UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
PPT VISION, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-1413345
(State of incorporation or organization) (I.R.S. Employer/
Identification No.)
12988 Valley View Road, Eden Prairie, Minnesota 55344
(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
If this form relates to the registration of a class of securities
pursuant to section 12(b) of the Exchange Act and is effective
pursuant to General Instruction A.(c), check the following box:
If this form relates to the registration of a class of securities
pursuant to Section 12(g) of the Exchange Act and is effective
pursuant to General Instruction A.(d), check then following box: X
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights
(Title of Class)
Item 1. Description of Securities to be Registered.
On June 2, 1999, the Board of Directors of PPT Vision, Inc.
(the "Company") declared a dividend of one Right for each
outstanding share of the Company's Common Stock, $.10 par value
per share (the "Common Stock"), to the stockholders of record at
the close of business on June 22, 1999 (the "Record Date").
Except as set forth below, each Right entitles the registered
holder to purchase from the Company one one-hundredth (1/100) of
a share of Series A Junior Participating Preferred Stock, no par
value (the "Preferred Stock"), at a price of $28 per one one-
hundredth of a share (the "Purchase Price"). The description and
terms of the Rights are set forth in a Rights Agreement dated as
of June 2, 1999 (the "Rights Agreement") between the Company and
Norwest Bank Minnesota, N.A., as Rights Agent.
Initially, the Rights will be attached implicitly to all
Common Stock certificates representing shares then outstanding,
and no separate Right certificates will be distributed. The
Rights are not exercisable until the Distribution Date. The
Rights will expire on June 2, 2009 unless earlier redeemed by the
Company as described below. A Distribution Date for the Rights
will occur upon the earlier of ten days following (i) a public
announcement that, without the prior consent of the Board of
Directors, a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired, or obtained the right to
acquire, beneficial ownership of voting securities having 20% or
more of the voting power of the Company (the "Stock Acquisition
Date"), or (ii) the commencement of (or a public announcement of
an intention to make) a tender offer or exchange offer which
would result in any person or group and related persons having
beneficial ownership of voting securities having 20% or more of
the voting power of the Company.
Until the Distribution Date, the Rights will be transferred
with and only with Common Stock certificates. From as soon as
practicable after the Record Date and until the Distribution Date
(or earlier redemption or expiration of the Rights), new Common
Stock certificates issued after the Record Date upon transfer or
new issuance of the Common Stock will contain a notation
incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates for
Common Stock outstanding as of the Record Date will also
constitute the transfer of the Rights associated with the Common
Stock represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing
the Rights ("Rights Certificates") will be mailed to holders of
record of the Common Stock as of the close of business on the
Distribution Date, and the separate Rights Certificates alone
will evidence the Rights.
In the event that any person becomes the beneficial owner of
20% or more of the voting power of the Company in a transaction
which has not previously been approved by a majority of the
independent directors, ten (10) days thereafter (the "Flip-In
Event") each holder of a Right will thereafter have the right to
receive, in lieu of shares of Preferred Stock, upon exercise
thereof at the then current Purchase Price of the Right, Common
Stock (or, in certain circumstances, a combination of cash, other
property, Common Stock or other securities) which has a value of
two times the Purchase Price of the Right (such right being
called the "Flip-In Right"). Upon the occurrence of the Flip-In
Event, any Rights that are or were at any time owned by an
Acquiring Person shall become null and void insofar as they
relate to the Flip-In Right.
In addition, in the event that the Company is acquired in a
merger or other business combination transaction where the
Company is not the surviving corporation or in the event that 50%
or more of its assets or earning power is sold, proper provision
shall be made so that each holder of a Right will thereafter have
the right to receive, upon the exercise thereof at the then
current Purchase Price of the Right, common stock of the
acquiring entity which has a value of two times the Purchase
Price of the Right (the "Flip-Over Right"). The Flip-Over Right
is in addition to the Flip-In Rights and will survive any
exercise of a Flip-In Right.
The Purchase Price payable, and the number of shares of
Preferred Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of the
Preferred Stock, (ii) upon the grant to holders of the Preferred
Stock of certain rights or warrants to subscribe for Preferred
Stock or convertible securities at less than the current market
price of the Preferred Stock or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to
above).
At any time after the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 20%
or more of the voting power of the Company and prior to the
acquisition by such person or group of 50% or more of the voting
power of the Company, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or
group which have become void), in whole or in part, at an
exchange ratio of one share of Common Stock, or one one-hundredth
of a share of Preferred Stock (or of a share of a class or series
of the Company's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an
adjustment of at least 1% in the Purchase Price. No fractions of
shares will be issued and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on
the last trading date prior to the date of exercise.
At any time prior to the earlier to occur of (i) the tenth
day after the Stock Acquisition Date, or (ii) the expiration of
the Rights, the Company may redeem the Rights in whole, but not
in part, at a price of $.001 per Right (the "Redemption Price"),
which redemption shall be effective at such time as the Board of
Directors shall establish. Additionally, the Company may,
following the tenth day after the Stock Acquisition Date, redeem
the then outstanding Rights in whole, but not in part, at the
Redemption Price provided that either (a) the Acquiring Person
reduces his beneficial ownership to less than 20% of the voting
power of the Company in a manner which is satisfactory to the
Company and there are no other Acquiring Persons, or (b) such
redemption is incidental to a merger or other business
combination transaction or series of transactions involving the
Company but not involving an Acquiring Person or any person who
was an Acquiring Person. The redemption of Rights described in
the preceding sentence shall be effective only after ten (10)
business days prior notice. Upon the effective date of the
redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
The Preferred Stock purchasable upon exercise of the Rights
will be nonredeemable. Each share of Preferred Stock will have a
preferential quarterly dividend in an amount equal to 100 times
the dividend declared on each share of Common Stock. In the
event of liquidation, the holders of Preferred Stock will receive
a preferred liquidation payment of $100 per whole share of
Preferred Stock. Each whole share of Preferred Stock will have
100 votes, voting together with the Common Stock. In the event
of any merger, consolidation or other transaction in which Common
Stock are exchange, each share of Preferred Stock will be
entitled to receive 100 times the amount and type of
consideration received per share of Common Stock. The rights of
the Preferred Stock as to dividends and liquidations, and in the
event of mergers and consolidations, are protected by customary
anti-dilution provisions. Fractional shares of Preferred Stock
in integral multiples of one one-hundredth of a share of
Preferred Stock will be issued unless the Company elects to
distribute depositary receipts in lieu of such fractional shares.
In lieu of fractional shares other than fractions that are
multiples of one one-hundredth of a share, an adjustment in cash
will be made based on the market price of the Preferred Stock on
the last trading date prior to the date of exercise.
Until a Right is exercised, it will not entitle the holder
to any rights as a stockholder of the Company (other than those
as an existing stockholder), including, without limitation, the
right to vote or to receive dividends.
The terms of the Rights may be amended by the Board of
Directors of the Company (i) prior to the Distribution Date in
any manner, and (ii) on or after the Distribution Date to cure
any ambiguity, to correct or supplement any provision of the
Rights Agreement which may be defective or inconsistent with any
other provisions, or in any manner not adversely affecting the
interests of the holders of the Rights.
As of June 2, 1999, there were 5,401,559 shares of Common
Stock issued and outstanding and 511,375 shares reserved for
issuance pursuant to the exercise of outstanding stock options.
Each outstanding share of Common Stock on June 22, 1999 will
receive one Right. As long as the Rights are attached to the
Common Stock, the Company will issue one Right for each share of
Common Stock issued between the Record Date and the Distribution
Date so that all such shares will have attached Rights. There
are 150,000 shares of Preferred Stock reserved for issuance upon
exercise of the Rights.
The Rights Agreement is designed to protect shareholders in
the event of an unsolicited attempt to acquire the Company for an
inadequate price and to protect against abusive practices that do
not treat all shareholders equally, including partial and two-
tier tender offers, coercive offers, and creeping stock
accumulation programs. Such practices can pressure shareholders
into tendering their investments prior to realizing the full
value or total potential of such investments. The Rights
Agreement is intended to make the cost of such abusive practices
prohibitive and create an incentive for a potential acquiror to
negotiate in good faith with the Board. The Rights Agreement is
not intended to, and will not, prevent all unsolicited offers to
acquire the Company. If an unsolicited offer is made, and the
Board determines that it is fair and in the best interests of the
Company and its shareholders, then, pursuant to the terms of the
Rights Agreement, the Board has the authority to redeem the
Rights and permit the offer to proceed. Essentially, the Rights
Agreement will provide the Board with sufficient opportunity to
evaluate the fairness of any unsolicited offer and the
credibility of the bidder, and will therefore enable the Board to
represent the interests of all shareholders more effectively. Of
course, in deciding whether to redeem the Rights in connection
with any unsolicited offer, the Board will be bound by its
fiduciary obligations to act in the best interests of the Company
and its shareholders.
The form of Rights Agreement between the Company and the
Rights Agent specifying the terms of the Rights, which includes
as Exhibit B the form of Rights Certificate, is attached hereto
as Exhibit 1 and is incorporated herein by reference. The
foregoing description of the Rights does not purport to be
complete and is qualified in its entirety by reference to such
Exhibit.
Item 2. Exhibits.
Exhibit 1:
Form of Rights Agreement dated as of June 2, 1999 between
PPT Vision, Inc. and Norwest Bank Minnesota, National
Association, which includes as Exhibit B thereto the form of
Rights Certificate. Pursuant to the Rights Agreement,
Rights Certificates will not be mailed until after the
earlier of (i) the tenth day after the Stock Acquisition
Date, or (ii) the tenth day after the date of the
commencement of, or first public announcement of the intent
to commence, a tender or exchange offer by any person or
group of affiliated or associated persons if, upon
consummation thereof, such person or group would be the
beneficial owner of 20% or more of the voting power of the
Company.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized.
PPT VISION, INC.
By /s/JOSEPH C. CHRISTENSON
Joseph C. Christenson, President
Dated: June 16, 1999
Exhibit 1
PPT VISION, INC.
and
NORWEST BANK MINNESOTA, N.A.
Rights Agent
________________
RIGHTS AGREEMENT
Dated as of June 2, 1999
TABLE OF CONTENTS
Section Page
1. Certain Definitions 1
2. Appointment of Rights Agent 5
3. Issue of Rights Certificates 5
4. Form of Rights Certificates 7
5. Countersignature and Registration 8
6. Transfer, Split Up, Combination and
Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or
Stolen Rights Certificates 9
7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 10
8. Cancellation and Destruction of
Rights Certificates 12
9. Reservation and Availability of
Capital Stock 12
10. Preferred Stock Record Date 14
11. Adjustment of Purchase Price,
Number and Kind of Stock or Number of
Rights 14
12. Certificate of Adjusted Purchase
Price or Number of Stock 23
13. Consolidation, Merger or Sale or
Transfer of Assets, Cash Flow
or Earning Power 23
14. Fractional Rights and Fractional Stock 26
15. Rights of Action 27
16. Agreement of Rights Holders 28
17. Rights Certificate Holder Not
Deemed a Shareholder 29
18. Concerning the Rights Agent 29
19. Merger or Consolidation or Change of
Name of Rights Agent 29
20. Duties of Rights Agent 30
21. Change of Rights Agent 32
22. Issuance of New Rights Certificates 33
23. Redemption and Termination 33
24. Exchange 34
25. Notice of Certain Events 36
26. Notices 36
27. Supplements and Amendments 37
28. Successors 38
29. Benefits of this Agreement 38
30. Administration of Agreement 38
31. Severability 38
32. Governing Law 39
33. Counterparts 39
34. Descriptive Headings 39
Exhibit A: Certificate of Designation, Preferences
and Rights of Series A Junior Participating
Preferred Stock
Exhibit B: Form of Rights Certificate
Exhibit C: Summary of Shareholders' Rights Plan
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of June 2, 1999 (the
"Agreement"), between PPT Vision, Inc., a Minnesota corporation
(the "Company"), and Norwest Bank Minnesota, N.A., a Minnesota
corporation (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on June 2, 1999, the Board of Directors of the
Company (the "Board") authorized and declared a dividend
distribution of one Right (as hereinafter defined) for each
outstanding share of the Company's Common Stock, $.10 par value
per share (the "Common Stock") outstanding at the close of
business on June 22, 1999 (the "Record Date"), each Right
representing the right to purchase one one-hundredth of a share
of Series A Junior Participating Preferred Stock of the Company
having the rights, powers and preferences set forth in the form
of Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock attached hereto as Exhibit
A, upon the terms and subject to the conditions hereinafter set
forth (the "Rights") and further authorized the issuance of one
Right with respect to each share of Common Stock that would
become outstanding after the close of business on the Record Date
in accordance with the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms 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 a majority of the
Board of Directors, shall be the Beneficial Owner (as such
term is hereinafter defined) of voting securities having
twenty percent (20%) or more of the then voting power of the
Company, but shall not include the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company, or any entity organized,
appointed or established by the Company for or pursuant to
the terms of any such plan; provided, however, that if a
Person is the Beneficial Owner at the close of business on
the date of this Agreement of twenty percent (20%) or more
of the voting power of the Company, such Person shall not be
deemed an Acquiring Person unless and until such Person
acquires any additional Common Stock in any manner other
than pursuant to a stock dividend, stock split,
recapitalization or similar transaction that does not affect
the percentage of outstanding Common Stock beneficially
owned by such Person. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of
an acquisition of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such
Person to twenty percent (20%) or more of the then voting
power of the Company then outstanding; provided, however,
that if a Person shall become the Beneficial Owner of twenty
percent(20%) or more of the then voting power of the Company
then outstanding by reason of shares purchased by the
Company and shall, after such share purchases by the
Company, become the Beneficial Owner of additional Common
Stock of the Company representing 1% or more of the shares
of Common Stock then outstanding, then such Person shall be
deemed to be an "Acquiring Person." Notwithstanding the
foregoing, if a majority of the members of the Company's
Board of Directors then in office determines in good faith
that a Person who would otherwise be an "Acquiring Person",
as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such
Person divests as promptly as practicable a sufficient
number of shares of Common Stock so that such Person would
no longer be an Acquiring Person, as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person
shall not be deemed to be an "Acquiring Person" for any
purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own," 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 or
obligation to acquire (whether such right or obligation
is exercisable or effective immediately or only after
the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights at any
time prior to the occurrence of a Triggering Event, but
thereafter including the Rights acquired from and after
the Distribution Date (as defined in Section 3(a)
below) other than pursuant to Section 3(a) below),
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 security under this
clause (B) if the agreement, arrangement or
understanding to vote such security: (1) arises solely
from a revocable proxy 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 (or any Affiliate or
Associate thereof) with which such Person or any of
such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not
in writing and other then customary agreements with and
between underwriters and selling group members with
respect to a bona fide public offering of securities),
for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in clause
(B) of subparagraph (ii) of this paragraph (d)) or
disposing of any voting securities of the Company.
Notwithstanding the foregoing, a Person shall
not be deemed to be the "Beneficial Owner" of or to
"beneficially own" any securities that are issued, or
proposed to be issued, to such Person pursuant to any
stock option plan or other employee compensation plan
or arrangement of the Company or any of its
Subsidiaries. Furthermore, directors and officers of
the Company shall not be deemed to beneficially own
each others Common Stock solely due to their status as
a director or officer of the Company.
Notwithstanding anything in this definition
of Beneficial Ownership to the contrary, the phrase
"then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the
Company, shall mean the number of such securities then
issued and outstanding together with the number of such
securities not then actually issued and outstanding
which such Person would be deemed to own beneficially
hereunder.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in
the States of Minnesota or New York are authorized or
obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean
5:00 P.M., Minneapolis, Minnesota time, on such date;
provided, however, that if such date is not a Business Day
it shall mean 5:00 P.M., Minneapolis, Minnesota time, on the
next succeeding Business Day.
(f) "Common Stock" shall mean the Common Stock, $.10
par value per share, of the Company (as such term is defined
in the introductory paragraphs above) or any other shares of
capital stock of the Company into which the Common Stock
shall be reclassified or changed, except that "Common Stock"
when used with reference to any Person other than the
Company shall mean the shares of capital stock of such
Person (if such Person is a corporation) of any class or
series, or units of equity interests in such Person (if such
Person is not a corporation) of any class or series, the
terms of which do not limit (as a fixed amount and not
merely in proportional terms) the amount of dividends or
income payable or distributable on such class or series or
the amount of assets distributable on such class or series
upon any voluntary or involuntary liquidation, dissolution
or winding up of such Person and do not provide that such
class or series is subject to redemption at the option of
such Person, or any shares of capital stock or units of
equity interests into which the foregoing shall be
reclassified or changed; provided, however, that if at any
time there shall be more than one such class or series of
capital stock or equity interests of such Person, "Common
Stock" of such Person shall include all such classes and
series substantially in the proportion of the total number
of shares or other units of each class or series outstanding
at such time.
(g) "Distribution Date" shall have the meaning set
forth in Section 3 hereof.
(h) "Expiration Date" and "Final Expiration Date"
shall have the meanings set forth in Section 7 hereof.
(i) "Flip-In Event" shall have the meaning set forth
in Section 11(a)(ii) hereof.
(j) "Person" shall mean any individual, firm,
corporation, partnership, limited liability company or other
entity and shall include any successor (by merger or
otherwise) of such entity.
(k) "Preferred Stock" shall mean shares of Series A
Junior Participating Preferred Stock, no par value, of the
Company.
(l) "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.
(m) "Subsidiary" shall mean, with reference to any
other Person, any corporation of which a majority of any
class of equity security is beneficially owned, directly or
indirectly, by such other Person.
(n) "Triggering Event" shall mean the Flip-In Event
or any event described in Section 13(a) hereof.
(o) "Voting power of the Company" shall mean the
collective voting power of the Common Stock of the Company.
In addition, for purposes of this Agreement, the
following terms have the meanings indicated in the specified
sections of this Agreement: "Act" shall have the meaning set
forth in Section 9(c) hereof; "Adjustment Shares" shall have the
meaning set forth in Section 11(a)(ii) hereof; "Board" shall have
the meaning set forth in the preamble; "Common Stock Equivalents"
shall have the meaning set forth in Section 11(a)(iii) hereof;
"Company" shall have the meaning set forth in the preamble;
"current market price" shall have the meaning set forth in
Section 11(d) hereof; "Current Value" shall have the meaning set
forth in Section 11(a)(iii) hereof; "Equivalent Preferred Stock"
shall have the meaning set forth in Section 11(b) hereof;
"Exchange Act" shall have the meaning set forth in section 1(b)
hereof; "Exchange Ratio" shall have the meaning set forth in
Section 24(a) hereof; "Flip-In Trigger Date" shall have the
meaning set forth in Section 11(a)(iii) hereof; "Nasdaq" shall
have the meaning set forth in Section 11(d)(i) hereof; "Principal
Party" shall have the meaning set forth in Section 13(b) hereof;
"Purchase Price" shall have the meaning set forth in Section 4(a)
hereof; "Record Date" shall have the meaning set forth in the
preamble; "Redemption Price" shall have the meaning set forth in
Section 23(a)(i) hereof; "Rights" shall have the meaning set
forth in the preamble; "Rights Agent" shall have the meaning set
forth in the preamble; "Rights Certificates" shall have the
meaning set forth in Section 3(a) hereof; "Spread" shall have the
meaning set forth in Section 11(a)(iii) hereof; "Substitution
Period" shall have the meaning set forth in Section 11(a)(iii)
hereof; "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof; and "Trading Day" shall have the meaning set
forth in Section 11(d)(i) hereof.
Any determination required by the definitions contained in
this Section 1 shall be made by the Board in their good faith
judgment, which determination shall be final and binding on the
Rights Agent.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the
Common Stock) in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it
may deem necessary or desirable. In the event the Company
appoints one or more Co-Rights Agents, the respective duties of
the Rights Agent and any Co-Rights Agent shall be as the Company
shall determine.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of business on
the tenth (10th) day after the Stock Acquisition Date, or
(ii) the close of business on the tenth (10th) day (or such
later date as may be determined by action of the majority of
the members of the Company's Board of Directors prior to
such time as any Person becomes an Acquiring Person) after
the date of the commencement of, or first public
announcement of the intent of any Person (other than the
Company, any Subsidiary of the Company or any employee
benefit plan of the Company or of any Subsidiary of the
Company or any entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan),
to commence, a tender or exchange offer which would result
in such person becoming an Acquiring Person (including any
such date which is after the date of this Agreement and
prior to the issuance of the Rights) (the earliest of (i)
and (ii) being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the
certificates for Common Stock registered in the names of the
holders of the Common Stock (which certificates for Common
Stock shall be deemed also to be certificates for Rights)
and not by separate certificates, and (y) the Rights (and
the right to receive certificates therefor) will be
transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to
the Company). As soon as practicable after the Distribution
Date, the Rights Agent will send by first-class, postage
prepaid mail, to each record holder of the Common Stock as
of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company,
one or more rights certificates, in substantially the form
of Exhibit B hereto (the "Rights Certificates"), 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 Rights Certificates.
(b) As promptly as practicable following the Record
Date, the Company will send a copy of a Summary of the
Shareholders' Rights Plan, in substantially the form
attached hereto as Exhibit C (the "Summary of Rights"), by
first-class, postage prepaid mail, to each record holder of
the Common Stock as of the close of business on the Record
Date, at the address of such holder shown on the records of
the Company. With respect to certificates for the Common
Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders
of the Common Stock shall also be the registered holders of
the associated Rights. Until the earlier of the Distribu
tion Date or the Expiration Date (as such term is defined in
Section 7 hereof), the surrender for transfer of any of the
certificates for the Common Stock outstanding on the Record
Date shall also constitute the transfer of the Rights
associated with the Common Stock represented by such
certificate.
(c) Certificates for the Common Stock issued after the
Record Date but prior to the earlier of the Distribution
Date or the Expiration Date, shall be deemed also to be
certificates for Rights, and shall bear the following
legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights
Agreement between PPT Vision, Inc. and Norwest Bank
Minnesota, N.A. dated as of June 2, 1999, (the "Rights
Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at
the principal offices of PPT Vision, Inc. 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.
PPT Vision, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement without
charge promptly after receipt of a written request
therefor. Under certain circumstances, Rights issued
to, or held by, an Acquiring Person, or an Affiliate or
Associate thereof (as such terms are defined in the
Rights Agreement) and any subsequent holder of such
Rights may become null and void.
With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or
(ii) the Expiration Date, the Rights associated with the
Common Stock represented by such certificates shall be
evidenced by such certificates alone and the registered
holders of Common Stock shall also be the registered holders
of the associated Rights, and the surrender for transfer of
any of such certificates shall also constitute the transfer
of the Rights associated with the Common Stock represented
by such certificates. In the event the Company purchases or
acquires any Common Stock after the Record Date but prior to
the Distribution Date, any Rights associated with such
Common Stock shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights
associated with the Common Stock which is no longer
outstanding.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election
to exercise and of assignment to be printed on the reverse
thereof) shall each be substantially in the form attached
hereto as Exhibit B and may have such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any
applicable 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 Section 11
and Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date and on
their face shall entitle the holders thereof to purchase
such number of shares of Preferred Stock (or Common Stock,
as the case may be) as shall be set forth therein at the
price per share set forth therein (the "Purchase Price"),
but the number of such shares and the Purchase Price shall
be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights
beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or any such Associate or
Affiliate) who becomes a transferee after the Acquiring
Person becomes such, except a transferee purchasing from or
through a nationally recognized broker-dealer where such
transferee and such transferee's Associates and Affiliates
do not collectively acquire, and will not have acquired
during the preceding 20 calendar days, in combination with
the proposed transfer, an amount of Common Stock equal to
more than one percent (1%) of the outstanding shares of
Common Stock, and (iii) a transferee of an Acquiring Person
(or any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration)
from the Acquiring Person to or on behalf of holders of
equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred
Rights or (B) a transfer which the majority of the members
of the Company's Board of Directors otherwise conclude in
good faith is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of
Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to
the extent feasible and reasonably identifiable as such) the
following legend:
The Rights represented by this Rights Certificate are
or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person (as such terms are defined in
the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may
become null and void in the circumstances specified in
Section 7(e) of such Agreement.
The provisions of Section 7(e) of the Rights Agreement shall
be operative whether or not the foregoing legend is contained on
any such Rights Certificate.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chief Executive Officer, its
President, its Chief Financial Officer or any Vice President
either manually or by facsimile signature, which shall be
attested by the Secretary or any Assistant Secretary of the
Company, either manually or by facsimile signature. The
Rights 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 Rights Certificates shall cease
to be such officer of the Company before countersignature by
the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned
by the Rights Agent, and issued and delivered by the Company
with the same force and effect as though the person who
signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificates may be
signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate,
shall be a proper officer of the Company to sign such Rights
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 its offices in South St.
Paul, Minnesota or New York, New York, books for
registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of
the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 14 hereof, at
any time after the close of business on the Distribution
Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Certificates
(other than Rights Certificates representing rights that
have become null and void pursuant to Section 7(e) hereof or
that have been exchanged pursuant to Section 24 hereof) may
be transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the registered
holder to purchase a like number of shares of Preferred
Stock as the Rights Certificate or Certificates surrendered
then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange
any Rights Certificate shall make such request in writing
delivered to the Rights Agent, and shall surrender the
Rights Certificate or Rights Certificates to be transferred,
split up, combined or exchanged at the office or offices of
the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such
surrendered Rights Certificate or Certificates until the
registered holder shall have completed and signed the
certificate contained in the form of assignment on the
reverse side of such Rights Certificate or Certificates and
shall have provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall,
subject to Section 4(b), Section 7(e), Section 14 and
Section 24, countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights 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 Rights 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 Rights Certificate,
and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement
to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in
lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) The registered holder of any Rights Certificate
may exercise the Rights evidenced thereby (except as
otherwise provided herein including without limitation, the
restrictions on exercisability set forth in Section 9(c),
Section 11(a)(iii) and Section 23(a) hereof) in whole or in
part at any time after the Distribution Date upon surrender
of the Rights Certificate, with the form of election to
exercise on the reverse side thereof duly executed, to the
Rights Agent at the office or offices of the Rights Agent
designated for such purpose, together with payment of the
Purchase Price for each one one-hundredth of a share of
Preferred Stock (or, if applicable, such other number of
shares or other securities) as to which the Rights are
exercised, at or prior to the earlier of (i) the close of
business on June 2, 2009 (the "Final Expiration Date"), or
(ii) the time at which the Rights are redeemed as provided
in Section 23 hereof (such earlier time being herein
referred to as the "Expiration Date"). Any Person who prior
to the Distribution Date becomes a record holder of shares
of Common Stock may exercise all of the rights of a
registered holder of a Rights Certificate with respect to
the Rights associated with such shares of Common Stock in
accordance with and subject to the provisions of this
Agreement, including the provisions of Section 7(e) hereof,
as of the date such Person becomes a record holder of shares
of Common Stock.
(b) The Purchase Price for each one one-hundredth of a
share of Preferred Stock pursuant to the exercise of a Right
shall initially be Twenty-eight Dollars ($28), and shall be
subject to adjustment from time to time as provided in
Section 11 hereof and shall be payable in lawful money of
the United States of America in accordance with paragraph
(c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to exercise
duly executed, accompanied by payment of the Purchase Price
for the shares to be purchased and an amount equal to any
applicable transfer tax, the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent of the
shares of Preferred Stock (or make available, if the Rights
Agent is the transfer agent for such shares) certificates
for the number of shares of Preferred Stock to be purchased
and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests, or (B) if the
Company, in its sole discretion, shall have elected to
deposit the shares of Preferred Stock issuable upon exercise
of the Rights hereunder into a depositary, requisition from
the depositary agent depositary receipts representing such
number of one one-hundredth of a share of Preferred Stock as
are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall
be deposited by the transfer agent with the depositary
agent) and the Company will direct the depositary agent to
comply with such request, (ii) when appropriate, requisition
from the Company the amount of cash, if any, to be paid in
lieu of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be
designated by such holder, and (iv) when appropriate, after
receipt thereof, deliver such cash, if any, to or upon the
order of the registered holder of such Rights Certificate.
The payment of the Purchase Price (as such amount may be
reduced pursuant to Section 11(a)(iii) hereof) shall be made
in cash or by certified check, cashier's check, bank draft
or money order payable to the order of the Company, except
that if so provided by the Board, the payment of the
Purchase Price following the Flip-In Event and until the
first occurrence of an event described in Section 13 may be
made wholly or in part by delivery of a certificate or
certificates (with appropriate stock powers executed in
blank attached thereto) evidencing a number of shares of
Common Stock of the Company equal to the then Purchase Price
divided by the closing price (as determined pursuant to
Section 11(d) hereof) per share of Common Stock on the
Trading Day immediately preceding the date of such exercise.
In the event that the Company is obligated to issue other
securities of the Company, pay cash and/or distribute other
property pursuant to Section 11(a)(iii) hereof, the Company
will make all arrangements necessary so that such other
securities, cash, and/or property are available for
distribution by the Rights Agent, if and when appropriate.
In addition, in the case of an exercise of the Rights by a
holder pursuant to Section 11(a)(ii), the Rights Agent shall
return such Rights Certificate to the registered holder
thereof after imprinting, stamping or otherwise indicating
thereon that the rights represented by such Rights
Certificate no longer include the rights provided by Section
11(a)(ii) of the Rights Agreement and if less than all the
Rights represented by such Rights Certificate were so
exercised, the Rights Agent shall indicate on the Rights
Certificate the number of Rights represented thereby which
continue to include the rights provided by Section
11(a)(ii).
(d) In case the registered holder of any Rights
Certificate shall exercise (except pursuant to Section
11(a)(ii)) less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the
Rights remaining unexercised shall be issued by the Rights
Agent and delivered to the registered holder of such Rights
Certificate or to his duly authorized assigns, subject to
the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the occurrence of a Flip-In Event,
any Rights beneficially owned by (a) an Acquiring Person or
an Associate or Affiliate of an Acquiring Person, (b) except
as provided below or in Section 4(b), a transferee of an
Acquiring Person (or any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes
such, and (c) except as provided below, a transferee of an
Acquiring Person (or any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights
pursuant to either (i) a transfer (whether or not for
consideration) from the Acquiring Person to or on behalf of
holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding regarding the
transferred Rights or (ii) a transfer which the majority of
the members of the Company's Board of Directors otherwise
conclude in good faith is part of a plan, arrangement or
understanding which has as a primary purpose or effect
avoidance of this Section 7(e), shall become null and void
without any further action, and any holder of such Rights
shall thereupon have no right to exercise such Rights under
any provision of this Agreement. A majority of the members
of the Company's Board of Directors may in appropriate
circumstances waive application of this Section 7(e) and the
requirements of Section 4(b) to any transfer by an Acquiring
Person in connection with a transfer or series of transfers
which cause an Acquiring Person to become the Beneficial
Owner of voting securities having less than twenty percent
(20%) of the voting power of the Company. The Company shall
use all reasonable efforts to insure that the provisions of
this Section 7(e) hereof are complied with, but shall have
no liability to any holder of Rights for the inability to
make any determinations with respect to an Acquiring Person
or any of their respective Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a
registered holder of any Rights Certificate upon the
occurrence of any purported exercise as set forth in this
Section 7 unless the certificate contained in the
appropriate form of election to purchase set forth on the
reverse side of the Rights Certificate surrendered for such
exercise shall have been completed and signed by the
registered holder thereof and the Company shall have been
provided with such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) of such
Rights Certificate or Affiliates or Associates thereof as
the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or any of its agents, be
delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled
by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the
Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its
authorized and unissued shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock
and/or other securities) or any authorized and issued shares
of Preferred Stock (and following the occurrence of a
Triggering Event, Common Stock and/or other securities) held
in its treasury, the number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) that, except as provided in
Section 11(a)(iii) and subject to Section 7(e) hereof, will
be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock
and/or other securities) issuable upon the exercise of the
Rights may be listed on any national securities exchange,
the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i)
file, as soon as practicable following the Distribution
Date, a registration statement under the Securities Act of
1933 (the "Act"), with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing,
and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the
requirements of the Act) until the date of the expiration of
the Rights. The Company will also take such action as may
be appropriate under the Blue Sky laws of the various
states. 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 any required
registration statement. Upon any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.
Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such
jurisdiction shall have been obtained, the exercise thereof
shall have been permitted under applicable law and a
registration statement shall have been declared effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all
shares of Preferred Stock (and, following the occurrence of
a Triggering Event, Common Stock and/or 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), be duly and validly
authorized and issued and fully paid and nonassessable
shares or securities.
(e) 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 Rights Certificates and
of any certificates for shares of Preferred Stock (or Common
Stock and/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 Rights Certificates
to a person other than, or the issuance or delivery of the
shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in respect of a name other
than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or
to issue or deliver any certificates for shares of Preferred
Stock (or Common Stock and/or other securities, as the case
may be) in a name other than that of the registered holder
upon the exercise of any Rights until such tax shall have
been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such
tax is due.
Section 10. Preferred Stock Record Date. Each person in
whose name any certificate for shares of Preferred Stock (or
Common Stock, 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 shares of Preferred Stock (or Common Stock, as
the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the
Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment
is a date upon which the Preferred Stock (or Common Stock, as the
case may be) transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock (or Common
Stock, as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any
rights of a shareholder of the Company with respect to shares for
which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not
be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind
of Stock or Number of Rights. The Purchase Price, the number and
kind of shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend
on the Preferred Stock payable in shares of Preferred
Stock, (B) subdivide the outstanding Preferred Stock,
(C) combine the outstanding Preferred Stock into a
smaller number of shares, or (D) issue any shares of
its capital stock in a reclassification of the
Preferred 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) and
in Section 7(e) hereof, 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
Preferred 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 Preferred Stock
or capital stock, as the case may be, which, if such
Right had been exercised immediately prior to such date
and at a time when the Preferred Stock transfer books
of the Company were open, such holder would have owned
upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event
shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon
exercise of one Right. If an event occurs which would
require an adjustment under both Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be
made prior to any adjustment required pursuant to
Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in
the event any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of
the Company or any Subsidiary of the Company, or any
Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such
plan), alone or together with its Affiliates and
Associates, shall, at any time after the date of this
Agreement, become an Acquiring Person, unless the event
causing such Person to become an Acquiring Person is an
acquisition of shares of Common Stock pursuant to a
tender offer or an exchange offer for all outstanding
shares of Common Stock at a price and on terms
determined by at least a majority of the members of the
Board of Directors who are not officers of the Company
and who are not representatives, nominees, Affiliates
or Associates of an Acquiring Person, after receiving
advice from one or more investment banking firms, to be
(a) at a price which is fair to shareholders and not
inadequate (taking into account all factors which such
members of the Board deem relevant, including, without
limitation, prices which could reasonably be achieved
if the Company or its assets were sold on an orderly
basis designed to realize maximum value) and (b)
otherwise in the best interests of the Company and its
shareholders, then, promptly following ten (10) days
after the date of the occurrence of such event (the
"Flip-In Event"), proper provision shall be made so
that each holder of a Right (except as provided below
and in Section 7(e) hereof) shall thereafter have the
right to receive, upon exercise thereof at the then
current Purchase Price in accordance with the terms of
this Agreement, in lieu of a number of one
one-hundredths of a share of Preferred Stock, such
number of shares of Common Stock of the Company as
shall equal the result obtained by (x) multiplying the
then current Purchase Price by the number of one
one-hundredths of a share of Preferred Stock for which
a Right was exercisable immediately prior to the first
occurrence of a Flip-In Event, and (y) dividing that
product (which, following such first occurrence, shall
thereafter be referred to as the "Purchase Price" for
each Right and for all purposes of this Agreement) by
50% of the current market price (determined pursuant to
Section 11(d) hereof) per share of Common Stock on the
date of such first occurrence (such number of shares,
the "Adjustment Shares").
(iii) In the event that (x) the number of shares
of Common Stock which are authorized by the Company's
articles of incorporation, but which are not
outstanding or reserved for issuance for purposes other
than upon exercise of the Rights, are not sufficient to
permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii) of this Section
11(a), or (y) if the majority of the members of the
Company's Board of Directors determine that such action
is necessary or appropriate and not contrary to the
interests of holders of Rights (excluding those owned
by the Acquiring Person), the Company shall: (A)
determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the
"Current Value") over (2) the Purchase Price (such
excess, the "Spread"), and (B) with respect to each
Right, make adequate provision to substitute for the
Adjustment Shares, upon payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without
limitation, shares, or units of shares, of preferred
stock which the Board of Directors of the Company has
deemed to have the same value as shares of Common Stock
(such shares of preferred stock "Common Stock
Equivalents")), (4) debt securities of the Company, (5)
other assets, or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value,
where such aggregate value has been determined by the
Board of Directors of the Company based upon the advice
of a nationally recognized investment banking firm
selected 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 (30) days following the later
of (x) the first occurrence of a Flip-In 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 "Flip-In 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
necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. 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 (30) day
period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the
Flip-In Trigger Date, in order that the Company may
seek shareholder approval for the authorization of such
additional shares (such thirty (30) day period, as it
may be extended, the "Substitution Period"). To the
extent that the Company determines that some action
need be taken pursuant to the first and/or second
sentences of this Section 11(a)(iii), the Company (x)
shall provide, subject to Section 7(e) 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 such shareholder approval for such
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 (as
determined pursuant to Section 11(d) hereof) per share
of the Common Stock on the Flip-In Trigger Date and the
value of any Common Stock Equivalent shall be deemed to
have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders
of Preferred Stock entitling them to subscribe for or
purchase (for a period expiring within forty-five (45)
calendar days after such record date) Preferred Stock (or
shares having the same rights, privileges and preferences as
the shares of Preferred Stock ("equivalent preferred
stock")) or securities convertible into Preferred Stock or
equivalent preferred stock at a price per share of Preferred
Stock or per share of equivalent preferred stock (or having
a conversion price per share, if a security convertible into
Preferred Stock or equivalent preferred stock) less than the
current market price (as determined pursuant to Section
11(d) hereof) per share of Preferred 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 Preferred Stock outstanding on such record date,
plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of
Preferred Stock and/or equivalent preferred stock so to be
offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase
at such current market price and the denominator of which
shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of additional shares of
Preferred Stock and/or equivalent preferred stock to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right.
In case such subscription price may be paid in a
consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as
determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the
holders of the Rights. Shares of Preferred 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 Preferred 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
(other than a regular quarterly cash dividend out of the
earnings or retained earnings of the Company), assets (other
than a dividend payable in Preferred Stock, but including
any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to
in Section 11(b)), 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 (as determined pursuant to Section
11(d) hereof) per share of Preferred Stock on such record
date, less the fair market value (as determined in good
faith by the Board, 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 Preferred Stock and the denominator
of which shall be such current market price (as determined
pursuant to Section 11(d) hereof) per share of Preferred
Stock; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital
stock of the Company to be issued upon exercise of one
Right. 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) (i) 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 such
Common Stock for the thirty (30) consecutive Trading
Days (as such term is hereinafter defined) immediately
prior to such date, and for purposes of 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 such Common Stock for the
ten (10) 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 such Common Stock of (A)
a dividend or distribution on such Common Stock payable
in shares of such Common Stock or securities
convertible into shares of such Common Stock (other
than the Rights), or (B) any subdivision, combination
or reclassification of such Common Stock, and prior to
the expiration of the requisite thirty (30) Trading Day
or ten (10) Trading Day period, as set forth above,
after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such
case, the "current market price" shall be properly
adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes
place on such 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 the National
Association of Securities Dealers, Inc. Automated
Quotation System ("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. 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 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 majority of the members of the
Company's Board of Directors, whose determination shall
be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes.
(ii) For the purpose of any computation
hereunder, the "current market price" per share of
Preferred Stock shall be determined in the same manner
as set forth above for the Common Stock in clause (i)
of this Section 11(d) (other than the last sentence
thereof). If the current market price per share of
Preferred Stock cannot be determined in the manner
provided above, the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an
amount equal to 100 times the current market price per
share of Common Stock, as appropriately adjusted for
stock splits, stock dividends or similar transactions
after the date hereof. If neither the Common Stock nor
the Preferred Stock is publicly held or so listed or
traded, "current market price" per share shall mean the
fair value per share as determined in good faith by the
majority of the members of the Company's Board of
Directors, 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 (1%) in the Purchase Price; provided,
however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the
nearest cent or to the nearest ten-thousandth of a share of
Common Stock or other share or one-millionth of a share of
Preferred Stock, 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 (3) 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) or Section 13, the holder of any Right
thereafter exercised shall become entitled to receive any
shares of capital stock other than Preferred Stock,
thereafter the number of such other shares so receivable
upon exercise of any Right shall be subject to adjustment
from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions contained in
Section 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and
(m), and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of shares of Preferred
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 one one-hundredth of a share
of Preferred Stock (calculated to the nearest one-millionth)
obtained by (i) multiplying (x) the number of one one-
hundredth of a share covered by the 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 to adjust the number of
Rights, in substitution for any adjustment in the number of
shares of Preferred 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 one one-hundredth of a share of Preferred 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 one ten-thousandth)
obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public
announcement 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 Rights
Certificates have been issued, shall be at least ten (10)
days later than the date of the public announcement. If
Rights 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 Rights Certificates on
such record date Rights 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 Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof,
if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights 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
Rights Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredth of a share
of Preferred Stock issuable upon the exercise of the Rights,
the Rights 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 Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated
or par value, if any, of the shares of Preferred Stock
issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly
and legally issue fully paid and non-assessable shares of
Preferred Stock, Common Stock or other securities 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 Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon
such exercise over and above the shares of Preferred 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 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 sole discretion the majority of the
members of the Company's Board of Directors shall determine
to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for
cash of any shares of Preferred Stock at less than the
current market price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities which by their terms
are convertible into or exchangeable for shares of Preferred
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 Preferred
Stock shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i)
consolidate with, (ii) merge with or into, or (iii) sell or
transfer (or permit any Subsidiary to sell or transfer), in
one or more transactions, assets, cash flow or earning power
aggregating more than 50% of the assets, cash flow or
earning power of the Company and its Subsidiaries (taken as
a whole) to, any other Person if at the time of or
immediately after such consolidation, merger or sale there
are any rights, warrants or other instruments or securities
outstanding or agreement in effect which would substantially
diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
(o) The Company covenants and agrees that, after the
Stock Acquisition Date, it will not, except as permitted by
Section 23 hereof, take (or permit any Subsidiary to take)
any action the purpose or effect of which is to diminish
substantially or otherwise eliminate the benefits intended
to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any
time after the date of this Agreement and prior to the
Distribution Date (i) declare a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, (iii) combine
the outstanding Common Stock into a smaller number of
shares, or (iv) issue any shares of its capital stock in a
reclassification of the outstanding Common Stock, the number
of Rights associated with each share of Common Stock shall
be proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share
of Common Stock immediately prior to such event by a
fraction the numerator of which shall be the total number of
shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall
be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event.
(q) The exercise of Rights under Section 11(a)(ii)
shall only result in the loss of rights under Section
11(a)(ii) to the extent so exercised and shall not otherwise
affect the rights represented by the Rights under this
Rights Agreement, including the rights represented by
Section 13.
Section 12. Certificate of Adjusted Purchase Price or
Number of Stock. 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 accounting for such adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock a copy of such certificate,
and (c) mail a brief summary thereof to each holder of a Rights
Certificate in accordance with Section 26 hereof. The Rights
Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets, Cash Flow or Earning Power.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person,
and the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (y) any Person
shall consolidate with, or merge with or 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 cash or any other property, or (z) the Company
shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or
more transactions, assets, cash flow or earning power
aggregating more than 50% of the assets, cash flow or
earning power of the Company and its Subsidiaries (taken as
a whole) to any Person or Persons (other than the Company or
any Subsidiary of the Company), then, and in each such case,
proper provision shall be made so that: (i) each holder of
a Right, shall thereafter have the right to receive, upon
the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid, non-assessable
and freely tradeable shares of Common Stock of the Principal
Party (as hereinafter defined), free and clear of liens,
rights of call or first refusal, encumbrances or other
adverse claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the then
number of one one-hundredths of a share of Preferred Stock
for which a Right is exercisable immediately prior to the
first occurrence of an event described in clauses (x), (y)
and (z) of this Section 13 (or, if a transaction described
in Section 11(a)(ii) hereof has occurred prior to the first
occurrence of an event described in clauses (x), (y) and (z)
of this Section 13(a), multiplying the number of such one
one-hundredths of a share for which a Right was exercisable
prior to the first occurrence of an event described in
Section 11(a)(ii) by the Purchase Price in effect
immediately prior to such first occurrence) and (2) dividing
that product (which, following the first occurrence of an
event described in clauses (x), (y) and (z) of this Section
13(a) shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by 50% of the
current market price (determined pursuant to Section
11(d)(i) hereof) per share of the Common Stock of such
Principal Party on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Principal
Party shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11
hereof shall apply to such Principal Party; 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 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 possible, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the
Rights.
(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), the
Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in
such merger or consolidation, and if no securities are
so issued, the Person that is the other party to such
merger or consolidation; and
(ii) in the case of any transaction described in
(z) of the first sentence in Section 13(a), the Person
that is the party receiving the greatest portion of the
assets, cash flow or earning power transferred pursuant
to such transaction or transactions;
provided, however, that in any such case, (1) if the Common
Stock of such Person is not at such time and has not been
continuously over the preceding twelve (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,
"Principal Party" shall refer to such other Person; (2) in
case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stocks of two or more of
which are and have been so registered, "Principal Party"
shall refer to whichever of such Persons is the issuer of
the Common Stock having the greatest aggregate market value;
and (3) in case such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply
to each of the chains of ownership having an interest in
such joint venture as if such party were a "Subsidiary" of
both or all of such joint venturers and the Principal
Parties in each such chain shall bear the obligations set
forth in this Section 13 in the same ratio as their direct
or indirect interests in such Person bear to the total of
such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the
Principal Party shall have a sufficient number of authorized
shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that,
as soon as practicable after the date of any consolidation,
merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will:
(i) prepare and file a registration statement
under the Act, with respect to the Rights and the
securities purchasable upon exercise of the Rights on
an appropriate form, and will use its best efforts to
cause such registration statement to (A) become
effective as soon as practicable after such filing and
(B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the
Expiration Date;
(ii) take all other actions as may be necessary
to enable the Principal Party to issue the securities
purchasable upon exercise of the Rights, including but
not limited to the registration or qualification of
such securities under all requisite securities laws of
jurisdictions of the various states and the listing of
such securities on such exchanges and trading markets
as may be necessary or appropriate; and
(iii) will deliver to holders of the Rights
historical financial statements for the Principal Party
and each of its Affiliates which comply in all material
respects with the requirements for registration on Form
10 under the Exchange Act.
The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such
transaction there are any rights, warrants, instruments or
securities outstanding or any agreements or arrangements
which, as a result of the consummation of such transaction,
would eliminate or substantially diminish the benefits
intended to be afforded by the Rights. The provisions of
this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. The rights
under this Section 13 shall be in addition to the rights to
exercise Rights and adjustments under Section 11(a)(ii) and
shall survive any exercise thereof.
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a
transaction described in subparagraphs (x) and (y) of
Section 13(a) if (i) such transaction is consummated with a
Person or Persons who acquired shares of Common Stock
pursuant to a tender offer or exchange offer for all
outstanding shares of Common Stock at a price and on terms
determined to be in accordance with the provisions of
Section 11(a)(ii) hereof (or a wholly owned subsidiary of
any such Person or Persons), (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
shares of Common Stock whose shares were purchased pursuant
to such tender offer or exchange offer and (iii) the form of
consideration being offered to the remaining holders of
shares of Common Stock pursuant to such transaction is the
same as the form of consideration paid pursuant to such
tender offer or exchange offer. Upon consummation of any
such transaction contemplated by this Section 13(d), all
Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Stock.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date
as provided in Section 11(p) hereof, or to distribute Rights
Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the
registered holders of the Rights Certificates with regard to
which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current
market value of a whole Right. For purposes of this Section
14(a), the current market value of a whole Right shall be
the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing
price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York
Stock Exchange or, if the Rights are not listed or admitted
to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with
respect to securities listed on the principal national
securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or
admitted to trading on any national securities exchange, the
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 Rights are not quoted by any
such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is
making a market in the Rights the fair value of the Rights
on such date as determined in good faith by the Board shall
be used.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one one-hundredth of a share
of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred
Stock). Fractions of shares of Preferred Stock in integral
multiples of one one-hundredth of a share of Preferred Stock
may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it;
provided, that such agreement shall provide that the holders
of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as
beneficial owners of the shares of Preferred Stock
represented by such depositary receipts. In lieu of
fractional shares of Preferred Stock that are not integral
multiples of one one-hundredth of a share of Preferred
Stock, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as
herein provided an amount in cash equal to the same fraction
of the current market value of one one-hundredth of a share
of Preferred Stock. For purposes of this Section 14(b), the
current market value of one one-hundredth of a share of
Preferred Stock shall be one one-hundredth of the closing
sale price of a share of Preferred Stock (as determined
pursuant to of Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event,
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 of
Common Stock. In lieu of fractional shares of Common Stock,
the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one (1) share of Common Stock. For
purposes of this Section 14(c), the current market value of
one (1) share of Common Stock shall be the closing sale
price of a share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right,
except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, excepting the rights of action given
to the Rights Agreement under Section 18 hereof, are vested in
the respective registered holders of the Rights Certificates
(and, prior to the Distribution Date, the registered holders of
the Common Stock); and any registered holder of any Rights
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 Rights 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 to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such
Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement
and shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to
this 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
Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right by accepting the same consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common
Stock;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of
the Rights Agent if surrendered at the office or offices of
the Rights Agent designated for such purposes, 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 a Rights 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 Rights Certificate
or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this 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 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 governmental authority,
prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use
reasonable efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Shareholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the shares of Preferred Stock or any other
securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as
provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the
administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and
to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of
liability arising therefrom, directly or indirectly.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Rights
Certificate or certificate for Common Stock or for other
securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons or otherwise
upon the advice of counsel as set forth in Section 20
hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger
or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding
to the corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the
parties hereto; provided, however, 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 Agreement, any of the Rights
Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver
such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign
such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent;
and in all such cases such Rights Certificates shall have
the full force provided in the Rights Certificates and in
this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights
Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its
prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
selected by it (who may be legal counsel for the Company),
and the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or
established by the Company prior to taking 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 Chief Executive Officer, the
President, the Chief Financial Officer or any Vice
President, 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 Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only
for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals
contained in this Agreement or in the Rights Certificates or
be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such
statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement
or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment required
under the provisions of Sections 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 Certifications
after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any
shares of Common Stock or Preferred Stock to be issued
pursuant to this Agreement or any Rights Certificate or as
to whether any shares of Common Stock or Preferred Stock
will, when so 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 Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of
its duties hereunder from the Chief Executive Officer, the
President, the Chief Financial Officer or any Vice
President, the Secretary or any Assistant Secretary of the
Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not
be liable for any action taken or suffered to be taken by it
in good faith in accordance with instructions of any such
officer.
(h) The Rights Agent and any shareholder, director,
officer or employee of the Rights Agent may buy, sell or
deal in any of the Rights or other securities of the Company
or become pecuniarily interested in any transaction in which
the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as
though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or
accountable for any act, or omission, default, neglect or
misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, or omission,
default, neglect or misconduct; provided, however,
reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this 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.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty (30) days' notice in
writing mailed to the Company, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-
class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (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 and
Preferred Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment
within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by
the Company), then the registered holder of any Rights
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 of the States of Minnesota or New York
(or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution
in the States of Minnesota or New York), in good standing, having
a principal office in the States of Minnesota or New York, which
is authorized under such laws to exercise corporate trust 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 the Preferred Stock, and mail a notice thereof
in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be
approved by the Board to reflect any adjustment or change in the
Purchase Price per share and the number or kind or class of
shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provision of this
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, granted or awarded as of the
Distribution Date, 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 Rights Certificates
representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Rights Certificate would
be issued, and (ii) no such Rights Certificate shall be issued
if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) (i) By a decision by the majority of the
members of the Company's Board of Directors, the Board
may, at its option, at any time prior to the close of
business on the earlier of (i) the Flip-In Event, or
(ii) the Final Expiration Date, redeem all but not less
than all of the then outstanding Rights at a redemption
price of $.001 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the
"Redemption Price"). The redemption of the Rights by
the Board may be made effective at such time, on such
basis and with such conditions as the Board in its sole
discretion may establish. Notwithstanding anything
contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of
an event described in Section 11(a)(ii) until such time
as the Company's right of redemption hereunder has
expired. The Company may, at its option, pay the
Redemption Price in cash, shares of Common Stock (based
on the "current market price", as defined in Section
11(d)(i) hereof, of the Common Stock at the time of
redemption) or any other form of consideration deemed
appropriate by the Board of Directors.
(ii) In addition, the majority of the members of
the Company's Board of Directors may redeem all but not
less than all of the then outstanding Rights at the
Redemption Price following the occurrence of a Flip-In
Event but prior to any event described in Section 13(a)
either (x) if each of the following shall have occurred
and remain in effect: (1) a Person who is an Acquiring
Person shall have transferred or otherwise disposed of
a number of shares of Common Stock in a manner
satisfactory to the majority of the members of the
Company's Board of Directors such that such Person is
thereafter a Beneficial Owner of voting securities
having less than twenty percent (20%) of the voting
power of the Company, and (2) there is no other Person,
immediately following the occurrence of the event
described in clause (1), who is an Acquiring Person, or
(y) in connection with any transaction not involving an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
(b) In the case of a redemption permitted under
Section 23(a)(i), immediately upon the action of the Board
of Directors of the Company ordering the redemption of the
Rights, evidence of which shall have been filed with the
Rights Agent 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. In the case of a
redemption permitted only under Section 23(a)(ii), evidence
of which shall have been filed with the Rights Agent, the
right to exercise the Rights will terminate and represent
only the right to receive the Redemption Price only after
ten (10) business days following the giving of notice of
such redemption to the holders of such Rights. Within ten
(10) days after the action of the Board of Directors,
ordering any such 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 the Rights Agent and 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 for the Common Stock.
Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be
made.
Section 24. Exchange.
(a) The Board may, at its option, at any time after the
occurrence of a Triggering Event, exchange all or part of
the then outstanding and exercisable Rights (which shall not
include Rights that have become null and void pursuant to
the provisions of Section 7(e) hereof) for Common Stock at
an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the
Board shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or any such Subsidiary, or any entity holding Common
Stock for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of fifty (50%) or more of the
voting power of the Company.
(b) Immediately upon the action of the Board ordering
the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives
the notice. Each such notice of exchange shall state the
method by which the exchange of the Common Stock for Rights
will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of
Rights (other than Rights which have become null and void
pursuant to the provisions of Section 7(e) hereof) held by
each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Stock (or
equivalent preferred stock, as such term is defined in
Section 11(b) hereof) for some or all of the Common Stock
exchangeable for Rights, at the initial rate of one one-
hundredth of a share of Preferred Stock (or equivalent
preferred stock) for each share of Common Stock, as
appropriately adjusted to reflect adjustments in the voting
rights of the Preferred Stock pursuant to the terms thereof,
so that the fraction of a share of Preferred Stock delivered
in lieu of each share of Common Stock shall have the same
voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient
shares of Common Stock or Preferred Stock issued but not
outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be
necessary to authorize additional Common Stock or Preferred
Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue
fractions of shares of Common Stock or to distribute
certificates which evidence fractional shares of Common
Stock. In lieu of such fractional shares of Common Stock,
the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional shares of
Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a
whole share of Common Stock. For the purposes of this
paragraph (e), the current market value of a whole share of
Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. In case the Company
shall propose, at any time after the Distribution Date, (a) to
pay any dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the holders
of Preferred Stock (other than a regular quarterly cash dividend
out of earnings or retained earnings of the Company), or (b) to
offer to the holders of Preferred Stock rights or warrants to
subscribe for or to purchase any additional shares of Preferred
Stock or shares of stock of any class or any other securities,
rights or options, or (c) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (d) to
effect any consolidation or merger into or with, or to effect any
sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or
more transactions, of more than 50% of the assets, cash flow or
earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, or (e) to effect the liquidation,
dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of
Preferred 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 (a)
or (b) above at least twenty (20) days prior to the record date
for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking
of such proposed action or the date of participation therein by
the holders of the shares of Preferred Stock whichever shall be
the earlier.
In case any of the events set forth in Section 11(a)(ii) of
this Agreement shall occur, then, in any such case, (i) the
Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of the occurrence of
such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof,
and (ii) all references in the preceding paragraph to Preferred
Stock shall be deemed thereafter to refer to Common Stock and/or,
if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the
holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
PPT Vision, Inc.
12988 Valley View Road
Eden Prairie, MN 55344
Attention: President
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Rights Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
Norwest Bank Minnesota, N.A.
161 N. Concord Exchange
South St. Paul, Minnesota 55075
Attention: Stock Transfer Department
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the
Company.
Section 27. Supplements and Amendments. The Board and the
Rights Agent shall from time to time, if the Board so directs,
supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other
provisions herein, (iii) prior to the Distribution Date, to
change or supplement any of the provisions hereunder which the
Board may deem necessary or desirable or (iv) following the
Distribution Date, to change or supplement any of the provisions
hereunder in any manner which the Board may deem necessary or
desirable and which shall not adversely affect the interests of
the holders of Rights Certificates (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person).
Notwithstanding the foregoing, following the Distribution Date,
this Agreement shall not be supplemented or amended to lengthen
any time period relating to the Rights, including, without
limitation, the time period during which the Rights may be
redeemed, unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of and benefits to
the holders of the Rights (excluding in each case Rights held by
an Acquiring Person or an Associate or Affiliate of an Acquiring
Person whose Rights have or may become null and void pursuant to
Section 7(e) hereof). 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 27, 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 Agreement. Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock).
Section 30. Administration of Agreement. The majority of
the members of the Company's Board of Directors shall have the
exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board
or the Company or as may be necessary or advisable in the admini
stration of this Agreement, including without limitation the
right and power to interpret the Agreement and to make all
determinations deemed necessary or advisable for the
administration of this Agreement. All such acts, interpretations
and determinations done or made by the Board in good faith shall
be final, conclusive and binding on the Company, the Rights Agent
and the holders of the Rights. Accordingly, the majority of the
members of the Company's Board of Directors shall not be liable
to the holders of Rights Certificates or any other party for any
determination made, action taken, or action omitted to be taken
pursuant to the terms of this Agreement, if such determination,
action or omitted action was made or taken in good faith.
Section 31. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant
or restriction is held by such court or authority to be invalid,
void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth day following the date of such
determination by the Board of Directors of the Company. Without
limiting the foregoing, if any provision requiring that a
determination be made by less than the entire Board is held by a
court of competent jurisdiction or other authority to be invalid,
void or unenforceable, such determination shall then be made by
the entire Board.
Section 32. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Minnesota and for
all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts made and to
be performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section 34. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested as of the day and year
first above written.
PPT Vision, Inc.
Attest:
By___________________ By____________________________
Its Secretary Its President
NORWEST BANK MINNESOTA, N.A.
Attest:
By___________________ By____________________________
Its________________ Its_________________________
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
PPT Vision, Inc.
Pursuant to Section 302A.401 of the Minnesota
Business Corporation Law
We, Joseph C. Christenson, President, and Thomas G. Lovett
IV, Secretary, of PPT Vision, Inc., a corporation organized and
existing under the Minnesota Business Corporation Act, in
accordance with the provisions of Section 302A.401 thereof, DO
HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Articles of Incorporation of the said
Corporation, the said Board of Directors on June 2, 1999 adopted
the following resolution creating a series of One Hundred Fifty
Thousand (150,000) shares of preferred stock designated as Series
A Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the
provisions of its Articles of Incorporation, a series of
preferred stock of the Corporation be, and it hereby is, created,
and that the designation and amount thereof and the voting
powers, preferences and relative, participating, optional and
other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof, are as
follows:
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Participating
Preferred Stock," no par value, and the number of shares
constituting such series shall be 150,000. Such number of shares
may be increased or decreased by resolution of the Board of
Directors; provided that no decrease shall reduce the number of
shares of Series A Junior Participating Preferred Stock to a
number less than that of the shares then outstanding plus the
number of shares issuable upon exercise of outstanding rights,
options or warrants or upon conversion of outstanding securities
issued by the Corporation.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders
of any shares of any series of preferred stock now or hereafter
ranking prior and superior to the shares of Series A Junior
Participating Preferred Stock with respect to dividends, the
holders of shares of Series A Junior Participating Preferred
Stock, in preference to the holders of shares of Common Stock,
$.10 par value per share (the "Common Stock"), of the Corporation
and any other junior stock, shall be entitled to receive, when,
as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on
the last day of March, June, September and December in each year
(each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a
share of Series A Junior Participating Preferred Stock, in an
amount per whole share (rounded to the nearest cent), subject to
the provision for adjustment hereinafter set forth, equal to 100
times the aggregate per share amount of all cash dividends, and
100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Junior
Participating Preferred Stock. In the event the Corporation
shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision (by
stock split or otherwise) or combination (by reverse stock split
or otherwise) or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case
the amount to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event (and rounding
the result to the nearest whole number); and provided further
that if at any time after June 22, 1999 the Corporation shall
issue any shares of its capital stock in a reclassification or
change of the outstanding shares of Common Stock (including any
such reclassification or change in connection with a merger in
which the Corporation is the surviving corporation), then in such
event the amount to which holders of Series A Junior
Participating Preferred Stock are entitled shall be appropriately
adjusted to reflect such reclassification or change.
(B) The Corporation shall declare a dividend or
distribution on the Series A Junior Participating Preferred Stock
as provided in paragraph (A) above immediately after it declares
a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock).
(C) The holders of shares of Series A Junior Participating
Preferred Stock shall not be entitled to receive any dividends or
other distributions except as provided herein.
Section 3. Voting Rights. The holders of shares of
Series A Junior Participating Preferred Stock shall have the
following voting rights:
(A) Each share of Series A Junior Participating Preferred
Stock shall entitle the holder thereof to one hundred (100)
votes, subject to adjustment in the manner set forth in Section
2(A), on all matters on which holders of the Common Stock or
stockholders generally are entitled to vote.
(B) Except as otherwise provided herein or by applicable
law, the holders of shares of Series A Junior Participating
Preferred Stock and the holders of shares of Common Stock shall
vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as set forth herein or by applicable law,
holders of Series A Junior Participating Preferred Stock shall
have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating
Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A
Junior Participating Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Participating Preferred
Stock, except dividends paid ratably on the Series A Junior
Participating Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares
are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up)
to the Series A Junior Participating Preferred Stock,
provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Junior Participating
Preferred Stock, or any shares of stock ranking on a parity
with the Series A Junior Participating Preferred Stock,
except in accordance with a purchase offer made in writing
or by publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the Board
of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Junior Participating Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All
such shares shall, upon their cancellation, become authorized but
unissued shares of preferred stock and may be reissued as part of
a new series of preferred stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein or as otherwise
required by law.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution
shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior
Participating Preferred Stock shall have received $100 per share,
plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment (the "Liquidation Preference"). Following the
payment of the full amount of the Liquidation Preference, no
additional distributions shall be made to the holders of shares
of Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Common Stock shall have
received an amount per share (the "Common Adjustment") equal to
the quotient obtained by dividing (i) the Liquidation Preference
by (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits,
stock dividends and recapitalization with respect to the Common
Stock) (such number in clause (ii) being herein referred to as
the "Adjustment Number"). Following the payment of the full
amount of the Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series A Junior Preferred
Stock and Common Stock, respectively, holders of Series A Junior
Participating Preferred Stock and holders of shares of Common
Stock shall proportionately share in the remaining assets in the
ratio of the Adjustment Number (per share of Preferred Stock) to
1 (per share of Common Stock).
(B) In the event there are not sufficient assets available
to permit payment in full of the Liquidation Preference and the
liquidation preferences of all other series of preferred stock,
if any, which rank on a parity with the Series A Junior
Participating Preferred Stock, then such remaining assets shall
be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the
event there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets
shall be distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time (i)
declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of
shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying
such Adjustment Number by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event.
Section 7. Consolidation, Merger etc. In case the
Corporation shall enter into any consolidation, merger
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
the shares of Series A Junior Participating Preferred Stock shall
at the same time be similarly exchanged or changed in an amount
per share (subject to the provision for adjustment hereinafter
set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation
shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Junior Participating
Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating
Preferred Stock shall rank junior to all other series of the
Corporation's preferred stock which may hereafter be authorized
as to the payment of dividends and the distribution of assets,
unless the terms of any such series shall provide otherwise.
Section 10. Amendment. The Articles of Incorporation of
the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special
rights of the Series A Junior Participating Preferred Stock so as
to affect them adversely without the affirmative vote of the
holders of two-thirds (2/3) or more of the outstanding shares of
Series A Junior Participating Preferred Stock, voting separately
as a class.
Section 11. Fractional Shares. Series A Junior
Participating Preferred Stock may be issued in fractions of a
share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive
dividends, participate in liquidating distributions and to have
the benefit of all other rights of holders of Series A Junior
Participating Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the
penalties of perjury this ____ day of June, 1999.
Attest:
_______________________ ______________________________
Thomas G. Lovett, IV Joseph C. Christenson
Secretary President
Exhibit B
Form of Rights Certificate
Certificate No. R-
Rights
NOT EXERCISABLE AFTER JUNE 2, 2009, OR EARLIER IF REDEEMED
BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF THE COMPANY, AT $.001 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT REFERRED TO HEREIN. UNDER
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO
WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
OF SUCH AGREEMENT.]1
Rights Certificate
PPT Vision, Inc.
This certifies that , or registered
assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to
the terms, provisions and conditions of the Rights Agreement,
dated as of June 2, 1999 (the "Rights Agreement"), between PPT
Vision, Inc., a Minnesota corporation (the "Company"), and
Norwest Bank Minnesota, N.A. (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M.
(Minneapolis, Minnesota time) on June 2, 2009 at the office or
offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-hundredth of a fully paid,
non-assessable share of Series A Junior Participating Preferred
Stock (the "Preferred Stock") of the Company, at a purchase price
of Twenty-eight Dollars ($28) per one one-hundredth of a share
(the "Purchase Price"), upon presentation and surrender of this
Rights Certificate with the Form of Election to Exercise duly
executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of
June 22, 1999, based on the Preferred Stock as constituted at
such date.
If the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement), (ii) a transferee of any such Acquiring
Person or Associate or Affiliate of such Acquiring Person except
as provided in Section 4(b) of the Rights Agreement, or (iii)
under certain circumstances, a transferee of persons who became
an Acquiring Person or Affiliate or Associate of such Acquiring
Person following such transfer, such Rights shall become null and
void upon the occurrence of a Flip-In Event described in Section
11(a)(ii) and as described in Section 7(e) of the Rights
Agreement and no holder hereof shall have any right with respect
to such Rights from and after the occurrence of such event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other
securities which may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification
and adjustment upon the happening of certain events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
certain circumstances specified in such Rights Agreement. Copies
of the Rights Agreement are on file at the above-mentioned office
of the Rights Agent and are also available upon written request
to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the
Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a
like aggregate number of shares of Preferred Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised (other than pursuant to
Section 11(a)(ii) of the Rights Agreement) in part, the holder
shall be entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole Rights
not exercised. If this Rights Certificate shall be exercised in
whole or in part pursuant to Section 11(a)(ii) of the Rights
Agreement, the holder shall be entitled to receive this Rights
Certificate duly marked to indicate that such exercise has
occurred as set forth in the Rights Agreement.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the
Company at its option at a redemption price of $.001 per Right.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder
of shares of Preferred Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof,
nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the
rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings
or other actions affecting shareholders (except as provided in
the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this
Rights Certificate shall have been exercised as provided in the
Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of
the Company.
Dated: _________________
ATTEST: PPT Vision, Inc.
_______________________ By_____________________________
Secretary Title:
Countersigned:
NORWEST BANK MINNESOTA, N.A.
By_____________________
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ____________________________________
hereby sells, assigns and transfers unto _____________________
______________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _____________________ Attorney, to transfer the within
Rights Certificate on the books of the within-named Company, with
full power of substitution.
The undersigned hereby certifies (after due inquiry and to
the best of its knowledge) by checking the appropriate boxes
that:
(1) this Rights Certificate
[ ] is
or
[ ] is not
being sold, assigned and transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of
an Acquiring Person (as such terms are defined in the Rights
Agreement); and
(2) the undersigned
[ ] did
or
[ ] did not
acquire the Rights evidenced by this Rights Certificate from any
person who is, was or subsequently became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person.
Dated: _________________
_______________________________
Signature
Signature Medallion Guaranteed:
NOTICE
The signature to the foregoing Assignment must correspond to
the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change
whatsoever.
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: PPT Vision, Inc.:
The undersigned hereby irrevocably elects to exercise
____________ Rights represented by this Rights Certificate to
purchase the shares of Preferred Stock issuable upon the exercise
of the Rights (or such other securities of the Company or of any
other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued
in the name of:
(Please print name and address)
(Please insert social security
or other identifying number)
The Rights Certificate indicating the balance, if any, of
such Rights which may still be exercised pursuant to Section
11(a)(ii) of the Rights Agreement shall be returned to the
undersigned unless such person requests that the Rights Certifi
cate be registered in the name of and delivered to: (complete
only if Rights Certificate is to be registered in a name other
than the undersigned)
(Please print name and address)
(Please insert social security
or other identifying number)
The undersigned hereby certifies (after due inquiry and to
the best of its knowledge) by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate
[ ] are
or
[ ] are not
being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the Rights Agreement); and
(2) the undersigned
[ ] did
or
[ ] did not
acquire the Rights evidenced by this Rights Certificate from any
person who is, was or subsequently became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person.
Dated: _________________
________________________________
Signature
Signature Medallion Guaranteed:
NOTICE
The signature to the foregoing Election to Exercise must
correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or
enlargement or any change whatsoever.
EXHIBIT C
SUMMARY OF SHAREHOLDER RIGHTS PLAN
On June 2, 1999 the Board of Directors of PPT Vision, Inc.
(the "Company") adopted a shareholder rights plan (the "Rights
Plan") The purpose of the Rights Plan is to deter certain
coercive or abusive takeover tactics and to encourage third
parties interested in acquiring the Company to negotiate with the
Board and otherwise assist the Board in representing the
interests of all shareholders. The Rights Plan does not deter
negotiated mergers or business combinations that the Board
determines to be in the best interests of the Company and its
stockholders.
To implement the Rights Plan, the Board declared a dividend
of one preferred stock purchase right (the "Right") for each
outstanding share of the Company's Common Stock, $.10 par value
per share (the "Common Stock"), to its shareholders of record at
the close of business on June 22, 1999 (the "Record Date").
Except as set forth below, each Right entitles the registered
holder to purchase from the Company one one-hundredth (1/100) of
a share of Series A Junior Participating Preferred Stock, no par
value (the "Preferred Stock"), at a price of $28 per one one-
hundredth of a share (the "Purchase Price"). The terms of the
Rights are set forth in a Rights Agreement dated as of June 2,
1999 (the "Rights Agreement") between the Company and Norwest
Bank Minnesota, N.A., as Rights Agent.
Initially, the Rights will be attached implicitly to all
Common Stock certificates representing shares then outstanding,
and no separate Right certificates will be distributed. Until
the earlier to occur of ten days following (i) a public announce
ment that, without the prior consent of the Board of Directors, a
person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to
acquire, beneficial ownership of voting securities having 20% or
more of the voting power of the Company (the "Stock Acquisition
Date"), or (ii) the commencement of (or a public announcement of
an intention to make) a tender offer or exchange offer which
would result in any person or group and related persons having
beneficial ownership of voting securities having 20% or more of
the voting power of the Company (the earlier of such dates
referred to in (i) and (ii) above being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of the
Common Stock certificates outstanding as of the Record Date, by
such Common Stock certificates.
The Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred with and only with Common
Stock certificates. From as soon as practicable after the Record
Date and until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued
after the Record Date upon transfer or new issuance of the Common
Stock will contain a notation incorporating the Rights Agreement
by reference. Until the Distribution Date (or earlier redemption
or expiration of the Rights), the surrender for transfer of any
certificates for Common Stock outstanding as of the Record Date
will also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certifi
cates evidencing the Rights ("Rights Certificates") will be
mailed to holders of record of the Common Stock as of the close
of business on the Distribution Date, and the separate Rights
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on June 2, 2009, unless earlier redeemed
by the Company as described below.
In the event that any person becomes the beneficial owner of
20% or more of the voting power of the Company in a transaction
which has not previously been approved by a majority of the
independent directors, ten (10) days thereafter (the "Flip-In
Event") each holder of a Right will thereafter have the right to
receive, upon exercise thereof at the then current Purchase Price
of the Right, Common Stock (or, in certain circumstances, a
combination of cash, other property, Common Stock or other
securities) which has a value of two times the Purchase Price of
the Right (such right being called the "Flip-In Right"). In the
event that the Company is acquired in a merger or other business
combination transaction where the Company is not the surviving
corporation or in the event that 50% or more of its assets, cash
flow or earning power is sold, proper provision shall be made so
that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current Purchase
Price of the Right, common stock of the acquiring entity which
has a value of two times the Purchase Price of the Right (such
right being called the "Flip-Over Right"). The holder of a Right
will continue to have the Flip-Over Right whether or not such
holder exercises the Flip-In Right. Upon the occurrence of the
Flip-In Event, any Rights that are or were at any time owned by
an Acquiring Person shall become null and void insofar as they
relate to the Flip-In Right.
For example, at a Purchase Price of $28 per Right, if any
person becomes the beneficial owner of 20% or more of the voting
power of the Company, ten (10) days thereafter each Right other
than a Right owned by such 20% beneficial owner would entitle its
holder to purchase $56 worth of the Company's Common Stock (or
other consideration, as noted above) for $28. Assuming that the
Common Stock had a per share value of $5 at such time, the holder
of each Right would effectively be entitled to purchase 11.2
shares of Common Stock for $28.
Similarly, assuming, following the Stock Acquisition Date,
the occurrence of a business combination with another entity in
which the Company's Common Stock is converted or exchanged, or a
sale of 50% or more of the Company's assets, cash flow or earning
power, each Right would entitle its holder to purchase $56 worth
of the acquiring entity's stock for $28.
The Purchase Price payable, and the number of shares of
Preferred Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of the
Preferred Stock, (ii) upon the grant to holders of the Preferred
Stock of certain rights or warrants to subscribe for Preferred
Stock or convertible securities at less than the current market
price of the Preferred Stock or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to
above).
At any time after the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 20%
or more of the voting power of the Company and prior to the
acquisition by such person or group of 50% or more of the voting
power of the Company, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or
group which have become null and void), in whole or in part, at
an exchange ratio of one share of Common Stock, or one one-
hundredth of a share of Preferred Stock (or of a share of a class
or series of the Company's preferred stock having equivalent
rights, preferences and privileges), per Right (subject to
adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an
adjustment of at least 1% in the Purchase Price. No fractions of
shares will be issued and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on
the last trading date prior to the date of exercise.
At any time prior to the earlier to occur of (i) the tenth
day after the Stock Acquisition Date, or (ii) the expiration of
the Rights, the Company may redeem the Rights in whole, but not
in part, at a price of $.001 per Right (the "Redemption Price"),
which redemption shall be effective at such time as the Board of
Directors shall establish. Additionally, the majority of the
members of the Company's Board of Directors may, following the
tenth day after the Stock Acquisition Date, redeem the then
outstanding Rights in whole, but not in part, at the Redemption
Price provided that either (a) the Acquiring Person reduces his,
her or its beneficial ownership to less than 20% of the voting
power of the Company in a manner which is satisfactory to the
majority of the members of the Company's Board of Directors and
there are no other Acquiring Persons, or (b) such redemption is
incidental to a merger or other business combination transaction
or series of transactions involving the Company but not involving
an Acquiring Person or any person who was an Acquiring Person.
The redemption of Rights described in the preceding sentence
shall be effective only after ten (10) business days prior
notice. Upon the effective date of the redemption of the Rights,
the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption
Price.
The Preferred Stock purchasable upon exercise of the Rights
will be nonredeemable. Each share of Preferred Stock will have a
preferential quarterly dividend in an amount equal to 100 times
the dividend declared on each share of Common Stock. In the
event of liquidation, the holders of Preferred Stock will receive
a preferred liquidation payment of $100 per whole share of
Preferred Stock. Each whole share of Preferred Stock will have
100 votes, voting together with the Common Stock. In the event
of any merger, consolidation or other transaction in which Common
Stock are exchanged, each share of Preferred Stock will be
entitled to receive 100 times the amount and type of
consideration received per share of Common Stock. The rights of
the Preferred Stock as to dividends and liquidations, and in the
event of mergers and consolidations, are protected by customary
anti-dilution provisions. Fractional shares of Preferred Stock
in integral multiples of one one-hundredth of a share of
Preferred Stock will be issued unless the Company elects to
distribute depositary receipts in lieu of such fractional shares.
In lieu of fractional shares other than fractions that are
multiples of one one-hundredth of a share, an adjustment in cash
will be made based on the market price of the Preferred Stock on
the last trading date prior to the date of exercise.
Until a Right is exercised, it will not entitle the holder
to any rights as a shareholder of the Company (other than those
as an existing shareholder), including, without limitation, the
right to vote or to receive dividends.
The terms of the Rights may be amended by the Board of
Directors of the Company (i) prior to the Distribution Date in
any manner, and (ii) on or after the Distribution Date to cure
any ambiguity, to correct or supplement any provision of the
Rights Agreement which may be defective or inconsistent with any
other provisions, or in any manner not adversely affecting the
interests of the holders of the Rights.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A. A copy of the Rights
Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights
Agreement.
_______________________________
1The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
