<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
AMENDMENT NO. 1
KLA Instruments Corporation
(Exact name of registrant as specified in its charter)
Delaware 04-2564110
(State of incorporation or organization) (I.R.S. Employer
Identification No.)
160 Rio Robles, San Jose, California 95134
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock Purchase Rights
(Title of Class)
<PAGE> 2
The undersigned registrant hereby amends the following item and exhibit
of its Registration Statement on Form 8-A filed with the Securities and Exchange
Commission on March 29, 1989:
ITEM 2. EXHIBITS.
Exhibit No. Description
----------- -----------
1 Amended and Restated Rights Agreement,
dated as of August 30, 1995, between the
Registrant and The First National Bank of
Boston, as Rights Agent. The Amended and
Restated Rights Agreement includes the
form of Right Certificate as Exhibit A.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
KLA INSTRUMENTS CORPORATION
Date: September 25, 1995 By: CHRISTOPHER STODDART
------------------------
Christopher Stoddart
Treasurer
3
<PAGE> 4
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
1 Amended and Restated Rights Agreement, dated as of August 30, 1995, between
the Registrant and The First National Bank of Boston, as Rights Agent. The
Amended and Restated Rights Agreement includes the form of Right
Certificate as Exhibit A.
4
<PAGE> 1
EXHIBIT 1
KLA INSTRUMENTS CORPORATION
and
THE FIRST NATIONAL BANK OF BOSTON
Rights Agent
AMENDED AND RESTATED RIGHTS AGREEMENT
Dated as of August 30, 1995
5
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C>
1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3. Issuance of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . . . . . . . . . . . . 9
8. Cancellation and Destruction of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
9. Reservation and Availability of Shares of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
10. Common Stock Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
11. Adjustments to Number and Kind of Shares, Number of Rights or Purchase Price . . . . . . . . . . . . . . . . . 12
12. Certification of Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power . . . . . . . . . . . . . . . . . . . . . 21
14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
16. Agreement of Right Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
17. Right Certificate Holder Not Deemed a Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 27
20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
22. Issuance of New Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
24. Notice of Proposed Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
26. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
27. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
29. Delaware Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
30. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
31. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
32. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
</TABLE>
ii
<PAGE> 4
RIGHTS AGREEMENT
THIS AMENDED AND RESTATED RIGHTS AGREEMENT ("Rights Agreement") is
entered into as of August 30, 1995 by and between KLA Instruments Corporation, a
Delaware corporation (the "Company"), and The First National Bank of Boston, a
national banking association (the "Rights Agent").
W I T N E S E T H:
WHEREAS, the Board of Directors of the Company on March 15, 1989 (i)
announced that it authorized the issuance and declared a dividend of one right
(a "Right") for each share of the common stock, par value $0.01 per share
("Common Stock"), of the Company outstanding as of the Close of Business on
March 27, 1989, each Right representing the right to purchase one share of
Common Stock of the Company upon the terms and subject to the conditions
hereinafter set forth, and (ii) further authorized the issuance of one Right
with respect to each share of Common Stock of the Company that shall become
outstanding between March 27, 1989, and the Distribution Date (as defined
herein) pursuant to that certain Rights Agreement dated as of March 15, 1989
(the "Prior Agreement");
WHEREAS, pursuant to Section 9(a) of the Prior Agreement, as amended,
the Company has covenanted to reserve one share of its Common Stock for every
Right outstanding;
WHEREAS, the Board has determined that it is in the best interests of
the Company and its stockholders to remove the covenant to reserve Common Stock
pursuant thereto prior to a Triggering Event (as defined under the Prior
Agreement, as amended); and
WHEREAS, the Company requested that the Prior Agreement, as amended, be
amended and restated as set forth herein and the Rights Agent is willing to
amend and restate the Prior Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the Prior Agreement is hereby amended and restated
to read in full as follows:
1. Certain Definitions. For purposes of this Rights Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, without the prior approval of the Board of Directors, shall be the
Beneficial Owner (as such term is hereinafter defined) of 20% or more of the
outstanding Common Stock; provided, however, that in no event shall a Person who
or which,
1
<PAGE> 5
together with all Affiliates and Associates of such Person, is the Beneficial
Owner of less than 20% of the Company's outstanding shares of Common Stock,
become an Acquiring Person solely as a result of a reduction of the number of
shares of outstanding Common Stock, including repurchases of outstanding shares
of Common Stock by the Company, which reduction increases the percentage of
outstanding shares of Common Stock beneficially owned by such person, and
provided, further, that an Acquiring Person shall not include an Exempt Person
(as such term is hereinafter defined).
(b) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), as in effect on March 15, 1989.
(d) 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 or only after the passage of time) pursuant to any
agreement, arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own", securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or exchange;
or (B) the right to vote pursuant to any agreement, arrangement or understanding
(whether or not in writing); provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own", any securities if
the agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is not also then reportable by
such Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquiring, holding, voting
(except as described in clause (B) of subparagraph (ii) of this paragraph (d) or
disposing of any securities of the Company.
2
<PAGE> 6
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the Commonwealth of
Massachusetts are authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
Boston time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Boston time, on the next succeeding
Business Day.
(g) "Common Stock" when used with reference to the Company
shall mean the common stock (presently $0.001 par value per share) of the
Company. "Common Stock" when used with reference to any Person other than the
Company which shall be organized in corporate form shall mean the capital stock
or other equity security with the greatest per share voting power of such Person
or, if such Person is a Subsidiary of or is controlled by another Person, the
Person which ultimately controls such first-mentioned Person. "Common Stock"
when used with reference to any Person other than the Company which shall not be
organized in corporate form shall mean units of beneficial interest which shall
represent the right to participate in profits, losses, deductions and credits of
such Person and which shall be entitled to exercise the greatest voting power
per unit of such Person.
(h) "Common Stock Equivalents" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(i) "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.
(j) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(k) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(l) "Equivalent Common Stock" shall have the meaning set forth
in Section 11(b) hereof.
(m) "Exchange Act" shall have the meaning set forth in Section
1(c) hereof.
(n) "Exempt Person" shall mean the Company, any Subsidiary of
the Company, any employee benefit plan or employee stock plan of the Company or
of any Subsidiary of the Company, or any Person, organized, appointed,
established or holding Common Stock for or pursuant to the terms of any such
plan.
(o) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
3
<PAGE> 7
(p) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(q) "NASDAQ" shall have the meaning set forth in Section 9(b)
hereof.
(r) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(s) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(t) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(u) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(v) "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(w) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) (A), (B) or (C) hereof.
(x) "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(y) "Section 13 Event" shall mean any event described in clause
(x), (y) or (z) of Section 13(a) hereof.
(z) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(aa) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such or such earlier date as a majority of the directors shall
become aware of the existence of an Acquiring Person.
(ab) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ac) "Subsidiary" of a Person shall mean any corporation or
other entity of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of directors or other
persons performing similar functions are beneficially owned, directly or
indirectly, by such Person and any corporation or other entity that is otherwise
controlled by such Person.
4
<PAGE> 8
(ad) "Summary of Rights" shall mean the Summary of Rights to
Purchase Common Stock that was attached to the Prior Agreement as Exhibit B
thereto.
(ae) "Trading Day" shall have the meaning set forth in Section
11(d) hereof.
(af) "Triggering Event" shall mean any event described in
Section 11(a)(ii)(A), (B), or (C) or Section 13 hereof.
(ag) "Voting Power" shall mean the voting power of all
securities of the Company then outstanding and generally entitled to vote for
the election of directors of the Company.
Any determination required by the definitions contained in this Section
1 shall be made by the Board of Directors of the Company in its good faith
judgment, which determination shall be binding on the Rights Agent and the
holders of the Rights.
2. Appointment of Rights Agent. The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. With
the consent of the Rights Agent, the Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.
3. Issuance of Right Certificates.
(a) Until the earlier of (i) the Stock Acquisition Date or (ii)
the tenth day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than an Exempt Person) of, or
of the first public announcement of the intent of any Person (other than an
Exempt Person) to commence (which intention to commence remains in effect for
five business days after such announcement), 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% or more of the outstanding
Common Stock (irrespective of whether any shares are actually purchased pursuant
to any such offer) (including any such date which is after the date of this
Rights Agreement and prior to the issuance of the Rights; the earlier of such
dates being herein referred to as the "Distribution Date"), (x) the Rights will
be evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock and not by separate Right certificates, and (y) each Right will be
transferable only in connection with the transfer of a share (subject to
adjustment as hereinafter provided) of Common Stock. As soon as practicable
after the Distribution Date, the Rights Agent will mail, by first-class, postage
prepaid mail, to each record holder of the Common Stock as of the Close of
Business on the Distribution Date, as shown by the records of the Company, at
the address of such holder shown on such records, a Right certificate in
substantially the
5
<PAGE> 9
form of Exhibit A hereto ("Right Certificate") evidencing one Right for each
share of Common Stock so held. As of and after the Distribution Date the Rights
will be evidenced solely by such Right Certificates.
(b) Until the Distribution Date (or, if earlier, the Expiration
Date or Final Expiration Date), the surrender for transfer of any certificate
for Common Stock, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the surrender for transfer of the Rights
associated with the Common Stock represented thereby.
(c) Certificates issued for Common Stock (including, without
limitation, certificates issued upon transfer or exchange of Common Stock) after
August 30, 1995 but prior to the earlier of the Distribution Date, the
Expiration Date or the Final Expiration Date shall have impressed on, printed
on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in an Amended and Restated Rights Agreement
between KLA Instruments Corporation and The First National Bank of
Boston, as Rights Agent, dated as of August 30, 1995 (as amended from
time to time in accordance with its terms, the "Rights Agreement"), the
terms of which are incorporated herein by reference and a copy of which
is on file at the principal executive office of KLA Instruments
Corporation. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. KLA Instruments
Corporation will mail to the holder of this certificate a copy of the
Rights Agreement without charge within five days after receipt by it of
a written request therefor. Under certain circumstances as provided in
the Rights Agreement, Rights issued to or beneficially owned by
Acquiring Persons or their Associates or Affiliates (as defined in the
Rights Agreement) or any subsequent holder of such Rights may be
limited as provided in Section 11(a)(ii) of the Rights Agreement.
With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock represented by such certificates shall, until
the Distribution Date, be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
surrender for transfer of the Rights associated with the Common Stock
represented thereby.
4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof), when,
as and if issued, shall be substantially in the form set forth in 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 Rights
Agreement, or as may be required to
6
<PAGE> 10
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. Subject to the provisions of Sections
11 and 22 hereof, the Right Certificates evidencing the Rights issued on March
27, 1989, whenever issued, shall be dated as of March 27, 1989 and the Right
Certificates evidencing Rights to holders of record of Common Stock issued after
March 27, 1989 shall be dated as of March 27, 1989 but also be dated to reflect
the date of issuance of such Right Certificate and on their face Right
Certificates shall entitle the holders thereof to purchase one share of Common
Stock, or other securities or property as provided herein, as the same may from
time to time be adjusted as provided herein, at the price of $100.00 set forth
therein, as the same may from time to time be adjusted as provided herein (the
"Purchase Price").
(b) Notwithstanding any other provision of this Rights
Agreement, any Right Certificate that represents Rights that are or were at any
time on or after the earlier of the Stock Acquisition Date or the Distribution
Date beneficially owned by an Acquiring Person or any Affiliate or Associate
thereof (or any transferee of such Rights) shall have impressed on, printed on,
written on or otherwise affixed to it (if the Company or the Rights Agent has
knowledge that such Person is an Acquiring Person or an Associate or Affiliate
thereof or transferee of such Persons or a nominee of any of the foregoing) the
following legend:
The beneficial owner of the Rights represented by this Right
Certificate is an Acquiring Person or an Affiliate or Associate (as
defined in the Rights Agreement) of an Acquiring Person or a subsequent
holder of such Right Certificates beneficially owned by such Persons.
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 11(a)(ii) of the Rights Agreement.
5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its President or any Vice President, 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 of the
7
<PAGE> 11
Company to sign such Right Certificate, although at the date of the execution of
this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at one of its offices designated for such purposes, books
for registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates, the date of each of the Right Certificates, and the certificate
numbers for each of the Right Certificates.
6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 14(b) hereof, at any
time after the Close of Business on the Distribution Date and at or prior to the
Close of Business on the earlier of the Expiration Date or the Final Expiration
Date, any Right Certificate or Certificates may be (a) transferred or (b) split
up, combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of shares of Common
Stock as the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer any Right
Certificate shall surrender the Right Certificate at the office of the Rights
Agent designated for such purposes with the form of assignment on the reverse
side thereof duly endorsed (or enclose with such Right Certificate a written
instrument of transfer in form satisfactory to the Company and the Rights
Agent), duly executed by the registered holder thereof or his attorney duly
authorized in writing, and with such signature duly guaranteed. Any registered
holder desiring to split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be split up, combined or
exchanged at the shareholder services office of the Rights Agent. Thereupon the
Rights Agent shall countersign (by manual signature) and deliver to the person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
(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, if requested by
the Company, reimbursement to the Company 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.
8
<PAGE> 12
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The Rights shall become exercisable, and may be exercised
to purchase Common Stock, except as otherwise provided herein, 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 executed (with such signature duly guaranteed), to the Rights Agent at the
shareholder services office of the Rights Agent in Boston, Massachusetts
together with payment of the Purchase Price with respect to each Right
exercised, subject to adjustment as hereinafter provided, at or prior to the
Close of Business on the earlier of (i) March 27, 1999 ("Final Expiration
Date"), or (ii) the time at which the Rights are redeemed as provided in Section
23 hereof (such date being herein referred to as the "Expiration Date").
(b) The Purchase Price shall initially be $100.00 for each
share of Common Stock issued pursuant to the exercise of a Right. The Purchase
Price and the number of shares of Common Stock or other securities or
consideration to be acquired upon exercise of a Right shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof. The
Purchase Price shall be payable in lawful money of the United States of America,
in accordance with Section 7(c) hereof.
(c) Except as provided in Section 7(d) hereof, upon receipt of
a Right Certificate with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price or so much thereof as is necessary
for the shares to be purchased and an amount equal to any applicable transfer
tax, by cash, certified check or official bank check payable to the order of the
Company or the Rights Agent, the Rights Agent shall thereupon promptly (i)
requisition from any transfer agent of the Common Stock certificates for the
number of shares of Common Stock so elected to be purchased and the Company will
comply and hereby authorizes and directs such 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 fractional shares in accordance with Section 14(b)
hereof, and (iii) promptly after receipt of such Common Stock certificates 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 to or
upon the order of the registered holder of such Right Certificate; provided,
however, that in the case of a purchase of securities, other than Common Stock,
pursuant to Section 13 hereof, the Rights Agent shall promptly take the
appropriate actions corresponding to the foregoing clauses (i) through (iii). In
the event that the Company is obligated to issue other securities of the
Company, pay cash and/or distribute other property, the Company will make all
arrangements necessary so that such other securities, cash and/or other property
are available for distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights
9
<PAGE> 13
Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Rights 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.
8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
9. Reservation and Availability of Shares of Common Stock.
(a) Prior to a Triggering Event the Company shall not be
required to cause to be reserved and kept available, (i) out of its authorized
and unissued shares of Common Stock or (ii) out of its shares of Common Stock
not reserved for another purpose held in its treasury, shares of Common Stock
that, as provided in this Rights Agreement, would permit the exercise of
outstanding Rights and this Rights Agreement shall not constitute a commitment
by the Company to issue any such shares; provided, however, that from and after
a Triggering Event the Company shall, to the extent required by Sections
11(a)(ii), 11(a)(iii) and 13, be required to reserve and keep available shares
of Common Stock or other securities, cash or property (or, in the case of
Section 13, the Principal Party shall be required to reserve and keep available
shares of Common Stock of the Principal Party) sufficient to permit the exercise
in full of all outstanding Rights pursuant to the adjustments provided for in
those sections. In the event that, prior to a Triggering Event, the number of
shares of Common Stock (a) authorized by the Company's certificate of
incorporation but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights or (b) held in the Company's treasury and not
received for another purpose is not sufficient to permit the exercise in full of
any Rights that become exercisable and are exercised, the Company shall issue
shares of Common
10
<PAGE> 14
Stock to the extent available for the exercise in full of any Right or Rights so
exercised and, to the extent shares of Common Stock are not so available, then
the Company shall be obligated to deliver, upon the surrender for exercise of
such Right or Rights, along with payment of the Purchase Price for each such
Right, shares of Common Stock (to the extent available) and then, if necessary,
(1) cash, (2) other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock), (3) debt securities
of the Company, (4) other assets, or (5) any combination of the foregoing,
having a value which, when added to the value of the shares of Common Stock
actually issued upon exercise of such Right or Rights, shall have an aggregate
value equal to the Current Market Price of the shares of Common Stock otherwise
issuable upon exercise of such Right or Rights, where the aggregate value has
been determined in good faith by the Board of Directors of the Company based
upon the advice of a nationally recognized independent investment banking firm
selected in good faith by the Board of Directors of the Company; provided,
however, that if the Board of Directors of the Company shall determine in good
faith that it is likely that sufficient additional shares of Common Stock could
be authorized for issuance upon exercise in full of the Rights prior to a
Triggering Event, then the Company may suspend the exercisability of the Rights
for such period, prior to a Triggering Event, as shall be necessary, but not for
more than 90 days after the Rights become exercisable, in order to seek
authorization of approval for the issuance of additional shares of Common Stock
and, in the event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. In determining the availability of shares of Common Stock for
purposes of this subsection, the Board of Directors may, but shall not be
required to, establish procedures to allocate the right to receive Common Stock
upon exercise of the Rights among the holders thereof on a basis other than
priority according to time of exercise.
(b) The Company shall (i) use its best efforts to cause, from
and after such time as the Rights become exercisable, the Rights and all shares
of Common Stock (and other securities) issued or reserved for issuance upon
exercise thereof to be reported by the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ") or such other system then
in use, and if the Common Stock shall become listed on any national securities
exchange, to cause, from and after such time as the Rights become exercisable,
the Rights and all shares of Common Stock (and other securities) issued or
reserved for issuance upon exercise thereof to be listed on such exchange upon
official notice of issuance upon such exercise and (ii) if then necessary to
permit the offer and issuance of such shares of Common Stock (and other
securities), register and qualify such shares of Common Stock (and other
securities) under the Securities Act and any applicable state securities or
"blue sky" laws (to the extent exemptions therefrom are not available), cause
such registration statement and qualifications to become effective as soon as
possible after such filing and keep such registration and qualifications
effective until the earlier of the Expiration Date or the Final Expiration Date
of the Rights. The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days, the exercisability of the Rights in order to prepare
and file a registration
11
<PAGE> 15
statement under the Securities Act and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Rights Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained and until a
registration statement under the Securities Act (if required) shall have been
declared effective.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all shares of Common Stock (and other
securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the Purchase Price in
respect thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares in accordance with applicable law.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares of Common Stock (or other securities, as the case
may be) upon the exercise of Rights. The Company shall not, however, be required
to pay any transfer tax which may be payable in respect of any transfer or
delivery of Right Certificates to a Person other than, or the issuance or
delivery of certificates for Common Stock (or other securities, as the case may
be) upon exercise of Rights in a name other than that of, the registered holder
of the Right Certificate, and the Company shall not be required to issue or
deliver a Right Certificate or certificate for Common Stock (or other
securities, as the case may be) to a person other than such registered holder
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.
10. Common Stock Record Date. Each Person in whose name any certificate
for shares of Common Stock (or other securities, as the case may be) is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Common Stock (or other securities, as the case may be)
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.
11. Adjustments to Number and Kind of Shares, Number of Rights or
Purchase Price. The number and kind of shares subject to purchase upon the
exercise of each Right, the number of Rights outstanding and the Purchase Price
are subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Rights Agreement (A) declare or pay any dividend on Common Stock
payable in shares of Common Stock, (B) subdivide or split the outstanding shares
of Common
12
<PAGE> 16
Stock into a greater number of shares, (C) combine or consolidate the
outstanding shares of Common Stock into a smaller number of shares or effect a
reverse split of the outstanding shares of Common Stock or (D) issue any shares
of its capital stock in a reclassification of the Common Stock (including any
such reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of Common
Stock or capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of Common Stock or capital
stock, as the case may be, which, if such Right had been exercised immediately
prior to such date, the holder thereof would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) In the event
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date of this Rights
Agreement, directly or indirectly, (1) shall consolidate with or merge with and
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 consolidation, merger or
combination and the Common Stock of the Company shall remain outstanding and no
shares thereof 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 (2)
shall, in one or more transactions, other than in connection with the exercise
of a Right or Rights and other than in connection with the exercise or
conversion of securities exercisable for or convertible into securities of the
Company or of any Subsidiary of the Company, transfer any assets or property to
the Company or any of its Subsidiaries in exchange (in whole or in part) for any
shares of any class of capital stock of the Company or any of its Subsidiaries
or any 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 any 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 offer or distribution by the Company or such Subsidiary to
all holders of such shares), or (3) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire (other than as a pro rata
dividend) or dispose, to, from or with, as the case may be, in one transaction
or a series of transactions, the Company or any of its Subsidiaries, assets
(including securities) on terms and conditions less favorable to the Company or
such Subsidiary
13
<PAGE> 17
than the Company or such Subsidiary would be able to obtain in arm's-length
negotiation with an unaffiliated third party, or (4) shall receive any
compensation from the Company or any of its Subsidiaries for services other than
compensation for employment as a regular or part-time employee, or fees for
serving as a director, at rates in accordance with the Company's (or its
Subsidiary's) past practices, or (5) shall receive the benefit, directly or
indirectly (except proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credits or tax
advantage provided by the Company or any of its Subsidiaries or (6) shall engage
in any transaction with the Company (or any of its Subsidiaries) involving the
sale, license, transfer or grant of any right in, or disclosure of, any patents,
copyrights, trade secrets, trademarks or knowhow (or any other intellectual or
industrial property rights recognized under any country's intellectual property
laws) which the Company (including its Subsidiaries) owns or has the right to
use on terms and conditions not approved by the Board; or
(B) any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring Person other than pursuant
to (1) any transaction set forth in Section 13(a) hereof, or (2) a tender or
exchange offer for all outstanding shares of Common Stock of the Company at a
price and on terms determined by the Board of Directors to be both adequate and
otherwise in the best interests of the Company and its stockholders other than
the Acquiring Person or an Affiliate or Associate thereof on whose behalf the
offer is being made (a "Permitted Offer"); or
(C) during such time as there is an Acquiring
Person, there shall be any reclassification of securities (including any reverse
stock split), or any recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
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 1% the proportionate
share of the outstanding shares of any class of equity securities of the Company
or any of its Subsidiaries, or securities exercisable for or convertible into
equity securities of the Company or any of its Subsidiaries, which is directly
or indirectly beneficially owned by any Acquiring Person or any Affiliate or
Associate of any Acquiring Person, then except as otherwise provided in this
Section 11, each holder of a Right shall thereafter have a right to receive for
each Right, upon exercise thereof in accordance with the terms of this Rights
Agreement and payment of the 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 shares of Common Stock for which a Right
was exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event, and (y) dividing that product (such product, following such first
occurrence, shall be referred to as the "Purchase Price" with respect to each
Right for all purposes of this Rights Agreement) by 50% of the Current Market
Price per share of Common Stock on the date of such first occurrence (such
number of shares is herein called the "Adjustment Shares"); provided that the
Purchase Price and the number of Adjustment Shares shall be
14
<PAGE> 18
further adjusted as provided in this Rights Agreement to reflect any events
occurring after the date of such first occurrence; and provided, further, that
if the transaction that would otherwise give rise to the foregoing adjustment is
also subject to the provisions of Section 13 hereof, then only the provisions of
Section 13 hereof shall apply and no adjustment shall be made pursuant to this
Section 11(a)(ii). Notwithstanding the foregoing, the adjustment pursuant to
this Section 11(a)(ii) shall not occur with respect to any Rights that are or
were at any time on or after the earlier of the Stock Acquisition Date or the
Distribution Date beneficially owned by the Acquiring Person or any Associate or
Affiliate of the Acquiring Person which is or was involved in or which caused or
facilitated, directly or indirectly, the event or transaction or transactions
listed above in this Section 11(a)(ii) in respect of which such adjustment
occurs (or any subsequent transferee of such Rights), and upon exercise of such
Rights, the holders thereof shall continue to receive upon exercise the number
of shares of Common Stock otherwise provided for herein without giving effect to
such adjustment.
(iii) In the event that the number of shares of Common
Stock which are authorized by the Company's certificate of incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights is not sufficient to permit the exercise in full of the Rights in
accordance with Section 11(a)(ii) and the Rights shall become so exercisable, to
the extent permitted by applicable law and any agreements in effect on the date
hereof to which the Company is a party, the Company shall: (A) determine the
value of the Adjustment Shares issuable upon the exercise of a Right (the
"Current Value") and (B) with respect to each Right, upon exercise of such
Right, issue shares of Common Stock to the extent available for the exercise in
full of such Right and, to the extent shares of Common Stock are not so
available, make adequate provision to substitute for the Adjustment Shares not
received upon exercise of such Right (1) cash, (2) other equity securities of
the Company (including, without limitation, shares, or units of shares, of
preferred stock which, by virtue of having dividend, voting and liquidation
rights substantially comparable to those of the Common Stock, are deemed in good
faith by the Board of Directors of the Company to have substantially the same
value as shares of Common Stock (such shares or units of shares of preferred
stock are herein called "common stock equivalents"), (3) debt securities of the
Company, (4) other assets, or (5) any combination of the foregoing, having a
value which, when added to the value of the shares of Common Stock actually
issued upon exercise of such Right, shall have an aggregate value equal to the
Current Value, where such aggregate value has been determined in good faith by
the Board of Directors of the Company based upon the advice of a nationally
recognized independent investment banking firm selected in good faith by the
Board of Directors of the Company; provided, however, if the Company shall not
have made adequate provision to deliver value pursuant to clause (B) above
within thirty days following the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the extent
available) and then, if
15
<PAGE> 19
necessary, cash, which shares and/or cash have an aggregate value equal to the
excess of the Current Value over the Purchase Price. If the Board of Directors
of the Company shall determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon exercise
in full of the Rights, the thirty day period set forth above may be extended to
the extent necessary, but not more than ninety days after the Section 11(a)(ii)
Trigger Date, in order that the Company may seek stockholder approval for the
authorization of such additional shares (such thirty day period, as it may be
extended, is herein called the "Substitution Period"). To the extent that the
Company determines that some action need be taken pursuant to the first and/or
second sentence of this Section 11(a)(iii), the Company (x) shall provide,
subject to the last sentence of Section 11(a)(ii) hereof, that such action shall
apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the value of the Common Stock shall be the Current Market Price per share of the
Common Stock on Section 11(a)(ii) Trigger Date and the per share or per unit
value of any "common stock equivalent" shall be deemed to equal the Current
Market Price per share of the Common Stock on such date. The Board of Directors
may, but shall not be required to, establish procedures to allocate the right to
receive Common Stock upon the exercise of the Rights among holders of Rights
pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all holders
of Common Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five calendar days after such record date) Common Stock,
shares having the same rights, privileges and preferences as the Common Stock
("equivalent common stock") or securities convertible into Common Stock or
equivalent common stock at a price per share of Common Stock or equivalent
common stock (or having a conversion price per share, if a security convertible
into Common Stock or equivalent common stock) less than the Current Market Price
per share of Common Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding on
such record date, plus the number of shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock and/or equivalent
common stock (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Market Price, and
the denominator of which shall be the number of shares of Common Stock
outstanding on such record date, plus the number of additional shares of Common
Stock and/or equivalent common stock to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by delivery of
consideration part or all of which
16
<PAGE> 20
may be in a form other than cash, the value of such non-cash 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 of Common Stock owned by or held for the account of the Company shall not
be deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed, and in the
event that such rights or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash, assets (other than a
dividend payable in Common Stock, but including any dividend payable in stock
other than Common Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Current Market Price per share of Common Stock on such record date,
less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to a share of Common Stock and the denominator of which 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 in the event that such
distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date had not been
fixed.
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, 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 the Common Stock for the thirty
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date, and for purpose of computations made pursuant to Section
11(a)(iii) hereof, the "Current Market Price" per share of the Common Stock on
any date shall be deemed to be the average of the daily closing prices per share
of the Common Stock for the ten consecutive Trading Days immediately following
such date; provided, however, that in the event that the Current Market Price
per share of the Common Stock is determined during a period following the
announcement by the issuer of the Common Stock of (i) any dividend or
distribution on the Common Stock (other than a regular quarterly cash dividend
and other than the Rights), (ii) any subdivision, combination or
reclassification of the Common Stock, and prior to the expiration of the
requisite thirty Trading Day or ten Trading Day period, as set forth above, the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification occurs, then, and in each such
case, the Current Market Price shall be properly adjusted to take into account
ex-dividend
17
<PAGE> 21
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 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 last quoted sale price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by NASDAQ or such other system then in use, or, if on any such date the
shares of Common Stock are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Common Stock selected by the Board of Directors of the
Company. If on any such date no market maker is making a market in the Common
Stock, the fair value of such shares on such date as determined in good faith by
the Board of Directors of the Company shall be used. 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. If the
Common Stock is not publicly held or not so listed or traded, "Current Market
Price" per share shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all
purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share, as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment, or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than Common
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Common Stock contained in Section
11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m) hereof, and the provisions
of Sections 7, 9, 10, 13 and 14 hereof with respect to the Common Stock shall
apply on like terms to any such other shares.
18
<PAGE> 22
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Common Stock
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 of Common Stock (calculated to the nearest ten-thousandth) obtained by
(i) multiplying (x) the number of shares covered by a Right immediately prior to
this adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price or any adjustment to the number of shares of
Common Stock for which a Right may be exercised, to adjust the number of Rights,
in lieu of any adjustment in the number of shares of Common Stock purchasable
upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of shares
of Common Stock 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
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least ten 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 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for 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.
19
<PAGE> 23
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock 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) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the shares of Common
Stock issuable upon exercise of the Rights, the Company shall take any corporate
action, including using its best efforts to obtain any required stockholder
approvals, which may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue fully paid and nonassessable shares of
Common Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the shares of Common Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the shares of Common Stock
and other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder's right to receive such
additional shares of Common Stock and other capital stock or securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment the Board of
Directors of the Company shall determine to be advisable in order that any (i)
consolidation or subdivision of the Common Stock, (ii) issuance for cash of any
shares of Common Stock at less than the current market price, (iii) issuance for
cash of shares of Common Stock or securities which by their terms are
convertible into or exchangeable for shares of Common Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Common Stock shall
not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company), (ii) merge with or into any other Person
(other than a Subsidiary of the Company), or (iii) sell or transfer (or permit
any Subsidiary to sell or transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons (other than the Company and/or any of its Subsidiaries),
if (x) at the time of or immediately after
20
<PAGE> 24
such consolidation, merger or sale 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 (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section 26
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be afforded by the Rights.
12. Certification of Adjustments. Whenever an adjustment is made as
provided in Sections 11 and 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of the facts
giving rise to such adjustment, (b) promptly file with the Rights Agent and with
each transfer agent for the Common Stock a copy of such certificate and (c) mail
a brief summary thereof to each holder of a Right Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 25 hereof. 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 or the requirement for such
adjustment. The Rights Agent shall be fully protected in relying on any
certificate prepared by the Company pursuant to Sections 11 and 13 and on any
adjustment therein contained and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such certificate. Any
adjustment to be made pursuant to Sections 11 and 13 of this Rights Agreement
shall be effective as of the date of the event giving rise to such adjustment.
13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power
(a) In the event that, at any time on or after the Distribution
Date, directly or indirectly, (x) the Company shall consolidate with, or merge
with and into, any other Person or Persons and the Company shall not be the
surviving or continuing corporation of such consolidation or merger, or (y) any
Person or Persons shall consolidate with, or merge with and into, the Company,
and the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or of the Company or
cash or any other property (other than in the case of the transactions described
in subparagraphs (x) or (y), a merger or consolidation which would result in all
of the Voting Power represented by the securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into securities of the surviving entity) all
of the Voting Power represented by the securities of the
21
<PAGE> 25
Company or such surviving entity outstanding immediately after such merger or
consolidation and the holders of such securities not having changed as a result
of such transactions), or (z) the Company or one or more of its Subsidiaries
shall sell, mortgage or otherwise transfer to any other Person or any Affiliate
or Associate of such Person, in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole), then, on
the first occurrence of any such event, proper provision shall be made so that
(i) each holder of record of a Right shall thereafter have the right to receive,
upon the exercise thereof and payment of the Purchase Price in accordance with
the terms of this Rights Agreement, such number of shares of validly issued,
fully paid and nonassessable and freely tradeable Common Stock of the Principal
Party (as defined herein) not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of shares of
Common Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event hereof has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
Purchase Price in effect immediately prior to the first occurrence of a Section
11(a)(ii) Event by the number of shares of Common Stock for which a Right was
exercisable immediately prior to such first occurrence of a Section 11(a)(ii)
Event) and (2) dividing that product (such product, following the first
occurrence of a Section 13 Event, shall be referred to as the "Purchase Price"
for all purposes of this Rights Agreement) by 50% of the Current Market Price
(determined as provided in Section 11(d) hereof with respect to the Common
Stock) per share of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event (or the fair market value on such date of
other securities or property of the Principal Party, as provided for herein);
provided that the Purchase Price and the number of shares of Common Stock of
such Principal Party issuable upon exercise of each Right shall be further
adjusted as provided in this Rights Agreement to reflect any events occurring
after the date of the first occurrence of a Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such Section 13 Event, all the obligations and duties of the Company pursuant to
this Rights Agreement; (iii) the term "Company" for all purposes of this Rights
Agreement shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall only apply
to such Principal Party following the first occurrence of a Section 13 Event;
and (iv) such Principal Party shall take such steps (including, but not limited
to, the reservation of a sufficient number of shares of its Common Stock in
accordance with Section 9 hereof) in connection with the consummation of any
such transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of 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
22
<PAGE> 26
been entitled to receive had he, 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) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or
(y) of the first sentence of Section 13(a) hereof; (A) the Person that
is the issuer of the securities into which shares of Common Stock of
the Company 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 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 survive the merger or consolidation (including the
Company if it survives); and
(ii) in the case of any transaction described in (z)
of the first sentence in Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if each Person that is a party
to such transaction or transactions receives the same portion of the assets or
earning power so transferred or if the Person receiving the greatest portion of
the assets or earning power cannot be determined, whichever of such Persons as
is the issuer of Common Stock having the greatest market value of shares
outstanding; provided, however, that in any such case described in the foregoing
(b)(i) or (b)(ii), 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 Person the Common Stock of which is and has been so
registered, the term "Principal Party" shall refer to such other Person, or if
such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stocks of all of which are and have been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest market value of shares outstanding.
(c) The Company shall not consummate any consolidation, merger,
sale or transfer referred to in Section 13(a) unless prior thereto the Company
and the Principal Party involved therein shall have executed and delivered to
the Rights Agent an agreement confirming that the requirements of Sections 13(a)
and (b) hereof shall promptly be performed in accordance with their terms and
that such consolidation, merger, sale or transfer of assets shall not result in
a default by the Principal Party under this Rights Agreement as the same shall
have been assumed by
23
<PAGE> 27
the Principal Party pursuant to Sections 13(a) and (b) hereof and further
providing that, as soon as practicable after executing such agreement pursuant
to this Section 13, the Principal Party at its own expense shall:
(i) prepare and file a registration statement under
the Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the date of expiration of the Rights,
and similarly comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall become listed on a national securities exchange, to list
(or continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on such securities exchange and, if the Common Stock of
the Principal Party shall not be listed on a national securities exchange, to
cause the Rights and the securities purchasable upon exercise of the Rights to
be reported by NASDAQ or such other system then in use;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in all respects with
the requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the shares of Common Stock of the Principal
Party subject to purchase upon exercise of outstanding Rights.
In the event that any of the transactions described in Section 13(a)
hereof shall occur at any time after the occurrence of a transaction described
in Section 11(a)(ii) hereof, the Rights which have not theretofore been
exercised shall thereafter be exercisable in the manner described in Section
13(a). The provisions of this Section 13 shall similarly apply to all successive
Section 13 Events.
(d) Furthermore, in case the Principal Party which is to be a
party to a transaction referred to in this Section 13 has a provision in any of
its authorized securities or in its Certificate of Incorporation or By-laws or
other instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then Current
Market Price per share (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into, Common Stock of such Principal
Party at less than such then current market price (other than to holders of
Rights pursuant to this Section 13) or (ii) providing for any special payment,
tax or similar provisions in connection with the issuance of the Common Stock of
such Principal Party pursuant to the provisions of Section 13; then, in such
event, the Company hereby agrees with each holder of
24
<PAGE> 28
Rights that it shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been cancelled, waived or amended, or that
the authorized securities shall be redeemed, so that the applicable provision
will have no effect in connection with, or as a consequence of, the consummation
of the proposed transaction.
(e) Notwithstanding anything in this Rights Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
subparagraphs (x) or (y) of Section 13(a) if (i) such transaction is consummated
with a Person or Persons (or a wholly owned subsidiary of any such Person) who
acquired shares of Common Stock pursuant to a Permitted Offer, (ii) the price
per share of Common Stock offered in 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 Permitted Offer and (iii) the form of consideration
being offered to the remaining holders of Common Stock pursuant to such
transaction is the same as the form of consideration paid pursuant to such
Permitted Offer. Upon consummation of any such transaction contemplated by this
subsection (e), all Rights hereunder shall expire.
14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the holders of record of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the then
current market value of a whole Right. For the purposes of this Section 14(a),
the then current market value of a Right shall be determined in the same manner
as the Current Market Price of a share of Common Stock shall be determined
pursuant to Section 11(d) hereof.
(b) The Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to distribute certificates
which evidence fractional shares. In lieu of issuing fractions of shares of
Common Stock, there shall be paid to the holders of record 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 then current market value of a share
of Common Stock. For purposes of this Section 14(b), the then current market
value of a share of Common Stock shall be the Current Market Price thereof as
determined pursuant to Section 11(d) hereof.
(c) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any fractional
shares upon exercise of a Right.
15. Rights of Action. All rights of action in respect of this
Rights Agreement, other than any rights of action vested in the Rights Agent
pursuant to
25
<PAGE> 29
Sections 18 and 20 below, are vested in the respective holders of record of the
Right Certificates (and, prior to the Distribution Date, the holders of record
of the Common Stock); and any holder of record of any Right Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company or any other Person 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 Rights 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 Rights Agreement and, accordingly, that
they 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 Rights Agreement. Holders of Rights shall be entitled
to recover the reasonable costs and expenses, including attorneys' fees,
incurred by them in any action to enforce the provisions of this Rights
Agreement.
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 not be
evidenced by a Right Certificate and will be transferable only in connection
with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the shareholder services office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common 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 Certificate or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent or the
transfer agent of the Common Stock) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary;
and
(d) notwithstanding anything in this Rights Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Rights Agreement by reason of any preliminary
or permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any
26
<PAGE> 30
governmental authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use its best efforts to have any
such order, decree or ruling lifted or otherwise overturned as soon as possible.
17. Right Certificate Holder Not Deemed a Stockholder. No holder of a
Right, as such, shall be entitled to vote, receive dividends in respect of or be
deemed for any purpose to be the holder of Common Stock or any other securities
of the Company which may at any time be issuable upon the exercise of the
Rights, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate, as such, any of
the rights of a 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, or to receive
dividends or subscription rights in respect of any such stock or securities, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
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 Rights
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 gross negligence, bad faith or
willful misconduct on the part of the Rights Agent for anything done or omitted
to be done by the Rights Agent in connection with the acceptance and
administration of this Rights Agreement, including the cost and expenses of
defending against any claim of liability in the premises. The indemnity provided
herein shall survive the expiration of the Rights and the termination of this
Rights Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Rights Agreement in reliance upon any
Right Certificate, certificate for Common Stock or other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, guaranteed, verified or acknowledged, by the proper Person or
Persons.
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
27
<PAGE> 31
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Rights
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 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Rights 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 Rights 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 such 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 Rights Agreement.
20. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Rights 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:
(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 to be taken by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person) 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 President or any Vice President and
by the Treasurer or any Assistant Treasurer or the Secretary or any Assistant
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 Rights Agreement in reliance
upon such certificate.
28
<PAGE> 32
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Rights 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 Rights 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 Rights Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after receipt of a Certificate furnished
pursuant to Section 12 describing 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 Common Stock to be issued pursuant
to this Rights Agreement or any Right Certificate or as to whether any shares of
Common 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 performing by
the Rights Agent of the provisions of this Rights 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 or any Vice President or the Secretary
or any Assistant Secretary or the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such
officer. Any application by the Rights Agent for written instructions from the
Company may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this Rights Agreement
and the date on and/or after which such action shall be taken or such omission
shall be effective. Subject to Section 20(c) hereof, the Rights Agent shall not
be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any officer of the Company actually receives such
application,
29
<PAGE> 33
unless any such officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, 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 the Rights
Agent under this Rights Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other 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) No provision of this Rights Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate contained in the form
of assignment or the form of election to purchase set forth on the reverse
thereof, as the case may be, has 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 of transfer
without first consulting with the Company.
21. Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Rights Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent (with or without cause) upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Stock by registered or certified
mail, and 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.
Notwithstanding the foregoing provisions of this Section 21, in no event shall
the resignation or removal of a Rights Agent be effective until a successor
Rights Agent shall have been appointed and have accepted
30
<PAGE> 34
such appointment. If the Company shall fail to make such appointment within a
period of 30 days after such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the incumbent Rights
Agent or the holder of record of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a corporation organized and doing business under the laws of the United States
or any State thereof, in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000 or (b) an Affiliate controlled by a corporation described in clause
(a) of this sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the purchase price per share and 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 Rights Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to shares of Common Stock so issued
or sold pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Right Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Right Certificate
would be issued, and (ii) no such Right Certificate shall be issued, if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.
31
<PAGE> 35
23. Redemption.
(a) (i) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (x) the time that any person becomes
an Acquiring Person or (y) the Close of Business on the Final Expiration Date,
redeem all but not less than all the then outstanding Rights at a redemption
price of $0.01 per Right, as such amount may be appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter referred to as the
"Redemption Price").
(ii) Notwithstanding anything contained in this Rights
Agreement to the contrary, the Board of Directors of the Company may redeem all
but not less than all of the then outstanding Rights at the Redemption Price
following the occurrence of a Stock Acquisition Date but prior to any Section 13
Event in connection with a Section 13 Event in which all holders of Common Stock
are treated alike and not involving (other than as a holder of Common Stock
being treated like all other such holders) an Acquiring Person or an Affiliate
or Associate of an Acquiring Person or any other Person in which such Acquiring
Person, Affiliate or Associate has an interest, or any other Person or Persons
acting directly or indirectly on behalf of or in association with any such
Acquiring Person, Affiliate or Associate.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price, without any interest thereon. Within 10 days after the action
of the Board of Directors ordering the redemption of the Rights, the Company
shall give notice of such redemption to the Rights Agent and the holders of the
then outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent of the
Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. The failure to give notice required by this Section 23(b) or any
defect therein shall not affect the legality or validity of the action taken by
the Company.
(c) In the case of a redemption permitted under Section 23(a),
the Company may, at its option, discharge all of its obligations with respect to
the Rights by (i) issuing a press release announcing the manner of redemption of
the Rights and (ii) mailing payment of the Redemption Price to the registered
holders of the Rights at their last addresses as they appear on the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent of the Common Stock, and upon such action, all
outstanding Right Certificates shall be null and void without any further action
by the Company.
32
<PAGE> 36
24. Notice of Proposed Actions.
(a) In case the Company, after the Distribution Date, shall
propose (i) to effect any of the transactions referred to in Section 11(a)(i) or
to pay any dividend to the holders of record of its Common Stock payable in
stock of any class or to make any other distribution to the holders of record of
its Common Stock (other than a regular periodic cash dividend), or (ii) to offer
to the holders of record of its Common Stock options, warrants, or other rights
to subscribe for or to purchase shares of Common Stock (including any security
convertible into or exchangeable for Common Stock) or shares of stock of any
class or any other securities, options, warrants, convertible or exchangeable
securities or other rights, or (iii) to effect any reclassification of its
Common Stock or any recapitalization or reorganization of the Company, or (iv)
to effect any consolidation or merger with or into, 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% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons, 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 record of a Right Certificate, in accordance with Section 25
hereof, notice of such proposed action, which shall specify the record date for
the purposes of such transaction referred to in Section 11(a)(i), or such
dividend or distribution, or the date on which such reclassification,
recapitalization, reorganization, consolidation, merger, sale or transfer of
assets, liquidation, dissolution, or winding up is to take place and the record
date for determining participation therein by the holders of record of Common
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least 10 days prior to
the record date for determining holders of record of the Common Stock for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of record of Common Stock, whichever shall
be the earlier. The failure to give notice required by this Section 24 or any
defect therein shall not affect the legality or validity of the action taken by
the Company or the vote upon any such action.
(b) In case any of the transactions referred to in Section
11(a)(ii) or Section 13 of this Rights Agreement are proposed, then, in any such
case, the Company shall give to each holder of Rights, in accordance with
Section 25 hereof, notice of the proposal of such transaction at least 10 days
prior to consummating such transaction, which notice shall specify the proposed
event and the consequences of the event to holders of Rights under Section
11(a)(ii) or Section 13 hereof, as the case may be, and, upon consummating such
transaction, shall similarly give notice thereof to each holder of Rights.
25. Notices. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agent or by the holder of record of
any Right Certificate or Right to or on behalf of the Company shall be
sufficiently given or made if sent by
33
<PAGE> 37
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
KLA Instruments Corporation
160 Rio Robles
P.O. Box 49055
San Jose, California 95161-9055
Attention: Chief Financial Officer
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Rights Agreement to be given or made by the Company or by the holder of
record of any Right Certificate or Right 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:
The First National Bank of Boston
P.O. Box l865
Boston, Massachusetts 02l05
Attention: Shareholder Services Division
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Right Certificate
or Right 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 it
appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent.
26. Supplements and Amendments. The Company and the Rights Agent
may from time to time supplement or amend this Rights Agreement without 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 provision herein, (iii) prior to the time a Person
becomes an Acquiring Person, to change or supplement any of the provisions
herein which the Company may deem necessary or desirable (including, but not
limited to, an amendment that provides that the Rights shall become exercisable
for shares or fractions or shares of Preferred Stock of the Company that are
economically Common Stock Equivalents) or (iv) following the time a Person
becomes an Acquiring Person, to change or supplement the provisions hereunder 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. 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
unless the Rights Agent shall have determined in good faith that such supplement
or amendment would adversely affect its interests under this Rights Agreement.
Notwithstanding anything contained in this Rights Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price. Prior
to the Distribution Date, the interests of
34
<PAGE> 38
the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.
27. Successors. All of the covenants and provisions of this Rights
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.
28. Benefits of this Rights Agreement. Nothing in this Rights Agreement
shall be construed to give to any person or corporation other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Stock) any legal or equitable right,
remedy or claim under this Rights Agreement; but this Rights Agreement shall be
for the sole and exclusive benefit of the Company, the Rights Agent and the
holders of record of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
29. Delaware Contract. This Rights 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; provided, however, that the rights and
obligations of the Rights Agent shall be governed by the laws of the State of
California (or state of incorporation of any successor Rights Agent).
30. Counterparts. This Rights 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.
31. Descriptive Headings. Descriptive headings of the several sections
of this Rights Agreement are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof.
32. Severability. If any term, provision, covenant or restriction of
this Rights Agreement is held by a court of competent jurisdiction or other
authority to be invalid, illegal, or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Rights Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
35
<PAGE> 39
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
ATTEST: KLA INSTRUMENTS CORPORATION
By:___________________________ By:___________________________
Name: Name:
Title:________________________ Title:________________________
ATTEST: THE FIRST NATIONAL BANK OF
BOSTON
By:___________________________ By:___________________________
Name: Name:
Title:________________________ Title:________________________
36
<PAGE> 40
EXHIBIT A
[Form of Right Certificate]
Certificate No. W-___________________________ Rights
NOT EXERCISABLE AFTER MARCH 27, 1999 OR EARLIER IF REDEEMED. THE RIGHTS
ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. IN THE EVENT THAT
THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE ISSUED TO A PERSON WHO
IS AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OR AN ACQUIRING
PERSON OR A TRANSFEREE OF THE RIGHTS PREVIOUSLY OWNED BY SUCH PERSONS,
THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BE SUBJECT
TO CERTAIN LIMITATIONS IN THE CIRCUMSTANCES SPECIFIED IN SECTION
11(A)(ii) OF THE RIGHTS AGREEMENT.
RIGHT CERTIFICATE
KLA INSTRUMENTS CORPORATION
This certifies that , or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Amended and
Restated Rights Agreement dated as of August 30, 1995 ("Rights Agreement")
between KLA Instruments Corporation, a Delaware corporation ("Company"), and The
First National Bank of Boston, a national banking association ("Rights Agent"),
to purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M. (Boston time) on
March 27, 1999 at the office of the Rights Agent, of its successors as Rights
Agent, designated for such purposes, one fully paid and nonassessable share of
Common Stock, par value $0.001 per share ("Common Stock"), of the Company at a
purchase price of $100.00 as the same may from time to time be adjusted in
accordance with the Rights Agreement ("Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed.
As provided in the Rights Agreement, the Purchase Price and the number
of shares of Common Sock 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 and, upon the happening of certain events,
securities other than shares of Common Stock, or other property, may be acquired
upon exercise of the Rights evidenced by this Right Certificate, as provided by
the Rights Agreement.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference
<PAGE> 41
is hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities of the Rights Agent, the Company and the
holders of record of the Right Certificates. Copies of the Rights Agreement are
on file at the principal executive office of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the shareholder services office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder of record to purchase a like
aggregate number of shares of Common Stock as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $0.01 per Right at any time prior to the earlier of (i) the date on
which a Person becomes an Acquiring Person (as such term is defined in the
Rights Agreement), or (ii) the Final Expiration Date.
No fractional shares of Common Stock shall be issued upon the exercise
of any Right or Rights evidenced hereby, and in lieu thereof, as provided in the
Rights Agreement, fractions of shares of Common Stock shall receive an amount in
cash equal to the same fraction of the then current market value of a share of
Common Stock.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of Common Stock or
of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the 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 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.
<PAGE> 42
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of_____________, 19___.
ATTEST: KLA INSTRUMENTS CORPORATION
__________________________ By:________________________
Secretary Title:_____________________
COUNTERSIGNED:
By: ______________________
Authorized Signature
