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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-A
For Registration of Certain Classes of Securities
Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
INTERNATIONAL RECTIFIER CORPORATION
-----------------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-1528961
-------- ----------
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
233 Kansas Street
El Segundo, California 90245
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
NONE
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights
-------------------------------
(Title of Class)
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The total number of pages is 81.
The Exhibit Index is located on page 6.
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On August 2, 1996, the Board of Directors of International Rectifier
Corporation (the "COMPANY") declared a distribution of one Right for each
outstanding share of common stock (the "COMMON SHARES") of the Company. The
distribution is to be made as of August 14, 1996 (the "RECORD DATE") to the
shareholders of record on that date. Each Right entitles the registered holder
to purchase from the Company, initially, one one-thousandth of a share of Junior
Participating Preferred Stock ("PREFERRED SHARES") at a price of $135.00 (the
"PURCHASE PRICE"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement between the Company and Chase Mellon
Shareholder Services as Rights Agent (the "RIGHTS AGREEMENT").
Preferred Shares purchasable upon exercise of the Rights will be
entitled to dividends of 1,000 times the dividends, per share, declared on the
Common Shares and in the event of liquidation will be entitled to a minimum
preferential liquidating distribution of $l,000 per share and an aggregate
liquidating distribution, per share, of 1,000 times the distribution made per
Common Share. The Preferred Shares will vote together with the Common Shares
and in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to receive
1,000 times the amount received per Common Share.
Because of the Preferred Shares' dividend and liquidation rights, the
value when issued of the one one-thousandth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
Until the earlier to occur of (i) 10 business days following a public
announcement that a person or group of affiliated or associated persons (an
"ACQUIRING PERSON") has acquired beneficial ownership of 20% or more of the
Company's general voting power other than pursuant to a Qualified Offer (as
defined below), the date of such public announcement being called the "STOCK
ACQUISITION DATE," or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 20% or more of the Company's general voting power (the date of such
earlier occurrence being called the "DISTRIBUTION DATE"), the Rights will be
evidenced by the certificates representing the Common Shares and will be
transferred with and only with the Common Shares. New Common Share certificates
issued after the Record Date upon transfer or
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new issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference, and the surrender for transfer of any certificate for
Common Shares, even without such notation, will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificate.
As soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("RIGHTS CERTIFICATES") will be mailed to holders of
record of the Common Shares as of the close of business on the Distribution Date
and such separate Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on the tenth anniversary of the Record Date (the "FINAL
EXPIRATION DATE"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, as described below.
The Purchase Price payable, the number of shares or other securities
or property issuable upon exercise of the Rights, and the number of outstanding
Rights, are subject to adjustment from time to time to prevent dilution.
A Qualified Offer is a tender offer or exchange offer for all
outstanding Common Shares which is determined by the non-affiliated continuing
directors to be fair to and otherwise in the best interests of the Company and
its shareholders.
If any person becomes an Acquiring Person other than by a purchase
pursuant to a Qualified Offer, proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring Person
(which will not be entitled to the benefit of such adjustment) will thereafter
have the right to receive upon exercise that number of Common Shares or Common
Share equivalents having a market value of two times the exercise price of the
Right.
If, at any time after an Acquiring Person has become such, the Company
is acquired in a merger or other business combination transaction (other than a
merger which follows a Qualified Offer at the same or a higher price) or 50% or
more of its consolidated assets or earning power are sold, proper provision will
be made so that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring company which at
the time of such transaction will have a market value of two times the exercise
price of the Right.
At any time after an Acquiring Person has become such, the Board of
Directors of the Company may exchange the Rights (other than Rights owned by
such person or group), in whole or in
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part, at an exchange ratio of one Common Share per Right (subject to
adjustment).
Up to and including the tenth business day after a Stock Acquisition
Date, the Board of Directors of the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (the "REDEMPTION PRICE"). Immediately
upon any redemption of the Rights, the right to exercise them will terminate and
the only right of the holders will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors
without the consent of the holders of the Rights at any time prior to the
Distribution Date. Thereafter the Rights may be amended to make changes which
do not adversely affect the interests of the holders of the Rights, or which
shorten or lengthen time periods, subject to certain limitations set forth in
the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company.
A copy of the Rights Agreement has been filed as Exhibit 2 to this
Registration Statement on Form 8-A. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by reference.
ITEM 2. EXHIBITS.
1. Form of Rights Certificate.
2. Rights Agreement, dated as of August 15, 1996, between International
Rectifier Corporation and Chase Mellon Shareholder Services as Rights
Agent.
3. Form of letter to be sent to stockholders of International Rectifier
Corporation.
4. Form of Certificate of Designations of Junior Participating Preferred
Stock.
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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, thereto duly authorized.
INTERNATIONAL RECTIFIER CORPORATION
Date: August 16, 1996 By: /S/ GERALD A. KORIS
----------------------
Name: Gerald A. Koris
Title: Secretary
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EXHIBIT INDEX
SEQUENTIAL
EXHIBIT NO. NAME OF ITEM PAGE NO.
1. Form of Rights Certificate. 7-10
2. Rights Agreement, dated as of 11-70
August 15, 1996, between
International Rectifier Corporation
and Chase Mellon Shareholder Services
as Rights Agent.
3. Form of letter to be sent to 71-74
stockholders of International
Rectifier Corporation
4. Form of Certificate of 75-81
Designations of Junior
Participating Preferred Stock.
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EXHIBIT 1
[Form of Right Certificate]
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER PUBLIC ANNOUNCEMENT OF
REDEMPTION IS MADE. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.01 PER RIGHT ON THE TERMS SET FORTH IN THE
AGREEMENT. IF THE RIGHTS
REPRESENTED BY THIS CERTIFICATE ARE ISSUED TO
A PERSON WHO IS AN ACQUIRING PERSON OR AN ASSOCIATE
OR AFFILIATE THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) OR CERTAIN TRANSFEREES
THEREOF, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BE SUBJECT TO CERTAIN
LIMITATIONS IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7 OF THE RIGHTS AGREEMENT.
RIGHT CERTIFICATE
This certifies that _______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of August __ , 1996 (the "Rights Agreement"), between
International Rectifier Corporation, (the "Company"), and Chase Mellon
Shareholder Services (the "Rights Agent"), to purchase from the Company, unless
the Rights have been previously redeemed, at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to the
Expiration Date (as such term is defined in the Rights Agreement), or the date,
if any, on which the Rights evidenced by this Certificate may be redeemed, at
the stock transfer office of the Rights Agent, or its successors as Rights
Agent, one one-thousandth of a fully paid and nonassessable share of Junior
Participating Preferred Stock ("Preferred Shares"), at a purchase price of $____
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly completed and executed.
The number of Rights evidenced by this Right Certificate as set forth above (and
the number of shares which may be purchased upon exercise thereof), and the
Purchase Price set forth above, are the number and Purchase Price as of the date
of the Rights Agreement based on the shares of Common Stock of the Company as
constituted at such date.
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Upon the occurrence of an event described in clause (A), (B), (C) or
(D) of Section 11(a)(ii) of the Rights Agreement, the holder of any Rights that
are, or were, beneficially owned by an Acquiring Person or an Associate or
Affiliate thereof (as such terms are defined in the Rights Agreement) or certain
transferees thereof which engaged in, or realized the benefit of, an event or
transaction or transactions described in clause (A), (B), (C) or (D) of such
Section 11(a)(ii), shall not be entitled to the benefit of the adjustment
described in such Section 11(a)(ii).
As provided in the Rights Agreement, the Purchase Price and the number
and class of shares which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and at the principal office of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the stock transfer office of the Rights Agent set forth above, may
be exchanged for another Right Certificate or Right Certificates of like tenor
and date evidencing Rights entitling the holder to purchase such number of
shares as the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Right Certificate or Right Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right.
No fractional shares will be issued upon the exercise of any Rights
evidenced hereby, but in lieu thereof a cash payment may be made, as provided in
the Rights Agreement.
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No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares or of any
other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signatures of the proper officers of the
Company. Dated as of ____________, ____.
Attest:
__________________________ By:
_________________________
Secretary Title:
Countersigned:
__________________________
By: _____________________
Authorized Signature
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
______________________________ hereby sells, assigns and
transfers unto __________________
___________________________________________________________________________
____ (Please print name and
address of transferee)
this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
____________________ Attorney to transfer the within Right Certificate on
the books of the within-named Corporation, with full power of substitution.
Dated: ____________, ____
______________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best
knowledge of the undersigned) by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement);
(2) the undersigned [ ] did [ ] did not acquire the Rights evidenced
by this Right Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Date: ______________, ____
______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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EXHIBIT 2
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INTERNATIONAL RECTIFIER CORPORATION
and
Chase Mellon Shareholder Services
Rights Agent
----------------------
RIGHTS AGREEMENT
Dated as of August 15, 1996
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TABLE OF CONTENTS Page
Section 1. Certain Definitions. . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent. . . . . . . . . . . 5
Section 3. Issuance of Right Certificates . . . . . . . . . 6
Section 4. Form of Right Certificates . . . . . . . . . . . 8
Section 5. Countersignature and Registration. . . . . . . . 9
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates . . . . . . . . . . . . . . . 10
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. . . . . . . . . . . . 10
Section 8. Cancellation and Destruction of
Right Certificates . . . . . . . . . . . . . . . 13
Section 9. Reservation and Availability of
Shares; Registration . . . . . . . . . . . . . . 13
Section 10. Record Date. . . . . . . . . . . . . . . . . . . 14
Section 11. Adjustment of Purchase Price,
Number of Shares or Number of
Rights . . . . . . . . . . . . . . . . . . . . . 15
Section 12. Certification of Adjusted Purchase
Price or Number of Shares. . . . . . . . . . . . 24
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning
Power. . . . . . . . . . . . . . . . . . . . . . 24
Section 14. Fractional Rights and Fractional
Shares . . . . . . . . . . . . . . . . . . . . . 28
Section 15. Rights of Action . . . . . . . . . . . . . . . . 29
Section 16. Agreement of Right Holders . . . . . . . . . . . 30
Section 17. Right Certificate Holder Not
Deemed a Stockholder . . . . . . . . . . . . . . 30
Section 18. Concerning the Rights Agent. . . . . . . . . . . 31
Section 19. Merger or Consolidation or Change
of Name of Rights Agent. . . . . . . . . . . . . 32
Section 20. Duties of Rights Agent . . . . . . . . . . . . . 32
Section 21. Change of Rights Agent . . . . . . . . . . . . . 35
Section 22. Issuance of New Right Certificates . . . . . . . 36
Section 23. Redemption . . . . . . . . . . . . . . . . . . . 36
Section 24. Notice of Proposed Actions . . . . . . . . . . . 37
Section 25. Notices. . . . . . . . . . . . . . . . . . . . . 37
Section 26. Supplements and Amendments . . . . . . . . . . . 38
Section 27. Exchange . . . . . . . . . . . . . . . . . . . . 39
Section 28. Successors . . . . . . . . . . . . . . . . . . . 40
Section 29. Determinations and Actions Taken
by the Board of Directors. . . . . . . . . . . . 40
Section 30. Benefits of this Agreement . . . . . . . . . . . 41
Section 31. Governing Law. . . . . . . . . . . . . . . . . . 41
Section 32. Counterparts . . . . . . . . . . . . . . . . . . 41
Section 33. Section Headings . . . . . . . . . . . . . . . . 41
Section 34. Severability . . . . . . . . . . . . . . . . . . 41
Exhibit A Form of Right Certificate
Exhibit B Form of Summary of Rights
Exhibit C Certificate re Junior Participating
Preferred Stock
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RIGHTS AGREEMENT
AGREEMENT, dated as of August 15, 1996, between International
Rectifier Corporation, a Delaware corporation (the "Company"), and Chase Mellon
Shareholder Services as Rights Agent.
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has authorized and
declared the distribution of one right for (i) each share of Common Stock of the
Company ("Common Stock") outstanding at the Close of Business (as hereinafter
defined) on August 14, 1996 (the "Rights Record Date"), each right representing
the right to purchase one Unit consisting, initially, of one one-thousandth of a
share of Junior Participating Preferred Stock, and (ii) each additional share of
Common Stock which shall become outstanding between the Rights Record Date and
the earliest of the Distribution Date, the Expiration Date (as such terms are
hereinafter defined) and the date, if any, on which such rights may be redeemed,
all upon the terms and subject to the conditions hereinafter set forth (each
such right being hereinafter referred to as a "Right");
NOW, THEREFORE, the parties agree as follows:
Section 1. CERTAIN DEFINITIONS.
(a) For purposes of this Agreement, the following terms have the
meanings indicated:
"ACQUIRING PERSON" shall mean any Person who or which, alone or
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner (within the meaning of Section 1(b)) of a Substantial
Block of Voting Stock, but shall not include (i) an Exempt Person or
(ii) any Person who or which acquires a Substantial Block of Voting Stock
in connection with a transaction or series of transactions approved prior
to such transaction or transactions by the Board of Directors of the
Company; provided that no person shall become an Acquiring Person solely as
a result of a reduction in the number of shares of Voting Stock
outstanding, unless and until such Person shall thereafter become the
Beneficial Owner of additional shares constituting 1% or more of the
general voting power of the Company.
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"AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act, as in effect as of the date hereof.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday
or day on which banking institutions in the State of California are
authorized or obligated by law or executive order to close.
"CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m., Los
Angeles time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m., Los Angeles time, on the next
succeeding Business Day.
"COMMON STOCK" shall have the meaning assigned to it in the
preamble; and "common stock" when used with reference to Persons other than
the Company shall mean: (i) in the case of Persons organized in corporate
form, the capital stock or equity security with the greatest voting power
of such Person or, if such Person is a Subsidiary of another Person, of the
Person or Persons which ultimately control such first-mentioned Person; and
(ii) in the case of Persons not organized in corporate form, the units of
beneficial interest which (A) represent the right to participate generally
in the profits and losses of such Person (including without limitation any
flow-through tax benefits resulting from an ownership interest in such
Person) and (B) are entitled to exercise the greatest voting power of such
Person or, in the case of a limited partnership, shall have the power to
remove the general partner or partners.
"CONTINUING DIRECTOR" shall mean any member of the Board of
Directors of the Company (while such Person is a member of the Board) who
(i) is not an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, or a representative of an Acquiring Person or of any such
Affiliate or Associate, and (ii) either (A) was a member of the Board of
Directors prior to the time any Person became an Acquiring Person, or
(B) became a member of the Board of Directors subsequent to the time any
Person became an Acquiring Person, if such Person's nomination for
election, or re-election, to the Board was recommended, or approved, by a
majority of the Continuing Directors then in office.
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"DISTRIBUTION DATE" shall have the meaning assigned to it in
Section 3(a).
"EQUIVALENT STOCK" shall have the meaning assigned to it in
Section 7(a).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"EXEMPT PERSON" shall mean the Company, any Subsidiary of the
Company and any employee benefit plan or employee stock plan of the Company
or of any Subsidiary of the Company, or any trust or other entity
organized, established or holding shares of Common Stock by, for or
pursuant to, the terms of any such plan.
"EXPIRATION DATE" shall have the meaning assigned to it in
Section 7(a).
"OFFER DATE" shall have the meaning assigned to it in Section
3(a).
"PERSON" shall mean any individual, firm, corporation,
partnership, trust or other entity and shall include any successor by
merger (or otherwise) of any of the foregoing.
"PRINCIPAL PARTY" shall have the meaning assigned to it in
Section 13(b).
"PURCHASE PRICE" shall mean the price payable for one Unit upon
exercise of a Right.
"QUALIFIED OFFER" shall mean a tender or exchange offer for all
outstanding Common Stock at a price and on terms determined to be adequate
and otherwise in the best interests of the Company and its shareholders
(other than the Person or an Affiliate or Associate thereof on whose behalf
the offer is made) by at least a majority of the Continuing Directors who
are not representatives of or affiliated with the Person making such offer
or any Affiliate or Associate of such Person.
"REDEMPTION PRICE" shall have the meaning assigned to it in
Section 23(a).
"RIGHT" shall have the meaning assigned to it in the preamble.
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"RIGHTS RECORD DATE" shall have the meaning assigned to it in the
preamble.
"SUBJECT SHARES" shall mean the class or series of shares then
issuable on exercise of the Rights.
"STOCK ACQUISITION DATE" shall mean the date of the first public
announcement by the Company or an Acquiring Person (which, for purposes of
this definition, shall include, without limitation, a report filed pursuant
to Section 13(d) under the Exchange Act) that an Acquiring Person has
become such.
"SUBSIDIARY" shall mean, with respect to any Person, a
corporation or other entity the securities or other ownership interests of
which having ordinary voting power sufficient to elect a majority of the
board of directors or other persons performing similar functions are at the
time directly or indirectly owned by such Person and any Affiliate of such
Person.
"SUBSTANTIAL BLOCK" shall mean a number of shares of Voting Stock
having in the aggregate 20 percent or more of the general voting power.
"TRADING DAY" shall have the meaning assigned to it in Section
11(d).
"UNIT" shall mean the shares or other securities issuable upon
exercise of one Right, initially one one-thousandth of a share of Junior
Participating Preferred Stock of the Company having the rights and
preferences set forth in Exhibit C, before any adjustment pursuant to
Section 11(a)(ii) or Section 13.
"VOTING STOCK" shall mean shares of the Company's capital stock
the holders of which have general voting power.
(b) For purposes of this Agreement, a Person shall be deemed the
"BENEFICIAL OWNER" of any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately
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or only after the passage of time) pursuant to any agreement, arrangement
or understanding, (whether or not in writing) or upon the exercise of any
conversion, exchange or purchase rights (other than the Rights), warrants
or options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for payment or exchange; or (B) the right to vote or to direct the
voting of, pursuant to any agreement, arrangement or understanding (whether
or not in writing); or (C) the right to dispose or to direct the
disposition of, pursuant to any agreement, arrangement or understanding
(whether or not in writing); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates
or Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any securities of the
Company;
provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to Beneficially Own, any security if the agreement, arrangement or understanding
to vote such security (1) arises solely from the grant of a revocable proxy or
consent given to such Person in connection with a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act, and (2) is not also then reportable on
Schedule 13D (or any comparable or successor report) under the Exchange Act;
provided, further, that a Person engaged in business as an underwriter of
securities shall not be deemed the "Beneficial Owner" of securities acquired
through such person's participation in good faith in a firm commitment
underwriting until the expiration of the 40-day period immediately following the
date of such acquisition.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
in accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such Co-
Rights Agent or Agents as it may deem necessary or desirable and determine the
respective duties of the Rights Agent and the Co-Rights Agents.
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Section 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) Until the Close of Business on the earlier of (i) the tenth
Business Day after a Stock Acquisition Date or (ii) the tenth Business Day (or
such later date as the Company's Board of Directors shall determine) after the
date of the commencement by any Person (other than an Exempt Person) of, or the
date of the first public announcement (such commencement date or announcement
date being herein referred to as the "Offer Date") of the intent of any Person
(other than an Exempt Person) to commence, a tender or exchange offer upon the
successful consummation of which such Person, together with its Affiliates and
Associates, would be the Beneficial Owner of 20 percent or more of the then
outstanding Voting Stock (irrespective of whether any shares are actually
purchased pursuant to such offer) (the tenth Business Day after the first to
occur of a Stock Acquisition Date or an Offer Date being herein referred to as
the "Distribution Date"),
(i) the Rights will automatically attach to, and be evidenced
by, the certificates for Common Stock registered in the names of the
holders of Common Stock (which certificates for Common Stock shall be
deemed also to be Right Certificates) and not by separate Right
Certificates, and
(ii) each Right will be transferable only in connection with the
transfer of the underlying shares of Common Stock.
As soon as practicable after the Distribution Date, the Rights Agent
will mail, by first-class, insured, postage prepaid mail, to each record holder
of Common Stock as of the Close of Business on the Distribution Date, as shown
by the records of the Company at the Close of Business on the Distribution Date,
at the address of such holder shown on such records, a Right Certificate, in
substantially the form of Exhibit A hereto, evidencing one Right for each share
of Common Stock so held.
(b) As soon as practicable after the Rights Record Date, the Company
will send a copy of a Summary of Rights, in substantially the form attached
hereto as Exhibit B, by first-class mail, postage prepaid, to each record holder
of Common Stock as of the Close of Business on the Rights Record Date, at the
address of such holder shown on the records of the Company.
(c) The Company will cause certificates for Common Stock issued after
the Rights Record Date (including
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replacement certificates for shares of Common Stock outstanding on or prior to
the Rights Record Date), but prior to the earliest of (i) the Distribution Date,
(ii) the Expiration Date and (iii) the date, if any, on which the Rights may be
redeemed, to have impressed on, printed on, written on or otherwise affixed to
them the following legend:
This certificate also entitles the holder hereof to certain Rights as
set forth in the Rights Agreement between the Company and Chase Mellon
Shareholder Services as Rights Agent as the same shall be amended from
time to time (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
by this certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain circumstances
set forth in the Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement)
or certain transferees of any thereof, whether currently held by or on
behalf of such Person or by any subsequent holder, may be limited as
provided in Section 7(f) of the Rights Agreement.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any such certificates shall also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate.
(d) Until the Distribution Date, the surrender for transfer of any of
the certificates for Common Stock outstanding on or after the Rights Record
Date, with or without a copy of the Summary of Rights attached thereto and with
or without the legend set forth in subsection (c) above, shall also constitute
the transfer of the Rights associated with such Common Stock. After the
Distribution Date, the Rights will be evidenced solely by the Right
Certificates.
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Section 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of assignment and
certification and of election to purchase shares to be printed on the reverse
thereof) shall be in substantially the form of Exhibit A hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this 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 stock exchange on which the Rights may from time
to time be listed, or to conform to usage.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section
22 that represents Rights Beneficially Owned by: (i) an Acquiring Person or any
Associate or Affiliate of any Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights, or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(f), and any Right Certificate
issued pursuant to Section 6 or Section 11 upon transfer, exchange, replacement
or adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible and reasonably identifiable as such) the
following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement) or certain transferees thereof.
Accordingly, under certain circumstances as provided in the Rights
Agreement, this Right Certificate and the Rights represented hereby
may be limited as provided in Section 7(f) of such Agreement.
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Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President or any of its Vice Presidents,
either manually or by facsimile signature, and have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, issued and delivered
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer (as specified above) of the Company to sign such Right Certificate,
although at the date of the execution of this Rights Agreement any such person
was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights evidenced on
its face by each Right Certificate, the date of each Right Certificate and the
number of each Right Certificate.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(f) and
Section 14, at any time after the Close of Business on the Distribution Date,
and prior to the Close of Business on the Expiration Date or the day prior to
the day, if any, on which the Rights are to be redeemed pursuant to Section 23,
any Right Certificate or Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase such number of Units as the Right Certificate or
Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
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Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate(s) to be transferred, split up,
combined or exchanged, with the form of assignment on the reverse side(s)
thereof duly completed and executed, at the stock transfer office of the Rights
Agent. Thereupon the Rights Agent shall countersign and deliver to the persons
entitled thereto the Right Certificate(s) requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates. Notwithstanding the foregoing, neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate unless and until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate and shall
have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate, if
mutilated, the Company will execute and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(f), and unless earlier redeemed as provided
in Section 23, the registered holder of any Right Certificate may exercise the
Rights evidenced thereby in whole or in part at any time after the Distribution
Date upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly completed and executed, to the Rights
Agent at the stock transfer office of the Rights Agent, together with payment of
the Purchase Price for each Unit as to which the Rights are exercised, at or
prior to the Close of Business on the tenth anniversary of the Rights Record
Date or such other date to which the Rights may be extended as provided in this
Agreement (the latest of such dates being herein
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referred to as the "Expiration Date"). If at any time after the Distribution
Date but prior to the Expiration Date the Company is unable, under its
Certificate of Incorporation, to issue the number and class of shares required
to be issued upon the exercise of all of the outstanding Rights, the Company may
issue upon exercise of any of the Rights shares of capital stock or other
securities of the Company of equivalent value to the shares so required to be
issued ("Equivalent Stock"), as determined by the Board of Directors.
(b) The Purchase Price for each Unit pursuant to the exercise of a
Right shall initially be $135, shall be subject to adjustment from time to
time as provided in Sections 11 and 13 and shall be payable in lawful money
of the United States of America.
(c) Upon receipt of a Right Certificate, with the form of election to
purchase duly executed, accompanied by payment of the Purchase Price for the
Units to be purchased and an amount equal to any applicable transfer tax in
cash, or by certified check, bank draft or money order payable to the order of
the Company, the Rights Agent shall thereupon promptly (i) requisition from the
Company or any transfer agent of the Company a certificate for the number of
shares to be purchased and the Company will comply, and hereby irrevocably
authorizes its transfer agent to comply, with all such requests,
(ii) requisition from the Company the amount of cash to be paid in lieu of
issuance of a fractional share, when appropriate, in accordance with Section 14,
and (iii) promptly after receipt of such certificate from any such transfer
agent, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder, and, when appropriate, after receipt promptly deliver
such cash in lieu of a fractional share to or upon the order of the registered
holder of such Right Certificate; provided, however, that in the case of the
purchase, in connection with the exercise of a Right, of securities other than
shares of stock, the Rights Agent shall promptly take the appropriate actions
with respect thereto as shall as nearly as practicable correspond to the actions
described in the foregoing clauses (i) through (iii).
(d) The Company shall not be required to pay any transfer tax which
may be payable in respect of any transfer involved in the transfer or delivery
of Right Certificates, or the issuance or delivery of certificates in a name
other than that of the registered holder of the Right Certificate evidencing
Rights surrendered for exercise, or to issue or
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deliver any certificates upon the exercise of any Rights, until any such tax
shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
(e) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14.
(f) Notwithstanding any provision of this Agreement to the contrary,
upon the occurrence of any of the events described in any of clauses (A), (B),
(C) or (D) of Section 11(a)(ii), the adjustment provided for under Section
11(a)(ii) shall not apply with respect to any Rights that are at the time of the
occurrence of such event Beneficially Owned by (i) an Acquiring Person or by any
Associate or Affiliate of such Acquiring Person (which Acquiring Person or
Affiliate or Associate engages in, or realizes the benefit of, one or more of
the transactions described in clause (A) or clause (B) of Section 11(a)(ii),
realizes the benefits set forth in clause (C) of Section 11(a)(ii) or, alone or
together, become the Beneficial Owner(s) of a number of shares of Voting Stock
which equals or exceeds the percentage of the general voting power as provided
in clause (D) of Section 11(a)(ii), as the case may be), or (ii) a transferee of
an Acquiring Person or of any Associate or Affiliate of such Acquiring Person
(which Acquiring Person or Associate or Affiliate engages in, or realizes the
benefit of, one or more of the transactions described in clause (A) or clause
(B) of Section 11(a)(ii), realizes the benefits set forth in clause (C) of
Section 11(a)(ii) or, alone or together with such Acquiring Person or any such
Associate or Affiliate, become the Beneficial Owner(s) of a number of shares of
Voting Stock which equals or exceeds the percentage of the general voting power
as provided in clause (D) of Section 11(a)(ii), as the case may be) (A) who
becomes a transferee after the Acquiring Person becomes such, or (B) who becomes
a transferee prior to or concurrently with the Acquiring Person becoming such
and receives such Rights pursuant to either (1) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (2) a transfer which the Board of Directors of the Company has
determined is part of a plan,
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arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(f). Upon the exercise of such Rights, the holders
thereof shall be entitled to receive, upon payment of the Purchase Price, the
number of Units issuable upon exercise of such Rights without giving effect to
the adjustment provided for under Section 11(a)(ii). The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(f) and
Section 4(b) are complied with, but shall have no liability to any holder of
Right Certificates or other Person as a result of its making or failing to make
any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(g) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such can-celled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF SHARES; REGISTRATION.
(a) The Company covenants and agrees that it shall (i) on or prior to
the Rights Record Date, take all such action as shall be necessary to cause to
be reserved
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and kept available out of its authorized and unissued capital stock, the number,
class and series of shares that will be sufficient to permit the exercise in
full of all Rights to be outstanding as of the Rights Record Date, (ii) no later
than promptly following the Distribution Date, take all such action as shall be
necessary to cause to be reserved and kept available out of its authorized and
unissued capital stock, or its authorized and issued shares held in its
treasury, the number of additional shares that will, from time to time, be
sufficient to permit the exercise in full of all Rights from time to time
outstanding, (iii) take all such action as may be necessary to insure 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 Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable, and (iv) pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares upon the exercise of Rights (except as otherwise
provided in Section 7(d)).
(b) The Company agrees to take all such action, from and after the
Distribution Date, as may be necessary or appropriate to permit the issuance of
shares in connection with the exercise of the Rights, including any required
registration under (i) the Securities Act of 1933, as amended from time to time
(the "Securities Act"), and (ii) the securities or "blue sky" laws of the
various states. The Company may temporarily suspend, for a period of time not to
exceed 90 days, the exercisability of the Rights in order to prepare and file a
registration statement or statements for the purpose of effecting any such
registration and permit such statement(s) to become effective. At the
commencement and termination of any such suspension, the Company shall issue a
public announcement and shall provide written notice to the Rights Agent,
stating that the exercisability of the Rights has been temporarily suspended, or
that such suspension has terminated, as the case may be.
(c) If and so long as the stock issuable upon the exercise of Rights
is listed on any national securities exchange, the Company shall use its
reasonable efforts to cause all shares reserved for issuance upon exercise of
Rights to be listed on such exchange upon official notice of issuance upon such
exercise.
Section 10. RECORD DATE. Each Person in whose name any stock
certificate is issued upon the exercise of Rights shall for all purposes be
deemed to have become the
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holder of record of the shares represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a stockholder of the Company with respect to shares for which the Rights
shall be exercisable, including without limitation the right to vote or to
receive dividends or other distributions, and such holder shall not be entitled
to receive any notice of any proceedings of the Company, except as provided
herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF RIGHTS. The Purchase Price, the number and kind of shares or other
securities covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) If the Company shall at any time after the date of this
Agreement (A) declare and pay a dividend on the shares which are subject to
the Rights ("Subject Shares") payable in shares of stock of the Company,
(B) subdivide or split the Subject Shares, (C) combine or consolidate the
Subject Shares into a smaller number of shares or effect a reverse stock
split of the Subject Shares or (D) issue any shares of its capital stock in
a reclassification of the Subject Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, and in each such
event, except as otherwise provided in this Section 11(a), the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, split, reverse split, combination,
consolidation or reclassification, and the number and kind of shares of
capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if
such Right had been exercised immediately prior to such date and at a time
when the transfer books of the Company were open, he would have received
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, split, reverse split, combination, consolidation or
reclassification. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii),
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the adjustment provided for in this Section 11(a)(i) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii).
(ii) If at any time after the date of this Agreement
(A) any Acquiring Person, or any Associate or Affiliate of any
Acquiring Person, directly or indirectly (1) shall merge into the
Company or any of its Subsidiaries or otherwise combine with the
Company or any of its Subsidiaries and the Company or such Subsidiary
shall be the continuing or surviving corporation of such merger or
combination and the Common Stock shall remain outstanding and the
outstanding shares thereof shall not be changed into or exchanged for
stock or other securities of the Company or of any other Person or
cash or any other property, or (2) shall sell or otherwise transfer in
one or more transactions, assets to the Company or any of its
Subsidiaries in exchange for 20 percent or more of the shares of any
class of capital stock of the Company or any of its Subsidiaries, and
the Common Stock shall remain outstanding and unchanged, or
(B) directly or indirectly, any Acquiring Person, or any
Associate or Affiliate of any Acquiring Person, shall (1) in one or
more transactions, transfer any assets to the Company or any of its
Subsidiaries in exchange (in whole or in part) for shares of any class
of capital stock of the Company or any of its Subsidiaries or for
securities exercisable for or convertible into shares of any class of
capital stock of the Company or any of its Subsidiaries or otherwise
obtain from the Company or any of its Subsidiaries, with or without
consideration, any additional shares of any class of capital stock of
the Company or any of its Subsidiaries or other securities exercisable
for or convertible into shares of any class of capital stock of the
Company or any of its Subsidiaries (other than as part of a PRO RATA
distribution by the Company or such Subsidiary to all holders of
Common Stock), (2) sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise dispose (in one or more transactions), to, from
or with, as the case may be, the Company or any of its Subsidiaries,
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assets on terms and conditions less favorable to the Company or such
Subsidiary than the Company or such Subsidiary would be able to obtain
in arm's-length negotiation with an unaffiliated third party,
(3) receive any compensation from the Company or any of the Company's
Subsidiaries other than compensation for full-time employment as a
regular employee, or fees for serving as director, at rates in
accordance with the Company's (or its Subsidiaries') past practices,
or (4) receive the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances, guarantees,
pledges or other financial assistance provided by the Company or any
of its Subsidiaries, on terms and conditions less favorable to the
Company or such Subsidiary than the Company or such Subsidiary would
be able to obtain in arm's-length negotiation with an unaffiliated
third party, or
(C) during any such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
similar transaction or series of transactions involving the Company or
any of its Subsidiaries (whether or not with or into or otherwise
involving an Acquiring Person or any Affiliate or Associate of such
Acquiring Person) which has the effect, directly or indirectly, of
increasing by more than one percent the proportionate share of the
outstanding shares of any class of equity securities, or of securities
exercisable for or convertible into equity securities, of the Company
or any of its Subsidiaries which is directly or indirectly owned by
any Acquiring Person or any Associate or Affiliate of any Acquiring
Person, or
(D) any Person shall become an Acquiring Person otherwise than
pursuant to a Qualified Offer,
then, and in each such case, but subject to the provisions of Section 27, proper
provision shall be made so that each holder of a Right, except as provided below
and in Section 7(f), shall, on and after the later of (I) the date of the
occurrence of an event described in clause (A), (B), (C) or (D) of this Section
11(a)(ii), or (II) the date of the expiration of the period within which the
Rights may
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be redeemed pursuant to Section 23 (as the same may have been amended as
provided in Section 26), have the right to receive, upon exercise thereof at the
then current Purchase Price, such number of shares of Common Stock as shall
equal the result obtained by (x) multiplying the then current Purchase Price by
the then number of Units for which a Right is then exercisable and dividing that
product by (y) 50 percent of the current market price per share of Common Stock
(determined in accordance with Section 11(d)) on the date of the occurrence of
the relevant event listed above in clause (A), (B), (C) or (D) of this
subparagraph (ii); PROVIDED, HOWEVER, that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13, then only the provisions of Section 13 shall apply and
no adjustment shall be made pursuant to this Section 11(a)(ii). The Company
shall not consummate any such merger, combination, transfer or transaction
referred to in any of such clauses (A), (B) and (C) unless prior thereto there
shall be sufficient authorized but unissued Common Stock to permit the exercise
in full of the Rights in accordance with the foregoing sentence, unless the
Board of Directors has determined to issue Equivalent Stock in accordance with
Section 7(a); PROVIDED, HOWEVER, that in no case may the Company consummate any
such merger, combination, transfer or transaction if at the time of or
immediately after such transaction there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
If the Company issues Equivalent Stock upon the exercise of any Rights
pursuant to the immediately preceding paragraph, then, upon any such exercise,
proper provision shall be made so that the holder of a Right (except as provided
in Section 7(f)) shall have the right to receive, upon such exercise at the then
current Purchase Price, such number of shares or other units of Equivalent Stock
of the Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of Units for which a Right is then
exercisable and dividing that product by (y) 50 percent of the current market
price per share or other unit of the Equivalent Stock of the Company (determined
on substantially the same basis as is prescribed by Section 11(d) with respect
to the valuation of Common Stock) on the date of occurrence of the relevant
event listed above in clause (A), (B), (C) or (D) of this subparagraph (ii). If
at any time the Company should be prohibited by law, by any provision of its
Certificate of Incorporation, or by any instrument or agreement to which the
Company is a party or by which it is
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bound, from issuing, or should be unable under its Certificate of Incorporation
to issue, sufficient Equivalent Stock to permit the exercise of all outstanding
Rights in accordance with the foregoing sentence, then, in lieu of issuing such
Equivalent Stock upon such exercise, the Company shall pay to each holder of a
Right (except as provided in Section 7(f)) upon surrender of the Right as
provided herein but without payment of the Purchase Price, an amount in cash for
each Right equal to the Purchase Price.
(b) In case the Company shall at any time after the Rights Record
Date fix a record date for the issuance of rights or warrants to all holders of
Common Stock or Subject Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase Common Stock
or Subject Shares or securities convertible into Common Stock or Subject Shares
at a price per share (or having a conversion price per share, if a security
convertible into Common Stock) less than the current market price per share
(determined in accordance with Section 11(d)) on such record date, the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, of which the numerator shall be the total number of shares of Common
Stock and Subject Shares outstanding on such record date plus the number of
shares of Common Stock which the aggregate offering price of the total number of
shares so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market
price and of which the denominator shall be the total number of shares of Common
Stock and Subject Shares outstanding on such record date plus the number of
additional shares to be offered for subscription or purchase (or into which the
convertible securities to be offered are initially convertible). In case such
subscription or purchase price may be paid, in whole or in part, in a form other
than cash, the value of such consideration shall be as determined in good faith
by the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent. Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and if such rights or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
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(c) In case the Company shall at any time after the Rights Record
Date fix a record date for the making of a distribution on the shares of Common
Stock or the Subject Shares, whether by way of a dividend, distribution,
reclassification of stock, recapitalization, reorganization or partial
liquidation of the Company or otherwise (and including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation), of subscription rights or warrants (excluding those
referred to in Section 11(b)), evidences of indebtedness or other assets (other
than (i) regular periodic cash dividends, (ii) a dividend payable in Common
Stock or (iii) a distribution which is part of or is made in connection with a
transaction to which Section 11(a)(ii) or Section 13 applies), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, of which the numerator shall be the current market price per share of
Common Stock (determined in accordance with Section 11(d)) on such record date,
less the fair market value applicable to one share of Common Stock (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent) of
such assets or evidences of indebtedness or of such subscription rights or
warrants so to be distributed, and of which the denominator shall be such
current market price per share of Common Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and if such distribution is
not so made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current market
price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days immediately prior to such date; PROVIDED, HOWEVER, that
if the current market price per share of Common Stock is determined during a
period following the announcement by the issuer of such Common Stock of a
dividend or distribution on such Common Stock payable in shares of such Common
Stock or securities convertible into shares of Common Stock (other than the
Rights), and prior to the expiration of 30 Trading Days after the ex-dividend
date for such dividend or distribution, then, and in each such case, the current
market price shall be appropriately adjusted to reflect the current market price
per share of Common Stock in connection with ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such
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day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the shares of Common Stock are listed or
admitted to trading or, if the shares of Common Stock are not listed or admitted
to trading on any national securities exchange, the average of the high bid and
low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc., Automated Quotation System ("NASDAQ").
If on any such date the shares of Common Stock are not quoted by any such
organization, the fair market value of such shares on such date as determined in
good faith by the Board of Directors of the issuer of such Common Stock shall be
used. Any such determination of current market price shall be described in a
statement filed with the Rights Agent.
For the purpose of any computation hereunder, the "current market
price" of a Unit shall be deemed to be equal to the current market price per
share of Common Stock, and the "current market price" of a Subject Share shall
be deemed to be equal to the current market price per share of Common Stock
divided by the number of Subject Shares which comprise a Unit.
For purposes of this Agreement, the term "Trading Day" shall mean a
day on which the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or admitted to trading
on any national securities exchange, a Business Day.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one percent in such
Price; PROVIDED, HOWEVER, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one-thousandth of a share,
as the case may be. Notwithstanding the proviso to the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the transaction which gives
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rise to such adjustment or (ii) the date of the expiration of the right to
exercise any Rights.
(f) If at any time, as a result of an adjustment made pursuant to
Section 11(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than shares
of Common Stock, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions, with
respect to such shares, contained in Sections 11(a) through (c), inclusive, and
the provisions of Sections 7, 9, 10, 13 and 14 with respect to the shares of
Common Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall represent the right to
purchase, at the adjusted Purchase Price, the number of shares purchasable from
time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of shares (calculated to
the nearest one-thousandth) obtained by (i) multiplying (x) the number of shares
covered by a Right immediately prior to such adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares purchasable upon the exercise of each Right.
Each of the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of Units for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price.
The Company shall make a public
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announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i) the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14, the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) In any case in which this Section 11 requires that an adjustment
in the Purchase Price be made effective as of the record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the
additional shares or securities of the Company, if any, issuable as a
consequence of such adjustment; PROVIDED, HOWEVER, that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares or securities upon the
occurrence of such event.
(l) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such adjustments in the number of shares which
may be acquired
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upon exercise of the Rights, and such adjustments in the Purchase Price, in
addition to those adjustments expressly required by the other subsections of
this Section 11, as and to the extent that the Company, in its sole discretion,
shall determine to be advisable, in order that, if (i) any reclassification,
consolidation or subdivision of the Common Stock, (ii) any reorganization or
partial liquidation of the Company or similar transaction, (iii) any issuance
wholly for cash of any Common Stock at less than the current market price,
(iv) any issuance wholly for cash of Common Stock or securities which by their
terms are convertible into or exchangeable for Common Stock, (v) any stock
dividends or (vi) any issuance of rights, options or warrants, hereafter made by
the Company to holders of its Common Stock as provided herein-above in this
Section 11, (x) the holders of the Rights in any such event shall be treated
equitably and in accordance with the purpose and intent of this Agreement, and
(y) to the extent reasonably possible, such event shall not, in the opinion of
counsel for the Company, result in the stockholders of the Company being subject
to any United States federal income tax liability by reason thereof.
Section 12. CERTIFICATION OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or 13, 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 a Right Certificate in accordance with Section 25. Notwithstanding the
foregoing sentence, the failure of the Company to give such notice shall not
affect the validity of, or the force or effect of, the requirement for such
adjustment.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) If, at any time after an Acquiring Person has become such,
(i) the Company shall consolidate with, or merge with and into,
any other Person and the Company shall not be the continuing or
surviving corporation of such consolidation or merger,
(ii) any other Person(s) shall consolidate or merge with and
into the Company, the Company shall be the continuing or surviving
corporation of such merger and, in connection with such consolidation
or merger,
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all or part of the Common Stock shall be changed into or exchanged for
stock or other securities of the Company or of any other Person or cash
or any other property, or
(iii) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating more than 50 percent of
the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person, (other than a pro rata distribution by the
Company of assets (including securities) of the Company or any of its
Subsidiaries to all holders of the Company's Common Stock),
then, on and after the later of (I) the date of the occurrence of an event
described in clause (i), (ii) or (iii) of this Section 13(a), or (II) the date
of the expiration of the period within which the Rights may be redeemed pursuant
to Section 23 (as the same may have been amended as provided in Section 26):
(A) proper provision shall be made so that each holder of a
Right shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price, such number of shares of
common stock of the Principal Party as shall be equal to the result
obtained by (x) multiplying the then current Purchase Price by the
number of Units for which a Right is then exercisable and dividing
that product by (y) 50 percent of the current market price per share
of the common stock of the Principal Party (determined in the same
manner as the current market price of Common Stock is determined under
Section 11(d)) on the date of consummation of such consolidation,
merger, sale or transfer;
(B) the Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to
this Agreement, and proper provision shall be made for the foregoing,
provided that the Principal Party shall, prior to the first occurrence
of an event described in clause (i), (ii) or (iii) of this Section
13(a), have caused to be reserved out of its authorized and unissued
shares of common stock (or its authorized and issued shares of common
stock held in its treasury), for issuance
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pursuant to this Agreement, the number of shares of common stock that
will be sufficient to permit the exercise in full of the Rights after
the occurrence of such event;
(C) the term "Company" wherever used in this Agreement shall
thereafter be deemed to refer to such Principal Party; and
(D) the Principal Party shall, in addition to the reservation of
shares of its common stock as provided in the proviso to clause (B)
above, take such steps (including without limitation compliance with
the Company's other obligations as set forth in Section 9) in
connection with such consummation as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the shares of its Common Stock
thereafter deliverable upon the exercise of the Rights; PROVIDED,
HOWEVER, that, upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all assets,
recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each
holder of a Right shall thereupon be entitled to receive, upon
exercise of a Right and payment of the Purchase Price, such cash,
shares, rights, warrants and other property which such holder would
have been entitled to receive had such holder, at the time of such
transaction, owned the shares of common stock of the Principal Party
purchasable upon the exercise of a Right, and such Principal Party
shall take such steps (including, but not limited to, reservation of
shares of stock) as may be necessary to permit the subsequent exercise
of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property.
(b) For purposes of this Agreement, "Principal Party" shall mean
(i) in the case of any transaction described in clause (i) or
(ii) of Section 13(a), (A) the Person that is the issuer of the securities
into which shares of Common Stock are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer the
common stock of which has the greatest market value, or (B) if no
securities are so issued, (x) the Person that is the other party to the
merger or
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consolidation and that survives said merger or consolidation, or, if there
is more than one such Person, the Person the common stock of which has the
greatest market value or (y) if the Person that is the other party to the
merger or consolidation does not survive the merger or consolidation, the
Person that does so survive (including the Company if it survives); and
(ii) in the case of any transaction described in clause (iii) of
Section 13(a), the Person that is the party receiving the greatest portion
of the assets or earning power transferred pursuant to such transaction or
transactions, or, if each Person that is a party to such transaction or
transactions receives the same portion of the assets or earning power so
transferred or if the Person receiving the greatest portion of the assets
or earning power cannot be determined, whichever of such Persons is the
issuer of common stock having the greatest market value of shares
outstanding;
PROVIDED, HOWEVER, that in any such case, (1) if the common stock of such Person
is not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary of another corporation the common stock of which
is and has been so registered, "Principal Party" shall refer to such other
corporation; (2) if the common stock of such Person is not and has not been so
registered and such Person is not a direct or indirect Subsidiary of another
corporation the common stock of which is and has been so registered, "Principal
Party" shall refer to the corporation which ultimately controls such Person;
(3) in case such Person is a Subsidiary, directly or indirectly, of more than
one corporation, the common stocks of all of which are and have been so
registered, "Principal Party" shall refer to whichever of such corporations is
the issuer of common stock having the greatest market value of shares held by
the public; and (4) if the common stock of such Person is not and has not been
so registered and such Person is owned, directly or indirectly, by a joint
venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in clauses (1), (2) and (3)
above shall apply to each of the chains of ownership having an interest in such
joint venture as if such Person were a "Subsidiary" of both or all of such joint
venturers and the Principal Party in each such chain shall bear the obligations
set forth in this Section 13 in the same ratio as its direct or indirect
interests in such Person bear to the total of such interests.
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(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless prior thereto the Company and the Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement making
valid provision for the results described in clause (A) of Section 13(a) and
confirming that the Principal Party will perform its obligations under this
Section 13(a); PROVIDED, HOWEVER, that in no case may the Company consummate any
such consolidation, merger, sale or transfer if (i) at the time of or
immediately after such transaction there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (ii) prior to, simultaneously with or immediately
after such transaction, the shareholders of the Person which constitutes, or
would constitute, the Principal Party for purposes of this Section 13 shall have
received a distribution of Rights previously owned by such Person or any of its
Affiliates and Associates.
(d) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. This Section
13 shall not be applicable to a transaction described in Subparagraphs (i), (ii)
or (iii) of Subsection (a) of this Section if (i) such transaction is
consummated with a Person or Persons who acquired Common Stock pursuant to a
Qualified Offer (or a wholly owned subsidiary of any such Person or Persons),
(ii) the price per share of Common Stock offered in such transaction or
distributable to shareholders upon conclusion of such transaction is not less
than the price per share of Common Stock paid to all holders of Common Stock
whose shares were purchased pursuant to such Qualified Offer and (iii) the form
of consideration being offered to the remaining holders of Common Stock pursuant
to such transaction or distributable to shareholders upon conclusion of such
transaction is the same as the form of consideration paid pursuant to such
Qualified Offer. Upon conclusion of any transaction described in the foregoing
sentence, all Rights shall expire.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. If the
Company shall elect not to issue such fractional Rights, in lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such
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Fractional Rights would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole Right. For the purposes of
this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ. If on any such
date the Rights are not quoted by any such organization, the fair value of the
Rights on such date as determined in good faith by the Board of Directors of the
Company shall be used. Any such determination of current market value shall be
described in a statement filed with the Rights Agent.
(b) The Company shall not be required to issue fractions of shares
upon exercise of a Right or to distribute certificates which evidence fractional
shares. In lieu of fractional shares, the Company shall pay to the registered
holders of Right Certificates at the time such Right Certificates are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of a share of Common Stock. For purposes of this Section 14, the
current market value of a share of Common Stock shall be the closing price of a
share of Common Stock (as determined pursuant to the second sentence of Section
11(d)) for the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance thereof expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right.
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Right
Certificates (and prior to the Distribution Date, the registered holders of the
Common Stock), and any registered holder of any Right
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<PAGE>
Certificate (or, prior to the Distribution Date, any registered holder of the
Common Stock), without the consent of the Rights Agent or of the holder of any
other Right Certificate (or, prior to the Distribution Date, any other
registered holder of the Common Stock), may, on his own behalf and for his own
benefit, enforce, and may institute and maintain, any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) on and after the Distribution Date, the Right Certificates will
be transferable only on the registry books of the Rights Agent and then if
surrendered at the stock transfer office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificates or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Common Stock or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall
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anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 24), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) 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
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 in the premises.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Right Certificate
or Certificate for Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it, acting with reasonable care, to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons.
If and for so long as the Rights are listed on the New York Stock
Exchange or the American Stock Exchange, the Rights Agent, if its principal
offices are located outside New York City, shall maintain in the New York City
area facilities for the servicing of the Rights in the area of Manhattan located
south of Chambers Street. Such facilities may consist of either an office or
agency where transactions in the Rights are serviced directly or a "drop" where
Common Stock certificates, Right Certificates, and other
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instruments relating to transactions in Rights may be received for redelivery to
an office or agency outside New York City, all in accordance with the applicable
rules of the stock exchange on which the Rights are listed.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the stock transfer business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned,
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned, and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name, and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
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(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved 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 proved and
established by a certificate signed by the Chairman of the Board, the President,
any Vice President, or the Secretary of the Company and delivered to the Rights
Agent, and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof), nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate, nor shall it
be responsible for any adjustment required under the provisions of Section 11 or
13 or responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of any such adjustment), nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any shares of stock to be issued pursuant to this Agreement or
any Right Certificate
33
<PAGE>
or as to whether any shares of stock will, when issued, be validly authorized
and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performance 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 the
Chairman of the Board, the President, any Vice President or the Secretary of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such
officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first obtaining the Company's approval.
34
<PAGE>
Section 21. CHANGE OF RIGHTS AGENT. Unless the Company and the
Rights Agent agree to a shorter time period, the Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 15 days' notice 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 Right
Certificates by first-class mail. Unless the Company and the Rights Agent agree
to a shorter time period, the Company may remove the Rights Agent or any
successor Rights Agent upon 15 days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of Common Stock by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 15 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 a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of the State of 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 California) in good standing, having a stock transfer office in the
State of California, which is authorized under such laws to exercise stock
transfer powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100,000,000. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed, but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of Common Stock and mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legali-
35
<PAGE>
ty or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Expiration Date, the Purchase Price per share or the number or
kind or class of shares of stock or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Agreement.
Section 23. REDEMPTION.
(a) The Board of Directors of the Company may, at its option and as
provided herein, and notwithstanding the provisions of Sections 11 and 13 of
this Agreement, elect to redeem all but not less than all of the then
outstanding Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend, reclassification or similar
transaction occurring after the date hereof (such redemption price being herein
referred to as the "Redemption Price") at any time up to the Close of Business
on the tenth Business Day after a Stock Acquisition Date; PROVIDED, HOWEVER, the
Board of Directors of the Company may authorize the redemption of the Rights
after the time that an Acquiring Person has become such only if (i) there is at
least one Continuing Director then in office and (ii) a majority of all of the
Continuing Directors then in office approves such redemption.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Company shall make a public
announcement thereof, and from and after the date of such announcement, without
any further action and without any further notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. As soon as practicable after the
election of the Board of Directors to redeem the Rights, the Company shall give
notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
36
<PAGE>
Section 24. NOTICE OF PROPOSED ACTIONS. In case the Company, after
the Rights become exercisable, shall propose (i) to pay any dividend payable in
stock of any class to the holders of its Common Stock or the Subject Shares or
to make any other distribution to the holders of its Common Stock or Subject
Shares (other than a regular periodic cash dividend), or (ii) to offer to the
holders of its Common Stock or Subject Shares rights or warrants to subscribe
for or to purchase any additional shares of Common Stock or shares of stock of
any class or any other securities, rights or options, or (iii) to effect any
reclassification of its Common Stock or Subject Shares (other than a
reclassification involving only the subdivision of outstanding shares of Common
Stock) or any recapitalization or reorganization of the Company, or (iv) to
effect any consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of more than 50 percent of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person, or (v) 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 25, a notice of such proposed
action, which shall specify the record date for the purposes of such dividend,
distribution of rights or warrants, or the date on which such reclassification,
recapitalization, reorganization, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of Common Stock and/or Subject Shares, if
any such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least twenty days prior to the
record date for determining holders of the Common Stock and/or Subject Shares
for purposes of such action, and in the case of any such other action, at least
twenty days prior to the date of the taking of such proposed action or the date
of participation therein by the holders of Common Stock and/or Subject Shares,
whichever shall be the earlier. The failure to give notice required by this
Section 24 or any defect thereon shall not affect the legality or validity of
the action taken by the Company or the vote upon any such action.
Section 25. NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
37
<PAGE>
address is filed in writing with the Rights Agent) as follows:
International Rectifier Corporation
233 Kansas Street
El Segundo, California 90245
Attention: Eric Lidow, Chairman of the Board
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
Chase Mellon Shareholder Services
15821 Ventura Blvd., Suite 670
Encino, California 91436
Attention: Derek G. Webster
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Right Certificate shall
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company and
the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the Distribution Date and
subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Right Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder (which lengthening or
shortening, after the time that any Acquiring Person has become such, shall be
effective only if (x) there is at least one Continuing Director then in office
and (y) a majority of all of the Continuing Directors then in office have
approved of such action), or (iv) to change or supplement the provisions hereof
in any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Right Certificates;
PROVIDED, HOWEVER, this Agreement may not be supplemented or amended to
lengthen, pursuant to
38
<PAGE>
clause (iii) of this sentence, (A) a time period relating to when the Rights may
be redeemed at such time as the Rights are not then redeemable, or (B) any other
time period, unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights.
Upon the delivery of a certificate from an appropriate officer of the Company
which states that the proposed supplement or amendment is in compliance with the
terms of this Section 26, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything contained in this Agreement to the
contrary: (1) no supplement or amendment shall be made which changes the
Redemption Price, the Purchase Price or the number of shares or Units for which
a Right is exercisable; and (2) the duration of the Rights may not be shortened
without the written consent of the registered holders thereof (other than by a
redemption of the Rights pursuant to Section 23). Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.
Section 27. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become subject to the provisions of Section 7(f) hereof) for Common Stock
at an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio").
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of this
Section and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
PROVIDED, HOWEVER, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not
39
<PAGE>
the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become subject to the provisions of
Section 7(f) hereof) held by each holder of Rights.
(c) If there shall not be sufficient authorized Common Stock to
permit an exchange of Rights as contemplated in accordance with this Section,
the Company shall take all such action as may be necessary to authorize
additional Common Stock or Equivalent Stock for issuance upon exchange of the
Rights.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. DETERMINATION AND ACTIONS TAKEN BY THE BOARD OF
DIRECTORS. For all purposes of this Agreement, any calculation of the number of
shares of Common Stock (or other applicable securities hereunder) outstanding at
any particular time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock (or other securities) of
which any Person is the Beneficial Owner, shall be made in accordance with the
last sentence of Rule 13d-3(d)(1)(i) (as in effect on the date of this
Agreement) of the General Rules and Regulations under the Exchange Act. 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 such Board or to the Company, or as may be necessary or advisable in
the administration of this 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 (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (B) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith,
shall (A) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (B) not subject the Board to
any liability to the holders of the Rights.
40
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Section 30. 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 registered holders of the Right Certificates (and, prior to the
Distribution Date, the holders of Common Stock) any legal or equitable right,
remedy or claim under this Agreement. This Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the holders of
Common Stock).
Section 31. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of 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. The rights and obligations of the Rights
Agent under this Agreement shall be governed by and construed in accordance with
the laws in effect in the State of Delaware.
Section 32. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. SECTION HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 34. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, illegal, or unenforceable, (i) such invalid,
illegal or unenforceable term, provision, covenant or restriction shall
nevertheless be valid, legal and enforceable to the extent, if any, provided by
such court or authority, and (ii) the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
41
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
INTERNATIONAL
RECTIFIER CORPORATION:
By: /s/ Alexander Lidow
--------------------------
Title: Chief Executive Officer
CHASE MELLON
SHAREHOLDER SERVICES:
By: /s/ D. G. Webster
--------------------------
Title: Assistant Vice President
42
<PAGE>
EXHIBIT A
[Form of Right Certificate]
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER PUBLIC ANNOUNCEMENT OF
REDEMPTION IS MADE. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.01 PER RIGHT ON THE TERMS SET FORTH IN THE
AGREEMENT. IF THE RIGHTS
REPRESENTED BY THIS CERTIFICATE ARE ISSUED TO
A PERSON WHO IS AN ACQUIRING PERSON OR AN ASSOCIATE
OR AFFILIATE THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) OR CERTAIN TRANSFEREES
THEREOF, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BE SUBJECT TO CERTAIN
LIMITATIONS IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7 OF THE RIGHTS AGREEMENT.
RIGHT CERTIFICATE
This certifies that _______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of August __ , 1996 (the "Rights Agreement"), between
International Rectifier Corporation, (the "Company"), and Chase Mellon
Shareholder Services (the "Rights Agent"), to purchase from the Company, unless
the Rights have been previously redeemed, at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to the
Expiration Date (as such term is defined in the Rights Agreement), or the date,
if any, on which the Rights evidenced by this Certificate may be redeemed, at
the stock transfer office of the Rights Agent, or its successors as Rights
Agent, one one-thousandth of a fully paid and nonassessable share of Junior
Participating Preferred Stock ("Preferred Shares"), at a purchase price of $____
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly completed and executed.
The number of Rights evidenced by this Right Certificate as set forth above (and
the number of shares which may be purchased upon exercise thereof), and the
Purchase Price set forth
A-1
<PAGE>
above, are the number and Purchase Price as of the date of the Rights Agreement
based on the shares of Common Stock of the Company as constituted at such date.
Upon the occurrence of an event described in clause (A), (B), (C) or
(D) of Section 11(a)(ii) of the Rights Agreement, the holder of any Rights that
are, or were, beneficially owned by an Acquiring Person or an Associate or
Affiliate thereof (as such terms are defined in the Rights Agreement) or certain
transferees thereof which engaged in, or realized the benefit of, an event or
transaction or transactions described in clause (A), (B), (C) or (D) of such
Section 11(a)(ii), shall not be entitled to the benefit of the adjustment
described in such Section 11(a)(ii).
As provided in the Rights Agreement, the Purchase Price and the number
and class of shares which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and at the principal office of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the stock transfer office of the Rights Agent set forth above, may
be exchanged for another Right Certificate or Right Certificates of like tenor
and date evidencing Rights entitling the holder to purchase such number of
shares as the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Right Certificate or Right Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right.
A-2
<PAGE>
No fractional shares will be issued upon the exercise of any Rights
evidenced hereby, but in lieu thereof a cash payment may be made, as provided in
the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares or of any
other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signatures of the proper officers of the
Company. Dated as of ____________, ____.
Attest:
__________________________ By: _________________________
Secretary Title:
Countersigned:
__________________________
By: _____________________
Authorized Signature
A-3
<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED __________________________________________________
hereby sells, assigns and transfers unto ______________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ____________________ Attorney to
transfer the within Right Certificate on the books of the within-named
Corporation, with full power of substitution.
Dated: ____________, ____ ______________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best
knowledge of the undersigned) by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement);
(2) the undersigned [ ] did [ ] did not acquire the Rights evidenced
by this Right Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Date: ______________, ____ ______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
A-4
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To the Company and the Rights Agent:
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented by this Right Certificate and to purchase
the shares issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name of:
Please insert social security
or other identifying number: _____________________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number: _____________________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Dated: ______________, ____
Signature: __________________
(Signature must conform
in all respects to name
of holder as specified on
the face of this Right
Certificate)
Signature Guaranteed:
A-5
<PAGE>
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best
knowledge of the undersigned) by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement);
(2) the undersigned [ ] did [ ] did not acquire the Rights evidenced
by this Right Certificate from any person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Date: ______________, ____ ______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
A-6
<PAGE>
EXHIBIT B
SUMMARY OF RIGHTS
On August 2, 1996, the Board of Directors of International Rectifier
Corporation (the "Company") declared a distribution of one Right for each
outstanding share of common stock (the "Common Shares") of the Company. The
distribution is to be made as of August 14, 1996 (the "Record Date") to the
stockholders of record on that date. Each Right entitles the registered holder
to purchase from the Company, initially, one one-thousandth of a share of Junior
Participating Preferred Stock ("Preferred Shares") at a price of $135.00 (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement between the Company and Chase Mellon
Shareholder Services as Rights Agent. The Rights are designed to protect the
Company from unfair takeovers.
Preferred Shares purchasable upon exercise of the Rights will be
entitled to dividends of 1,000 times the dividends, per share, declared on the
Common Shares and in the event of liquidation will be entitled to a minimum
preferential liquidating distribution of $l,000 per share and an aggregate
liquidating distribution, per share, of 1,000 times the distribution made per
Common Share. The Preferred Shares will vote together with the Common Shares
and in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to receive
1,000 times the amount received per Common Share.
Because of the Preferred Shares' dividend and liquidation rights, the
value when issued of the one one-thousandth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
Until the earlier to occur of (i) 10 business days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired beneficial ownership of 20% or more of the
Company's general voting power other than pursuant to a Qualified Offer (as
defined below), the date of such public announcement being called the "Stock
Acquisition Date," or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors) following the commencement of,
or announcement of an intention to
B-1
<PAGE>
make, a tender offer or exchange offer the consummation of which would result in
the beneficial ownership by a person or group of 20% or more of the Company's
general voting power (the date of such earlier occurrence being called the
"Distribution Date"), the Rights will be evidenced by the certificates
representing the Common Shares and will be transferred with and only with the
Common Shares. New Common Share certificates issued after the Record Date upon
transfer or new issuance of Common Shares will contain a notation incorporating
the Rights Agreement by reference, and the surrender for transfer of any
certificate for Common Shares, even without such notation or a copy of this
Summary of Rights being attached thereto, will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificate.
As soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Common Shares as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on the tenth anniversary of the Record Date (the "Final
Expiration Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, as described below.
The Purchase Price payable, the number of shares or other securities
or property issuable upon exercise of the Rights, and the number of outstanding
Rights, are subject to adjustment from time to time to prevent dilution.
A QUALIFIED OFFER is a tender offer or exchange offer for all
outstanding Common Shares which is determined by the non-affiliated continuing
directors to be fair to and otherwise in the best interests of the Company and
its shareholders.
If any person becomes an Acquiring Person other than by a purchase
pursuant to a QUALIFIED OFFER, proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring Person
(which will not be entitled to the benefit of such adjustment) will thereafter
have the right to receive upon exercise that number of Common Shares or Common
Share equivalents having a market value of two times the exercise price of the
Right.
B-2
<PAGE>
If, at any time after an Acquiring Person has become such, the Company
is acquired in a merger or other business combination transaction (other than a
merger which follows a QUALIFIED OFFER at the same or a higher price) or 50% or
more of its consolidated assets or earning power are sold, proper provision will
be made so that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring company which at
the time of such transaction will have a market value of two times the exercise
price of the Right.
At any time after an Acquiring Person has become such, the Board of
Directors of the Company may exchange the Rights (other than Rights owned by
such person or group), in whole or in part, at an exchange ratio of one Common
Share per Right (subject to adjustment).
Up to and including the tenth business day after a Stock Acquisition
Date, the Board of Directors of the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (the "Redemption Price").
Immediately upon any redemption of the Rights, the right to exercise them will
terminate and the only right of the holders will be to receive the Redemption
Price.
The terms of the Rights may be amended by the Board of Directors
without the consent of the holders of the Rights at any time prior to the
Distribution Date. Thereafter the Rights may be amended to make changes which do
not adversely affect the interests of the holders of the Rights, or which
shorten or lengthen time periods, subject to certain limitations set forth in
the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company.
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to a registration statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
B-3
<PAGE>
EXHIBIT C
CERTIFICATE OF DESIGNATIONS
of
JUNIOR PARTICIPATING PREFERRED STOCK
of
INTERNATIONAL RECTIFIER CORPORATION
International Rectifier Corporation, a Delaware corporation (the
"Corporation"), hereby certifies that the following resolution has been duly
adopted by the Board of Directors of the Corporation:
RESOLVED, that pursuant to the authority granted to the Board of
Directors of the Corporation by the Certificate of Incorporation, a series of
shares of the Preferred Stock of the Corporation is hereby established and the
number of shares constituting such series and the designation thereof, and the
rights, preferences, privileges and restrictions of the shares of such series,
are fixed and established as follows:
I. DESIGNATION AND AMOUNT
The shares of such series shall be designated as "Junior Participating
Preferred Stock" (the "Junior Preferred Stock") and the number of shares
constituting the Junior Preferred Stock shall be one hundred fifty thousand
(150,000). Such number of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall reduce the number of
shares of Junior Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Junior
Preferred Stock.
II. DIVIDENDS AND DISTRIBUTIONS
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Junior
Preferred Stock with respect to dividends, the holders of shares of Junior
Preferred Stock, in preference to the holders of Common Stock of the
Corporation, shall be entitled to receive,
C-1
<PAGE>
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first day
of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Junior Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth, 1,000 times the aggregate per
share amount of all cash dividends, and 1,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared
on the Common Stock since the immediately preceding Quarterly Dividend Payment
Date or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Junior Preferred Stock. If
the Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Junior Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Junior
Preferred Stock as provided in paragraph (A) of this Section immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, if no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1.00 per share on the Junior Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares of
Junior Preferred Stock from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares, unless the date of issue of such shares is
prior to the record date for the first Quarterly
C-2
<PAGE>
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Junior Preferred Stock entitled to receive
a quarterly dividend and before such Quarterly Dividend Payment Date, in either
of which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Junior Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Junior Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment
thereof.
III. VOTING RIGHTS
The holders of shares of Junior Preferred Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each share
of Junior Preferred Stock shall entitle the holder thereof to 1,000 votes on all
matters submitted to a vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein, or in any other resolutions of the
Board creating a series of Preferred Stock or any similar stock, or by law, the
holders of shares of Junior Preferred Stock and the holders of shares of Common
Stock and any other capital stock of the Corporation having general voting
rights shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as set forth herein, in the Corporation's Certificate of
Incorporation or as otherwise provided by law, holders of Junior Preferred Stock
shall have no voting rights.
IV. CERTAIN RESTRICTIONS
(A) Whenever quarterly dividends or other dividends or distributions payable on
the Junior Preferred Stock as provided in Section II are in arrears, thereafter
and until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Junior Preferred Stock
C-3
<PAGE>
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Junior Preferred Stock,
except dividends paid ratably on the Junior Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares of
any such junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Junior Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Junior Preferred Stock, or any shares of stock ranking on a
parity with the Junior Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section IV
purchase or otherwise acquire such shares at such time and in such manner.
C-4
<PAGE>
V. REACQUIRED SHARES
Any shares of Junior Preferred Stock purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock subject to the conditions
and restrictions on issuance set forth herein, in the Certificate of
Incorporation, in any other Certificate of Designations creating a series of
Preferred Stock or any similar stock or as otherwise required by law.
VI. LIQUIDATION, DISSOLUTION OR WINDING UP
Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Junior Preferred Stock unless, prior thereto, the holders of shares of Junior
Preferred Stock shall have received $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Junior
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Junior Preferred Stock, except distributions made ratably on the Junior
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation, disso-
lution or winding up. If the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the aggregate amount to which holders of shares of Junior
Preferred Stock were entitled immediately prior to such event under the proviso
in clause (1) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
C-5
<PAGE>
VII. CONSOLIDATION, MERGER, ETC.
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Junior Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. If the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Junior
Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
VIII. REDEMPTION
The shares of Junior Preferred Stock shall not be redeemable.
IX. RANK
The Junior Preferred Stock shall rank, with respect to the payment of
dividends and the distribution of assets, junior to all series of any other
class of the Corporation's Preferred Stock.
X. AMENDMENT
The Certificate of Incorporation of the Corporation shall not be
amended in any manner which would alter or change the powers, preferences or
special rights of the Junior Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Junior Preferred Stock, voting together as a single class.
C-6
<PAGE>
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its Chief Executive Officer and attested by its
Secretary each of whom affirms that the facts stated herein are true this 5th
day of August, 1996.
/s/ Derek B. Lidow
---------------------
By:
Title: Chief Executive Officer
Attest:
/s/ Gerald A. Koris
----------------------
By: Gerald A. Koris
Title: Secretary
C-7
<PAGE>
EXHIBIT 3
[LETTERHEAD]
Dear Shareholder:
Your Board of Directors has adopted a Shareholder Rights Plan and declared
a distribution of rights under the Plan to shareholders of record on August 14,
1996.
After careful consideration your Board concluded that the Plan serves as a
reasonable and appropriate precaution against the risks posed to shareholder
interests by coercive or abusive takeover attempts and tactics that discriminate
unfairly among shareholders and undermine their best interests. The Board
believes that the Plan will enable it to more effectively protect shareholder
values against such tactics, which are commonplace in takeover attempts.
The Rights granted under the Plan are designed to ensure that all
shareholders receive fair and equitable treatment in any unsolicited bid for the
Company. The Rights are not intended to preclude legitimate offers to acquire
the Company; however, they are intended to encourage anyone seeking to acquire
the Company to negotiate with the Directors before attempting a takeover. The
Rights Plan was not adopted in response to any takeover threats, and the Company
is not aware of any efforts to acquire it.
Adoption of the Rights Plan and issuance of the Rights are not taxable to
shareholders or to the Company and do not affect the financial strength of the
Company or the reported earnings per share.
No action is necessary on your part. The Rights granted to you as a holder
of record of Common Stock on August 14, 1996 initially will be represented by,
and trade together with, the Company's Common Stock. A summary description of
the Rights Plan is enclosed, and we urge you to read it carefully.
The Directors believe that the Rights Plan represents a prudent means of
addressing any future possibility of abusive takeover tactics and enables the
Board to ensure that the Company's shareholders are treated fairly. Consistent
with our goal to create long-term value for our shareholders, the adoption of
the Rights Plan is designed to preserve the full value of your investment in
International Rectifier Corporation.
Similar plans have been adopted by more than 1,000 major companies. If you
have any questions, please call Lesley Kleveter, Assistant Secretary, at
(310) 726-8482.
Sincerely,
/s/ ERIC LIDOW
-------------------------------
Eric Lidow
<PAGE>
ATTACHMENT
SUMMARY OF RIGHTS
On August 2, 1996, the Board of Directors of International Rectifier
Corporation (the "Company") declared a distribution of one Right for each
outstanding share of common stock (the "Common Shares") of the Company. The
distribution is to be made as of August 14, 1996 (the "Record Date") to the
stockholders of record on that date. Each Right entitles the registered holder
to purchase from the Company, initially, one one-thousandth of a share of Junior
Participating Preferred Stock ("Preferred Shares") at a price of $135.00 (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement between the Company and Chase Mellon
Shareholder Services as Rights Agent. The Rights are designed to protect the
Company from unfair takeovers.
Preferred Shares purchasable upon exercise of the Rights will be
entitled to dividends of 1,000 times the dividends, per share, declared on the
Common Shares and in the event of liquidation will be entitled to a minimum
preferential liquidating distribution of $l,000 per share and an aggregate
liquidating distribution, per share, of 1,000 times the distribution made per
Common Share. The Preferred Shares will vote together with the Common Shares
and in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to receive
1,000 times the amount received per Common Share.
Because of the Preferred Shares' dividend and liquidation rights, the
value when issued of the one one-thousandth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
Until the earlier to occur of (i) 10 business days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired beneficial ownership of 20% or more of the
Company's general voting power other than pursuant to a Qualified Offer (as
defined below), the date of such public announcement being called the "Stock
Acquisition Date," or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors) following the commencement of,
or announcement of an intention to
<PAGE>
make, a tender offer or exchange offer the consummation of which would result in
the beneficial ownership by a person or group of 20% or more of the Company's
general voting power (the date of such earlier occurrence being called the
"Distribution Date"), the Rights will be evidenced by the certificates
representing the Common Shares and will be transferred with and only with the
Common Shares. New Common Share certificates issued after the Record Date upon
transfer or new issuance of Common Shares will contain a notation incorporating
the Rights Agreement by reference, and the surrender for transfer of any
certificate for Common Shares, even without such notation or a copy of this
Summary of Rights being attached thereto, will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificate.
As soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Common Shares as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on the tenth anniversary of the Record Date (the "Final
Expiration Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, as described below.
The Purchase Price payable, the number of shares or other securities
or property issuable upon exercise of the Rights, and the number of outstanding
Rights, are subject to adjustment from time to time to prevent dilution.
A QUALIFIED OFFER is a tender offer or exchange offer for all
outstanding Common Shares which is determined by the non-affiliated continuing
directors to be fair to and otherwise in the best interests of the Company and
its shareholders.
If any person becomes an Acquiring Person other than by a purchase
pursuant to a QUALIFIED OFFER, proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring Person
(which will not be entitled to the benefit of such adjustment) will thereafter
have the right to receive upon exercise that number of Common Shares or Common
Share equivalents having a market value of two times the exercise price of the
Right.
<PAGE>
If, at any time after an Acquiring Person has become such, the Company
is acquired in a merger or other business combination transaction (other than a
merger which follows a QUALIFIED OFFER at the same or a higher price) or 50% or
more of its consolidated assets or earning power are sold, proper provision will
be made so that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring company which at
the time of such transaction will have a market value of two times the exercise
price of the Right.
At any time after an Acquiring Person has become such, the Board of
Directors of the Company may exchange the Rights (other than Rights owned by
such person or group), in whole or in part, at an exchange ratio of one Common
Share per Right (subject to adjustment).
Up to and including the tenth business day after a Stock Acquisition
Date, the Board of Directors of the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (the "Redemption Price").
Immediately upon any redemption of the Rights, the right to exercise them will
terminate and the only right of the holders will be to receive the Redemption
Price.
The terms of the Rights may be amended by the Board of Directors
without the consent of the holders of the Rights at any time prior to the
Distribution Date. Thereafter the Rights may be amended to make changes which do
not adversely affect the interests of the holders of the Rights, or which
shorten or lengthen time periods, subject to certain limitations set forth in
the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company.
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to a registration statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
<PAGE>
EXHIBIT 4
CERTIFICATE OF DESIGNATIONS
of
JUNIOR PARTICIPATING PREFERRED STOCK
of
INTERNATIONAL RECTIFIER CORPORATION
International Rectifier Corporation, a Delaware corporation (the
"Corporation"), hereby certifies that the following resolution has been duly
adopted by the Board of Directors of the Corporation:
RESOLVED, that pursuant to the authority granted to the Board of
Directors of the Corporation by the Certificate of Incorporation, a series of
shares of the Preferred Stock of the Corporation is hereby established and the
number of shares constituting such series and the designation thereof, and the
rights, preferences, privileges and restrictions of the shares of such series,
are fixed and established as follows:
I. DESIGNATION AND AMOUNT
The shares of such series shall be designated as "Junior Participating
Preferred Stock" (the "Junior Preferred Stock") and the number of shares
constituting the Junior Preferred Stock shall be one hundred fifty thousand
(150,000). Such number of shares may be increased or decreased by resolution of
the Board of Directors; PROVIDED, that no decrease shall reduce the number of
shares of Junior Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Junior
Preferred Stock.
II. DIVIDENDS AND DISTRIBUTIONS
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Junior
Preferred Stock with respect to dividends, the holders of shares of Junior
Preferred Stock, in preference to the holders of Common Stock of the
Corporation, shall be entitled to receive,
<PAGE>
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first day
of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Junior Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth, 1,000 times the aggregate per
share amount of all cash dividends, and 1,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared
on the Common Stock since the immediately preceding Quarterly Dividend Payment
Date or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Junior Preferred Stock. If
the Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Junior Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Junior
Preferred Stock as provided in paragraph (A) of this Section immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); PROVIDED that, if no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1.00 per share on the Junior Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares of
Junior Preferred Stock from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares, unless the date of issue of such shares is
prior to the record date for the first Quarterly
<PAGE>
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Junior Preferred Stock entitled to receive
a quarterly dividend and before such Quarterly Dividend Payment Date, in either
of which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Junior Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Junior Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment
thereof.
III. VOTING RIGHTS
The holders of shares of Junior Preferred Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each share
of Junior Preferred Stock shall entitle the holder thereof to 1,000 votes on all
matters submitted to a vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein, or in any other resolutions of the
Board creating a series of Preferred Stock or any similar stock, or by law, the
holders of shares of Junior Preferred Stock and the holders of shares of Common
Stock and any other capital stock of the Corporation having general voting
rights shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as set forth herein, in the Corporation's Certificate of
Incorporation or as otherwise provided by law, holders of Junior Preferred Stock
shall have no voting rights.
IV. CERTAIN RESTRICTIONS
(A) Whenever quarterly dividends or other dividends or distributions payable on
the Junior Preferred Stock as provided in Section II are in arrears, thereafter
and until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Junior Preferred Stock
<PAGE>
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Junior Preferred Stock,
except dividends paid ratably on the Junior Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Junior Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Junior Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Junior Preferred Stock, or any shares of stock ranking on a
parity with the Junior Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section IV
purchase or otherwise acquire such shares at such time and in such manner.
<PAGE>
V. REACQUIRED SHARES
Any shares of Junior Preferred Stock purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock subject to the conditions
and restrictions on issuance set forth herein, in the Certificate of
Incorporation, in any other Certificate of Designations creating a series of
Preferred Stock or any similar stock or as otherwise required by law.
VI. LIQUIDATION, DISSOLUTION OR WINDING UP
Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Junior Preferred Stock unless, prior thereto, the holders of shares of Junior
Preferred Stock shall have received $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Junior
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Junior Preferred Stock, except distributions made ratably on the Junior
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. If the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the aggregate amount to which holders of shares of Junior
Preferred Stock were entitled immediately prior to such event under the proviso
in clause (1) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
<PAGE>
VII. CONSOLIDATION, MERGER, ETC.
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Junior Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. If the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Junior
Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
VIII. REDEMPTION
The shares of Junior Preferred Stock shall not be redeemable.
IX. RANK
The Junior Preferred Stock shall rank, with respect to the payment of
dividends and the distribution of assets, junior to all series of any other
class of the Corporation's Preferred Stock.
X. AMENDMENT
The Certificate of Incorporation of the Corporation shall not be
amended in any manner which would alter or change the powers, preferences or
special rights of the Junior Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Junior Preferred Stock, voting together as a single class.
<PAGE>
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its Chief Executive Officer and attested by its
Secretary each of whom affirms that the facts stated herein are true this 5th
day of August, 1996.
/S/ Derek B. Lidow
-----------------------
By:
Title: Chief Executive Officer
Attest:
/S/ Gerald A. Koris
----------------------
By: Gerald A. Koris
Title: Secretary
