dividend or
stock split) of any additional shares of Voting Stock, (ii) any Person who
Beneficially Owns shares of Voting Stock consisting solely of one or more of (A)
shares of Voting Stock Beneficially Owned pursuant to the grant or exercise of
an option granted to such Person by the Company in connection with an agreement
to merge with, or acquire, the Company at a time at which there is no Acquiring
Person, (B) shares of Voting Stock (or securities convertible into, exchangeable
into or exercisable for Voting Stock), Beneficially Owned by such Person or its
Affiliates (as hereinafter defined) or Associates (as hereinafter defined) at
the time of grant of such option or (C) shares of Voting Stock (or securities
convertible into, exchangeable into or exercisable for Voting Stock) acquired by
Affiliates or Associates of such Person after the time of
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such grant, which, in the aggregate, amount to less than 1% of the outstanding
shares of Voting Stock, or (iii) the Company, any wholly owned Subsidiary (as
hereinafter defined) of the Company, and any employee stock ownership or other
employee benefit plan of the Company or a wholly owned Subsidiary of the
Company. Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this definition of
"Acquiring Person," has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of shares of Common Stock so that
such Person would no longer be an "Acquiring Person," as defined pursuant to
such foregoing provisions of this definition of "Acquiring Person," then such
Person shall not be deemed to be an "Acquiring Person" for any purposes of this
Agreement.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Securities Exchange Act of 1934,
as such Rule is in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner," and to have
"Beneficial Ownership" of, and to "Beneficially Own," any securities as to which
such Person or any of such Person's Affiliates or Associates is or may be deemed
to be the beneficial owner pursuant to Rule 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, as such Rules are in effect on the date of this Agreement,
as well as any securities as to which such Person or any of such Person's
Affiliates or Associates has the right to become the Beneficial Owner (whether
such right is exercisable immediately or only after the passage of time or the
occurrence of conditions) pursuant to any agreement, arrangement
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or understanding, or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner," or to have
"Beneficial Ownership" of, or to "Beneficially Own," any security (i) solely
because such security has been tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's affiliates or Associates until such
tendered security is accepted for payment or exchange or (ii) solely because
such Person or any of such Person's Affiliates or Associates has or shares the
power to vote or direct the voting of such security pursuant to a revocable
proxy given in response to a public proxy or consent solicitation made to
holders of shares of a class of stock of the Company registered under Section 12
of the Securities Exchange Act of 1934, and pursuant to, and in accordance with,
the applicable rules and regulations under the Securities Exchange Act of 1934,
except if such power, (or the arrangements relating thereto) is then reportable
under Item 6 of Schedule 13D under the Securities Exchange Act of 1934 (or any
similar provision of a comparable or successor report). For purposes of the
Agreement, in determining the percentage of the outstanding shares of Voting
Stock with respect to which a Person is the Beneficial Owner, all shares as to
which such Person is deemed the Beneficial Owner shall be deemed outstanding.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the City of New York are generally
authorized or obligated by law or executive order to close.
"Close of business" on any given date shall mean 5:00 P.M., California
time, on such date or, if such date is not a Business Day, 5:00 P.M., California
time, on the next succeeding Business Day.
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"Common Stock" shall mean the shares of Common Stock, par value $1 per
share, of the Company.
"Control" or "control" shall mean the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.
"Exchange Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at which a
holder may purchase the securities issuable upon exercise of one whole Right.
Until adjustment thereof in accordance with the terms hereof, the Exercise Price
shall equal $180.
"Expiration Time" shall meant the earliest of (i) the Exchange Time,
(ii) the Redemption Time (as hereinafter defined), (iii) the close of business
on the tenth-year anniversary of the Record Time and (iv) upon the merger of the
Company into another corporation pursuant to an agreement entered into when
there is no Acquiring Person.
"Flip-in Date" shall mean any Stock Acquisition Date (as hereinafter
defined) or such earlier or later date as the Board of Directors of the Company
may from time to time fix by resolution adopted prior to the Flip-in Date that
would otherwise have occurred.
"Flip-over Entity," for purposes of Section 3.2, shall mean (i) in the
case of Flip-over Transaction or Event (as hereinafter defined) described in
clause (i) of the definition thereof, the Person issuing any securities into
which shares of Common Stock are being converted or exchanged and, if no such
securities are being issued, the other party to such Flip-over Transaction or
Event and (ii) in the case of Flip-over Transaction
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or Event referred to in clause (ii) of the definition thereof, the Person
receiving the greatest portion of the assets or earning power being transferred
in such Flip-over Transaction or Event, provided in all cases if such Person is
a subsidiary of a corporation, the parent corporation shall be the Flip-over
Entity.
"Flip-over Stock" shall mean the class of capital stock (or similar
equity interest) with the greatest voting power in respect of the election of
directors (or other persons similarly responsible for direction of the business
and affairs) of the Flip-over Entity.
"Flip-over Transaction or Event" shall mean a transaction or series of
transactions after the time when an Acquiring Person has become such in which,
directly or indirectly, (i) the Company shall consolidate or merge or
participate in a share exchange with any other Person if, at the time of the
consolidation, merger or share exchange or at the time the Company enters into
any agreement with respect to any such conciliation, merger or share exchange,
the Acquiring Person controls the Board of Directors of the Company, or (ii) the
company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer) directly or by sale of stock, assets or
control of assets (A) aggregating more than 50% of the assets (measured by
either book value or fair market value) as of the end of the more recently
completed fiscal year or (B) generating more than 50% of the operating income or
cash flow during the more recently completed fiscal year, of the Company and its
Subsidiaries (taken as a whole) to any Person (other than the Company or one or
more of its wholly owned Subsidiaries) or to two or more such Persons which are
Affiliates or Associates or otherwise acting in concert, if, at the time of the
entry by the Company (or any such Subsidiary) into an
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agreement with respect to such sale or transfer of assets, the Acquiring Person
controls the Board of Directors of the Company. For purposes of the foregoing
description, the term "Acquiring Person" shall include any Acquiring Person and
its Affiliates and Associates and others acting directly or indirectly on behalf
of or in concert with any such Acquiring Person, Affiliate or Associate, counted
together as a single Person.
"Market Price" per share of any securities on any date shall mean the
average of the daily closing prices per share of such securities (determined as
described below) on each of the 20 consecutive Trading Days through and
including the Trading Day immediately preceding such date; provided, however,
that if a type of event analogous to any of the events described in Section 2.4
hereof shall have caused the closing prices used to determine the Market Price
on any Trading Days during such period of 20 Trading Days not to be fully
comparable with the closing price on such date because of stock exchange or
other trading adjustments, each such closing price so used shall be
appropriately adjusted in order to make it fully comparable with the closing
price on such date. The closing price per share of any securities on any date
shall be the last reported sale price, regular way, or, in case no such sale
takes place or is quoted on such date, the average of the closing bid and asked
prices, regular way, for each share of such securities, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange, Inc.
or, if the securities are not listed or admitted to trading on the New York
Stock Exchange, Inc., as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the securities are listed or admitted to trading
or, if the securities are not listed or
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admitted to trading on any national securities exchange, as reported on the
NASDAQ National Market, or if the securities are not included therein or
reported thereby, as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System or such other system then in use, or, if any
such date the securities are not listed or admitted to trading on any national
securities exchange or quoted by any such organization or system, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the securities selected by the Board of Directors of the
Company; provided, however, that if on any such date the securities are not
listed or admitted to trading on a national securities exchange or quoted in the
over-the-counter market, the closing price per share of such securities on such
date as determined in good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking firm, and set forth
in a certificate delivered to the Rights Agent.
"Person" shall mean any individual, firm, partnership, association,
group (as such term is used in Rule 13d-5 under the Securities Exchange Act of
1934, as such Rule is in effect on the date of the Agreement), corporation or
other entity.
"Preferred Stock" shall mean the series of Participating Preferred
Stock, par value $1 per share, of the Company created by a Certificate of
Designation and Terms in substantially the form set forth in Exhibit B hereto
appropriately completed.
"Redemption Price" shall mean an amount equal to $0.001 per Right, as
such amount may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof.
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"Redemption Time" shall mean the time at which the right to exercise
the Rights shall terminate pursuant to Section 5.1 hereof.
"Separation Time" shall mean the close of business on the earlier of
(i) the tenth Business Day (or such later date as the Board of Directors of the
Company may from time to time fix by resolution adopted prior to the Separation
Time that would otherwise have occurred) after the date on which any Person
commences a tender or exchange offer which, if consummated, would result in such
Person's becoming an Acquiring Person and (ii) the Flip-in Date; provided, that
if the foregoing results in the Separation Time being prior to the Record Time,
the Separation Time shall be the Record Time and provided further, that if any
tender or exchange offer referred to in clause (i) of this paragraph is
cancelled, terminated or otherwise withdrawn prior to the Separation Time
without the purchase of any shares of Voting Stock pursuant thereto, such offer
shall be deemed, for purposes of this paragraph, never to have been made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person (by any means) that an
Acquiring Person has become such, provided such Person otherwise comes within
the definition of an "Acquiring Person" hereinabove set forth.
"Subsidiary" of any specified Person shall mean any corporation or
other entity of which a majority of the voting power of the equity securities or
a majority of the equity interest is Beneficially Owned, directly or indirectly,
by such Person.
"Trading Day," when used with respect to any securities, shall mean a
day on which the New York Stock Exchange, Inc. is open for the transaction of
business or, if such securities are not listed or admitted to trading on the New
York Stock Exchange,
9
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Inc., a day on which the principal national securities exchange or quotation
system on which such securities are listed or traded is open for the transaction
of business or, if such securities are not listed or traded on any national
securities exchange or quotation system, a Business Day.
"Voting Stock" means shares of capital stock of the Company
entitled to vote generally in the election of directors.
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record Time, the
-----------------
Company will mail a letter summarizing the terms of the Rights to each holder of
record of Common Stock as of the Record Time, at such holder's address as shown
by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for the Common
-----------------------------------
Stock issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
"Until the Separation Time (as defined in the Rights Agreement referred to
below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement, dated as of November 20,
1998 (as such may be amended from time to time, the "Rights Agreement"),
between Varian Associates, Inc. (the "Company") and First Chicago Trust
Company of New York, as Rights Agent, the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain circumstances,
as set forth in the Rights Agreement, such Rights may be redeemed, may be
exchanged for shares of Common Stock or other securities or assets of the
Company or a Subsidiary of the Company, may expire, may become void (if
they are "Beneficially Owned" by an "Acquiring Person" or an Affiliate or
Associate thereof, as such terms are defined in the Rights Agreement, or by
any transferee of any of the foregoing) or may be evidenced by separate
certificates and may no longer
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be evidenced by this certificate. The Company will mail or arrange for the
mailing of a copy of the Rights Agreement to the holder of this certificate
without charge within five days after the receipt of a written request
therefor."
Certificates representing shares of Common Stock that are issued
and outstanding at the Record Time shall evidence one Right for each share of
Common Stock evidenced thereby notwithstanding the absence of the foregoing
legend.
2.3 Exercise of Rights; Separation of Rights.
----------------------------------------
(a) Subject to Sections 3.1, 5.1 and 5.10 and subject to
adjustment as herein set forth, each Right will entitle the holder thereof,
after the Separation Time and prior to the Expiration Time, to purchase, for the
Exercise Price, one one-thousandth of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised and
(ii) each Right will be evidenced by the certificate for the associated share of
Common Stock (together, in the case of certificates issued prior to the Record
Time, with the letter mailed to the record holder thereof pursuant to
Section 2.1) and will be transferable only together with, and will be
transferred by a transfer (whether with or without such letter) of, such
associated share.
(c) Subject to the terms hereof, after the Separation Time and
prior to the Expiration Time, the Rights (i) may be exercised and (ii) may be
transferred independent of shares of Common Stock. Promptly following the
Separation Time, the Rights Agent will mail to each holder of record of Common
Stock as of the Separation Time (other than any Person whose Rights have become
void pursuant to Section 3.1(b)), at such holder's address as shown by the
records of the Company (the Company hereby agreeing to furnish copies of such
records to the Rights Agent for this purpose), (x) a certificate (a
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"Rights Certificate") in substantially the form of Exhibit A hereto
appropriately completed, representing the number of Rights held by such holder
at the Separation Time and having such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any national
securities exchange or quotation system on which the Rights may from time to
time be listed or traded, or to conform to usage, and (y) a disclosure statement
describing the Rights. The Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 5.5 hereof) so that Rights
Certificates evidencing only whole numbers of Rights are distributed and cash is
paid in lieu of fractional Rights.
(d) Subject to the terms hereof, Rights may be exercised on any
Business Day after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent the Rights Certificate evidencing such Rights
with an Election to Exercise (an "Election to Exercise") substantially in the
form attached to the Rights Certificate duly completed, accompanied by payment
in cash, or by certified or official bank check or money order payable to the
order of the Company, of a sum equal to the Exercise Price multiplied by the
number of Rights being exercised and a sum sufficient to cover any transfer tax
or charge which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or delivery of
certificates for shares or depositary receipts (or both) in a name other than
that of the holder of the Rights being exercised.
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<PAGE>
(e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 2.3(d), and subject to
the terms hereof, the Rights Agent will thereupon promptly (i)(A) requisition
from a transfer agent stock certificates evidencing such number of shares or
other securities to be purchased (the Company hereby irrevocably authorizing its
transfer agents to comply with all such requisitions) and (B) if the Company
elects pursuant to Section 5.5 not to issue certificates representing fractional
shares, requisition from the depositary selected by the Company depositary
receipts representing the fractional share to be purchased or requisition from
the Company the amount of cash to be paid in lieu of fractional shares in
accordance with Section 5.5 and (ii) after receipt of such certificates,
depositary receipts and/or cash, deliver the same to or upon the order of the
registered holder of such Rights Certificate, registered (in the case of
certificates or depositary receipts) in such name or names as may be designated
by such holder.
(f) In case the holder of any Rights shall exercise less than all
the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all
such action as may be necessary to ensure that all shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Exercise Prices), be duly and validly
authorized, executed, issued and delivered and fully paid and nonassessable;
(ii) take all such action as may be necessary to comply with any applicable
requirements of the Securities Act of 1933 or the Securities Exchange Act of
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<PAGE>
1934, and the rules and regulations thereunder, and any other applicable law,
rule or regulation, in connection with the issuance of any shares upon exercise
of Rights; and (iii) pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of Rights, provided that the Company shall not be required to pay any
transfer tax or charge which may be payable in respect of any transfer involved
in the transfer of delivery of Rights Certificates or the issuance or delivery
of certificates for shares in a name other than that of the holder of the Rights
being transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights.
-----------------------------------------------
(a) In the event the Company shall at any time after the Record
Time and prior to the Separation Time (i) declare or pay a dividend on Common
Stock payable in Common Stock, (ii) subdivide the outstanding Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of shares of
Common Stock, (x) the Exercise Price in effect after such adjustment will be
equal to the Exercise Price in effect immediately prior to such adjustment
divided by the number of shares of Common Stock (the "Expansion Factor") that a
holder of one share of Common Stock immediately prior to such dividend,
subdivision or combination would hold thereafter as a result thereof and (y)
each Right held prior to such adjustment will become that number of Rights equal
to the Expansion Factor, and the adjusted number of Rights will be deemed to be
distributed among the shares of Common Stock with respect to which the original
Rights were associated (if they remain outstanding) and the shares issued in
respect of such dividend, subdivision or combination, so that each such share of
Common Stock will have exactly
14
<PAGE>
one Right associated with it. Each adjustment made pursuant to this paragraph
shall be made as of the payment or effective date for the applicable dividend,
subdivision or combination.
In the event the Company shall at any time after the Record Time
and prior to the Separation Time issue any shares of Common Stock otherwise than
in a transaction referred to in the preceding paragraph, each such share of
Common Stock so issued shall automatically have one new Right associated with
it, which Right shall be evidenced by the certificate representing such share.
To the extent provided in Section 5.3, Rights shall be issued by the Company in
respect of shares of Common Stock that are issued or sold by the Company after
the Separation Time.
(b) In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue or distribute any securities or
assets in respect of, in lieu of or in exchange for Common Stock (other than
pursuant to a regular periodic cash dividend or a dividend paid solely in Common
Stock) whether by dividend, in a reclassification or recapitalization (including
any such transaction involving a merger, consolidation or share exchange), or
otherwise, the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property purchasable upon
exercise of Rights as the Board of Directors of the Company, in its sole
discretion, may deem to be appropriate under the circumstances in order
adequately to protect the interests of holders of Rights generally, and the
Company and the Rights Agent shall amend this Agreement as necessary to provide
for such adjustments.
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<PAGE>
(c) Each adjustment to the Exercise Price made pursuant to this
Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment to
the Exercise Price is made pursuant to this Section 2.4, the Company shall (i)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (ii) promptly file with
the Rights Agent and with each transfer agent for the Common Stock a copy of
such certificate and (iii) mail a brief summary thereof to each holder of
Rights.
(d) Irrespective of any adjustment or change in the securities
purchase upon exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the securities so purchasable which
were expressed in the initial Rights Certificates issued hereunder.
2.5 Date on Which Exercise is Effective. Each person in whose name any
-----------------------------------
certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Exercise Price for such Rights (and any applicable taxes and other governmental
charges payable by the exercising holder hereunder) was made; provided, however,
that if the date of such surrender and payment is a date upon which the stock
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificates shall be
dated, the next succeeding Business Day on which the stock transfer books of the
Company are open.
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<PAGE>
2.6 Execution, Authentication, Delivery and Dating of Rights
--------------------------------------------------------
Certificates.
- ------------
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its
President, any of its Executive Vice Presidents, any of its Vice Presidents, its
Chief Financial Officer or its Treasurer under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Rights Certificates may be manual or
facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such officer prior to the countersignature and delivery of such Rights
Certificates.
Promptly after the Company learns of the Separation Time, the
Company will notify the Rights Agent of such Separation Time and will deliver
Rights Certificates executed by the Company to the Rights Agent for
countersignature, and, subject to Section 3.1(b), the Rights Agent shall
manually countersign and deliver such Rights Certificates to the holders of the
Rights pursuant to Section 2.3(c) hereof. No Rights Certificate shall be valid
for any purpose unless manually countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.7 Registration, Registration of Transfer and Exchange.
---------------------------------------------------
(a) After the Separation Time, the Company will cause to be kept
a register (the "Rights Register") in which, subject to such reasonable
regulations as it may
17
<PAGE>
prescribe, the Company will provide for the registration and transfer of Rights.
The Rights Agent is hereby appointed "Rights Registrar" for the purpose of
maintaining the Rights Register for the Company and registering Rights and
transfers of Rights after the Separation Time as herein provided. In the event
that the Rights Agent will have the right to examine the Rights Register at all
reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate,
and subject to the provisions of Section 2.7(c) and (d), the Company will
execute, and the Rights Agent will countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required pursuant to the
holder's instructions, one or more new Rights Certificates evidencing the same
aggregate number of Rights as did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be entitled
to the same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent,
as the case may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. As a condition to the issuance of any new
Rights Certificate under this Section 2.7, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
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(d) The Company shall not be required to register the transfer or
exchange of any Rights after such Rights have become void under Section 3.1(b),
been exchanged under Section 3.1(c) or been redeemed or terminated under
Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates.
---------------------------------------------------------
(a) If any mutilated Rights Certificate is surrendered to the
Rights Agent prior to the Expiration Time, then, subject to Section 3.1(b) and
5.1, the Company shall execute and the Rights Agent shall countersign and
deliver in exchange therefor a new Rights Certificate evidencing the same number
of Right as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights
Agent prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Section 3.1(b) and 5.1 and in the absence of
notice to the Company or the Rights Agent that such Rights Certificate has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Rights Agent shall countersign and deliver, in lieu of any such
destroyed, lost or stolen Rights Certificate, a new Rights Certificate so
destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate
under this Section 2.8, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Rights
Agent) connected therewith.
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(d) Every new Rights Certificate issued pursuant to this
Section 2.8 in lieu of any destroyed, lost or stolen Rights Certificate shall
evidence an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all other Rights duly issued
hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a Rights
---------------------
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights Agent may deem and treat the person in whose
name such Rights Certificate (or, prior to the Separation Time, such Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, including the payment of the
Redemption Price, and neither the Company nor the Rights Agent shall be affected
by any notice to the contrary. As used in the Agreement, unless the context
otherwise requires, the term "holder" of any Rights shall mean the registered
holder of such Rights (or, prior to the Separation Time, the associated shares
of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights Certificates
-----------------------------------------
surrendered upon exercise or for registration of transfer or exchange shall, if
surrendered to any person other than the Rights Agent, be delivered to the
Rights Agent and, in any case, shall be promptly cancelled by the Rights Agent.
The Company may at any time deliver to the Rights Agent for cancellation any
Rights Certificate previously countersigned and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Rights Certificate
so delivered shall be promptly cancelled by
20
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the Rights Agent. No Rights Certificate shall be countersigned in lieu of or in
exchange for any Rights Certificate cancelled as provided in this Section 2.10,
except as expressly permitted by this Agreement. The Rights Agent shall destroy
all cancelled Rights Certificate and deliver a certificate of destruction to the
Company.
2.11 Agreement of Rights Holders. Every holder of Rights by accepting the
---------------------------
same consents and agrees with the Company and the Rights Agent and with every
other holder of Rights that:
(a) Prior to the Separation Time, each Right will be transferable
only together with, and will be transferred by a transfer of, the associated
share of Common Stock;
(b) After the Separation Time, the Rights Certificate will be
transferable only on the Rights Register as provided herein;
(c) Prior to due presentment of a Rights Certificate (or, prior
to the Separation Time, the associated Common Stock certificate) for
registration of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in whose name the
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become void; and
(e) This Agreement may be supplemented or amended from time to
time pursuant to Section 2.4(b) or 5.4 hereof.
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ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in.
-------
(a) In the event that prior to the Expiration Time a Flip-in Date
shall occur, the Company shall take such action as shall be necessary to
ensure and provide that, except as provided in this Section 3.1, each Right
shall constitute the right to purchase from the Company, upon exercise
thereof in accordance with the terms hereof (but subject to Section 5.10),
that number of shares of Common Stock having an aggregate Market Price on
the Stock Acquisition Date equal to twice the Exercise Price for an amount
in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights
generally in the event that on or after such Stock Acquisition Date an
event of a type analogous to any of the events described in Section 2.4(a)
or (b) shall have occurred with respect to the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring
Person or an Affiliate or Associate thereof or by any transferee, direct or
indirect, of any of the foregoing shall become void and any holder of such
Rights (including transferees) shall thereafter have no right to exercise
or transfer such Rights under any provision of this Agreement. If any
Rights Certificate is presented for assignment or exercise and the Person
presenting the same will not complete the certification set forth at the
end of the form or assignment or notice of election to exercise and provide
such additional evidence of the identity of the Beneficial Owner and its
Affiliates and Associates (or former Beneficial Owners and their Affiliates
and Associates) as the Company shall reasonably
22
<PAGE>
request, then the Company shall be entitled conclusively to deem the
Beneficial Owner thereof to be an Acquiring Person or an Affiliate or
Associate thereof or a transferee of any of the foregoing and accordingly
will deem the Rights evidenced thereby to be void and not transferable or
exercisable.
(c) The Board of Directors of the Company may, at its option, at any
time after a Flip-in Date and prior to the time that an Acquiring Person
becomes the Beneficial owner of more than 50% of the outstanding shares of
Voting Stock elect to exchange all or part of the then outstanding Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 3.1(b)) for shares of Common Stock at an exchange
ratio of one share of Common Stock per Right, appropriately adjusted in
order to protect the interests of holders of Rights generally in the event
that after the Separation Time an event of a type analogous to any of the
events described in Section 2.4(a) or (b) shall have occurred with respect
to the Common Stock (such exchange ratio, as adjusted from time to time,
being hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right
(other than Rights that have become void pursuant to Section 3.1(b)) will
thereafter represent only the right to receive a number of shares of Common
Stock equal to the Exchange Ratio. Promptly after the action of the Board
of Directors electing to exchange the Rights, the Company shall give notice
thereof (specifying the steps to be taken to receive shares of Common Stock
in exchange for Rights) to the Rights Agent and the holders of the Rights
(other than Rights
23
<PAGE>
that have become void pursuant to Section 3.1(b)) outstanding immediately
prior thereto by mailing such notice in accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued upon
the exchange of Rights pursuant to the Section 3.1(c) or Section 3.1(d)
shall for all purposes be deemed to have become the holder of record of the
shares represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of any applicable taxes and other governmental
charges by the holder was made; provided, however, that if the date of such
surrender and payment is a date upon which the stock transfer books of the
Company are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the stock transfer books of the Company
are open.
(d) Whenever the Company shall become obligated under Section 3.1(a)
or (c) to issue shares of Common Stock upon exercise of or in exchange for
Rights, the Company, at its option, may substitute therefor shares of
Preferred Stock, at a ratio of one-thousandth of a share of Preferred Stock
for each share of Common Stock so issuable, appropriately adjusted to
protect interests of the holders of the Rights generally to reflect any
event of this type analogous to any of the events described in Section 2.4
(a) or (b) which may have occurred with respect to the Common Stock.
(e) In the event that there shall not be sufficient treasury shares
or authorized but unissued shares of Common Stock or Preferred Stock of the
Company to permit the exercise or exchange in full of the Rights in
accordance with Section 3.1(a) or (c), the Company shall either (i) call a
meeting of Stockholders seeking approval to cause
24
<PAGE>
sufficient additional shares to be authorized (provided that if such
approval is not obtained the Company will take the action specified in
clause (ii) of this sentence) or (ii) take such action as shall be
necessary to ensure and provide, to the extent permitted by applicable law
and any agreements or instruments in effect on the Stock Acquisition Date
to which it is a party, that each Right shall thereafter constitute the
right to receive, (x) at the Company's option, either (A) in return for the
Exercise Price, debt or equity securities or other assets (or a combination
thereof) having a fair value equal to twice the Exercise Price, or (B)
without payment of consideration (except as otherwise required by
applicable law), debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the Exercise Price, or
(y) if the Board of Directors of the Company elects to exchange the Rights
in accordance with Section 3.1(c), debt or equity securities or other
assets (or a combination thereof) having a fair value equal to the product
of the Market Price of a share of Common Stock on the Flip-in Date times
the Exchange Ratio in effect on the Flip-in Date, where in any case set
forth in (x) or (y) above the fair value of such debt or equity securities
or other assets shall be as determined in good faith by the Board of
Directors of the Company, after consultation with a nationally recognized
investment banking firm.
3.2 Flip-over.
---------
(a) Prior to the Expiration Time, the Company shall not enter into
any agreement with respect to, or consummate or permit to occur, any Flip-
over Transaction or Event unless and until it shall have duly entered into
a binding and enforceable supplemental agreement with the Flip-over Entity,
for the benefit of the holders of the Rights, providing that, upon
consummation or occurrence or the Flip-over Transaction or
25
<PAGE>
Event (i) each Right shall thereafter constitute the right to purchase from
the Flip-over Entity, upon exercise thereof in accordance with the terms
hereof, that number of shares of Flip-over Stock of the Flip-over Entity
having an aggregate Market Price on the date of consummation or occurrence
of such Flip-over Transaction or Event Equal to twice the Exercise Price
for an amount in cash equal to the Exercise Price (such right to be
appropriately adjusted in order to protect the interests of the holders of
Rights generally in the event that after such date of consummation or
occurrence an event of a type analogous to any of the events described in
Section 2.4(a) or (b) shall have occurred with respect to the Flip-over
Stock) and (ii) the Flip-over Entity shall thereafter be liable for, and
shall assume, by virtue of such Flip-over Transaction or Event and such
supplemental agreement, all the obligations and duties of the Company
pursuant to this Agreement, but the Company's obligations under this
Agreement shall not be discharged and shall continue in full. The
provisions of this Section 3.2 shall apply to successive Flip-over
Transactions or Events.
(b) Prior to the Expiration Time, the Company shall not enter into
any agreement with respect to, or consummate or permit to occur, any Flip-
over Transaction or Event if at the time thereof there are any rights,
warrants or securities outstanding or any other arrangements, agreements or
instruments that would eliminate or otherwise diminish in any material
respect the benefits intended to be afforded by this Rights Agreement to
the holders of Rights upon consummation of such transaction.
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<PAGE>
ARTICLE IV
THE RIGHTS AGENT
4.1 General
-------
(a) The Company hereby appoints the Rights Agent to act as agent
for the Company in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted to be done by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
certificate for securities purchasable upon exercise of Rights, Rights
Certificate, certificate for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons.
27
<PAGE>
4.2 Merger or Consolidation or Change of Name of Rights Agent.
---------------------------------------------------------
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the rights Agent
or any successor Rights Agent is a party, or any corporation succeeding to the
stockholder services business of the rights Agent or any successor Rights Agent,
will be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 4.4 hereof. In case,
at the time such successor Rights Agent succeeds to the agency created by this
Agreement, any of the Rights Certificates have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates have not be
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Rights Certificates
will have the full force provided in the Rights Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent is changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates
28
<PAGE>
either in its prior name or in its changed name; and in all such cases such
Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
4.3 Duties of Rights Agent.
----------------------
The Rights Agent undertakes the duties and obligations imposed by
this Agreement upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel will be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any fact or
matter be provided or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
provided and established by a certificate signed by a person believed by the
Rights Agent to be the Chairman of the Board, the Chief Executive Officer, the
President, any Executive Vice President, any Vice President, the Chief Financial
Officer or the Treasurer and by the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
29
<PAGE>
(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or willful misconduct. Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
indirect, consequential or incidental loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent has been
advised of the likelihood of such damages.
(d) The Rights Agent will not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have been
made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the Rights
Agent) or in respect of the validity or execution of any certificate for
securities purchasable upon exercise of Rights or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 3.1(b) hereof) or any adjustment required under the provisions of
Section 2.4, 3.1 or 3.2 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights after
receipt of the certificate contemplated by Section 2.4 describing any such
adjustment); nor will it by any act hereunder be deemed to make any
30
<PAGE>
representation or warranty as to the authorization or reservation of any
securities purchasable upon exercise of Rights or any Rights or as to whether
any securities purchasable upon exercise of Rights will, when issued, be duly
and validly authorized, executed, issued and delivered and fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Rights Agent to be the Chairman of the Board, the Chief
Executive Officer, the President, any Executive Vice President, any Vice
President, the Chief Financial Officer, the Treasurer or the Secretary or any
Assistant Secretary of the Company, and to apply to such persons for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance with instructions of
any such person.
(h) The Rights Agent and any Stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing
31
<PAGE>
herein shall preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent will not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
4.4 Change of Rights Agent. The Rights Agent may resign and be
----------------------
discharged from its duties under this Agreement upon 90 days' notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to each transfer agent of Common Stock by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.9. The Company may
remove the Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. If the
Rights Agent should resign or be removed or otherwise become incapable of
acting, the Company will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then the holder of any Rights may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by
32
<PAGE>
the Company or by such a court, shall be (A) a corporation organized and doing
business under the laws of the United States or of the State of New York or
California, or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the State
of New York or California, which is authorized under such laws to exercise the
powers of the Rights Agent contemplated by this Agreement and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $15,000,000 or (B) an affiliate of a corporation described in clause (A)
of this sentence. After appointment, the successor Rights Agent will be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor rights Agent shall deliver and transfer to the successor rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the holders of the
Rights. Failure to give any notice provided for in this Section 4.4, however, or
any defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
ARTICLE V
MISCELLANEOUS
5.1 Redemption.
----------
(a) The Board of Directors of the Company may, at its option, at any
time prior to the close of business on the Flip-in Date, elect to redeem all
(but not less than all)
33
<PAGE>
the then outstanding Rights at the Redemption Price and the Company, at its
option, may pay the Redemption Price either in cash or shares of Common Stock or
other securities of the Company deemed by the Board of Directors, in the
exercise of its sole discretion, to be at least equivalent in value to the
Redemption Price.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights (or, if the resolution of the Board of
Directors electing to redeem the Rights states that the redemption will not be
effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further action and without
any notice, the right to exercise the Rights will terminate and each Right will
thereafter represent only the right to receive the Redemption Price in cash or
securities, as determined by the Board of Directors. Promptly after the Rights
are redeemed, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice in
accordance with Section 5.9.
5.2 Expiration. The Rights and this Agreement shall expire at the
----------
Expiration Time and no Person shall have any rights pursuant to this Agreement
or any Right after the Expiration Time, except as provided in Sections 3.1 and
5.1 hereof, with respect to Rights which the Board of Directors of the Company
have elected to exchange or redeem, and except with respect to any Rights for
which an Election to Exercise has been duly filed with the Rights Agents prior
to the Expiration time.
5.3 Issuance of New Rights Certificates. Notwithstanding any of the
-----------------------------------
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board
34
<PAGE>
of Directors to reflect any adjustment or change in the number or kind or class
of shares of stock purchasable upon exercise of Rights made in accordance with
the provisions of this Agreement. In addition, in connection with the issuance
or sale of shares of Common Stock by the Company following the Separation Time
and prior to the Redemption Time or Expiration Time pursuant to the terms of
securities exercisable, convertible or exchangeable into shares of Common Stock
or pursuant to options exercisable for Common Stock or in connection with the
vesting or payment of securities awarded by the Corporation under any plan or
arrangement, in each case issued, granted or awarded prior to, and outstanding
at, the Separation Time, the Company shall issue to the holders of such shares
of Common Stock, Rights Certificates representing the appropriate number of
Rights in connection with the issuance or sale of such shares of Common Stock;
provided, however, in each case, (i) no such Rights Certificate shall be issued,
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Company or to the Person to whom such Rights Certificates would be issued,
(ii) no such Rights Certificates shall be issued if, and to the extent that,
appropriate adjustment shall have otherwise been made in lieu of the issuance
thereof, and (iii) the Company shall have no obligation to distribute Rights
Certificates to any Acquiring Person or Affiliate or Associate of an Acquiring
Person or any transferee of any of the foregoing.
5.4 Supplements and Amendments. The Company and the Rights Agent may from
--------------------------
time to time supplement or amend this Agreement without the approval of any
holders of Rights (i) prior to the close of business on the Flip-in Date, in any
respect and (ii) after the close of business on the Flip-in Date, to make any
changes that the Company
35
<PAGE>
may deem necessary or desirable and which shall not materially adversely affect
the interests of the holders of Rights generally (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person). The Rights Agent will duly
execute and deliver any supplement or amendment hereto requested by the Company
which satisfies the terms of the preceding sentence.
5.5 Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of Rights or
to distribute Rights Certificates that evidence fractional Rights. In lieu of
such fractional Rights, as soon as practicable following the Separation Time
there shall be paid to the registered holders of the Rights Certificates with
regard to which such fractional Rights would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a whole Right.
For the purposes of this Section 5.5, the current market value of a whole Right
shall be the closing price of the Rights for the Trading Day immediately prior
to the date on which such fractional Rights would have been otherwise issuable.
The closing price for any day shall be the last reported sale price, regular
way, or, in case no such sale takes place or is quoted on such date, the average
of the closing bid and asked prices, regular way, for each share of such
securities, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the
New York Stock Exchange, Inc. or, if the securities are not listed or admitted
to trading on the New York Stock Exchange, Inc., as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the securities are listed or
admitted to trading or, if the securities are not listed or admitted to trading
on
36
<PAGE>
any national securities exchange, as reported on the NASDAQ National Market, or
if the securities are not included therein or reported thereby, as reported by
the National Association of Securities Dealers, Inc. Automated Quotation System
or such other system then in use, or, if any such date the securities are not
listed or admitted to trading on any national securities exchange or quoted by
any such organization or system, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the securities
selected by the Board of Directors of the Company; provided, however, that if on
any such date the securities are not listed or admitted to trading on a national
securities exchange or quoted in the over-the-counter market, the closing price
per share of such securities on such date as determined in good faith by the
Board of Directors of the Company, after consultation with a nationally
recognized investment banking firm, and set forth in a certificate delivered to
the Rights Agent.
(b) If the Company elects not to issue certificates representing
fractional shares upon exercise or redemption of Rights, the Company shall, in
lieu thereof, in the sole discretion of the Board of Directors, either (a)
evidence such fractional shares by depositary receipts issued pursuant to an
appropriate agreement between the Company and a depositary selected by it,
providing that each holder of a depositary receipt shall have all of the rights,
privileges and preferences to which such holder would be entitled as a
beneficial owner of such fractional share, or (b) sell such shares on behalf of
the holders of Rights and pay to the registered holder of such Rights the
appropriate fraction of price per share received upon such sale.
37
<PAGE>
(c) The holder of a Right by the acceptance of the Right expressly
waives his/her right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided in Section 5.5 hereof).
5.6 Rights of Action. Subject to the terms of this Agreement (including
----------------
Section 3.1(b)), rights of action in respect of this Agreement, other than
rights of action vested solely in the Rights Agent, are vested in the respective
holders of the Rights; and any holder of any Rights, without the consent of the
Rights Agent or of the holder of any other Rights, may, on such holder's own
behalf and for such holder's own benefit and the benefit of other holders of
Rights, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, such holder's
right to exercise such holder's Rights in the manner provided in such holder's
Rights Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
5.7 Holder of Rights Not Deemed a Stockholder. No holder, as such, of any
-----------------------------------------
Rights shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of shares or any other securities which may at any time be issuable
on the exercise of such Rights, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights, as
such, any of the rights of a Stockholder of the Company or any right to vote for
the election of directors or upon any
38
<PAGE>
matter submitted to Stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting Stockholders (except as provided in Section 5.8 hereof), or to
receive dividends or subscription rights, or otherwise, until such Rights shall
have been exercised or exchanged in accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose after
--------------------------
the Separation Time and prior to the Expiration Time (i) to effect or permit (in
cases where the Company's permission is required) the occurrence of any Flip-in
Date or Flip-over Transaction or Event or (ii) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Right, in accordance with Section 5.9 hereof,
notice of such proposed action, which shall specify the Flip-in Date or the date
on which such Flip-over Transaction or Event, liquidation, dissolution, or
winding up is to take place, and such notice shall be as given at least 20
Business Days prior to the date of the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by this Agreement
-------
to be given or made by the Rights Agent or by the holder of any Rights to or on
the Company shall be sufficiently given or made if delivered or sent by first-
class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Varian Associates, Inc.
3050 Hansen Way
Palo Alto, California 94304-1000
Attention: Corporate Secretary
39
<PAGE>
Any notice or demand authorized or required by this Agreement to be
given or made by the Company or by the holder of any Rights to or on the Rights
Agent shall be sufficiently given or made if delivered or sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Company) as follows:
First Chicago Trust Company of New York
525 Washington Boulevard, Suite 4660
Jersey City, New Jersey 07310
Attention: Corporate Actions, Administration
Notices or demands authorized or required by this Agreement to be
given or made by the Company or the Rights Agent to or on the holder of any
Rights shall be sufficiently given or made if delivered or sent by first-class
mail, postage prepaid, addressed to such holder at the address of such holder as
it appears upon the registry books of the Rights Agent or, prior to the
Separation Time, on the registry books of the transfer agent for the Common
Stock.
All such notices and demands shall be deemed to have been given on the
date of delivery thereof, if delivered by hand, and on the third day after the
mailing thereof, if mailed. Any notice that is mailed in the manner herein
provided, shall be deemed given, whether or not the holder receives the notice.
5.10 Suspension of Exercisability. To the extent that the Company
----------------------------
determines in good faith that some action will or need be taken pursuant to
Section 3.1(a), (b), (d) or (e) or to comply with federal or state securities
laws, the Company may suspend the exercisability of the Rights for a period of
up to ninety (90) days following the date of the occurrence of the Separation
Time or the Flip-in Date in order to take such action or comply with such laws.
In the event of any such suspension, the Company shall issue as
40
<PAGE>
promptly as practicable a public announcement stating that the exercisability or
exchangeability of the Rights has been temporarily suspended. Notice thereof
pursuant to Section 5.9 shall not be required.
Failure to give a notice pursuant to the provisions of this Agreement
shall not affect the validity of any action taken hereunder.
5.11 Costs of Enforcement. The Company agrees that if the Company
--------------------
or any other Person the securities of which are purchasable upon exercise of
Rights fails to fulfill any of its obligations pursuant to this Agreement, then
the Company or such Person will reimburse the holder of any Rights for the costs
and expenses (including legal fees) incurred by such holder in actions to
enforce such holder's rights pursuant to any Rights or this Agreement.
5.12 Successors. All the covenants and provisions of this Agreement by or
----------
for the benefit of the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
5.13 Benefits of this Agreement. Nothing in this Agreement shall be
--------------------------
construed to give to any Person other than the Company, the Rights Agent and the
holders of the Rights any legal or equitable right, remedy or claim under this
Agreement; this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.
5.14 Determination and Actions by the Board of Directors, Etc. The Board of
--------------------------------------------------------
Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this
41
<PAGE>
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement. All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board of Directors of the Company to any
liability to the holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein for
--------------------
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
5.16 Governing Law. This Agreement and each Right issued hereunder shall
-------------
be deemed to be a contract made under the laws of the State of Delaware and for
all purposes shall be governed by and construed in accordance with the laws of
such state applicable to contracts to be made and performed entirely within such
state.
5.17 Counterparts. This Agreement may be executed in any number of
------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
5.18 Severability. If any term or provision hereof or the application
------------
thereof to any circumstance shall, in any jurisdiction and to any extent, be
invalid or unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidation or rendering unenforceable the
42
<PAGE>
remaining terms and provision hereof or the application of such term or
provision to circumstances other than those as to which it is held invalid or
unenforceable.
5.19 Book-Entry Account Statements. Except where the context otherwise
------------------------------
indicates, (a) if at any time or from time to time the Company determines that
shares of Common Stock shall be evidenced by book-entry account statements or
similar instruments or documents ("Book-Entry Account Statements"), then all
references in this Agreement to Common Stock certificate(s), certificates for
the Common Stock, certificates representing shares of Common Stock or
certificate for the associated share of Common Stock shall be deemed to include
such Book-Entry Account Statements which evidence such shares of Common Stock,
(b) if at any time or from time to time the Company determines that after the
Separation Time the Rights shall be evidenced by Book-Entry Account Statements,
then all references in this Agreement to Rights Certificates shall be deemed to
include such Book-Entry Account Statements which evidence such Rights and (c) if
at any time or from time to time the Company determines that shares of Preferred
Stock issued upon the exercise of Rights shall be evidenced by Book-Entry
Account Statements, then all references in this Agreement to certificates for
such shares of Preferred Stock shall be deemed to include such Book-Entry
Account Statements which evidence such shares of Preferred Stock.
43
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
VARIAN ASSOCIATES, INC.
By: /s/ Joseph B. Phair
---------------------------------
Name: Joseph B. Phair
Title: Vice President, General Counsel and
Secretary
FIRST CHICAGO TRUST COMPANY OF
NEW YORK
By: /s/ Thomas F. McDonough
---------------------------------
Name: Thomas F. McDonough
Title: Assistant Vice President
44
<PAGE>
EXHIBIT A
---------
[Form of Rights Certificate]
Certificate No. ______Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE OPTION
OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES OR ASSOCIATES THEREOF
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY
OF THE FOREGOING WILL BE VOID.
Rights Certificate
Varian Associates, Inc.
This certifies that _______________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of November 20, 1998 (as amended
from time to time, the "Rights Agreement"), between Varian Associates, Inc., a
Delaware corporation (the "Company"), and First Chicago Trust Company of New
York, as Rights Agent (the "Rights Agent," which term shall include any
successor Rights Agent under the Rights Agreement), to purchase from the Company
at any time after the Separation Time (as such term is defined in the Rights
Agreement) and prior to the close of business on December 4, 2008 (California
time) one one-thousandth of a fully paid share of Participating Preferred Stock,
par value $1 per share (the "Preferred Stock"), of the Company (subject to
adjustment as provided in the Rights Agreement) at the Exercise Price referred
to below, upon presentation and surrender of this Rights Certificate with the
Form of Election to Exercise duly executed at the principal office of the Rights
Agent in The City of New
<PAGE>
York. The Exercise Price shall initially be $180 per Right and shall be subject
to adjustment in certain events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase
securities of an entity other than the Company or securities or assets of the
Company other than Preferred Stock, all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available without cost upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor evidencing an aggregate number of Rights equal to the aggregate number of
Rights evidenced by the Rights Certificate or Rights Certificates surrendered.
If this Rights Certificate shall be exercised in part, the registered holder
shall be entitled to receive, upon surrender hereof, another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, each Right
evidenced by this Certificate may be (a) redeemed by the Company under certain
circumstances, at
<PAGE>
its option, at a redemption price of $0.001 per Right, or (b) exchanged by the
Company under certain circumstances, at its option, for one share of Common
Stock or one-thousandth of a share of Preferred Stock per Right (or, in certain
cases, other securities or assets of the Company), subject in each case to
adjustment in certain events as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of any
securities which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a Stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
Stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
the Stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Rights evidenced by
this Rights Certificate shall have been exercised or exchanged as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
<PAGE>
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Date: ___________ ___, _______
ATTEST: VARIAN ASSOCIATES, INC.
By:
- ------------------------------ -----------------------------
Secretary Title:
Countersigned:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By:
-----------------------------
Authorized Signature
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
this Rights Certificate.)
FOR VALUE RECEIVED _________________________ hereby sells,
assigns
and transfers unto_____________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: ________________, _______
Signature Guaranteed:
--------------------------------------------------
Signature
(Signature must correspond to name as written upon
the face of this Rights Certificate in every
particular, without alteration or enlargement or
any change whatsoever)
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
<PAGE>
- --------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
------------------------
Signature
- --------------------------------------------------------------------------------
NOTICE
------
In the event the certification set forth above is not completed in
connection with a purported assignment, the Company will deem the Beneficial
Owner of the Rights evidenced by the enclosed Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced by such Rights Certificate to be void and not transferable or
exercisable.
<PAGE>
(To be attached to each Rights Certificate)
FORM OF ELECTION TO EXERCISE
----------------------------
(To be executed if holder desires to exercise the Rights
Certificate.)
TO: [ ]
The undersigned hereby irrevocably elects to exercise
____________________ whole Rights represented by the attached Rights Certificate
to purchase the shares of Common or Participating Preferred Stock issuable upon
the exercise of such Rights and requests that certificates for such shares be
issued in the name of:
--------------------------------------------------------
Address:
--------------------------------------------------------
--------------------------------------------------------
Social Security or Other Taxpayer
Identification Number:
----------------------------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
--------------------------------------------------------
Address:
--------------------------------------------------------
--------------------------------------------------------
Social Security or Other Taxpayer
Identification Number:
----------------------------------
Dated: ________________, _______
Signature Guaranteed:
--------------------------------------------------
Signature
(Signature must correspond to name as written upon
the face of this Rights Certificate in every
particular, without alteration or enlargement or
any change whatsoever)
<PAGE>
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank of trust company having an office or
correspondent in the United States.
- --------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of
Rights and shares of Common Stock, that the Rights evidenced by this Rights
Certificate are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
-------------------------------
Signature
- --------------------------------------------------------------------------------
NOTICE
------
In the event the certification set forth above is not completed in
connection with a purported exercise, the Company will deem the Beneficial Owner
of the Rights evidenced by the attached Rights Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
or a transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
<PAGE>
EXHIBIT B
---------
FORM OF CERTIFICATE OF DESIGNATION AND TERMS
OF PARTICIPATING PREFERRED STOCK OF VARIAN ASSOCIATES, INC.
-----------------------------------------------------------
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
----------------------------------------
We, the undersigned, J. Tracy O'Rourke and Joseph B. Phair, the Chairman of the
Board and Chief Executive Officer, and the Secretary, respectively, of Varian
Associates, Inc., a Delaware corporation (the "Corporation"), do hereby certify
as follows:
Pursuant to authority granted by Article IV of the Restated
Certificate of Incorporation, as amended, of the Corporation and in accordance
with the provisions of Section 151 of the General Corporation Law of the State
of Delaware, the Board of Directors of the Corporation has adopted the following
resolutions fixing the designation and certain terms, powers, preferences and
other rights of a new series of the Corporation's Preferred Stock, par value $1
per share, and certain qualifications, limitations and restrictions thereon:
RESOLVED, that there is hereby established a series of Preferred
Stock, par value $1 per share, of the Corporation, and the designation and
certain terms, powers, preferences and other rights of the shares of such
series, and certain qualifications, limitations and restrictions thereon,
are hereby fixed as follows:
(i) The distinctive serial designation of this series shall be
"Participating Preferred Stock" (hereinafter called "this Series"). Each share
of this Series shall be identical in all respects with the other shares of this
Series except as to the dates from and after which dividends thereon shall be
cumulative.
(ii) The number of shares in this Series shall initially be
50,000, which number may from time to time be increased or decreased (but not
below the number then outstanding) by the Board of Directors. Shares of this
Series purchased by the Corporation shall be cancelled and shall revert to
authorized but unissued shares of Preferred Stock undesignated as to series.
Shares of this Series may be issued in fractional shares, which fractional
shares shall entitle the holder, in proportion to such holder's fractional
share, to all rights of a holder of a whole share of this Series.
<PAGE>
(iii) The holders of full or fractional shares of this Series
shall be entitled to receive, when and as declared by the Board of Directors,
but only out of funds legally available therefor, dividends, (A) on each date
that dividends or other distributions (other than dividends or distributions
payable in Common Stock of the Corporation) are payable on or in respect of
Common Stock comprising part of the Reference Package (as defined below), in an
amount per whole share of this Series equal to the aggregate amount of dividends
or other distributions (other than dividends or distributions payable in Common
Stock of the Corporation) that would be payable on such date to a holder of the
Reference Package (as hereinafter defined) and (B) on the last day of March,
June, September and December in each year, in an amount per whole share of this
Series equal to the excess (if any) of $2.50 over the aggregate dividends paid
per whole share of this Series during the three month period ending on such last
day. Each such dividend shall be paid to the holders of record of shares of this
Series on the date, not exceeding sixty days preceding such dividend or
distribution payment date, fixed for the purpose by the Board of Directors in
advance of payment of each particular dividend or distribution. Dividends on
each full and each fractional share of this Series shall be cumulative from the
date such full or fractional share is originally issued; provided that any such
full or fractional share originally issued after a dividend record date and on
or prior to the dividend payment date to which such record date relates shall
not be entitled to receive the dividend payable on such dividend payment date or
any amount in respect of the period from such original issuance to such dividend
payment date.
The term "Reference Package" shall initially mean 1,000 shares of
Common Stock, $1 par value per share ("Common Stock"), of the Corporation.
In the event the Corporation shall at any time after the close of business
on December 4, 1998 (A) declare or pay a dividend on any Common Stock
payable in Common Stock, (B) subdivide any Common Stock or (C) combine any
Common Stock into a smaller number of shares, then and in each such case
the Reference Package after such event shall be the Common Stock that a
holder of the Reference Package immediately prior to such event would hold
thereafter as a result thereof.
Holders of shares of this Series shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of full
cumulative dividends, as herein provided on this Series.
So long as any shares of this series are outstanding, no dividends
(other than a dividend in Common Stock or in any other stock ranking junior
to this Series as to dividends and upon liquidation) shall be declared or
paid or set aside for payment or other distribution declared or made upon
the Common Stock or upon any other stock ranking junior to this Series as
to dividends or upon liquidation, nor shall any Common Stock nor any other
stock of the Corporation ranking junior to or on a parity with this Series
as to dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available
for a sinking fund for the redemption of any shares of any such stock) by
the Corporation (except by conversion into or exchange for stock of the
Corporation ranking junior to this Series as to dividends
<PAGE>
and upon liquidation), unless, in each case, the full cumulative dividends
(including the dividend to be due upon payment of such dividend,
distribution, redemption, purchase or other acquisition) on all outstanding
shares of this Series shall have been, or shall contemporaneously be, paid.
(iv) In the event of any merger, consolidation, reclassification
or other transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property, then in
any such case the shares of this Series shall at the same time be similarly
exchanged or changed in an amount per whole share equal to the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, that a holder of the Reference Package would be entitled to receive
as a result of such transaction.
(v) In the event of any liquidation, dissolution or winding up
of the affairs of the Corporation, whether voluntary or involuntary, the holders
of full and fractional shares of this Series shall be entitled, before any
distribution or payment is made on any date to the holders of the Common Stock
or any other stock of the Corporation ranking junior to this Series upon
liquidation, to be paid in full an amount per whole share of this Series equal
to the greater of (A) $100 or (B) the aggregate amount distributed or to be
distributed prior to such date in connection with such liquidation, dissolution
or winding up to a holder of the Reference Package (such greater amount being
hereinafter referred to as the "Liquidation Preference"), together with accrued
dividends to such distribution or payment date, whether or not earned or
declared. If such payment shall have been made in full to all holders of shares
of this Series, the holders of shares of this Series as such shall have no right
or claim to any of the remaining assets of the Corporation.
In the event the assets of the Corporation available for distribution
to the holders of shares of this Series upon any liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, shall
be insufficient to pay in full all amounts to which such holders are
entitled pursuant to the first paragraph of this Section (v), no such
distribution shall be made on account of any shares of any other class or
series of Preferred Stock ranking on a parity with the shares of this
Series upon such liquidation, dissolution or winding up unless
proportionate distributive amounts shall be paid on account of the shares
of this Series, ratably in proportion to the full distributable amounts for
which holders of all such parity shares are respectively entitled upon such
liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the Corporation,
the holders of shares of this Series then outstanding shall be entitled to
be paid out of assets of the Corporation available for distribution to its
Stockholders all amounts to which such holders are entitled pursuant to the
first paragraph of this Section (v) before any payment shall be made to the
holders of Common Stock or any other stock of the Corporation ranking
junior upon liquidation to this Series.
<PAGE>
For the purposes of this Section (v), the consolidation or merger of,
or binding share exchange by, the Corporation with any other corporation
shall not be deemed to constitute a liquidation, dissolution or winding up
of the Corporation.
(vi) The shares of this Series shall not be redeemable.
(vii) In addition to any other vote or consent of Stockholders
required by law or by the Restated Certificate of Incorporation, as amended, of
the Corporation, each whole share of this Series shall, on any matter, vote as a
class with any other capital stock comprising part of the Reference Package and
voting on such matter and shall have the number of votes thereon that a holder
of the Reference Package would have.
IN WITNESS WHEREOF, the undersigned have signed and attested this
certificate on the 20th day of November, 1998.
---------------------------------
J. Tracy O'Rourke
Chairman of the Board and
Chief Executive Officer
Attest:
- --------------------------------------
Joseph B. Phair
Secretary
