This document consists of 25
pages, of which this page
is number 1.
FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-11250
DIONEX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-2647429
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1228 Titan Way, Sunnyvale, California 94086
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 737-0700
NONE
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
YES X NO_____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of February 11, 1999:
CLASS NUMBER OF SHARES
Common Stock 22,330,917
DIONEX CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS Page
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 1998 and June 30, 1998............... 3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended December 31, 1998 and 1997..... 4
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Six months Ended December 31, 1998 and 1997 5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended December 31, 1998 and 1997....... 6-7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS........................................ 8-12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS................. 13-18
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. 19
ITEM 5. OTHER INFORMATION................................... 19-23
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.................... 24-25
SIGNATURES................................................... 25
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DIONEX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
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December 31, June 30,
ASSETS 1998 1998
(unaudited)
Current assets:
Cash and equivalents (including invested cash
of $1,868 at December 31, 1998 and $5,364
at June 30, 1998)............................ $ 6,893 $ 13,184
Temporary cash investments..................... - 5,850
Accounts receivable (net of allowance for
doubtful accounts of $632 at December 31,
1998 and $606 at June 30, 1998).............. 35,155 31,350
Inventories.................................... 11,808 9,921
Deferred tax benefits.......................... 9,363 7,965
Prepaid expenses and other..................... 2,054 1,089
Total current assets.................... 65,273 69,359
Property, plant and equipment, net............... 40,355 30,070
Intangible assets................................ 12,446 -
Other assets .................................... 13,456 7,830
$131,530 $107,259
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to banks......................... $ 1,997 $ -
Accounts payable............................... 4,689 5,681
Accrued liabilities............................ 23,636 17,394
Income taxes payable........................... 4,442 6,526
Accrued product warranty....................... 4,420 4,013
Total current liabilities............... 39,184 33,614
Deferred taxes and other ........................ 6,704 2,956
Long-term debt................................... 1,236 -
Stockholders' equity:
Preferred stock (par value $.001 per share;
1,000,000 shares authorized; none
outstanding)................................. - -
Common stock (par value $.001 per share;
40,000,000 shares authorized; outstanding:
22,257,741 shares at December 31, 1998 and
22,315,910 shares at June 30, 1998).......... 44,650 38,926
Retained earnings.............................. 37,014 32,106
Accumulated other comprehensive income (loss).. 2,742 (343)
Total stockholders' equity.............. 84,406 70,689
$131,530 $107,259
See notes to condensed consolidated financial statements.
3
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DIONEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED DECEMBER 31, 1998 AND 1997
(In thousands, except per share amounts)
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1998 1997
(unaudited)
Net sales............................................. $44,505 $39,420
Cost of sales......................................... 14,340 12,353
Revaluation of acquired inventory..................... 1,952 -
Gross profit.......................................... 28,213 27,067
Operating expenses:
Selling, general and administrative................. 13,644 12,346
Research and product development.................... 3,592 3,318
Write-off of in-process research and development.... 4,991 -
Total operating expenses......................... 22,227 15,664
Operating income...................................... 5,986 11,403
Interest income....................................... 197 392
Interest expense...................................... (118) (13)
Income before taxes on income......................... 6,065 11,782
Taxes on income....................................... 2,032 4,006
Net income............................................ $ 4,033 $ 7,776
Basic earnings per share.............................. $ .18 $ .34
Diluted earnings per share............................ $ .17 $ .32
Shares used in computing per share amounts:
Basic ............................................ 22,196 23,182
Diluted .......................................... 23,516 24,550
See notes to condensed consolidated financial statements.
4
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DIONEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED DECEMBER 31, 1998 AND 1997
(In thousands, except per share amounts)
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1998 1997
(unaudited)
Net sales............................................ $79,350 $73,353
Cost of sales........................................ 25,371 23,120
Revaluation of acquired inventory.................... 1,952 -
Gross profit......................................... 52,027 50,233
Operating expenses:
Selling, general and administrative................ 25,160 23,911
Research and product development................... 7,027 6,425
Write-off of in-process research and development... 4,991 -
Total operating expenses........................ 37,178 30,336
Operating income..................................... 14,849 19,897
Interest income...................................... 455 740
Interest expense..................................... (143) (54)
Income before taxes on income........................ 15,161 20,583
Taxes on income...................................... 5,079 6,998
Net income........................................... $10,082 $13,585
Basic earnings per share............................. $ .45 $ .58
Diluted earnings per share........................... $ .43 $ .55
Shares used in computing per share amounts:
Basic ............................................. 22,242 23,278
Diluted ........................................... 23,463 24,645
See notes to condensed consolidated financial statements.
5
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DIONEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED DECEMBER 31, 1998 AND 1997
(In thousands)
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1998 1997
(unaudited)
Cash and equivalents provided by (used for):
Cash flows from operating activities:
Net income............................................ $ 10,082 $13,585
Adjustments to reconcile net income to net cash
provided by operating activities:
Write-off of in-process research and development.... 4,991 -
Depreciation and amortization......................... 1,602 1,243
Deferred taxes...................................... (1,393) (471)
Changes in assets and liabilities:
Accounts receivable............................... 1,069 (1,836)
Inventories....................................... 2,612 (256)
Prepaid expenses and other assets................. (772) (367)
Accounts payable.................................. (1,758) (1,295)
Accrued liabilities............................... 3,824 (243)
Income taxes payable.............................. (2,267) 1,771
Accrued product warranty.......................... 172 219
Net cash provided by operating activities............. 18,162 12,350
Cash flows from investing activities:
Purchase of temporary cash investments.............. (3,500) (7,650)
Proceeds from maturities of temporary
cash investments................................. 9,350 9,000
Purchase of property, plant and equipment........... (5,709) (794)
Acquisition of Softron, net of cash acquired........ (23,206) -
Other............................................... 102 13
Net cash provided by (used for) investing activities.. (22,963) 569
Cash flows from financing activities:
Net change in notes payable to banks................ 1,058 -
Sale of common stock................................ 4,809 1,094
Repurchase of common stock.......................... (5,647) (17,691)
Lease obligations and other......................... (462) 9
Net cash used for financing activities................ (242) (16,588)
Effect of exchange rate changes on cash............... (1,248) 786
Net decrease in cash and equivalents.................. (6,291) (2,883)
Cash and equivalents, beginning of period............. 13,184 24,624
Cash and equivalents, end of period................... $ 6,893 $21,741
(continued)
6
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DIONEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED DECEMBER 31, 1998 AND 1997
(In thousands)
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1998 1997
(unaudited)
(continued)
Supplemental disclosures of cash flow information:
Income taxes paid................................. $5,365 $5,787
Interest paid..................................... $ 144 $ 55
Noncash investing activities:
Common stock issued in connection with acquisition
of Softron GmbH................................. $1,388 $ -
See notes to condensed consolidated financial statements.
7
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DIONEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
- ------------------
1. Basis of Presentation
The condensed consolidated financial statements included herein
have been prepared by the Company, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company
believes the disclosures which are made are adequate to make the
information presented not misleading. It is suggested that these
condensed consolidated financial statements be read in
conjunction with the consolidated financial statements and the
notes thereto included in the Company's Annual Report to
Stockholders for the fiscal year ended June 30, 1998.
The unaudited condensed consolidated financial statements
included herein reflect all adjustments (which include only
normal, recurring adjustments) which are, in the opinion of
management, necessary to state fairly the results for the periods
presented. The results for such periods are not necessarily
indicative of the results to be expected for the entire fiscal
year ending June 30, 1999.
2. Acquisition Event
On October 20, 1998, the Company, through a wholly owned
subsidiary, purchased all of the issued and outstanding shares of
Softron GmbH, a limited liability company organized under the
laws of Germany (Softron), for total consideration, including
acquisition costs, of approximately $25.0 million comprised of
cash and 63,091 shares of Dionex common stock valued at $22 per
share. The consideration also includes an earn-out of $3.6
million which was fully earned as of December 31, 1998 and is
reported in accrued liabilities.
The acquisition of Softron was accounted for by the purchase
method and its results of operations have been included in the
Company's results of operations since the date of acquisition.
The total purchase price and final allocation among the tangible
and intangible assets and liabilities acquired (including
acquired in-process research and development) is summarized as
follows: (in thousands):
Total purchase price:
Total cash consideration $22,950
Value of common stock issued 1,388
Transaction costs 700
$25,038
8
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DIONEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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Purchase price allocation:
Tangible assets $12,776
Deferred tax asset 3,240
Intangible Assets:
Developed and core technology 4,415
Assembled workforce 830
Goodwill 7,402
In-process research and development 4,991
Tangible liabilities (5,376)
Deferred tax liabilities (3,240)
$25,038
In connection with the acquisition the Company recorded a
nonrecurring charge of $5.0 million for the write-off of
in-process research and development acquired. In addition, cost
of sales included $2.0 million in the quarter ended December 31,
1998 related to the sale of inventory acquired which had been
written up as part of the purchase accounting.
The Company initially expected to record a charge of between $10
million and $12 million for in-process research and development
acquired in connection with the Softron acquisition. However,
over the course of the last few months the Securities and
Exchange Commission issued new guidance concerning the methods
for determining in-process research and development charges. In
light of this new guidance, the Company reported charges related
to in-process research and development substantially lower than
originally anticipated.
The valuation of intangibles was based upon management's
estimates of after tax net cash flow. The valuation gave
consideration to the following: (i) comprehensive due diligence
concerning all potential intangibles; (ii) the value of developed
and core technology, ensuring that the relative allocation to
core technology and in-process research and development were
consistent with the contribution of each to the final product;
(iii) the allocation to in-process research and development was
based upon a calculation that only considered the efforts
completed as of the date of the transaction, and only the cash
flows associated with one generation of products currently
in-process; and (iv) it was performed by an independent valuation
group and was deemed reasonable in light of all the quantitative
and qualitative information available.
The write-off of in-process research and development related to
three projects that were in development, had not reached
technological feasibility, had no alternative future use and for
which successful development was uncertain.
9
<PAGE>
DIONEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
- ------------------
Two of the in-process projects were to design and build new
liquid chromatography modules. At the date of acquisition, the
estimated cost to complete these projects was approximately
$900,000. The third project is a new generation of software. At
the time of the acquisition, the estimated cost to complete was
approximately $750,000. The projects are scheduled to be
completed mid to late 1999. Costs incurred during the current
quarter were approximately $300,000.
There can be no assurances that the Company will be able to
complete the development of the products on a timely basis.
Failure to complete these projects could have an adverse impact
on the Company's financial condition or results of operations.
The write-up of the value of land and building and goodwill and
other intangibles will be amortized over periods of up to 30
years using the straight line method of amortization.
The following unaudited pro forma results of operations for the
six months ended December 31, 1998 and 1997 give effect to the
acquisition as if it had occurred at the beginning of fiscal
1997. The pro forma results of operations exclude the
nonrecurring charges that were recorded in conjunction with the
acquisition.
Pro Forma Results of Operations
(In thousands, except per share amounts)
Six Months Ended
Ended December 31,
1998 1997
Net sales............................ $83,126 $79,009
Income from continuing operations.... $21,180 $20,642
Net income........................... $14,098 $13,764
Basic earnings per share............. $.63 $.59
Diluted earnings per share........... $.60 $.56
Softron, which markets its products primarily in Europe,
specializes in high performance liquid chromatography systems
used by scientific, pharmaceutical and industrial laboratories to
analyze the chemical components of compounds.
10
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DIONEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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3. Inventories
Inventories consist of (in thousands):
December 31, June 30,
1998 1998
Finished goods $ 4,906 $3,459
Work in process 2,677 3,548
Raw materials and subassemblies 4,225 2,914
$11,808 $9,921
4. Income Taxes
The effective income tax rate for the first six months of
1999 was 33.5%, compared to 34.0% reported in the same
period of fiscal 1998.
5. Comprehensive Income
In the first quarter of fiscal 1999, the Company adopted
Statement of Financial Accounting Standards ("SFAS") No. 130,
"Reporting Comprehensive Income". SFAS No. 130 establishes
standards for the reporting and display of comprehensive income.
Components of comprehensive income include net income, foreign
currency translation adjustments and unrealized gain on equity
securities available for sale. As such, Accumulated Other
Comprehensive Income (Loss) in the Condensed Consolidated
Balance Sheets represents cumulative foreign currency
translation adjustments and unrealized gain on equity securities
available for sale. Comprehensive income was $6,157,000 and
$7,165,000 for the three months ended December 31, 1998 and
1997, respectively, and $13,167,000 and $13,570,000 for the six
months ended December 31, 1998 and 1997, respectively. The
adoption of SFAS No. 130 required additional disclosure but did
not impact the Company's consolidated financial position,
results of operations or cash flows.
11
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DIONEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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6. Net Income Per Share
Basic earnings per share excludes dilution and is computed by
dividing net income by the weighted average of common shares
outstanding for the period. Diluted earnings per share reflects
the potential dilution from securities and other contracts which
are exercisable or convertible into common stock. Diluted
earnings per share is computed by dividing net income by the
weighted average number of common shares that would have been
outstanding during the period assuming the issuance of common
shares for all dilutive potential common shares outstanding. The
difference between the number of shares outstanding for basic and
diluted earnings per share is due to stock options outstanding
during the period.
7. Common Stock Repurchases
During the second quarter of fiscal 1999, the Company repurchased
127,600 shares of its common stock on the open market, bringing
the cumulative number of shares repurchased during the first half
of the year to 267,600 shares compared with 747,900 shares
repurchased in the same period of the previous fiscal year.
During all of fiscal 1998, the Company repurchased 1,851,460
shares.
8. New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging
Activities," which is effective for all fiscal quarters of fiscal
years beginning after June 15, 1999. Earlier application is
permitted. The statement establishes accounting and reporting
standards for derivative instruments, including certain derivative
instruments embedded in other contracts and for hedging
activities. It requires that an entity recognize all derivatives
as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. Management
has not determined the impact of this new standard on the
Company's results of operations and financial position.
12
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DIONEX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Acquisition of Softron GmbH
On October 20, 1998, the Company, through a wholly owned
subsidiary, purchased all of the issued and outstanding shares of
Softron GmbH, a limited liability company organized under the laws
of Germany (Softron), for total consideration, including
acquisition costs, of approximately $25.0 million comprised of cash
and 63,091 shares of Dionex stock valued at $22 per share. The
consideration also includes an earn-out of $3.6 million which was
fully earned at December 31, 1998 and is reported in accrued
liabilities.
The acquisition of Softron was accounted for by the purchase method
and its results of operations have been included in the Company's
results of operations since the date of acquisition.
In connection with the acquisition, the Company recorded a
nonrecurring charge of $5.0 million for the write-off of in-process
research and development acquired. In addition, cost of sales
included $2.0 million in the quarter ended December 31, 1998
related to the sale of inventory acquired which had been written up
as a part of the purchase accounting.
The Company initially expected to record a charge of between $10
million and $12 million for in-process research and development
acquired in connection with the Softron acquisition. However, over
the course of the last few months the Securities and Exchange
Commission issued new guidance concerning the methods for
determining in-process research and development charges. In light
of this new guidance, the Company reported charges related to
in-process research and development substantially lower than
originally anticipated.
Results of Operations - Three Months Ended December 31, 1998 and
1997
Net sales for the second quarter of fiscal 1999 were $44.5 million,
an increase of 13% from the $39.4 million reported for the same
period last year. The Company experienced strong sales growth in
Europe, while growth in North America was moderate. Demand for
products in Asia outside of Japan was better than in recent
quarters, but remained well below the level experienced in the same
quarter last year. Importantly, demand in Japan was much improved
compared with the recent quarters. The inclusion of Softron also
increased sales during the second quarter. Had currency rates been
the same as in last year's second quarter, sales growth would have
been 12%.
13
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Gross margin for the second quarter of fiscal 1999 was 63.4%.
Excluding a nonrecurring charge related to the sale of inventory
acquired which had been written up as part of the purchase
accounting of $2.0 million, gross margin was 67.8%. The lower
gross margin was attributable to the inclusion of Softron, whose
products have a lower gross margin than Dionex's historical product
margins. There were no significant selling price changes between
these periods.
Operating expenses of $22.2 million for the second quarter of
fiscal 1999 were up $6.6 million. The increase was due to the
inclusion of Softron since the date of acquisition and the
write-off of in-process research and development acquired.
Excluding the nonrecurring write-off, operating expenses increased
$1.6 million, or 10%. As a percentage of sales, operating
expenses, excluding the nonrecurring charge, were 39% of sales
compared with 40% in the same period last year. Selling, general
and administrative expenses (SG&A) increased $1.3 million, or 11%,
compared with $12.3 million reported in the same period last year.
The increase in SG&A expenses was primarily due to the inclusion of
Softron since the date of acquisition.
Research and development (R&D) costs of $3.6 million increased
$274,000, or 8%, from the $3.3 million reported in the same period
last year. The increase was attributable to the inclusion of
Softron. The level of R&D spending varies depending on both the
breadth of the Company's R&D efforts and the stage of specific
product development.
Write-off of in-process research and development represents a
nonrecurring charge of $5.0 million associated with the acquisition
of Softron completed in October 1998 for technology which had not
reached technological feasibility and had no alternative future
use.
The valuation of intangibles was based upon management's estimates
of after tax net cash flow. The valuation gave consideration to
the following: (i) comprehensive due diligence concerning all
potential intangibles; (ii) the value of developed and core
technology, ensuring that the relative allocation to core
technology and in-process research and development were consistent
with the contribution of each to the final product; (iii) the
allocation to in-process research and development was based upon a
calculation that only considered the efforts completed as of the
date of the transaction, and only the cash flows associated with
one generation of products currently in-process; and (iv) it was
performed by an independent valuation group and was deemed
reasonable in light of all the quantitative and qualitative
information available.
14
<PAGE>
The write-off of in-process research and development related to
three projects that were in development, had not reached
technological feasibility, had no alternative future use and for
which successful development was uncertain.
Two of the in-process projects were to design and build new liquid
chromatography modules. At the date of acquisition, the estimated
cost to complete these projects was approximately $900,000. The
third project is a new generation of software. At the time of the
acquisition, the estimated cost to complete was approximately
$750,000. The projects are scheduled to be completed mid to late
1999. Costs incurred during the current quarter were approximately
$300,000.
There can be no assurances that the Company will be able to
complete the development of the products on a timely basis.
Failure to complete these projects could have an adverse impact on
the Company's financial condition or results of operations.
Interest income was $197,000 for the second quarter of fiscal 1999,
$195,000 lower than the $392,000 reported in the second quarter
last year. The decrease in interest income was due to lower
average cash balances resulting from the acquisition of Softron.
Interest expense was $118,000, an increase of $105,000 compared
with $13,000 reported in the second quarter last year. The
increase was due to borrowings used in the acquisition of Softron.
At December 31, 1998, the Company had no borrowings outstanding
related to its acquisition of Softron.
The effective tax rate for the first quarter of fiscal 1999 was
33.5%, compared with 34.0% in the first quarter a year ago.
Variations in the tax rate reflect changes in the mix of taxable
income among the various tax jurisdictions in which the Company
does business.
Net income in the second quarter of fiscal 1998 was $4.0 million
compared with the $7.8 million reported in the second quarter last
year. Basic and diluted earnings per share were $.18 and $.17
respectively, compared with $.34 and $.32 reported for the same
period last year. The nonrecurring charges reduced basic and
diluted earnings per share by $.21 and $.20, respectively, during
the quarter.
15
<PAGE>
Results of Operations - Six months ended December 31, 1998 and 1997
Net sales for the six months ended December 31, 1998 were $79.4
million, an increase of 8%, compared with the $73.4 million
reported for the same period last year. The Company experienced
continued strong sales growth in Europe, while growth in North
America was moderate. Demand in Asia was lower during the first
half of fiscal 1999 compared with the same period last year. The
inclusion of Softron since the date of acquisition also increased
sales. Had currency remained the same as the first half last year,
sales growth would have been 9%.
Gross margin for the first six months of fiscal 1999 was 65.6%
compared with 68.5% reported for the same period last year.
Excluding a nonrecurring charge related to the sale of inventory
acquired which had been written up as part of the purchase
accounting, gross margin was 68.0%. The lower gross margin was
attributable to the inclusion of Softron, whose products have a
lower gross margin than Dionex's historical product margins. There
were no significant selling price changes between these periods.
Operating expenses for the six months ended December 31 1998 were
$37.2 million, an increase of $6.8 million compared with $30.3
million reported for the same period last year. Excluding the
nonrecurring write-off of in-process research and development,
operating expenses increased $1.9, or 6%, and as a percentage of
sales, operating expenses were 41%, unchanged from the same period
last year. SG&A expenses were $25.2 million, an increase of $1.2
million or 5%, compared with $23.9 million reported for the same
period last year. The increase in SG&A expenses was attributable
to the inclusion of Softron.
R&D expenses for the six months ended December 31, 1998 were $7.0
million, an increase of $602,000, or 9%, from the $6.4 million
reported in the same six-month period last year. The increase was
attributable to the inclusion of Softron and an increase in
personnel related costs. The level of R&D spending varies
depending on both the breadth of the Company's R&D efforts and the
stage of specific product development.
Write-off of in-process research and development represents a
nonrecurring charge of $5.0 million associated with the acquisition
of Softron completed in October 1998 for technology which had not
reached technological feasibility and had no alternative future
use.
Interest income for the six months ended December 31, 1997 was
$455,000, a decrease of $285,000 from the $740,000 reported for the
same period last year. The decrease in interest income was due to
lower average cash balances resulting from the Softron acquisition.
Interest expense of $143,000 was $89,000 higher than the $54,000
reported for the first half last year. The interest expense
increase was due to borrowings for the acquisition of Softron.
16
<PAGE>
The effective tax rate for the first six months of fiscal 1999 was
33.5%, compared with 34.0% in the first quarter a year ago.
Variations in the tax rate reflect changes in the mix of taxable
income among the various tax jurisdictions in which the Company
does business.
Net income in the first half of fiscal 1998 was $10.1 million
compared with $13.6 million reported in the same period last year.
Basic and diluted earnings per share were $.45 and $.43
respectively, compared with $.58 and $.55 per share in same period
of last year. The nonrecurring acquisition related charges reduced
basic and diluted earnings per share by $.21 and $.20, respectively
during the first six months of fiscal 1999. Basic and diluted
earnings per share were favorably affected by the Company's stock
repurchase program.
Liquidity and Capital Resources
At December 31, 1998, the Company had cash and cash investments of
$6.9 million. During the second quarter of fiscal 1998, the
Company repurchased 127,600 shares of its common stock, bringing
the total shares repurchased for the first six months of fiscal
1999 to 267,600. During fiscal 1998, the Company repurchased a
total of 1,851,460 shares of its common stock.
At December 31, 1998, the Company had outstanding borrowings of
$3.2 million consisting of borrowings by its Japanese subsidiary
and Softron. There were no borrowings outstanding at December 31,
1998 related to the acquisition of Softron. At December 31, 1998,
the Company had bank lines of credit totaling $29.7 million. The
Company believes its cash flow from operations, its existing cash
and cash investments and its bank lines of credit will be adequate
to meet its cash requirements for the remainder of the fiscal year.
The impact of inflation on Dionex Corporation's financial position
and results of operations was not significant during the six months
ended December 31, 1998.
17
<PAGE>
Year 2000 Compliance
Many older computer software programs refer to years in terms of
their final two digits only. Such programs may interpret the year
2000 to mean the year 1900 instead. If not corrected, those
programs could cause date-related transaction failures. Beginning
in fiscal 1997, the Company started a process to review its
internal systems for year 2000 compliance. Testing of the internal
systems was substantially completed during fiscal 1998 and the
Company believes its current internal systems are compliant.
Dionex believes the products it is currently shipping are year 2000
compliant as well. The Company has no obligation to upgrade
previously shipped products which are not year 2000 compliant but
may make available for sale to customers fixes for certain
products. Additionally, the Company has contacted numerous vendors
and customers to assess their progress in addressing the year 2000
issue. Based upon our assessments, testing and the plans in
progress, the Company does not believe that the year 2000 issue
will have a material adverse effect on the Company's financial
position, results of operation or cash flows. However, the Company
does not have control over whether its vendors or customers will
make any appropriate modifications on a timely basis. If such
modifications are not made in a timely manner, the financial
position and results of operations could be materially adversely
affected. To date, the Company has not incurred any significant
costs related to this issue, and does not expect significant costs
directly related to year 2000 compliance issues in the future.
However, should the need arise, the Company has adequate resources
and would use them to resolve significant year 2000 issues in a
timely manner.
Forward-looking statements
Except for historical information contained herein, the above
discussion and the letter to shareholders contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, Section 21E of the Securities and Exchange Act
of 1934, as amended and the Private Securities Litigation Reform
Act of 1995, and are made under the safe harbor provisions thereof.
Such statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those
discussed here. Such risks and uncertainties include: general
economic conditions, foreign currency fluctuations, new product
development, including market receptiveness, fluctuation in
worldwide demand for analytical instrumentation, competition from
other products, existing product obsolescence, the ability to
manufacture products on an efficient and timely basis and at a
reasonable cost and in sufficient volume, year 2000 compliance
issues, the ability to attract and retain talented employees and
other risks as described in more detail in the Company's Form 10-K
for the year ended June 30, 1998. Readers are cautioned not to
place undue reliance on these forward-looking statements which
reflect management's analysis only as of the date hereof. The
Company undertakes no obligation to publicly release the results of
any revision to these forward-looking statements which may be made
to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
18
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On October 22, 1998, the Company held its annual meeting
for the following purposes: (1) to elect directors, and
(2) to ratify the selection of Deloitte & Touche LLP as
the Company's independent auditors for its fiscal year
ending June 30, 1999. A description of these matters is
contained in the Company's Proxy Statement, dated
September 11, 1998, relating to the 1998 Annual Meeting of
Stockholders.
There were 22,282,956 shares of the Company's common stock
entitled to vote at the Annual Meeting of Stockholders
based on the September 8, 1998 record date. The Company
solicited proxies pursuant to Regulation 14 of the
Securities Exchange Act of 1934 and there was no
solicitation in opposition to management's nominees for
directors as listed in the proxy statement. Each director
received a minimum of 19,841,018 votes which represented
at least 89% of the outstanding common shares entitled to
vote.
The shareholders voted to ratify the selection of Deloitte
& Touche LLP as the Company's independent auditors for its
fiscal year ending June 30, 1999.
Item 5. Other Information
On January 21, 1999 the Company's Board of Directors
approved the adoption of a Share Purchase Rights Plan (the
"Plan"). Terms of the Plan provide for a dividend
distribution of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par
value $.001 per share (the "Common Shares"), of the
Company. The dividend is payable on June 27, 1999 (the
"The "Record Date") to the stockholders of record on that
date. Each Right entitles the registered holder to
purchase from the Company one one-hundredth of a share of
Series A Junior Participating Preferred Stock, par value
$.001 per share (the "Preferred Shares"), at a price of
$200.00 per one one-hundredth of a Preferred Share (the
"Purchase Price"), subject to adjustment. Each one
one-hundredth Preferred Share has designations and powers,
preferences and rights, and the qualifications,
limitations and restrictions which make its value
approximately equal to the value of a Common Share. The
description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement"), dated as of
January 21, 1999 entered into between the Company and
BankBoston, N.A., as Rights Agent (the "Rights Agent").
19
<PAGE>
Initially, the Rights will be evidenced by the stock
certificates representing the Common Shares then
outstanding, and no separate Right Certificates, as
defined, will be distributed. Until the earlier to occur
of (i) the date of a public announcement that a person,
entity or group of affiliated or associated persons have
acquired beneficial ownership of 15% or more of the
outstanding Common Shares (an "Acquiring Person")or (ii)
10 business days (or such later date as may be determined
by action of the Board of Directors prior to such time as
any person or entity becomes an Acquiring Person)
following the commencement of, or announcement of an
intention to commence, a tender offer or exchange offer
the consummation of which would result in any person or
entity becoming an Acquiring Person (the earlier of such
dates being called the "Distribution Date") the Rights
will be evidenced, with respect to any of the Common Share
certificates outstanding as of the Record Date, by such
Common Share certificate with or without a copy of the
Summary of Rights, which is included in the Rights
Agreement as Exhibit C thereof (the "Summary of Rights").
Until the Distribution Date, the Rights will be
transferable with and only with the Common Shares. Until
the Distribution Date (or earlier redemption or expiration
of the Rights), new Common Share certificates issued after
the Record Date, upon transfer or new issuance of Common
Shares, will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the
surrender or transfer of any certificates for Common
Shares outstanding as of the Record Date, even without
such notation or a copy of the Summary of Rights being
attached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by
such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the
Rights ("Right Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on
the Distribution Date and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on June 26, 2009 (the "Final
Expiration Date"), unless the Rights are earlier redeemed
or exchanged by the Company, in each case, as described
below.
20
<PAGE>
The Purchase Price payable, and the number of Preferred
Shares or other securities or other property, 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 of
reclassification of, the Preferred Shares, (ii) upon the
grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares
at a price, or securities convertible into Preferred
Shares with a conversion price, less than the then current
market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of
evidences of indebtedness or assets (excluding regular
periodic cash dividends paid out of earnings or retained
earnings or dividends payable in Preferred Shares) or of
subscription rights or warrants (other than those referred
to above). The exercise of Rights for Preferred Shares is
at all times subject to the availability of a sufficient
number of authorized but unissued Preferred Shares.
The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise
of each Right are also subject to adjustment in the event
of a stock split of the Common Shares or a stock dividend
on the Common Shares payable in Common Shares or
subdivisions, consolidations or combinations of the Common
Shares occurring, in any case, prior to the Distribution
Date.
Preferred Shares purchasable upon exercise of the Rights
will not be redeemable. Each Preferred Share will be
entitled to a minimum preferential quarterly dividend
payment of $1.00 but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common
Share. In the event of liquidation, the holders of the
Preferred Shares would be entitled to a minimum
preferential liquidation payment of $100 per share, but
would be entitled to receive an aggregate payment equal to
100 times the payment made per Common Share. Each
Preferred Share will have 100 votes, voting together with
the Common Shares. Finally, in the event of any merger,
consolidation or other transaction in which Common Shares
are exchanged, each Preferred Share will be entitled to
receive 100 times the amount of consideration received per
Common Share. These rights are protected by customary
anti-dilution provisions. Because of the nature of the
Preferred Shares' dividend and liquidation rights, the
value of one one-hundredth of a Preferred Share should
approximate the value of one Common Share. The Preferred
Shares would rank junior to any other series of the
Company's preferred stock.
21
<PAGE>
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring
Person and its associates and affiliates (which will
thereafter be void), will for a 60-day period have the
right to receive upon exercise that number of Common
Shares having a market value of two times the exercise
price of the Right (or, if such number of shares is not
and cannot be authorized, the Company may issue Preferred
Shares, cash, debt, stock or a combination thereof in
exchange for the Rights). This right will terminate 60
days after the date on which the Rights become
nonredeemable (as described below), unless there is an
injunction or similar obstacle to exercise of the Rights,
in which event this right will terminate 60 days after the
date on which the Rights again become exercisable.
Generally, under the Plan, an "Acquiring Person" shall not
be deemed to include (i) the Company, (ii) a subsidiary of
the Company, (iii) any employee benefit or compensation
plan of the Company, or (iv) any entity holding Common
Shares for or pursuant to the terms of any such employee
benefit or compensation plan. In addition, except under
limited circumstances, no person or entity shall become an
Acquiring Person as the result of the acquisition of
Common Shares by the Company which, by reducing the number
of shares outstanding, increases the proportionate number
of shares beneficially owned by such person or entity to
15% or more of the Common Shares then outstanding.
Further, except under certain circumstances, no person
shall become an Acquiring Person due to the acquisition of
Common Shares directly from the Company.
In the event that the Company is acquired in a merger or
other business combination transaction or 50% or more of
its consolidated assets or earning power are sold to an
Acquiring Person, its associates or affiliates or certain
other persons in which such persons have an interest,
proper provision will be made so that each holder of a
Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the
acquiring company which at the time of such transaction
will have a market value of two times the exercise price
of the Right.
At any time after an Acquiring Person becomes an Acquiring
Person and prior to the acquisition by such Acquiring
Person of 50% or more of the outstanding Common Shares,
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 any
exchange ratio of one Common Share, or one one-hundredth
of a Preferred Share, per Right (or, at the election of
the Company, the Company may issue cash, debt, stock or a
combination thereof in exchange for the Rights), subject
to adjustment.
22
<PAGE>
With certain exceptions, no adjustments in the Purchase
Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase
Price. No fractional Preferred Shares will be issued
(other than fractions which are integral multiples of the
number of one one-hundredths of a Preferred Share issuable
upon the exercise of one Right, which may, at the election
of the Company, be evidenced by depository receipts), and
in lieu thereof, an adjustment in cash will be made based
on the market price of the Preferred Shares on the last
trading day prior to the date of exercise.
At any time prior to the earlier of (i) the day of the
first public announcement that a person has become an
Acquiring Person or (ii) the Final Expiration Date, the
Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.001 per Right (the
"Redemption Price").
Following the expiration of the above periods, the Rights
become nonredeemable. Immediately upon any 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 terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the
holders of the Rights, except that from and after such
time as the rights are distributed no such amendment may
adversely affect the interest of the holders of the Rights
excluding the interests of an Acquiring Person.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to
receive dividends.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that
attempts to acquire the Company on terms not approved by
the Company's Board of Directors. The Rights should not
interfere with any merger or other business combination
approved by the Board of Directors since the Rights may be
amended to permit such acquisition or redeemed by the
Company at $.001 per Right prior to the earliest of (i)
the time that a person or group has acquired beneficial
ownership of 15% or more of the Common Shares or (ii) the
final expiration date of the rights.
23
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3 Bylaws, as amended through January 21, 1999
4 Rights Agreement between Dionex Corporation and
BankBoston, N.A., dated as of January 21, 1999.
27 Financial Data Schedule for the period ended
December 31, 1998.
(b) Reports on Form 8-K.
Reports filed on Form 8-K during the quarter ended
December 31, 1998.
Form 8-K dated October 20, 1998 and filed
November 4, 1998
Item 2. Acquisition or Disposition of Assets -
Announcement of the Acquisition of Softron
GmbH.
Item 7. Financial Statements, Pro forma Financial
Information and Exhibits.
(a),(b) Financial statements and pro forma
financial information omitted in reliance on
Item 7 (a)(4) of the Instructions to Form 8-K.
(c) Exhibits.
2.1 Stock Purchase Agreement, dated
October 20, 1998, among the Registrant,
Zeus Vierrunddreissigste
Beteiligungsgesellschaft mbH and the
shareholders of Softron GmbH (the
Disclosure Schedule has been omitted as
permitted pursuant to the rules and
regulations of the Securities and Exchange
Commission (SEC), but will be furnished
supplementally to the SEC upon request).
20.2 Press release of Dionex Corporation dated
October 20, 1998.
24
<PAGE>
Item 9. Sale of Equity Securities Pursuant to Regulation S.
Form 8-K/A dated October 20, 1998 and filed November 12, 1998.
Item 2. Acquisition or Disposition of Assets - Announcement
of the Acquisition of Softron GmbH.
Item 7. Financial Statements, Pro forma Financial
Information and Exhibits.
(a) Financial statements of Business Acquired
filed in accordance with Item 7 (a)(4) of
the Instructions to Form 8-K.
(b) Pro Forma Financial Information filed in
accordance with Item 7(a)(4) of the
Instructions to Form 8-K.
(c) Exhibits.
2.1 Stock Purchase Agreement, dated
October 20 1998, among the Registrant, "Zeus"
Vierrunddreissigste Beteiligungsgesellschaft
mbH and the shareholders of Softron GmbH (the
Disclosure Schedule has been Omitted as
permitted pursuant to the rules and regulations
of the Securities and Exchange Commission
("SEC"), but will be furnished supplementally
to the SEC upon request).
20.1 Press release of the Registrant dated
October 20, 1998.
23.1 Independent Auditors' Consent
Item 9. Sale of Equity Securities Pursuant to
Regulation S.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
DIONEX CORPORATION
(Registrant)
Date: February 11, 1999 By: /s/A. Blaine Bowman
A. Blaine Bowman
President, Chief Executive Officer
By:/s/Michael W. Pope
Michael W. Pope
Vice President, Finance and
Administration
(Principal Financial and
Accounting Officer)
25
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed consolidated financial statements included in the Form 10-Q of Dionex
Corporation for the quarter ended December 31, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> DEC-31-1998
<CASH> 6893
<SECURITIES> 0
<RECEIVABLES> 35787
<ALLOWANCES> 632
<INVENTORY> 11808
<CURRENT-ASSETS> 65273
<PP&E> 57778
<DEPRECIATION> 17423
<TOTAL-ASSETS> 131530
<CURRENT-LIABILITIES> 39184
<BONDS> 0
0
0
<COMMON> 44650
<OTHER-SE> 39756
<TOTAL-LIABILITY-AND-EQUITY> 131530
<SALES> 79350
<TOTAL-REVENUES> 79350
<CGS> 27323
<TOTAL-COSTS> 27323
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 143
<INCOME-PRETAX> 15161
<INCOME-TAX> 5079
<INCOME-CONTINUING> 10082
<DISCONTINUED> 0
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<CHANGES> 0
<NET-INCOME> 10082
<EPS-PRIMARY> .45
<EPS-DILUTED> .43
</TABLE>
BYLAWS
OF
DIONEX CORPORATION
(as amended through January 21, 1999)
BYLAWS
OF
DIONEX CORPORATION
(A Delaware Corporation)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
corporation in the State of Delaware shall be in the City of
Dover, County of Kent. (Del. Code Ann., tit. 8, 131)
Section 2. Other Offices. The corporation shall also have
and maintain an office or principal place of business at such
place as may be fixed by the Board of Directors, and may also
have offices at such other places, both within and without the
State of Delaware as the Board of Directors may from time to time
determine or the business of the corporation may require. (Del.
Code Ann., tit. 8, 122(8))
ARTICLE II
CORPORATE SEAL
Section 3. Corporate Seal. The corporate seal shall consist
of a die bearing the name of the corporation and the inscription,
"Corporate Seal-Delaware." Said seal may be used by causing it
or a facsimile thereof to be impressed or affixed or reproduced
or otherwise. (Del. Code Ann., tit. 8, 122(3))
ARTICLE III
STOCKHOLDERS' MEETINGS
Section 4. Place of Meetings. Meetings of the stockholders
of the corporation shall be held at such place, either within or
without the State of Delaware, as may be designated from time to
time by the Board of Directors, or, if not so designated, then at
the office of the corporation required to be maintained pursuant
to Section 2 hereof. (Del. Code Ann., tit. 8, 211(a))
Section 5. Annual Meetings.
(a) The annual meeting of the stockholders of the
corporation for the purpose of electing Directors and for such
other business as may lawfully come before it shall be held on
such date and at such time as may be designated from time to time
by the Board of Directors. (Del. Code Ann., tit. 8, 211(b))
Nominations of persons for election to the Board of Directors of
the corporation and the proposal of business to be considered by
the stockholders at an annual meeting of stockholders may be
made: (1) pursuant to the corporation's notice of meeting of
stockholders; (2) by or at the direction of the Board of
Directors; or (3) by any stockholder of the corporation who was a
stockholder of record at the time of giving of notice provided
for in the following paragraph, who is entitled to vote at the
meeting and who complied with the notice procedures set forth in
this Section 5. (Del. Code Ann., tit. 8, 211(b)).
(b) At an annual meeting of the stockholders, only
such business shall be conducted as shall have been properly
brought before the meeting. For nominations or other business to
be properly brought before an annual meeting by a stockholder
pursuant to clause (3) of Section 5(a) of these Bylaws, (1) the
stockholder must have given timely notice thereof in writing to
the Secretary of the corporation, (2) such other business must be
a proper matter for stockholder action under the General
Corporation Law of Delaware, (3) if the stockholder, or the
beneficial owner on whose behalf any such proposal or nomination
is made, has provided the corporation with a Solicitation Notice
(as defined in this Section 5(b)), such stockholder or beneficial
owner must, in the case of a proposal, have delivered a proxy
statement and form of proxy to holders of at least the percentage
of the corporation's voting shares required under applicable law
to carry any such proposal, or, in the case of a nomination or
nominations, have delivered a proxy statement and form of proxy
to holders of a percentage of the corporation's voting shares
reasonably believed by such stockholder or beneficial owner to be
sufficient to elect the nominee or nominees proposed to be
nominated by such stockholder, and must, in either case, have
included in such materials the Solicitation Notice, and (4) if no
Solicitation Notice relating thereto has been timely provided
pursuant to this section, the stockholder or beneficial owner
proposing such business or nomination must not have solicited a
number of proxies sufficient to have required the delivery of
such a Solicitation Notice under this Section 5. To be timely, a
stockholder's notice shall be delivered to the Secretary at the
principal executive offices of the Corporation not later than the
close of business on the ninetieth (90th) day nor earlier than
the close of business on the one hundred twentieth (120th) day
prior to the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of
the annual meeting is advanced more than thirty (30) days prior
to or delayed by more than thirty (30) days after the anniversary
of the preceding year's annual meeting, notice by the stockholder
to be timely must be so delivered not earlier than the close of
business on the one hundred twentieth (120th) day prior to such
annual meeting and not later than the close of business on the
later of the ninetieth (90th) day prior to such annual meeting
or the tenth (10th) day following the day on which public
announcement of the date of such meeting is first made. In no
event shall the public announcement of an adjournment of an
annual meeting commence a new time period for the giving of a
stockholder's notice as described above. Such stockholder's
notice shall set forth: (A) as to each person whom the
stockholder proposes to nominate for election or reelection as a
director all information relating to such person that is required
to be disclosed in solicitations of proxies for election of
directors in an election contest, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "1934 Act") and Rule 14a-
11 thereunder (including such person's written consent to being
named in the proxy statement as a nominee and to serving as a
director if elected); (B) as to any other business that the
stockholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting
and any material interest in such business of such stockholder
and the beneficial owner, if any, on whose behalf the proposal is
made; and (C) as to the stockholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination or
proposal is made (i) the name and address of such stockholder, as
they appear on the corporation's books, and of such beneficial
owner, (ii) the class and number of shares of the corporation
which are owned beneficially and of record by such stockholder
and such beneficial owner, and (iii) whether either such
stockholder or beneficial owner intends to deliver a proxy
statement and form of proxy to holders of, in the case of a
proposal, at least the percentage of the corporation's voting
shares required under applicable law to carry the proposal or, in
the case of a nomination or nominations, a sufficient number of
holders of the corporation's voting shares to elect such nominee
or nominees (an affirmative statement of such intent, a
"Solicitation Notice").
(c) Notwithstanding anything in the second sentence of
Section 5(b) of these Bylaws to the contrary, in the event that
the number of directors to be elected to the Board of Directors
of the Corporation is increased and there is no public
announcement naming all of the nominees for director or
specifying the size of the increased Board of Directors made by
the corporation at least one hundred (100) days prior to the
first anniversary of the preceding year's annual meeting, a
stockholder's notice required by this Section 5 shall also be
considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to
the Secretary at the principal executive offices of the
corporation not later than the close of business on the tenth
(10th) day following the day on which such public announcement
is first made by the corporation.
(d) Only such persons who are nominated in accordance
with the procedures set forth in this Section 5 shall be eligible
to serve as directors and only such business shall be conducted
at a meeting of stockholders as shall have been brought before
the meeting in accordance with the procedures set forth in this
Section 5. Except as otherwise provided by law, the Chairman of
the meeting shall have the power and duty to determine whether a
nomination or any business proposed to be brought before the
meeting was made, or proposed, as the case may be, in accordance
with the procedures set forth in these Bylaws and, if any
proposed nomination or business is not in compliance with these
Bylaws, to declare that such defective proposal or nomination
shall not be presented for stockholder action at the meeting and
shall be disregarded.
(e) Notwithstanding the foregoing provisions of this
Section 5, in order to include information with respect to a
stockholder proposal in the proxy statement and form of proxy for
a stockholder's meeting, stockholders must provide notice as
required by the regulations promulgated under the 1934 Act.
Nothing in these Bylaws shall be deemed to affect any rights of
stockholders to request inclusion of proposals in the corporation
proxy statement pursuant to Rule 14a-8 under the 1934 Act.
(f) For purposes of this Section 5, "public
announcement" shall mean disclosure in a press release reported
by the Dow Jones News Service, Associated Press or comparable
national news service or in a document publicly filed by the
corporation with the Securities and Exchange Commission pursuant
to Section 13, 14 or 15(d) of the 1934 Act.
Section 6. Special Meetings.
(a) Special meetings of the stockholders of the
corporation may be called, for any purpose or purposes, by
(i) the Chairman of the Board of Directors, (ii) the Chief
Executive Officer, or (iii) the Board of Directors pursuant to a
resolution adopted by a majority of the total number of
authorized directors (whether or not there exist any vacancies in
previously authorized directorships at the time any such
resolution is presented to the Board of Directors for adoption),
and shall be held at such place, on such date, and at such time
as the Board of Directors shall fix.
(b) If a special meeting is properly called by any
person or persons other than the Board of Directors, the request
shall be in writing, specifying the general nature of the
business proposed to be transacted, and shall be delivered
personally or sent by registered mail or by telegraphic or other
facsimile transmission to the Chairman of the Board of Directors,
the Chief Executive Officer, or the Secretary of the corporation.
No business may be transacted at such special meeting otherwise
than specified in such notice. The Board of Directors shall
determine the time and place of such special meeting, which shall
be held not less than thirty-five (35) nor more than one hundred
twenty (120) days after the date of the receipt of the request.
Upon determination of the time and place of the meeting, the
officer receiving the request shall cause notice to be given to
the stockholders entitled to vote, in accordance with the
provisions of Section 7 of these Bylaws. If the notice is not
given within one hundred (100) days after the receipt of the
request, the person or persons properly requesting the meeting
may set the time and place of the meeting and give the notice.
Nothing contained in this paragraph (b) shall be construed as
limiting, fixing, or affecting the time when a meeting of
stockholders called by action of the Board of Directors may be
held.
(c) Nominations of persons for election to the Board
of Directors may be made at a special meeting of stockholders at
which directors are to be elected pursuant to the corporation's
notice of meeting (i) by or at the direction of the Board of
Directors or (ii) by any stockholder of the corporation who is a
stockholder of record at the time of giving notice provided for
in these Bylaws who shall be entitled to vote at the meeting and
who complies with the notice procedures set forth in this
Section 6(c). In the event the corporation calls a special
meeting of stockholders for the purpose of electing one or more
directors to the Board of Directors, any such stockholder may
nominate a person or persons (as the case may be), for election
to such position(s) as specified in the corporation's notice of
meeting, if the stockholder's notice required by Section 5(b) of
these Bylaws shall be delivered to the Secretary at the principal
executive offices of the corporation not earlier than the close
of business on the one hundred twentieth (120th) day prior to
such special meeting and not later than the close of business on
the later of the ninetieth (90th) day prior to such meeting or
the tenth (10th) day following the day on which public
announcement is first made of the date of the special meeting and
of the nominees proposed by the Board of Directors to be elected
at such meeting. In no event shall the public announcement of an
adjournment of a special meeting commence a new time period for
the giving of a stockholder's notice as described above.
Section 7. Notice of Meetings. Except as otherwise provided
by law or the Certificate of Incorporation, written notice of
each meeting of stockholders shall be given not less than ten
(10) nor more than sixty (60) days before the date of the meeting
to each stockholder entitled to vote at such meeting, such notice
to specify the place, date and hour and purpose or purposes of
the meeting. Notice of the time, place and purpose of any
meeting of stockholders may be waived in writing, signed by the
person entitled to notice thereof, either before or after such
meeting, and will be waived by any stockholder by his attendance
thereat in person or by proxy, except when the stockholder
attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Any
stockholder so waiving notice of such meeting shall be bound by
the proceedings of any such meeting in all respects as if due
notice thereof had been given. (Del. Code Ann., tit. 8, 222,
229)
Section 8. Quorum. At all meetings of stockholders, except
where otherwise provided by statute or by the Certificate of
Incorporation, or by these Bylaws, the presence, in person or by
proxy duly authorized, of the holders of a majority of the
outstanding shares of stock entitled to vote shall constitute a
quorum for the transaction of business. In the absence of a
quorum, any meeting of stockholders may be adjourned, from time
to time, either by the chairman of the meeting or by vote of the
holders of a majority of the shares represented thereat, but no
other business shall be transacted at such meeting. The
stockholders present at a duly called or convened meeting, at
which a quorum is present, may continue to transact business
until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum. Except as otherwise
provided by statute, the Certificate of Incorporation or these
Bylaws, in all matters other than the election of directors, the
affirmative vote of the majority of shares present in person or
represented by proxy at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders. Except as
otherwise provided by statute, the Certificate of Incorporation
or these Bylaws, directors shall be elected by a plurality of the
votes of the shares present in person or represented by proxy at
the meeting and entitled to vote on the election of directors.
Where a separate vote by a class or classes or series is
required, except where otherwise provided by the statute or by
the Certificate of Incorporation or these Bylaws, a majority of
the outstanding shares of such class or classes or series,
present in person or represented by proxy, shall constitute a
quorum entitled to take action with respect to that vote on that
matter and, except where otherwise provided by the statute or by
the Certificate of Incorporation or these Bylaws, the affirmative
vote of the majority (plurality, in the case of the election of
directors) of the votes cast by the holders of shares of such
class or classes or series shall be the act of such class or
classes or series. (Del. Code Ann., tit. 8, 216)
Section 9. Adjournment and Notice of Adjourned Meetings. Any
meeting of stockholders, whether annual or special, may be
adjourned from time to time either by the chairman of the meeting
or by the vote of a majority of the shares casting votes. When a
meeting is adjourned to another time or place, notice need not be
given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken. At
the adjourned meeting the corporation may transact any business
which might have been transacted at the original meeting. If the
adjournment is for more than thirty (30) days, or if after the
adjournment a new record date is fixed for the adjourned meeting,
a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting. (Del.
Code Ann., tit. 8, 222(c))
Section 10. Voting Rights. For the purpose of determining
those stockholders entitled to vote at any meeting of the
stockholders, except as otherwise provided by law, only persons
in whose names shares stand on the stock records of the
corporation on the record date, as provided in Section 12 of
these Bylaws, shall be entitled to vote at any meeting of
stockholders. Every person entitled to vote shall have the right
to do so either in person or by an agent or agents authorized by
a proxy granted in accordance with Delaware law. An agent so
appointed need not be a stockholder. No proxy shall be voted
after three (3) years from its date of creation unless the proxy
provides for a longer period. (Del. Code Ann., tit. 8,
211(e), 212(b))
Section 11. Joint Owners of Stock. If shares or other
securities having voting power stand of record in the names of
two (2) or more persons, whether fiduciaries, members of a
partnership, joint tenants, tenants in common, tenants by the
entirety, or otherwise, or if two (2) or more persons have the
same fiduciary relationship respecting the same shares, unless
the Secretary is given written notice to the contrary and is
furnished with a copy of the instrument or order appointing them
or creating the relationship wherein it is so provided, their
acts with respect to voting shall have the following effect: (a)
if only one (1) votes, his act binds all; (b) if more than one
(1) votes, the act of the majority so voting binds all; (c) if
more than one (1) votes, but the vote is evenly split on any
particular matter, each faction may vote the securities in
question proportionally, or may apply to the Delaware Court of
Chancery for relief as provided in the General Corporation Law of
Delaware, Section 217(b). If the instrument filed with the
Secretary shows that any such tenancy is held in unequal
interests, a majority or even-split for the purpose of this
subsection (c) shall be a majority or even-split in interest.
(Del. Code Ann., tit. 8, 217(b))
Section 12. List of Stockholders. The Secretary shall prepare
and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to
vote at said meeting, arranged in alphabetical order, showing the
address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not specified, at
the place where the meeting is to be held. The list shall be
produced and kept at the time and place of meeting during the
whole time thereof, and may be inspected by any stockholder who
is present. (Del. Code Ann., tit. 8, 219(a))
Section 13. No Action without Meeting. Any action required or
permitted to be taken by the stockholders of the corporation must
be effected at an annual meeting or special meeting of such
holders called in accordance with these Bylaws, and may not be
effected by any consent in writing by such holders. (Del. Code
Ann., tit. 8, 228(a), (c))
Section 14. Organization.
(a) At every meeting of stockholders, the Chairman of
the Board of Directors, or, if a Chairman has not been appointed
or is absent, the President, or, if the President is absent, a
chairman of the meeting chosen by a majority in interest of the
stockholders entitled to vote, present in person or by proxy,
shall act as chairman. The Secretary, or, in his absence, an
Assistant Secretary directed to do so by the President, shall act
as secretary of the meeting.
(b) The Board of Directors of the corporation shall be
entitled to make such rules or regulations for the conduct of
meetings of stockholders as it shall deem necessary, appropriate
or convenient. Subject to such rules and regulations of the
Board of Directors, if any, the chairman of the meeting shall
have the right and authority to prescribe such rules, regulations
and procedures and to do all such acts as, in the judgment of
such chairman, are necessary, appropriate or convenient for the
proper conduct of the meeting, including, without limitation,
establishing an agenda or order of business for the meeting,
rules and procedures for maintaining order at the meeting and the
safety of those present, limitations on participation in such
meeting to stockholders of record of the corporation and their
duly authorized and constituted proxies and such other persons as
the chairman shall permit, restrictions on entry to the meeting
after the time fixed for the commencement thereof, limitations on
the time allotted to questions or comments by participants and
regulation of the opening and closing of the polls for balloting
on matters which are to be voted on by ballot. Unless and to the
extent determined by the Board of Directors or the chairman of
the meeting, meetings of stockholders shall not be required to be
held in accordance with rules of parliamentary procedure.
ARTICLE IV
DIRECTORS
Section 15. Number and Term of Office. The number of
Directors constituting the whole of the Board of Directors shall
be five (5). Except as provided in Section 17, the Directors
shall be elected by the stockholders at their annual meeting in
each year and shall hold office until the next annual meeting and
until their successors shall be duly elected and qualified, or
until their death, resignation or removal. Directors need not be
stockholders unless so required by the Certificate of
Incorporation. If for any cause, the Directors shall not have
been elected at an annual meeting, they may be elected as soon
thereafter as convenient at a special meeting of the stockholders
called for that purpose in the manner provided in these Bylaws.
(Del. Code Ann., tit. 8, 141(b), 211(b), (c))
Section 16. Powers. The powers of the corporation shall be
exercised, its business conducted and its property controlled by
the Board of Directors, except as may be otherwise provided by
statute or by the Certificate of Incorporation. (Del. Code Ann.,
tit. 8, 141(a))
Section 17. Vacancies. Unless otherwise provided in the
Certificate of Incorporation, vacancies and newly created
directorships resulting from any increase in the authorized
number of Directors may be filled by a majority of the Directors
then in office, although less than a quorum, or by a sole
remaining Director, and each Director so elected shall hold
office for the unexpired portion of the term of the Director
whose place shall be vacant and until his successor shall have
been duly elected and qualified. A vacancy in the Board of
Directors shall be deemed to exist under this Section 17 in the
case of the death, removal or resignation of any Director, or if
the stockholders fail at any meeting of stockholders at which
Directors are to be elected (including any meeting referred to in
Section 20 below) to elect the number of Directors then
constituting the whole Board of Directors. (Del. Code Ann.,
tit. 8, 223(a), (b))
Section 18. Resignation. Any Director may resign at any time
by delivering his written resignation to the Secretary, such
resignation to specify whether it will be effective at a
particular time, upon receipt by the Secretary or at the pleasure
of the Board of Directors. If no such specification is made, it
shall be deemed effective at the pleasure of the Board of
Directors. When one or more Directors shall resign from the
Board of Directors, effective at a future date, a majority of the
Directors then in office, including those who have so resigned,
shall have power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations
shall become effective, and each Director so chosen shall hold
office for the unexpired portion of the term of the Director
whose place shall be vacated and until his successor shall have
been duly elected and qualified. (Del. Code Ann., tit. 8,
141(b), 223(d))
Section 19. Removal. At a special meeting of stockholders
called for the purpose in the manner hereinabove provided, the
Board of Directors, or any individual Director, may be removed
from office, with or without cause, and a new Director or
Directors elected by a vote of stockholders holding a majority of
the outstanding shares entitled to vote at an election of
Directors; provided, however, that if less than the entire Board
of Directors is to be removed, no Director may be removed without
cause if the votes cast against his removal would be sufficient
to elect him if then voted at an election of the entire Board of
Directors. (Del. Code Ann., tit. 8, 141(k))
Section 20. Meetings.
(a) Annual Meetings. The annual meeting of the Board
of Directors shall be held immediately before or after the annual
meeting of stockholders and at the place where such meeting is
held. No notice of an annual meeting of the Board of Directors
shall be necessary and such meeting shall be held for the purpose
of electing officers and transacting such other business as may
lawfully come before it.
(b) Regular Meetings. Unless otherwise restricted by
the Certificate of Incorporation, regular meetings of the Board
of Directors may be held at any time or date and at any place
within or without the State of Delaware which has been designated
by the Board of Directors and publicized among all directors. No
formal notice shall be required for regular meetings of the Board
of Directors. (Del. Code Ann., tit. 8, 141(g))
(c) Special Meetings. Unless otherwise restricted by
the Certificate of Incorporation, special meetings of the Board
of Directors may be held at any time and place within or without
the State of Delaware whenever called by the President or a
majority of the Directors. (Del. Code Ann., tit. 8, 141(g))
(d) Telephone Meetings. Any member of the Board of
Directors, or of any committee thereof, may participate in a
meeting by means of conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other, and
participation in a meeting by such means shall constitute
presence in person at such meeting. (Del. Code Ann., tit. 8,
141(i))
(e) Notice of Meetings. Notice of the time and place
of all special meetings of the Board of Directors shall be orally
or in writing, by telephone, including a voice messaging system
or other system or technology designed to record and communicate
messages, facsimile, telegraph or telex, or by electronic mail or
other electronic means, during normal business hours, at least
twenty-four (24) hours before the date and time of the meeting,
or sent in writing to each director by first class mail, charges
prepaid, at least three (3) days before the date of the meeting.
Notice of any meeting may be waived in writing at any time before
or after the meeting and will be waived by any director by
attendance thereat, except when the director attends the meeting
for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting
is not lawfully called or convened. (Del. Code Ann., tit. 8,
229)
(f) Waiver of Notice. The transaction of all business
at any meeting of the Board of Directors, or any committee
thereof, however called or noticed, or wherever held, shall be as
valid as though had at a meeting duly held after regular call and
notice, if a quorum be present and if, either before or after the
meeting, each of the directors not present shall sign a written
waiver of notice, or a consent to holding such meeting, or an
approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a
part of the minutes of the meeting. (Del. Code Ann., tit. 8,
229)
Section 21. Quorum And Voting.
(a) Unless the Certificate of Incorporation requires a
greater number and except with respect to indemnification
questions arising under Article XI hereof, for which a quorum
shall be one-third of the exact number of directors fixed from
time to time in accordance with the Certificate of Incorporation,
a quorum of the Board of Directors shall consist of a majority of
the exact number of directors fixed from time to time by the
Board of Directors in accordance with the Certificate of
Incorporation; provided, however, at any meeting whether a quorum
be present or otherwise, a majority of the directors present may
adjourn from time to time until the time fixed for the next
regular meeting of the Board of Directors, without notice other
than by announcement at the meeting. (Del. Code Ann., tit. 8,
141(b))
(b) At each meeting of the Board of Directors at which
a quorum is present, all questions and business shall be
determined by the affirmative vote of a majority of the directors
present, unless a different vote be required by law, the
Certificate of Incorporation or these Bylaws. (Del. Code Ann.,
tit. 8, 141(b))
Section 22. Action without Meeting. Unless otherwise
restricted by the Certificate of Incorporation or these Bylaws,
any action required or permitted to be taken at any meeting of
the Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and
such writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee. (Del. Code
Ann., tit. 8, 141(f))
Section 23. Fees and Compensation. Directors shall not
receive any stated salary for their services as Directors, but by
resolution of the Board of Directors a fixed fee may be allowed
for attendance at each meeting and at each meeting of any
committee of the Board of Directors. Directors shall be
reimbursed in full for all expenses incurred in serving the
corporation, unless otherwise determined by the Board of
Directors. Nothing herein contained shall be construed to
preclude any Director from serving the corporation in any other
capacity as an officer, agent, employee, or otherwise and
receiving compensation therefor. (Del. Code Ann., tit. 8,
141(h))
Section 24. Committees.
(a) Executive Committee. The Board of Directors may
by resolution passed by a majority of the whole Board of
Directors, appoint an Executive Committee to consist of one (1)
or more members of the Board of Directors. The Executive
Committee, to the extent permitted by law and specifically
granted by the Board of Directors, shall have and may exercise
when the Board of Directors is not in session all powers of the
Board of Directors in the management of the business and affairs
of the corporation, including, without limitation, the power and
authority to declare a dividend or to authorize the issuance of
stock, except such committee shall not have the power or
authority to amend the Certificate of Incorporation, to adopt an
agreement of merger or consolidation, to recommend to the
stockholders the sale, lease or exchange of all or substantially
all of the corporation's property and assets, to recommend to the
stockholders of the corporation a dissolution of the corporation
or a revocation of a dissolution or to amend these Bylaws. (Del.
Code Ann., tit. 8, 141(c))
(b) Other Committees. The Board of Directors may, by
resolution passed by a majority of the whole Board of Directors,
from time to time appoint such other committees as may be
permitted by law. Such other committees appointed by the Board
of Directors shall consist of one (1) or more members of the
Board of Directors, and shall have such powers and perform such
duties as may be prescribed by the resolution or resolutions
creating such committees, but in no event shall such committee
have the powers denied to the Executive Committee in these
Bylaws. (Del. Code Ann., tit. 8, 141(c))
(c) Term. The members of all committees of the Board
of Directors shall serve a term coexistent with that of the Board
of Directors which shall have appointed such committee. The
Board of Directors, subject to the provisions of subsections (a)
or (b) of this Section 24, may at any time increase or decrease
the number of members of a committee or terminate the existence
of a committee. The membership of a committee member shall
terminate on the date of his death or voluntary resignation. The
Board of Directors may at any time for any reason remove any
individual committee member and the Board of Directors may fill
any committee vacancy created by death, resignation, removal or
increase in the number of members of the committee. The Board of
Directors may designate one or more Directors as alternate
members of any committee, who may replace any absent or
disqualified member at any meeting of the committee, and, in
addition, in the absence or disqualification of any member of a
committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any
such absent or disqualified member. (Del. Code Ann., tit. 8,
141(c))
(d) Meetings. Unless the Board of Directors shall
otherwise provide, regular meetings of the Executive Committee or
any other committee appointed pursuant to this Section 24 shall
be held at such times and places as are determined by the Board
of Directors, or by any such committee, and when notice thereof
has been given to each member of such committee, no further
notice of such regular meetings need be given thereafter.
Special meetings of any such committee may be held at the
principal office of the corporation required to be maintained
pursuant to Section 2 hereof, or at any place which has been
designated from time to time by resolution of such committee or
by written consent of all members thereof, and may be called by
any Director who is a member of such committee, upon written
notice to the members of such committee of the time and place of
such special meeting given in the manner provided for the giving
of written notice to members of the Board of Directors of the
time and place of special meetings of the Board of Directors.
Notice of any special meeting of any committee may be waived in
writing at any time before or after the meeting and will be
waived by any Director by attendance thereat, except when the
Director attends such special meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of
any business because the meeting is not lawfully called or
convened. A majority of the authorized number of members of any
such committee shall constitute a quorum for the transaction of
business, and the act of a majority of those present at any
meeting at which a quorum is present shall be the act of such
committee. (Del. Code Ann., tit. 8, 141(c), 229)
Section 25. Organization. At every meeting of the Directors,
the Chairman of the Board of Directors, or, if a Chairman has not
been appointed or is absent, the President, or if the President
is absent, the most senior Vice President, or, in the absence of
any such officer, a chairman of the meeting chosen by a majority
of the Directors present, shall preside over the meeting. The
Secretary, or in his absence, an Assistant Secretary directed to
do so by the President, shall act as secretary of the meeting.
ARTICLE V
OFFICERS
Section 26. Officers Designated. The officers of the
corporation shall be the Chairman of the Board of Directors, the
President, one or more Vice Presidents, the Secretary, and the
Chief Financial Officer, all of whom shall be elected at the
annual meeting of the Board of Directors. The order of the
seniority of the Vice Presidents shall be in the order of their
nomination, unless otherwise determined by the Board of
Directors. The Board of Directors may also appoint such other
officers and agents with such powers and duties as it shall deem
necessary. The Board of Directors may assign such additional
titles to one or more of the officers as it shall deem
appropriate. Any one person may hold any number of offices of
the corporation at any one time unless specifically prohibited
therefrom by law. The salaries and other compensation of the
officers of the corporation shall be fixed by or in the manner
designated by the Board of Directors. (Del. Code Ann., tit. 8,
122(5), 142(a), (b))
Section 27. Tenure and Duties of Officers.
(a) General. All officers shall hold office at the
pleasure of the Board of Directors and until their successors
shall have been duly elected and qualified, unless sooner
removed. Any officer elected or appointed by the Board of
Directors may be removed at any time by the Board of Directors.
If the office of any officer becomes vacant for any reason, the
vacancy may be filled by the Board of Directors. (Del. Code
Ann., tit. 8, 141(b), (e))
(b) Duties of Chairman of the Board of Directors. The
Chairman of the Board of Directors, when present, shall preside
at all meetings of the shareholders and the Board of Directors.
The Chairman of the Board of Directors shall perform other duties
commonly incident to his office and shall also perform such other
duties and have such other powers as the Board of Directors shall
designate from time to time. (Del. Code Ann., tit. 8, 142(a))
(c) Duties of President. The President shall preside
at all meetings of the shareholders and at all meetings of the
Board of Directors, unless the Chairman of the Board of Directors
has been appointed and is present. The President shall be the
chief executive officer of the corporation and shall, subject to
the control of the Board of Directors, have general supervision,
direction and control of the business and officers of the
corporation. The President shall perform other duties commonly
incident to his office and shall also perform such other duties
and have such other powers as the Board of Directors shall
designate from time to time. (Del. Code Ann., tit. 8, 142(a))
(d) Duties of Vice Presidents. The Vice Presidents,
in the order of their seniority, may assume and perform the
duties of the President in the absence or disability of the
President or whenever the office of President is vacant. The
Vice Presidents shall perform other duties commonly incident to
their office and shall also perform such other duties and have
such other powers as the Board of Directors or the President
shall designate from time to time. (Del. Code Ann., tit. 8,
142(a))
(e) Duties of Secretary. The Secretary shall attend
all meetings of the stockholders and of the Board of Directors,
and shall record all acts and proceedings thereof in the minute
book of the corporation. The Secretary shall give notice in
conformity with these Bylaws of all meetings of the stockholders,
and of all meetings of the Board of Directors and any committee
thereof requiring notice. The Secretary shall perform all other
duties given him in these Bylaws and other duties commonly
incident to his office and shall also perform such other duties
and have such other powers as the Board of Directors shall
designate from time to time. The President may direct any
Assistant Secretary to assume and perform the duties of the
Secretary in the absence or disability of the Secretary, and each
Assistant Secretary shall perform other duties commonly incident
to his office and shall also perform such other duties and have
such other powers as the Board of Directors or the President
shall designate from time to time. (Del. Code Ann., tit. 8,
142(a))
(f) Duties of Chief Financial Officer. The Chief
Financial Officer shall keep or cause to be kept the books of
account of the corporation in a thorough and proper manner, and
shall render statements of the financial affairs of the
corporation in such form and as often as required by the Board of
Directors or the President. The Chief Financial Officer, subject
to the order of the Board of Directors, shall have the custody of
all funds and securities of the corporation. The Chief Financial
Officer shall perform other duties commonly incident to his
office and shall also perform such other duties and have such
other powers as the Board of Directors or the President shall
designate from time to time. The President may direct any
Assistant Chief Financial Officer to assume and perform the
duties of the Chief Financial Officer in the absence or
disability of the Chief Financial Officer, and each Assistant
Chief Financial Officer shall perform other duties commonly
incident to his office and shall also perform such other duties
and have such other powers as the Board of Directors or the
President shall designate from time to time. (Del. Code Ann.,
tit. 8, 142(a))
Section 28. Resignations. Any officer may resign at any time
by giving written notice to the Board of Directors or to the
President or to the Secretary. Any such resignation shall be
effective when received by the person or persons to whom such
notice is given, unless a later time is specified therein, in
which event the resignation shall become effective at such later
time. Unless otherwise specified in such notice, the acceptance
of any such resignation shall not be necessary to make it
effective. (Del. Code Ann., tit. 8, 142(b))
Section 29. Removal. Any officer may be removed from office
at any time, either with or without cause, by the vote or written
consent of a majority of the Directors in office at the time, or
by any committee or superior officers upon whom such power of
removal may have been conferred by the Board of Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND
VOTING OF SECURITIES OWNED BY THE CORPORATION
Section 30. Execution of Corporate Instruments. The Board of
Directors may, in its discretion, determine the method and
designate the signatory officer or officers, or other person or
persons, to execute on behalf of the corporation any corporate
instrument or document, or to sign on behalf of the corporation
the corporate name without limitation, or to enter into contracts
on behalf of the corporation, except where otherwise provided by
law or these Bylaws, and such execution or signature shall be
binding upon the corporation. (Del. Code Ann., tit. 8,
103(a), 142(a), 158)
All checks and drafts drawn on banks or other depositaries
on funds to the credit of the corporation or in special accounts
of the corporation shall be signed by such person or persons as
the Board of Directors shall authorize so to do.
Unless authorized or ratified by the Board of Directors or
within the agency power of an officer, no officer, agent or
employee shall have any power or authority to bind the
corporation by any contract or engagement or to pledge its credit
or to render it liable for any purpose or for any amount. (Del.
Code Ann., tit. 8, 103(a), 142(a), 158)
Section 31. Voting of Securities Owned by the Corporation.
All stock and other securities of other corporations owned or
held by the corporation for itself, or for other parties in any
capacity, shall be voted, and all proxies with respect thereto
shall be executed, by the person authorized so to do by
resolution of the Board of Directors, or, in the absence of such
authorization, by the Chairman of the Board of Directors, the
President, or any Vice President. (Del. Code Ann., tit. 8,
123)
ARTICLE VII
SHARES OF STOCK
Section 32. Form and Execution of Certificates. Certificates
for the shares of stock of the corporation shall be in such form
as is consistent with the Certificate of Incorporation and
applicable law. Every holder of stock in the corporation shall
be entitled to have a certificate signed by or in the name of the
corporation by the Chairman of the Board of Directors, or the
President or any Vice President and by the Chief Financial
Officer or Assistant Chief Financial Officer or the Secretary or
Assistant Secretary, certifying the number of shares owned by him
in the corporation. Where such certificate is countersigned by a
transfer agent other than the corporation or its employee, or by
a registrar other than the corporation or its employee, any other
signature on the certificate may be a facsimile. In case any
officer, transfer agent, or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent, or registrar before
such certificate is issued, it may be issued with the same effect
as if he were such officer, transfer agent, or registrar at the
date of issue. Each certificate shall state upon the face or
back thereof, in full or in summary, all of the designations,
preferences, limitations, restrictions on transfer and relative
rights of the shares authorized to be issued. (Del. Code Ann.,
tit. 8, 158)
Section 33. Lost Certificates. A new certificate or
certificates shall be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to
have been lost, stolen, or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate of
stock to be lost, stolen, or destroyed. The corporation may
require, as a condition precedent to the issuance of a new
certificate or certificates, the owner of such lost, stolen, or
destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall
require or to give the corporation a surety bond in such form and
amount as it may direct as indemnity against any claim that may
be made against the corporation with respect to the certificate
alleged to have been lost, stolen, or destroyed. (Del. Code
Ann., tit. 8, 167)
Section 34. Transfers. Transfers of record of shares of stock
of the corporation shall be made only upon its books by the
holders thereof, in person or by attorney duly authorized, and
upon the surrender of a properly endorsed certificate or
certificates for a like number of shares. (Del. Code Ann.,
tit. 6, 8-401(1))
Section 35. Fixing Record Dates. In order that the
corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment
thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend
or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix, in advance, a record date, which
shall not be more than sixty (60) nor less than ten (10) days
before the date of such meeting, nor more than sixty (60) days
prior to any other action. If no record date is fixed: (a) the
record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held; (b) the
record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when no
prior action by the Board of Directors is necessary, shall be the
day on which the first written consent is expressed; and (c) the
record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the Board
of Directors adopts the resolution relating thereto. A
determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
(Del. Code Ann., tit. 8, 213)
Section 36. Registered Stockholders. The corporation shall be
entitled to recognize the exclusive right of a person registered
on its books as the owner of shares to receive dividends, and to
vote as such owner, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares
on the part of any other person whether or not it shall have
express or other notice thereof, except as otherwise provided by
the laws of Delaware. (Del. Code Ann., tit. 8, 213(a), 219)
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 37. Execution of Other Securities. All bonds,
debentures and other corporate securities of the corporation,
other than stock certificates, may be signed by the Chairman of
the Board of Directors, the President or any Vice President, or
such other person as may be authorized by the Board of Directors,
and the corporate seal impressed thereon or a facsimile of such
seal imprinted thereon and attested by the signature of the
Secretary or an Assistant Secretary, or the Chief Financial
Officer or an Assistant Chief Financial Officer; provided,
however, that where any such bond, debenture or other corporate
security shall be authenticated by the manual signature of a
trustee under an indenture pursuant to which such bond, debenture
or other corporate security shall be issued, the signatures of
the persons signing and attesting the corporate seal on such
bond, debenture or other corporate security may be the imprinted
facsimile of the signatures of such persons. Interest coupons
appertaining to any such bond, debenture or other corporate
security, authenticated by a trustee as aforesaid, shall be
signed by the Chief Financial Officer or an Assistant Chief
Financial Officer of the corporation or such other person as may
be authorized by the Board of Directors, or bear imprinted
thereon the facsimile signature of such person. In case any
officer who shall have signed or attested any bond, debenture or
other corporate security, or whose facsimile signature shall
appear thereon or on any such interest coupon, shall have ceased
to be such officer before the bond, debenture or other corporate
security so signed or attested shall have been delivered, such
bond, debenture or other corporate security nevertheless may be
adopted by the corporation and issued and delivered as though the
person who signed the same or whose facsimile signature shall
have been used thereon had not ceased to be such officer of the
corporation.
ARTICLE IX
DIVIDENDS
Section 38. Declaration of Dividends. Dividends upon the
capital stock of the corporation, subject to the provisions of
the Certificate of Incorporation and applicable law, if any, may
be declared by the Board of Directors pursuant to law at any
regular or special meeting. Dividends may be paid in cash, in
property, or in shares of the capital stock, subject to the
provisions of the Certificate of Incorporation and applicable
law. (Del. Code Ann., tit. 8, 170, 173)
Section 39. Dividend Reserve. Before payment of any dividend,
there may be set aside out of any funds of the corporation
available for dividends such sum or sums as the Board of
Directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any
property of the corporation, or for such other purpose as the
Board of Directors shall think conducive to the interests of the
corporation, and the Board of Directors may modify or abolish any
such reserve in the manner in which it was created. (Del. Code
Ann., tit. 8, 171)
ARTICLE X
FISCAL YEAR
Section 40. Fiscal Year. Unless otherwise fixed by resolution
of the Board of Directors, the fiscal year of the corporation
shall end on the 30th day of June in each calendar year.
ARTICLE XI
INDEMNIFICATION OF OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS
Section 41. Directors. The corporation shall indemnify its
directors to the fullest extent permitted by the Delaware General
Corporation Law, as the same exists or may hereafter be amended
(but, in the case of alleged occurrences of actions or omissions
preceding any such amendment, only to the extent that such
amendment permits the corporation to provide broader
indemnification rights than said Law permitted the corporation to
provide prior to such amendment).
Section 42. Officers, Employees and Other Agents. The
corporation shall have the power to indemnify its officers,
employees and other agents as set forth in the Delaware General
Corporation Law.
Section 43. Good Faith.
(1) For purposes of any determination under this
Bylaw, a Director shall be deemed to have acted in good faith and
in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any
criminal action or proceeding, to have had no reasonable cause to
believe that his conduct was unlawful, if his action is based on
the records or books of account of the corporation or another
enterprise, or on information supplied to him by the officers of
the corporation or another enterprise in the course of their
duties, or on the advice of legal counsel for the corporation or
another enterprise or on information or records given or reports
made to the corporation or another enterprise by an independent
certified public accountant or by an appraiser or other expert
selected with reasonable care by the corporation or another
enterprise.
(2) The termination of any proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere
or its equivalent shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal proceeding,
that he had reasonable cause to believe that his conduct was
unlawful.
(3) The provisions of this Section 43 shall not be
deemed to be exclusive or to limit in any way the circumstances
in which a person may be deemed to have met the applicable
standard of conduct set forth by the Delaware General Corporation
Law.
Section 44. Expenses. The corporation shall advance, prior to
the final disposition of any proceeding, promptly following
request therefor, all expenses incurred by any director or
executive officer in connection with such proceeding upon receipt
of an undertaking by or on behalf of such person to repay said
amounts if it should be determined ultimately that such person is
not entitled to be indemnified under this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined
pursuant to Section 45 of these Bylaws, no advance shall be made
by the corporation if a determination is reasonably and promptly
made (1) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding,
or (2) if such quorum is not obtainable, or, even if obtainable,
a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion that, based upon the facts
known to the decision making party at the time such determination
is made, such person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best
interests of the corporation, or, with respect to any criminal
proceeding, such person believed or had reasonable cause to
believe that his conduct was unlawful.
Section 45. Enforcement. Without the necessity of entering
into an express contract, all rights to indemnification and
advances under this Bylaw shall be deemed to be contractual
rights and be effective to the same extent and as if provided for
in a contract between the corporation and the Director who serves
in such capacity at any time while this Bylaw and other relevant
provisions of the Delaware General Corporation Law and other
applicable law, if any, are in effect. Any right to
indemnification or advances granted by this Bylaw to a Director
shall be enforceable by or on behalf of the person holding such
right in any court of competent jurisdiction if (i) the claim for
indemnification or advances is denied, in whole or in part, or
(ii) no disposition of such claim is made within ninety (90) days
of request therefor. The claimant in such enforcement action, if
successful in whole or in part, shall be entitled to be paid also
the expense of prosecuting his claim. It shall be a defense to
any such action (other than an action brought to enforce a claim
for expenses incurred in connection with any proceeding in
advance of its final disposition when the required undertaking
has been tendered to the corporation) that the claimant has not
met the standards of conduct which make it permissible under the
Delaware General Corporation Law for the corporation to indemnify
the claimant for the amount claimed, but the burden of proving
such defense shall be on the corporation. Neither the failure of
the corporation (including its Board of Directors, independent
legal counsel or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he has met
the applicable standard of conduct set forth in the Delaware
General Corporation Law, nor an actual determination by the
corporation (including its Board of Directors, independent legal
counsel or its stockholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action
or create a presumption that claimant has not met the applicable
standard of conduct.
Section 46. Non-Exclusivity of Rights. The rights conferred
on any person by this Bylaw shall not be exclusive of any other
right which such person may have or hereafter acquire under any
statute, provision of the Certificate of Incorporation, Bylaws,
agreement, vote of stockholders or disinterested Directors or
otherwise, both as to action in his official capacity and as to
action in another capacity while holding office. The corporation
is specifically authorized to enter into individual contracts
with any or all of its Directors, officers, employees or agents
respecting indemnification and advances, to the fullest extent
permitted by the Delaware General Corporation Law.
Section 47. Survival of Rights. The rights conferred on any
person by this Bylaw shall continue as to a person who has ceased
to be a Director, officer, employee or other agent and shall
inure to the benefit of the heirs, executors and administrators
of such a person.
Section 48. Insurance. To the fullest extent permitted by the
Delaware General Corporation Law, the corporation, upon approval
by the Board of Directors, may purchase insurance on behalf of
any person required or permitted to be indemnified pursuant to
this Bylaw.
Section 49. Amendments. Any repeal or modification of this
Bylaw shall only be prospective and shall not affect the rights
under this Bylaw in effect at the time of the alleged occurrence
of any action or omission to act that is the cause of any
proceeding against any agent of the corporation.
Section 50. Savings Clause. If this Bylaw or any portion
hereof shall be invalidated on any ground by any court of
competent jurisdiction, then the corporation shall nevertheless
indemnify each agent to the full extent permitted by any
applicable portion of this Bylaw that shall not have been
invalidated, or by any other applicable law.
Section 51. Certain Definitions. For the purposes of this
Bylaw, the following definitions shall apply:
(1) The term "proceeding" shall be broadly construed
and shall include, without limitation, the investigation,
preparation, prosecution, defense, settlement and appeal of any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative.
(2) The term "expenses" shall be broadly construed
and shall include, without limitation, court costs, attorneys'
fees, witness fees, fines, amounts paid in settlement or judgment
and any other costs and expenses of any nature or kind incurred
in connection with any proceeding.
(3) The term "the corporation" shall include, in
addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed
in a consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person
who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust
or other enterprise, shall stand in the same position under the
provisions of this Bylaw with respect to the resulting or
surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
(4) References to a "director", "officer",
"employee", or "agent" of the corporation shall include,
without limitation, situations where such person is serving at
the request of the corporation as a director, officer, employee,
trustee or agent of another corporation, partnership, joint
venture, trust or other enterprise.
(5) References to "other enterprises" shall include
employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee
benefit plan; and references to "serving at the request of the
corporation" shall include any service as a director, officer,
employee or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee, or agent
with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall
be deemed to have acted in a manner "not opposed to the best
interests of the corporation" as referred to in this Bylaw.
ARTICLE XII
NOTICES
Section 52. Notices.
(a) Notice to Stockholders. Whenever, under any
provisions of these Bylaws, notice is required to be given to any
stockholder, it shall be given in writing, personally or timely
and duly deposited in the United States mail, postage prepaid,
and addressed to his last known post office address as shown by
the stock record of the corporation or its transfer agent. (Del.
Code Ann., tit. 8, 222)
(b) Notice to Directors. Any notice required to be
given to any Director may be given by the method stated in
subsection (e) of Section 20 of these Bylaws except that such
notice other than one which is delivered personally shall be sent
to such address as such Director shall have filed in writing with
the Secretary, or, in the absence of such filing, to the last
known post office address of such Director.
(c) Address Unknown. If no address of a stockholder
or Director be known, notice may be sent to the office of the
corporation required to be maintained pursuant to Section 2
hereof.
(d) Affidavit of Mailing. An affidavit of mailing,
executed by a duly authorized and competent employee of the
corporation or its transfer agent appointed with respect to the
class of stock affected, specifying the name and address or the
names and addresses of the stockholder or stockholders, or
Director or Directors, to whom any such notice or notices was or
were given, and the time and method of giving the same, shall be
conclusive evidence of the statements therein contained. (Del.
Code Ann., tit. 8, 222)
(e) Time Notices Deemed Given. All notices given by
mail, as above provided, shall be deemed to have been given as at
the time of mailing and all notices given by telegram shall be
deemed to have been given as at the sending time recorded by the
telegraph company transmitting the notices.
(f) Methods of Notice. It shall not be necessary that
the same method of giving notice be employed in respect of all
Directors, but one permissible method may be employed in respect
of any one or more, and any other permissible method or methods
may be employed in respect of any other or others.
(g) Failure to Receive Notice. The period or
limitation of time within which any stockholder may exercise any
option or right, or enjoy any privilege or benefit, or be
required to act, or within which any Director may exercise any
power or right, or enjoy any privilege, pursuant to any notice
sent him in the manner above provided, shall not be affected or
extended in any manner by the failure of such stockholder or such
Director to receive such notice.
(h) Notice to Person with Whom Communication Is
Unlawful. Whenever notice is required to be given, under any
provision of law or of the Certificate of Incorporation or Bylaws
of the corporation, to any person with whom communication is
unlawful, the giving of such notice to such person shall not be
required and there shall be no duty to apply to any governmental
authority or agency for a license or permit to give such notice
to such person. Any action or meeting which shall be taken or
held without notice to any such person with whom communication is
unlawful shall have the same force and effect as if such notice
had been duly given. In the event that the action taken by the
corporation is such as to require the filing of a certificate
under any provision of the Delaware General Corporation Law, the
certificate shall state, if such is the fact and if notice is
required, that notice was given to all persons entitled to
receive notice except such persons with whom communication is
unlawful. (Del. Code Ann., tit. 8, 230)
ARTICLE XIII
AMENDMENTS
Section 53. Amendments. These Bylaws may be repealed, altered
or amended or new Bylaws adopted by the stockholders. The Board
of Directors shall also have the authority, if such authority is
conferred upon the Board of Directors by the Certificate of
Incorporation, to repeal, alter or amend these Bylaws or adopt
new Bylaws (including, without limitation, the amendment of any
Bylaw setting forth the number of Directors who shall constitute
the whole Board of Directors) subject to the power of the
stockholders to change or repeal such Bylaws and provided that
the Board of Directors shall not make or alter any Bylaws fixing
the qualifications, classifications, term of office or
compensation of Directors. (Del. Code Ann., tit. 8, 109(a),
122(6))
ARTICLE I OFFICES 1
Section 1. Registered Office 1
Section 2. Other Offices 1
ARTICLE II CORPORATE SEAL 1
Section 3. Corporate Seal 1
ARTICLE III STOCKHOLDERS' MEETINGS 1
Section 4. Place of Meetings 1
Section 5. Annual Meetings 1
Section 6. Special Meetings 3
Section 7. Notice of Meetings 4
Section 8. Quorum 5
Section 9. Adjournment and Notice of Adjourned Meetings 5
Section 10. Voting Rights 5
Section 11. Joint Owners of Stock 6
Section 12. List of Stockholders 6
Section 13. No Action without Meeting 6
Section 14. Organization 6
ARTICLE IV DIRECTORS 7
Section 15. Number and Term of Office 7
Section 16. Powers 7
Section 17. Vacancies 7
Section 18. Resignation 7
Section 19. Removal 8
Section 20. Meetings 8
(a) Annual Meetings 8
(b) Regular Meetings 8
(c) Special Meetings 8
(d) Telephone Meetings 8
(e) Notice of Meetings 8
(f) Waiver of Notice 8
Section 21. Quorum And Voting 9
Section 22. Action without Meeting 9
Section 23. Fees and Compensation 9
Section 24. Committees 9
(a) Executive Committee 9
(b) Other Committees 10
(c) Term 10
(d) Meetings 10
Section 25. Organization 11
ARTICLE V OFFICERS 11
Section 26. Officers Designated 11
Section 27. Tenure and Duties of Officers 11
(a) General 11
(b) Duties of Chairman of the Board of Directors 11
(c) Duties of President 11
(d) Duties of Vice Presidents 12
(e) Duties of Secretary 12
(f) Duties of Chief Financial Officer 12
Section 28. Resignations 12
Section 29. Removal 12
ARTICLE VI EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
OF SECURITIES OWNED BY THE CORPORATION 13
Section 30. Execution of Corporate Instruments 13
Section 31. Voting of Securities Owned by the Corporation 13
ARTICLE VII SHARES OF STOCK 13
Section 32. Form and Execution of Certificates 13
Section 33. Lost Certificates 14
Section 34. Transfers 14
Section 35. Fixing Record Dates 14
Section 36. Registered Stockholders 14
ARTICLE VIII OTHER SECURITIES OF THE CORPORATION 15
Section 37. Execution of Other Securities 15
ARTICLE IX DIVIDENDS 15
Section 38. Declaration of Dividends 15
Section 39. Dividend Reserve 15
ARTICLE X FISCAL YEAR 16
Section 40. Fiscal Year 16
ARTICLE XI INDEMNIFICATION OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS 16
Section 41. Directors 16
Section 42. Officers, Employees and Other Agents 16
Section 43. Good Faith 16
Section 44. Expenses 17
Section 45. Enforcement 17
Section 46. Non-Exclusivity of Rights 17
Section 47. Survival of Rights 18
Section 48. Insurance 18
Section 49. Amendments 18
Section 50. Savings Clause 18
Section 51. Certain Definitions 18
ARTICLE XII NOTICES 19
Section 52. Notices 19
(a) Notice to Stockholders 19
(b) Notice to Directors 19
(c) Address Unknown 19
(d) Affidavit of Mailing 19
(e) Time Notices Deemed Given 19
(f) Methods of Notice 20
(g) Failure to Receive Notice 20
(h) Notice to Person with Whom Communication Is
Unlawful 20
ARTICLE XIII AMENDMENTS 20
Section 53. Amendments 20
___________________________________________________________
DIONEX CORPORATION
AND
BANKBOSTON, N.A.
AS RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF JANUARY 21, 1999
___________________________________________________________
Rights Agreement
This Rights Agreement ("Agreement"), dated as of January
21, 1999, between DIONEX CORPORATION, a Delaware corporation (the
"Company"), and BANKBOSTON, N.A., a national banking association
("Rights Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a
"Right") for each Common Share (as such term is hereinafter
defined) outstanding at the close of business on June 27, 1999
(the "Record Date"), each Right representing the right to
purchase one one-hundredth of a Preferred Share (as such term is
hereinafter defined), upon the terms and subject to the
conditions herein set forth, and has further authorized and
directed the issuance of one Right with respect to each Common
Share that shall become outstanding between the Record Date and
the earliest to occur of the Distribution Date, the Redemption
Date and the Final Expiration Date (as such terms are hereinafter
defined); provided, however, that Rights may be issued with
respect to Common Shares that shall become outstanding after the
Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date in accordance with the provisions
of Section 22 hereof.
Accordingly, 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 and Associates (as
such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as such
term is hereinafter defined) of 15% or more of the
Common Shares then outstanding. Notwithstanding
the foregoing, (A) the term Acquiring Person shall
not include (i) the Company, (ii) any Subsidiary
(as such term is hereinafter defined) of the
Company, (iii) any employee benefit or
compensation plan of the Company or any Subsidiary
of the Company, (iv) any entity holding Common
Shares for or pursuant to the terms of any such
employee benefit or compensation plan, and (B) no
Person shall become an "Acquiring Person" either
(x) as the result of an acquisition of Common
Shares by the Company which, by reducing the
number of shares outstanding, increases the
proportionate number of shares beneficially owned
by such Person to 15% or more of the Common Shares
then outstanding; provided, however, that if a
Person shall become the Beneficial Owner of 15% or
more of the Common Shares then outstanding by
reason of share purchases by the Company and
shall, following written notice from, or public
disclosure by the Company of such share purchases
by the Company, become the Beneficial Owner of any
additional Common Shares without the prior consent
of the Company and shall then Beneficially Own
more than 15% of the Common Shares then
outstanding, then such Person shall be deemed to
be an "Acquiring Person", or (y) if the Board of
Directors 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 (as determined in good faith by the
Board of Directors), but in any event within five
Business Days, following receipt of written notice
from the Company of such event, of Beneficial
Ownership of a sufficient number of Common Shares
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 no longer be deemed to be an
"Acquiring Person" for purposes of this
Agreement; provided, however, that if such Person
shall again become the Beneficial Owner of 15% or
more of the Common Shares then outstanding, such
Person shall be deemed an "Acquiring Person",
subject to the exceptions set forth in this
Section 1(a).
(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 is deemed to
beneficially own, within the meaning of Rule
13d-3 of the General Rules and Regulations
under the Exchange Act as in effect on the
date of this Rights Agreement;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to
acquire (whether such right is exercisable
immediately or only after the passage of
time) pursuant to any agreement, arrangement
or understanding (other than customary
agreements with and between underwriters and
selling group members with respect to a bona
fide public offering of securities) or upon
the exercise of conversion rights, exchange
rights, rights (other than these Rights),
warrants or options, or otherwise; provided,
however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially
own, securities tendered pursuant to a tender
or exchange offer made by or on behalf of
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; provided, however, that a
Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any
security if the agreement, arrangement or
understanding to vote such security
(1) arises solely from a revocable proxy or
consent given to such Person in response to a
public proxy or consent solicitation made
pursuant to, and in accordance with, the
applicable rules and regulations promulgated
under the Exchange Act and (2) is not also
then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which
such Person or any of such Person's
Affiliates or Associates has any agreement,
arrangement or understanding (other than
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 to the extent
contemplated by the proviso to
Section 1(c)(ii)(B) hereof) or disposing of
any securities of the Company, provided,
however, an agreement, arrangement or
understanding for purposes of this Section
1(c)(iii) shall not be deemed to include
actions, including any agreement, arrangement
or understanding, or statements by any member
of the Company's Board of Directors on the
date of this Agreement, any subsequent
directors of the Company (the "Successor
Directors") who have been nominated by a
majority of directors who are directors as of
the date of this Agreement or who are
Successor Directors, or by any Person of whom
such a director is an Affiliate or Associate,
provided, however that this exception shall
not apply to a particular Person or Persons
if and to the extent that such Person or
Persons, after the date of this Agreement,
acquires Beneficial Ownership of more than an
additional 5% of the then outstanding Common
Shares of the Company unless (A) the shares
are acquired directly from the Company or as
part of an employee benefit or compensation
plan of the Company or a subsidiary of the
Company or (B) the Person establishes to the
satisfaction of the directors of the Company
that it is acting on its own behalf and not
in concert with any other Person and will
not, upon completion of any purchases, be the
Beneficial Owner of 15% or more of the
outstanding Common Shares.
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, a Sunday, or a day on which banking
institutions in The Commonwealth of Massachusetts
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., Eastern Time, on such date; provided,
however, that if such date is not a Business Day
it shall mean 5:00 p.m., Eastern Time, on the next
succeeding Business Day.
(f) "Common Shares" shall mean the shares of common
stock, par value $.001 per share, of the Company;
provided, however, that, "Common Shares," when
used in this Agreement in connection with a
specific reference to any Person other than the
Company, shall mean the capital stock (or equity
interest) with the greatest voting power of such
other Person or, if such other Person is a
Subsidiary of another Person, the Person or
Persons which ultimately control such first-
mentioned Person.
(g) "Distribution Date" shall have the meaning set
forth in Section 3 hereof.
(h) "Final Expiration Date" shall have the meaning
set forth in Section 7(a) hereof.
(i) "Interested Stockholder" shall mean any
Acquiring Person or any Affiliate or Associate of
an Acquiring Person or any other Person in which
any such Acquiring Person, Affiliate or Associate
has an interest, or any other Person acting
directly or indirectly on behalf of or in concert
with any such Acquiring Person, Affiliate or
Associate.
(j) "Person" shall mean any individual, firm,
corporation or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(k) "Preferred Shares" shall mean shares of Series A
Junior Participating Preferred Stock, par value
$.001 per share, of the Company having the
designations and the powers, preferences and
rights, and the qualifications, limitations and
restrictions set forth in the Form of Certificate
of Designation attached to this Agreement as
Exhibit A.
(l) "Purchase Price" shall have the meaning set
forth in Section 7(b) hereof.
(m) "Redemption Date" shall have the meaning set
forth in Section 7(a) hereof.
(n) "Shares Acquisition Date" shall mean the first
date of public announcement by the Company or an
Acquiring Person that an Acquiring Person has
become such; provided, however that, if such
Person is determined not to have become an
Acquiring Person pursuant to clause (y) of
Subsection 1(a)(B) hereof, then no Shares
Acquisition Date shall be deemed to have occurred.
(o) "Subsidiary" of any Person shall mean any
corporation or other entity of which a majority of
the voting power of the voting equity securities
or equity interest is owned, directly or
indirectly, by such Person.
(p) "Transaction" shall mean any merger,
consolidation or sale of assets described in
Section 13(a) hereof or any acquisition of Common
Shares which would result in a Person becoming an
Acquiring Person or a Principal Party (as such
term is hereinafter defined).
(q) "Transaction Person" with respect to a
Transaction shall mean (i) any Person who (x) is
or will become an Acquiring Person or a Principal
Party (as such term is hereinafter defined) if the
Transaction were to be consummated and
(y) directly or indirectly proposed or nominated a
director of the Company which director is in
office at the time of consideration of the
Transaction, or (ii) an Affiliate or Associate of
such a Person.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the
Company in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint
such co-Rights Agents as it may deem necessary or
desirable, upon ten (10) days' prior written notice to
the Rights Agent. The Rights Agent shall have no duty
to supervise, and shall in no event be liable for, the
acts or omissions of any such co-Rights Agent.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the Shares Acquisition
Date or (ii) the tenth Business Day (or such later
date as may be determined by action of the Board
of Directors prior to such time as any Person
becomes an Acquiring Person) after the date of the
commencement (determined in accordance with
Rule 14d-2 under the Exchange Act) by any Person
(other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company
or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms
of any such plan) of, or of the first public
announcement of the intention of any Person (other
than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding
Common Shares for or pursuant to the terms of any
such plan) to commence, a tender or exchange offer
(which intention to commence remains in effect for
five Business Days after such announcement), the
consummation of which would result in any 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 earlier
of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be
evidenced by the certificates for Common Shares
registered in the names of the holders thereof
(which certificates shall also be deemed to be
Right Certificates) and not by separate Right
Certificates, and (y) the Rights (and the right to
receive Right Certificates therefor) will be
transferable only in connection with the transfer
of Common Shares. As soon as practicable after
the Distribution Date, the Company will prepare
and execute, the Rights Agent will countersign,
and the Company will send or cause to be sent (and
the Rights Agent will, if requested, send) by
first-class, insured, postage-prepaid mail, to
each record holder of Common Shares as of the
Close of Business on the Distribution Date, at the
address of such holder shown on the records of the
Company, a Right Certificate, in substantially the
form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right for each
Common Share so held, subject to the adjustment
provisions of Section 11 of this Rights Agreement.
As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send (directly or
through the Rights Agent or its transfer agent) a
copy of a Summary of Rights to Purchase Preferred
Shares, in substantially the form of Exhibit C
hereto (the "Summary of Rights"), by first-
class, postage-prepaid mail, to each record holder
of Common Shares 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 Common Shares outstanding as
of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates
registered in the names of the holders thereof.
Until the Distribution Date (or the earlier of the
Redemption Date and the Final Expiration Date),
the surrender for transfer of any certificate for
Common Shares outstanding on the Record Date shall
also constitute the transfer of the Rights
associated with the Common Shares represented
thereby.
(c) Certificates for Common Shares which become
outstanding (including, without limitation,
reacquired Common Shares referred to in the last
sentence of this paragraph (c)) after the Record
Date but prior to the earliest of the Distribution
Date, the Redemption Date or the Final Expiration
Date shall have impressed on, printed on, written
on or otherwise affixed to them the following
legend:
This certificate also evidences and
entitles the holder hereof to certain
rights as set forth in a Rights
Agreement between Dionex Corporation
(the "Corporation") and BankBoston,
N.A., as Rights Agent (the "Rights
Agent"), dated as of June 27, 1999, as
amended from time to time (the "Rights
Agreement"), the terms of which are
hereby incorporated herein by reference
and a copy of which is on file at the
principal executive offices of the
Corporation. Under certain
circumstances, as set forth in the
Rights Agreement, such Rights will be
evidenced by separate certificates and
will no longer be evidenced by this
certificate. The Corporation will mail
to the holder of this certificate a copy
of the Rights Agreement without charge
after receipt of a written request
therefor addressed to the Secretary of
the Corporation. As described in the
Rights Agreement, Rights issued to any
Person who becomes an Acquiring Person
or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and
certain related persons, whether
currently held by or on behalf of such
Person or by any subsequent holder,
shall become null and void.
With respect to such certificates containing the
foregoing legend, until the Distribution Date, the
Rights associated with the Common Shares
represented by such certificates shall be
evidenced by such certificates alone, and the
surrender for transfer of any such certificate
shall also constitute the transfer of the Rights
associated with the Common Shares represented
thereby. In the event that the Company purchases
or acquires any Common Shares after the Record
Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be
deemed canceled and retired so that the Company
shall not be entitled to exercise any Rights
associated with the Common Shares which are no
longer outstanding. Notwithstanding this Section
3(c), the omission of a legend shall not affect
the enforceability of any part of this Rights
Agreement or the rights of any holder of the
Rights.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the form of election
to purchase Preferred Shares, the form of
assignment and the form of certification to be
printed on the reverse thereof) shall be
substantially the same as Exhibit B hereto and may
have such marks of identification or designation
and such legends, summaries or endorsements
printed thereon as the Company may deem
appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be
required to comply with any applicable law or with
any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange
or quotation system on which the Rights may from
time to time be listed, or to conform to usage.
Subject to the provisions of Sections 7, 11
and 22 hereof, the Right Certificates shall
entitle the holders thereof to purchase such
number of one one-hundredths of a Preferred Share
as shall be set forth therein at the price per one
one-hundredth of a Preferred Share set forth
therein (the "Purchase Price"), but the number
of such one one-hundredths of a Preferred Share
and the Purchase Price shall be subject to
adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights
which are null and void pursuant to Section
11(a)(ii) hereof and any Right Certificate issued
pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of
any other Right Certificate referred to in this
sentence shall contain (to the extent feasible)
the following legend:
The Rights represented by this
Right Certificate are or were
beneficially owned by a Person who
was or became an Acquiring Person
or an Affiliate or Associate of an
Acquiring Person (as such terms are
defined in the Rights Agreement).
Accordingly, this Right Certificate
and the Rights represented hereby
are null and void.
The provisions of Section 11(a)(ii) hereof shall
be operative whether or not the foregoing legend
is contained on any such Right Certificate.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its Chief Executive
Officer, its President, its Vice Chairman of the Board,
its Chief Financial Officer, or any of its Vice
Presidents, either manually or by facsimile signature,
shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the
Rights Agent and shall not be valid for any purpose
unless countersigned. In case any officer of the
Company who shall have signed any of the Right
Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right
Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who
signed such Right Certificates had not ceased to be
such officer of the Company; and any Right Certificate
may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company
to sign such Right Certificate, although at the date of
the execution of this Agreement any such person was not
such an officer.
Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its office designated for
such purpose, books for registration and transfer of
the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates
and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates. Subject to the provisions of
Section 11(a)(ii), Section 14 and Section 24 hereof, at
any time after the Close of Business on the
Distribution Date, and at or prior to the Close of
Business on the earlier of the Redemption Date or the
Final Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to
purchase a like number of one one-hundredths of a
Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the
Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the
office 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 Right Certificate
until the registered holder shall have completed and
signed the certificate contained in the form of
assignment on the reverse side of such Right
Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to
Section 11(a)(ii), Section 14 and Section 24 hereof,
countersign and deliver to the person entitled thereto
a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of
Right Certificates.
Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the
Right Certificate if mutilated, the Company will issue,
execute and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and
delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Notwithstanding any other provisions hereof, the
Company and the Rights Agent may amend this Rights
Agreement to provide for uncertificated Rights in
addition to or in place of Rights evidenced by Rights
Certificates.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at
any time after the Distribution Date upon
surrender of the Right Certificate, with the form
of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the
office of the Rights Agent designated for such
purpose, together with payment of the Purchase
Price for each one one-hundredth of a Preferred
Share (or such other number of shares or other
securities) as to which the Rights are exercised,
at or prior to the earliest of (i) the Close of
Business on June 26, 2009 (the "Final Expiration
Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the
"Redemption Date"), or (iii) the time at which
such Rights are exchanged as provided in
Section 24 hereof.
(b) The purchase price (the "Purchase Price") for
each one one-hundredth of a Preferred Share
pursuant to the exercise of a Right shall
initially be $200.00 and shall be subject to
adjustment from time to time as provided in
Sections 11 and 13 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 Right Certificate representing
exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of
the Purchase Price for the shares to be purchased
and an amount equal to any applicable transfer tax
required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by
certified check, cashier's check, bank draft or
money order payable to the order of the Company,
the Rights Agent shall thereupon promptly
(i) (A) requisition from any transfer agent for
the Preferred Shares certificates for the number
of Preferred Shares 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 Preferred Shares issuable
upon exercise of the Rights hereunder into a
depository, requisition from the depositary agent
depositary receipts representing such number of
one one-hundredths of a Preferred Share as are to
be purchased (in which case certificates for the
Preferred Shares represented by such receipts
shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs
the depositary agent to comply with such request,
(ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of
issuance 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 Right Certificate,
registered in such name or names as may be
designated by such holder and (iv) when
appropriate, after receipt, deliver such cash to
or upon the order of the registered holder of such
Right Certificate. In the event that the Company
is obligated to issue securities of the Company
other than Preferred Shares (including Common
Shares) of the Company pursuant to Section 11(a)
hereof, the Company will make all arrangements
necessary so that such other securities 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)
hereof, the Rights Agent shall return such Right
Certificate to the registered holder thereof after
imprinting, stamping or otherwise indicating
thereon that the rights represented by such Right
Certificate no longer include the rights provided
by Section 11(a)(ii) hereof, and, if fewer than
all the Rights represented by such Right
Certificate were so exercised, the Rights Agent
shall indicate on the Right Certificate the number
of Rights represented thereby which continue to
include the rights provided by Section 11(a)(ii)
hereof.
(d) In case the registered holder of any Right
Certificate shall exercise fewer than all the
Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the
Rights Agent to the registered holder of such
Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14
hereof.
(e) The Company covenants and agrees that it will
cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any
Preferred Shares held in its treasury, the number
of Preferred Shares that will be sufficient to
permit the exercise in full of all outstanding
Rights in accordance with this Section 7.
(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 upon the occurrence
of any purported exercise as set forth in this
Section 7 unless such registered holder shall have
(i) completed and signed the certification
following the form of election to purchase set
forth on the reverse side of the Rights
Certificate surrendered for such exercise and
(ii) provided such additional evidence of the
identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if delivered or
surrendered to the Rights Agent, shall be canceled by
it, and no Right 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 Right Certificate purchased or
acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall,
at the written request of the Company, destroy such
canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the
Company.
Section 9. Availability of Preferred Shares. The Company
covenants and agrees that so long as the Preferred
Shares (and, after the time a person becomes an
Acquiring Person, Common Shares or any other
securities) issuable upon the exercise of the Rights
may be listed on any national securities exchange or
quotation system, 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 or quotation
system upon official notice of issuance upon such
exercise.
The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all
Preferred Shares (or Common Shares and other
securities, as the case may be) delivered upon exercise
of Rights shall, at the time of delivery of the
certificates for such Preferred Shares (subject to
payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable
shares or other securities.
The Company further covenants and agrees that it will
pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in
respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares upon the
exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or
delivery of certificates or depositary receipts for the
Preferred Shares in a name other than that of, the
registered holder of the Right Certificate evidencing
Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for
Preferred Shares upon the exercise of any Rights until
any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to
the Company's reasonable satisfaction that no such tax
is due.
As soon as practicable after the Distribution Date, the
Company shall use its best efforts to:
(i) prepare and file a registration statement
under the Securities Act of 1933, as amended
(the "Act"), with respect to the Rights and
the securities purchasable upon exercise of
the Rights on an appropriate form, will use
its best efforts to cause such registration
statement to become effective as soon as
practicable after such filing and will use
its best efforts to cause such registration
statement to remain effective (with a
prospectus at all times meeting the
requirements of the Act) until the Final
Expiration Date; and
(ii) use its best efforts to qualify or register
the Rights and the securities purchasable
upon exercise of the Rights under the blue
sky laws of such jurisdictions as may be
necessary or appropriate.
Section 10. Preferred Shares Record Date. Each person in whose
name any certificate for Preferred Shares or other
securities is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of
record of the Preferred Shares or other securities
represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered with the
forms of election and certification duly executed and
payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if
the date of such surrender and payment is a date upon
which the Preferred Shares or other securities 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 Shares
or other securities transfer books of the Company are
open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate, as such,
shall not be entitled to any rights of a holder of
Preferred 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 of Shares or
Number of Rights. The Purchase Price, the number of
Preferred 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 Shares payable in
Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller
number of Preferred Shares or (D) issue any
shares of its capital stock in a
reclassification of the Preferred Shares
(including any such reclassification in
connection with a consolidation or merger in
which the Company is the continuing or
surviving Company), except as otherwise
provided in this Section 11(a), the Purchase
Price in effect at the time of the record
date for such dividend or of the effective
date of such subdivision, combination or
reclassification, and the number and kind of
shares of capital stock issuable on such
date, shall be proportionately adjusted so
that the holder of any Right exercised after
such time shall be entitled to receive the
aggregate number and kind of shares of
capital stock which, if such Right had been
exercised immediately prior to such date and
at a time when the Preferred Shares 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)
hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and
shall be made prior to any adjustment
required pursuant to Section 11(a)(ii)
hereof.
(ii) Subject to Section 24 hereof and the
provisions of the next paragraph of this
Section 11(a)(ii), in the event any Person
shall become an Acquiring Person, each holder
of a Right shall, for a period of 60 days
after the later of such time any Person
becomes an Acquiring Person or the effective
date of an appropriate registration statement
under the Act pursuant to Section 9 hereof
(provided, however that, if at any time prior
to the expiration or termination of the
Rights there shall be a temporary restraining
order, a preliminary injunction, an
injunction, or temporary suspension by the
Board of Directors, or similar obstacle to
exercise of the Rights (the "Injunction")
which prevents exercise of the Rights, a new
60-day period shall commence on the date the
Injunction is removed), have a right to
receive, upon exercise thereof at a price
equal to the then current Purchase Price
multiplied by the number of one one-
hundredths of a Preferred Share for which a
Right is then exercisable, in accordance with
the terms of this Agreement and in lieu of
Preferred Shares, such number of Common
Shares as shall equal the result obtained by
(A) multiplying the then current Purchase
Price by the number of one one-hundredths of
a Preferred Share for which a Right is then
exercisable and dividing that product by
(B) 50% of the then current per share market
price of the Common Shares (determined
pursuant to Section 11(d) hereof) on the date
such Person became an Acquiring Person;
provided, however, that if the transaction
that would otherwise give rise to the
foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only
the provisions of Section 13 hereof shall
apply and no adjustment shall be made
pursuant to this Section 11(a)(ii). In the
event that any Person shall become an
Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any
action which would eliminate or diminish the
benefits intended to be afforded by the
Rights.
Notwithstanding anything in this Agreement to
the contrary, from and after the time any
Person becomes an Acquiring Person, any
Rights beneficially owned by (i) such
Acquiring Person or an Associate or Affiliate
of such Acquiring Person, (ii) a transferee
of such Acquiring Person (or of any such
Associate or Affiliate) who becomes a
transferee after the Acquiring Person became
such, or (iii) a transferee of such Acquiring
Person (or of any such Associate or
Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person's
becoming such and receives such Rights
pursuant to either (A) a transfer (whether or
not for consideration) from the Acquiring
Person to holders of equity interests in such
Acquiring Person or to any Person with whom
the Acquiring Person has any continuing
agreement, arrangement or understanding
regarding the transferred Rights or (B) a
transfer which the Board of Directors of the
Company has determined is part of a plan,
arrangement or understanding which has as a
primary purpose or effect the avoidance of
this Section 11(a)(ii), shall become null and
void without any further action and no holder
of such Rights shall have any rights
whatsoever with respect to such Rights,
whether under any provision of this Agreement
or otherwise. The Company shall use all
reasonable efforts to insure that the
provisions of this Section 11(a)(ii) and
Section 4(b) hereof are complied with, but
shall have no liability to any holder of
Right Certificates or other Person as a
result of its failure to make any
determinations with respect to an Acquiring
Person or its Affiliates, Associates or
transferees hereunder. No Right Certificate
shall be issued at any time upon the transfer
of any Rights to an Acquiring Person whose
Rights would be void pursuant to the
preceding sentence or any Associate or
Affiliate thereof or to any nominee of such
Acquiring Person, Associate or Affiliate; and
any Right Certificate delivered to the Rights
Agent for transfer to an Acquiring Person
whose Rights would be void pursuant to the
preceding sentence shall be canceled.
(iii) In lieu of issuing Common Shares in
accordance with Section 11(a)(ii) hereof, the
Company may, if a majority of the Board of
Directors then in office determines that such
action is necessary or appropriate and not
contrary to the interests of holders of
Rights, elect to (and, in the event that the
Board of Directors has not exercised the
exchange right contained in Section 24(c)
hereof and there are not sufficient treasury
shares and authorized but unissued Common
Shares to permit the exercise in full of the
Rights in accordance with the foregoing
subparagraph (ii), the Company shall) take
all such action as may be necessary to
authorize, issue or pay, upon the exercise of
the Rights, cash (including by way of a
reduction of the Purchase Price), property,
Common Shares, other securities or any
combination thereof having an aggregate value
equal to the value of the Common Shares which
otherwise would have been issuable pursuant
to Section 11(a)(ii) hereof, which aggregate
value shall be determined by a nationally
recognized investment banking firm selected
by a majority of the Board of Directors then
in office. For purposes of the preceding
sentence, the value of the Common Shares
shall be determined pursuant to Section 11(d)
hereof. Any such election by the Board of
Directors must be made within 60 days
following the date on which the event
described in Section 11(a)(ii) hereof shall
have occurred. Following the occurrence of
the event described in Section 11(a)(ii)
hereof, a majority of the Board of Directors
then in office may suspend the exercisability
of the Rights for a period of up to 60 days
following the date on which the event
described in Section 11(a)(ii) hereof shall
have occurred to the extent that such
directors have not determined whether to
exercise their rights of election under this
Section 11(a)(iii). 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.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all
holders of Preferred Shares entitling them to
subscribe for or purchase Preferred Shares (or
shares having the same designations and the
powers, preferences and rights, and the
qualifications, limitations and restrictions as
the Preferred Shares ("equivalent preferred
shares")) or securities convertible into
Preferred Shares or equivalent preferred shares at
a price per Preferred Share or equivalent
preferred share (or having a conversion price per
share, if a security convertible into Preferred
Shares or equivalent preferred shares) less than
the then current per share market price of the
Preferred Shares (as such term is hereinafter
defined) 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 Preferred Shares outstanding on such
record date plus the number of Preferred Shares
which the aggregate offering price of the total
number of Preferred Shares and/or equivalent
preferred shares so to be offered (and/or the
aggregate initial conversion price of the
convertible securities so to be offered) would
purchase at such current market price and the
denominator of which shall be the number of
Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares
and/or equivalent preferred shares 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 of Directors of the Company, whose
determination shall be described in a statement
filed with the Rights Agent. Preferred Shares
owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be
made successively whenever such a record date is
fixed; and in the event that such rights, options
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
the making of a distribution to all holders of the
Preferred Shares (including any such distribution
made in connection with a consolidation or merger
in which the Company is the continuing or
surviving corporation) of evidences of
indebtedness or assets (other than a regular
quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or
warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined
by multiplying the Purchase Price in effect
immediately prior to such record date by a
fraction, the numerator of which shall be the then
current per share market price of the Preferred
Shares (as such term is hereinafter defined) on
such record date, less the fair market value (as
determined in good faith by the Board of Directors
of the Company, whose determination shall be
described in a statement filed with the Rights
Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one
Preferred Share and the denominator of which shall
be such current per share market price of the
Preferred Shares; 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 again be adjusted to be the
Purchase Price which would then be in effect if
such record date had not been fixed.
(d)
(i) For the purpose of any computation hereunder,
the "current per share market price" of any
security (a "Security" for the purpose of
this Section 11(d)(i)) on any date shall be
deemed to be the average of the daily closing
prices per share of such Security for the 30
consecutive Trading Days (as such term is
hereinafter defined) immediately prior to
such date; provided, however, that in the
event that the current per share market price
of the Security is determined during a period
following the announcement by the issuer of
such Security of (A) a dividend or
distribution on such Security payable in
shares of such Security or securities
convertible into such shares, or (B) any
subdivision, combination or reclassification
of such Security or securities convertible
into such shares, or (C) any subdivision,
combination or reclassification of such
Security and prior to the expiration of 30
Trading Days 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 per share market price
shall be appropriately adjusted to reflect
the current market price per share equivalent
of such Security. 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
Security is 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 Security is listed or
admitted to trading or as reported on the
Nasdaq National Market or, if the Security is
not listed or admitted to trading on any
national securities exchange or reported on
the Nasdaq National Market, the last quoted
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 Quotations System ("Nasdaq")
or such other system then in use, or, if on
any such date the Security is 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 Security selected by the Board of
Directors of the Company or, if on any such
date no professional market maker is making a
market in the Security, the price as
determined in good faith by the Board of
Directors. The term "Trading Day" shall
mean a day on which the principal national
securities exchange on which the Security is
listed or admitted to trading is open for the
transaction of business or, if the Security
is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the
Preferred Shares shall be determined in
accordance with the method set forth in
Section 11(d)(i) hereof. If the Preferred
Shares are not publicly traded, the "current
per share market price" of the Preferred
Shares shall be conclusively deemed to be the
current per share market price of the Common
Shares as determined pursuant to
Section 11(d)(i) hereof (appropriately
adjusted to reflect any stock split, stock
dividend or similar transaction occurring
after the date hereof) multiplied by one
hundred. If neither the Common Shares nor
the Preferred Shares are publicly held or so
listed or traded, "current per share market
price" shall mean the fair value per share
as determined in good faith by the Board of
Directors of the Company, whose determination
shall be described in a statement filed with
the Rights Agent.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an
increase or decrease of at least 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 one one-hundredth of a Preferred Share
or one ten-thousandth of any other share or
security as the case may be. Notwithstanding the
first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years
from the date of the transaction which requires
such adjustment or (ii) the date of the expiration
of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right
thereafter exercised shall become entitled to
receive any shares of capital stock of the Company
other than Preferred Shares, thereafter the number
of such other shares so receivable upon exercise
of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with
respect to the Preferred Shares contained in
Sections 11(a) through 11(c) hereof, inclusive,
and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Shares 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 one one-hundredths of a Preferred Share
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) hereof, upon
each adjustment of the Purchase Price as a result
of the calculations made in Section 11(b) and
Section 11(c) hereof, 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-hundredths of a Preferred Share (calculated to
the nearest one one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number
of one one-hundredths of a Preferred Share covered
by a Right immediately prior to this adjustment by
(y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the
Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the
number of Rights, in substitution for any
adjustment in the number of one one-hundredths of
a Preferred Share purchasable upon the exercise of
a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be
exercisable for the number of one one-hundredths
of a Preferred Share 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 Right
Certificates have been issued, shall be at least
10 days later than the date of the public
announcement. If Right Certificates have been
issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be
distributed to holders of record of Right
Certificates on such record date Right
Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such
holders shall be entitled as a result of such
adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of
record in substitution and replacement for the
Right Certificates held by such holders prior to
the date of adjustment, and upon surrender
thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which
such holders shall be entitled after such
adjustment. Right Certificates so to be
distributed shall be issued, executed and
countersigned in the manner provided for herein
and shall be registered in the names of the
holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths
of a Preferred Share issuable upon the exercise of
the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the
Purchase Price and the number of one one-
hundredths of a Preferred Share which were
expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one
one-hundredth of the then par value, if any, of
the Preferred Shares 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 nonassessable
Preferred Shares 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 issuing to the holder
of any Right exercised after such record date of
the Preferred Shares 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) The Company covenants and agrees that, after the
Distribution Date, it will not, except as
permitted by Section 23 or Section 27 hereof, take
(or permit any Subsidiary to take) any action the
purpose of which is to, or if at the time such
action is taken it is reasonably foreseeable that
the effect of such action is to, materially
diminish or eliminate the benefits intended to be
afforded by the Rights. Any such action taken by
the Company during any period after any Person
becomes an Acquiring Person but prior to the
Distribution Date shall be null and void unless
such action could be taken under this Section
11(m) from and after the Distribution Date.
(n) 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 it
in its sole discretion shall determine to be
advisable in order that any consolidation or
subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at less
than the current market price, issuance wholly for
cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable
for Preferred Shares, dividends on Preferred
Shares payable in Preferred Shares or issuance of
rights, options or warrants referred to
hereinabove in Section 11(b), hereafter made by
the Company to holders of its Preferred Shares
shall not be taxable to such stockholders.
(o) In the event that at any time after the date of
this Agreement and prior to the Distribution Date,
the Company shall (i) declare or pay any dividend
on the Common Shares payable in Common Shares or
(ii) effect a subdivision, combination or
consolidation of the Common Shares (by
reclassification or otherwise than by payment of
dividends in Common Shares) into a greater or
lesser number of Common Shares, then in any such
case (A) the number of one one-hundredths of a
Preferred Share purchasable after such event upon
proper exercise of each Right shall be determined
by multiplying the number of one one-hundredths of
a Preferred Share so purchasable immediately prior
to such event by a fraction, the numerator of
which is the number of Common Shares outstanding
immediately before such event and the denominator
of which is the number of Common Shares
outstanding immediately after such event, and
(B) each Common Share outstanding immediately
after such event shall have issued with respect to
it that number of Rights which each Common Share
outstanding immediately prior to such event had
issued with respect to it. The adjustments
provided for in this Section 11(o) shall be made
successively whenever such a dividend is declared
or paid or such a subdivision, combination or
consolidation is effected.
(p) The exercise of Rights under Section 11(a)(ii)
hereof shall only result in the loss of rights
under Section 11(a)(ii) hereof to the extent so
exercised and shall not otherwise affect the
rights represented by the Rights under this
Agreement, including the rights represented by
Section 13 hereof.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in
Sections 11 and 13 hereof, the Company shall promptly
(a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts
accounting for such adjustment, (b) file with the
Rights Agent and with each transfer agent for the
Common Shares or the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to
each holder of a Right Certificate in accordance with
Section 25 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to
have knowledge of any adjustment unless and until it
shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, following the Shares
Acquisition Date or, if a Transaction is proposed,
the Distribution Date, directly or indirectly
(x) the Company shall consolidate with, or merge
with and into, any Interested Stockholder, or if
in such merger or consolidation all holders of
Common Stock are not treated alike, any other
Person, (y) any Interested Person, or if in such
merger or consolidation all holders of Common
Stock are not treated alike, any other Person
shall consolidate with the Company, or merge with
and into the Company, and the Company shall be the
continuing or surviving corporation of such merger
(other than, in the case of either transaction
described in (x) or (y), a merger or consolidation
which would result in all of the voting power
represented by the securities of the Company
outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or
by being converted into securities of the
surviving entity) all of the voting power
represented by the securities of the Company or
such surviving entity outstanding immediately
after such merger or consolidation and the holders
of such securities not having changed as a result
of such merger or consolidation), or (z) the
Company shall sell, mortgage or otherwise transfer
(or one or more of its subsidiaries shall sell,
mortgage or otherwise transfer), in one or more
transactions, assets or earning power aggregating
more than 50% of the assets or earning power of
the Company and its subsidiaries (taken as a
whole) to any Interested Stockholder or
Stockholders, or if in such transaction all
holders of Common Stock are not treated alike, any
other Person, (other than the Company or any
Subsidiary of the Company in one or more
transactions each of which individually and the
aggregate does not violate Section 13(d) hereof)
then, and in each such case, proper provision
shall be made so that (i) each holder of a Right,
subject to Section 11(a)(ii) hereof, shall have
the right to receive, upon the exercise thereof at
a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of
a Preferred Share for which a Right is then
exercisable in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such
number of freely tradeable Common Shares of the
Principal Party (as such term is 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 (A) multiplying the then current Purchase Price
by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable
(without taking into account any adjustment
previously made pursuant to Section 11(a)(ii)
hereof) and dividing that product by (B) 50% of
the then current per share market price of the
Common Shares of such Principal Party (determined
pursuant to Section 11(d) hereof) 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 Shares
in accordance with Section 9 hereof) in connection
with such consummation as may be necessary to
assure that the provisions hereof shall thereafter
be applicable, as nearly as reasonably may be, in
relation to its Common Shares thereafter
deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of
Section 13(a) hereof, the Person that is the
issuer of any securities into which Common
Shares are converted in such merger or
consolidation, and if no securities are so
issued, the Person that is the other party to
the merger or consolidation (or, if
applicable, the Company, if it is the
surviving corporation); and
(ii) in the case of any transaction described in
(z) of the first sentence of Section 13(a)
hereof, the Person that is the party
receiving the greatest portion of the assets
or earning power transferred pursuant to such
transaction or transactions;
provided, however, that in any case, (1) if the
Common Shares of such Person are not at such time
and have not been continuously over the preceding
12-month period registered under Section 12 of the
Exchange Act, and such Person is a direct or
indirect subsidiary or Affiliate of another Person
the Common Shares of which are and have been so
registered, "Principal Party" shall refer to
such other Person; (2) if such Person is a
subsidiary, directly or indirectly, or Affiliate
of more than one Person, the Common Shares 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 Shares
having the greatest aggregate market value; and
(3) if 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 Common Shares that 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 each Principal Party and each other Person who
may become a Principal Party as a result of such
consolidation, merger, sale or transfer shall have
(i) 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 (ii) prepared, filed and had declared and
remain effective a registration statement under
the Act on the appropriate form with respect to
the Rights and the securities exercisable upon
exercise of the Rights and further providing that,
as soon as practicable after the date of any
consolidation, merger, sale or transfer of assets
mentioned in paragraph (a) of this Section 13, the
Principal Party at its own expense will:
(i) cause the registration statement under the
Act with respect to the Rights and the
securities purchasable upon exercise of the
Rights on an appropriate form to remain
effective (with a prospectus at all times
meeting the requirements of the Act) until
the Final Expiration Date;
(ii) use its best efforts to qualify or register
the Rights and the securities purchasable
upon exercise of the Rights under the blue
sky laws of such jurisdictions as may be
necessary or appropriate;
(iii) list the Rights and the securities
purchasable upon exercise of the Rights on
each national securities exchange on which
the Common Shares were listed prior to the
consummation of such consolidation, merger,
sale or transfer of assets or on the Nasdaq
National Market if the Common Shares were
listed on the Nasdaq National Market or, if
the Common Shares were not listed on a
national securities exchange or the Nasdaq
National Market prior to the consummation of
the consolidation, merger, sale or transfer
of assets, on a national securities exchange
or the Nasdaq National Market; and
(iv) 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 provisions of this Section 13 shall similarly apply
to successive mergers or consolidations or sales or
other transfers.
(d) After the Distribution Date, the Company covenants
and agrees that it shall not (i) consolidate with,
(ii) merge with or into, or (iii) sell or transfer
to, in one or more transactions, assets or earning
power aggregating more than 50% of the assets or
earning power of the Company and its subsidiaries
taken as a whole, any other Person (other than a
Subsidiary of the Company in a transaction which
does not violate Section 11(m) hereof), if (x) at
the time of or after such consolidation, merger or
sale there are any charter or bylaw provisions or
any rights, warrants or other instruments or
securities outstanding, agreements in effect or
any other action taken which would diminish or
otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to,
simultaneously with or immediately after such
consolidation, merger or sale, the stockholders of
the Person who constitutes, or would constitute,
the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of
Rights previously owned by such Person or any of
its Affiliates and Associates. The Company shall
not consummate any such consolidation, merger,
sale or transfer unless prior thereto the Company
and such other Person shall have executed and
delivered to the Rights Agent a supplemental
agreement evidencing compliance with this Section
13(d).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be
paid to the registered holders of the Right
Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in
cash equal to the same fraction of the current
market value of a whole Right. For the purposes
of this Section 14(a), the current market value of
a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to
the date on which such fractional Rights would
have been otherwise issuable. The closing price
for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such
day, the average of the closing bid and asked
prices, regular way, in either case as reported in
the principal consolidated transaction reporting
system with respect to securities listed or
admitted to trading on the New York Stock Exchange
or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as
reported in the principal consolidated transaction
reporting system with respect to securities listed
on the principal national securities exchange on
which the Rights are listed or admitted to trading
or as reported on the Nasdaq National Market or,
if the Rights are not listed or admitted to
trading on any national securities exchange or
reported on the Nasdaq National Market, the last
quoted 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
of Directors of the Company shall be used.
(b) The Company shall not be required to issue
fractions of Preferred Shares (other than
fractions which are integral multiples of one one-
hundredth of a Preferred Share) upon exercise of
the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-
hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-
hundredth of a Preferred Share may, at the
election of the Company, be evidenced by
depositary receipts; provided, however, that
holders of such depositary receipts shall have all
of the designations and the powers, preferences
and rights, and the qualifications, limitations
and restrictions to which they are entitled as
beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu
of fractional Preferred Shares that are not
integral multiples of one one-hundredth of a
Preferred Share, the Company shall pay to the
registered holders of Right 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 Preferred Share.
For the purposes of this Section 14(b), the
current market value of a Preferred Share shall be
the current per share market price of the
Preferred Shares (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of
such exercise (or, if not publicly traded, in
accordance with Section 11(d)(ii) hereof).
(c) Following the occurrence of one of the
transactions or events specified in Section 11
hereof giving rise to the right to receive Common
Shares, capital stock equivalents (other than
Preferred Shares) or other securities upon the
exercise of a Right, the Company shall not be
required to issue fractions of Common Shares or
units of such Common Shares, capital stock
equivalents or other securities upon exercise of
the Rights or to distribute certificates which
evidence fractional Common Shares, capital stock
equivalents or other securities. In lieu of
fractional Common Shares, capital stock
equivalents or other securities, the Company shall
pay to the registered holders of Right
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
Common Share or unit of such Common Shares,
capital stock equivalents or other securities.
For purposes of this Section 14(c), the current
market value shall be the current per share market
price (as determined pursuant to Section 11(d)(i)
hereof) for the Trading Day immediately prior to
the date of such exercise and, if such capital
stock equivalent is not traded, each such capital
stock equivalent shall have the value of one one-
hundredth of a Preferred Share.
(d) The holder of a Right by the acceptance of the
Right expressly waives his right to receive any
fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to
the Rights Agent under Sections 18 and 20 hereof, are
vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution
Date, the registered holders of the Common Shares) and
any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), 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 Right Certificate in the manner provided in
such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy
at law for any breach of this Agreement and will be
entitled to specific performance of the obligations
under, and injunctive relief against actual or
threatened violations of the obligations of any Person
subject to, this Agreement. 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 Right Holders. Every holder of a Right,
by accepting the same, consents and agrees with the
Company and the Rights Agent and with every other
holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer
of the Common Shares;
(b) after the Distribution Date, the Right
Certificates are transferable (subject to the
provisions of this Rights Agreement) only on the
registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent, duly
endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and
treat the person in whose name the Right
Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is
registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right
Certificates or the associated Common Shares
certificate made by anyone other than the Company
or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall
be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be
entitled to vote, receive dividends or be deemed for
any purpose the holder of the Preferred Shares 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
Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the
rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements
incurred in the administration and execution of this
Agreement and the exercise and performance of its
duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without gross
negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted by
the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs
and expenses of defending against any claim of
liability in the premises. The indemnity provided
herein shall survive the expiration of the Rights and
the termination of this Agreement.
The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken,
suffered or omitted by it in connection with, its
administration of this Agreement in reliance upon any
Right Certificate or certificate for the Preferred
Shares or Common Shares 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. In no case will the Rights Agent be
liable for special, indirect, incidental or
consequential or consequential loss or damage at any
kind whatsoever (including but not limited to lost
profits), even if the Rights Agent has been advised of
such loss or damage.
Section 19. Merger Or Consolidation Or Change Of Name Of Rights
Agent. 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 shareholder
services or 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 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 Right Certificates
shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and
in case at that time any of the Right Certificates
shall not have been countersigned, any successor Rights
Agent may countersign such Right Certificates either in
the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases
such Right Certificates shall have the full force
provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right
Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its
changed name; and in all such cases such Right
Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of
which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel of
its choice (who may be legal counsel for the
Company), and the opinion of such counsel shall be
full and complete authorization and protection to
the Rights Agent as to any action taken or omitted
by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter be
proved or established by the Company prior to
taking or suffering any action hereunder, such
fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established
by a certificate signed by any one of the Chairman
of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer, any Vice
President, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and
such certificate shall be full authorization to
the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or
recitals contained in this Agreement or in the
Right Certificates (except its countersignature
thereof) or be required to verify the same, but
all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this
Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights
Agent) or in respect of the validity or execution
of any Right Certificate (except its
countersignature thereof); nor shall it be
responsible for any breach by the Company of any
covenant or condition contained in this Agreement
or in any Right Certificate; nor shall it be
responsible for any change in the exercisability
of the Rights (including the Rights becoming void
pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including
the manner, method or amount thereof) provided for
in Sections 3, 11, 13, 23 or 24 hereof, or the
ascertaining of the existence of facts that would
require any such change or adjustment (except with
respect to the exercise of Rights evidenced by
Right Certificates after receipt of a certificate
pursuant to Section 12 hereof describing such
change or adjustment); nor shall it by any act
hereunder be deemed to make any representation or
warranty as to the authorization or reservation of
any Preferred Shares to be issued pursuant to this
Agreement or any Right Certificate or as to
whether any Preferred Shares will, when issued, be
validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such
further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent
for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the
performance of its duties hereunder from any one
of the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial
Officer, any Vice President, the Secretary or the
Treasurer of the Company, and to apply to such
officers for advice or instructions in connection
with its duties, and it shall not be liable for
any action taken or suffered by it in good faith
in accordance with instructions of any such
officer or for any delay in acting while waiting
for those instructions. Any application by the
Rights Agent for written instructions from the
Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be
taken or omitted by the Rights Agent with respect
to its duties or obligations under this Agreement
and the date on and/or after which such action
shall be taken or omitted and the Rights Agent
shall not be liable for any action taken or
omitted in accordance with a proposal included in
any such application on or after the date
specified therein (which date shall not be less
than three Business Days after the date indicated
in such application unless any such officer shall
have consented in writing to an earlier date)
unless, prior to taking or omitting any such
action, the Rights Agent has received written
instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy,
sell or deal in any of the Rights or other
securities of the Company or become pecuniarily
interested in any transaction in which the Company
may be interested, or contract with or lend money
to the Company or otherwise act as fully and
freely as though it were not Rights Agent under
this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for
the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or
perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the
Company resulting from any such act, default,
neglect or misconduct, provided reasonable care
was exercised in the selection and continued
employment thereof.
(j) 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.
(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or
transfer, the certificate attached to the form of
assignment or form of election to purchase, as the
case may be, has not been executed, the Rights
Agent shall not take any further action with
respect to such requested exercise of transfer
without first consulting with the Company.
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 30 days'
notice in writing mailed to the Company and to each
transfer agent for the Common Shares or Preferred
Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail.
The Company may remove the Rights Agent or any
successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent for the
Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 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 Right Certificate (who
shall, with such notice, submit his Right Certificate
for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court
of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be
either (a) a corporation business trust or limited
liability company organized and doing business under
the laws of the United States or of any other state of
the United States which is authorized under such laws
to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal
or state authority and which has at the time of its
appointment as Rights Agent a combined capital and
surplus of at least $50 million or (b) a direct or
indirect wholly owned subsidiary of such an entity or
its wholly-owning parent. 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
for the Common Shares or Preferred Shares, and mail a
notice thereof in writing to the registered holders of
the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case
may be.
Section 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such
form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price
and the number or kind or class of shares or other
securities or property purchasable under the Right
Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the
issuance or sale of Common Shares following the
Distribution Date and prior to the earlier of the
Redemption Date and the Final Expiration Date, the
Company (a) shall with respect to Common Shares so
issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement in
existence prior to the Distribution Date, or upon the
exercise, conversion or exchange of securities, notes
or debentures issued by the Company and in existence
prior to the Distribution Date, and (b) may, in any
other case, if deemed necessary or appropriate by the
Board of Directors of the Company, issue Right
Certificates representing the appropriate number of
Rights in connection with such issuance or sale;
provided, however, that (i) the Company shall not be
obligated to issue any such Right Certificates if, and
to the extent that, the Company shall be advised by
counsel that such issuance would create a significant
risk of material adverse tax consequences to the
Company or the Person to whom such Right Certificate
would be issued, and (ii) no Right 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.
(a) The Rights may be redeemed by action of the Board
of Directors pursuant to Section 23(b) hereof and
shall not be redeemed in any other manner.
(b)
(i) The Board of Directors of the Company may, at
its option, at any time prior to the earlier
of such time as any Person becoming an
Acquiring Person or the Final Expiration
Date, redeem all but not less than all of the
then outstanding Rights at a redemption price
of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or
similar transaction occurring after the date
hereof (such redemption price being
hereinafter referred to as the "Redemption
Price"), and the Company may, at its option,
pay the Redemption Price in Common Shares
(based on the "current per-share market
price," as such term is defined in
Section 11(d) hereof, of the Common Shares at
the time of redemption), cash or any other
form of consideration deemed appropriate by
the Board of Directors. The redemption of
the Rights by the Board of Directors may be
made effective at such time, on such basis
and subject to such conditions as the Board
of Directors in its sole discretion may
establish. Notwithstanding anything
contained in this Agreement to the contrary,
the Rights shall not be exercisable pursuant
to Section 11(a)(ii) hereof prior to the
expiration or termination of the Company's
right of redemption under this Section
23(b)(i).
(ii) In addition, the Board of Directors of the
Company may, at its option, at any time after
the time a Person becomes an Acquiring Person
and the expiration of any period during which
the holder of Rights may exercise the rights
under Section 11(a)(ii) hereof but prior to
any event described in clause (x), (y) or (z)
of the first sentence of Section 13 hereof,
redeem all but not less than all of the then
outstanding Rights at the Redemption Price
(x) in connection with any merger,
consolidation or sale or other transfer (in
one transaction or in a series of related
transactions) of assets or earning power
aggregating 50% or more of the assets or
earning power of the Company and its
subsidiaries (taken as a whole) in which all
holders of Common Shares are treated alike
and not involving (other than as a holder of
Common Shares being treated like all other
such holders) an Interested Stockholder or a
Transaction Person or (y)(A) if and for so
long as the Acquiring Person is not
thereafter the Beneficial Owner of 15% or
more of the then outstanding Common Shares,
and (B) at the time of redemption no other
Persons are Acquiring Persons.
(c) Immediately upon the action of the Board of
Directors of the Company ordering the redemption
of the Rights pursuant to Section 23(b) hereof,
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. The Company shall promptly give
public notice of any such redemption; provided,
however, that the failure to give, or any defect
in, any such notice shall not affect the validity
of such redemption. Within 10 days after such
action of the Board of Directors ordering the
redemption of the Rights pursuant to Section 23(b)
hereof, the Company shall mail a notice of
redemption to all the holders of the then
outstanding Rights 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 Shares, provided, however, that failure to
give, or any defect in, any such notice shall not
affect the validity of such redemption. 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.
Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other
than that specifically set forth in this
Section 23 or in Section 24 hereof, and other than
in connection with the purchase of Common Shares
prior to the Distribution Date.
(d) The Company may, at its option, discharge all of
its obligations with respect to any redemption of
the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights
and (ii) mailing payment of the Redemption Price
to the registered holders of the Rights at their
last addresses as they appear on the registry
books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the
transfer agent for the Common Shares, and upon
such action, all outstanding Right Certificates
shall be null and void without any further action
by the Company.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an
Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant
to the provisions of Section 11(a)(ii) hereof) for
Common Shares at an exchange ratio of one Common
Share 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 of Directors 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 Shares for or pursuant to
the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes
the Beneficial Owner of 50% or more of the Common
Shares then outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of
any Rights pursuant to Section 24(a) hereof 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 Common
Shares 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; provided, however, that the
failure to give, or any defect in, such notice
shall not affect the validity of such exchange.
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 will state the method by which the
exchange of the Common Shares 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 void pursuant to the
provisions of Section 11(a)(ii) hereof) held by
each holder of Rights.
(c) In lieu of issuing Common Shares in accordance
with Section 24(a) hereof, the Company may, if a
majority of the Board of Directors then in office
determines that such action is necessary or
appropriate and not contrary to the interests of
the holders of Rights, elect to (and, in the event
that there are not sufficient treasury shares and
authorized but unissued Common Shares to permit
any exchange of the Rights in accordance with
Section 24(a) hereof, the Company shall) take all
such action as may be necessary to authorize,
issue or pay, upon the exchange of the Rights,
cash (including by way of a reduction of the
Purchase Price), property, Common Shares, other
securities or any combination thereof having an
aggregate value equal to the value of the Common
Shares which otherwise would have been issuable
pursuant to Section 24(a) hereof, which aggregate
value shall be determined by a nationally
recognized investment banking firm selected by a
majority of the Board of Directors then in office.
For purposes of the preceding sentence, the value
of the Common Shares shall be determined pursuant
to Section 11(d) hereof. Any election pursuant to
this Section 24(c) by the Board of Directors must
be made within 60 days following the date on which
the event described in Section 11(a)(ii) hereof
shall have occurred. Following the occurrence on
the event described in Section 11(a)(ii) hereof, a
majority of the Board of Directors then in office
may suspend the exercisability of the Rights for a
period of up to 60 days following the date on
which the event described in Section 11(a)(ii)
hereof shall have occurred to the extent that such
directors have not determined whether to exercise
their rights of election under this Section 24(c).
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.
(d) The Company shall not be required to issue
fractions of Common Shares or to distribute
certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares,
the Company shall pay to the registered holders of
the Right Certificates with regard to which such
fractional Common Shares would otherwise be
issuable an amount in cash equal to the same
fraction of the current market value of a whole
Common Share. For the purposes of this
Section 24(d), the current market value of a whole
Common Share shall be the closing price of a
Common Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the
Trading Day immediately after the date of the
first public announcement by the Company that an
exchange is to be effected pursuant to this
Section 24.
(e) The Company shall not be required to issue
fractions of Preferred Shares (other than
fractions which are integral multiples of one one-
hundredth of a Preferred Share) upon exchange of
the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-
hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-
hundredth of a Preferred Share may, at the
election of the Company, be evidenced by
depositary receipts; provided, however, that
holders of such depositary receipts shall have all
of the designations and the powers, preferences
and rights, and the qualifications, limitations
and restrictions to which they are entitled as
beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu
of fractional Preferred Shares that are not
integral multiples of one one-hundredth of a
Preferred Share, the Company shall pay to the
registered holders of Right 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 Preferred Share.
For the purposes of this Section 24(e), the
current market value of a Preferred Share shall be
one hundred (100) times the closing price of a
Common Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the
Trading Day immediately after the date of the
first public announcement by the Company that an
exchange is to be effected pursuant to this
Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any
dividend payable in stock of any class to the
holders of its Preferred Shares or to make any
other distribution to the holders of its Preferred
Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of its
Preferred Shares rights or warrants to subscribe
for or to purchase any additional Preferred Shares
or shares of stock of any class or any other
securities, rights or options, (iii) to effect any
reclassification of its Preferred Shares (other
than a reclassification involving only the
subdivision of outstanding Preferred Shares),
(iv) to effect any consolidation or merger into or
with, or to effect any sale or other transfer (or
to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries
(taken as a whole), to any other Person, (v) to
effect the liquidation, dissolution or winding up
of the Company, or (vi) to declare or pay any
dividend on the Common Shares payable in Common
Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by
reclassification or otherwise than by payment of
dividends in Common Shares), then, in each such
case, the Company shall give to each holder of a
Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which
shall specify the record date for the purpose of
such stock dividend, or 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 Common Shares and/or
the Preferred Shares, if any such date is to be
fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii)
above at least 10 days prior to the record date
for determining holders of the Preferred Shares
for purposes of such action, and in the case of
any such other action, at least 10 days prior to
the date of the taking of such proposed action or
the date of participation therein by the holders
of the Common Shares and/or the Preferred Shares,
whichever shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii)
hereof shall occur, then the Company shall as soon
as practicable thereafter give to each holder of a
Right Certificate, in accordance with Section 26
hereof, a notice of the occurrence of such event,
which notice shall describe the event and the
consequences of the event to holders of Rights
under Section 11(a)(ii) hereof.
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 Right 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:
Dionex Corporation
1228 Titan Way
Sunnyvale, Ca 94086
Attention: Secretary
Subject to the provisions of Section 21 hereof, any
notice or demand authorized by this Agreement to be
given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
BankBoston, N.A.
c/o EquiServe Limited Partnership
150 Royall Street
Canton, MA 02021
Attention: Client Administration
Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the
holder of any Right Certificate shall be sufficiently
given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the
Company.
Section 27. Supplements and Amendments. Prior to the Distribution
Date, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders
of the Rights. From and after the Distribution Date,
the Company and the Rights Agent shall, if the Company
so directs, from time to time supplement or amend any
provision of this Agreement without the approval of any
holders of Right Certificates in order to (i) cure any
ambiguity, (ii) correct or supplement any provision
contained herein which may be defective or inconsistent
with any other provisions herein, or (iii) change any
other provisions with respect to the Rights which the
Company may deem necessary or desirable; provided,
however, that no such supplement or amendment shall be
made which would adversely affect the interests of the
holders of Rights (other than the interests of an
Acquiring Person or its Affiliates or Associates). Any
supplement or amendment adopted during any period after
any Person has become an Acquiring Person but prior to
the Distribution Date shall become null and void unless
such supplement or amendment could have been adopted by
the Company from and after the Distribution Date. Any
such supplement or amendment shall be evidenced by a
writing signed by the Company and the Rights Agent.
Upon 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 interest 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
Shares.
Section 28. Determination and Actions by the Board of Directors,
etc. For all purposes of this Agreement, any
calculation of the number of Common Shares outstanding
at any particular time, including for purposes of
determining the particular percentage of such
outstanding Common Shares or any other securities of
which any Person is the Beneficial Owner, shall be made
in accordance with the last sentence of Rule 13d-
3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act as in effect on the date of this
Agreement. The Board of Directors of the Company shall
have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers
specifically granted to the Board, or the Company, or
as may be necessary or advisable in the administration
of this Agreement, including without limitation, the
right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this
Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such
actions, calculations, interpretations and
determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing)
which are done or made by the Board in good faith,
shall (x) be final, conclusive and binding on the
Rights Agent and the holders of the Rights, and (y) not
subject the Board to any liability to the holders of
the Rights.
Section 29. 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 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation
other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares) 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 Right Certificates (and,
prior to the Distribution Date, the Common Shares).
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.
Section 32. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed
in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such
State.
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, parties whereto have caused this
Agreement to be duly executed, all as of the day and year first
above written.
Attest: DIONEX CORPORATION
By: By:
Print Name: Print Name:
Title: Title:
Attest: BANKBOSTON, N.A.
By: By:
Print Name: Print Name:
Title: Title:
TABLE OF CONTENTS
Page
SECTION 1. CERTAIN DEFINITIONS 1
SECTION 2. APPOINTMENT OF RIGHTS AGENT. 5
SECTION 3. ISSUE OF RIGHT CERTIFICATES. 5
SECTION 4. FORM OF RIGHT CERTIFICATES. 7
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. 8
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES. 9
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. 10
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES 11
SECTION 9. AVAILABILITY OF PREFERRED SHARES 12
SECTION 10. PREFERRED SHARES RECORD DATE 13
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF RIGHTS 13
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES 22
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER 23
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES 26
SECTION 15. RIGHTS OF ACTION 28
SECTION 16. AGREEMENT OF RIGHT HOLDERS 28
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER 29
SECTION 18. CONCERNING THE RIGHTS AGENT 29
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT 30
SECTION 20. DUTIES OF RIGHTS AGENT 30
SECTION 21. CHANGE OF RIGHTS AGENT 33
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES 33
SECTION 23. REDEMPTION 34
SECTION 24. EXCHANGE 36
SECTION 25. NOTICE OF CERTAIN EVENTS 38
SECTION 26. NOTICES. 39
SECTION 27. SUPPLEMENTS AND AMENDMENTS 40
SECTION 28. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. 40
SECTION 29. SUCCESSORS 41
SECTION 30. BENEFITS OF THIS AGREEMENT 41
SECTION 31. SEVERABILITY 41
SECTION 32. GOVERNING LAW 41
SECTION 33. COUNTERPARTS 41
SECTION 34. DESCRIPTIVE HEADINGS 41
EXHIBIT A - CERTIFICATE OF DESIGNATION
EXHIBIT B - FORM OF RIGHT CERTIFICATE
EXHIBIT C - SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
CERTIFICATE OF DESIGNATION
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
DIONEX CORPORATION
(Pursuant to Section 151 of the
Delaware General Corporation Law)
(EXHIBIT A TO RIGHTS AGREEMENT)
DIONEX CORPORATION, a corporation organized and existing under
the General Corporation Law of the State of Delaware (hereinafter
called the "Company"), hereby certifies that the following
resolution was adopted by the Board of Directors of the
Corporation as required by Section 151 of the General Corporation
Law at a meeting duly called and held on January 21, 1999.
Resolved, that pursuant to the authority granted to and
vested in the Board of Directors of the Company in accordance
with the provisions of its Amended and Restated Certificate of
Incorporation, the Board of Directors hereby creates a series of
Preferred Stock, par value $.001 per share, of the Company and
hereby states the designation and number of shares, and fixes the
relative designations and the powers, preferences and rights, and
the qualifications, limitations and restrictions thereof (in
addition to the provisions set forth in the Certificate of
Incorporation of the Company, which are applicable to the
Preferred Stock of all classes and series), as follows:
Series A Junior Participating Preferred
Stock:
Section 1. Designation and Amount. Four Hundred
Thousand (400,000) shares of Preferred Stock,
$.001 par value, are designated "Series A Junior
Participating Preferred Stock" with the
designations and the powers, preferences and
rights, and the qualifications, limitations and
restrictions specified herein (the "Junior
Preferred Stock"). Such number of shares may be
increased or decreased by resolution of the Board
of Directors; provided, that no decrease shall
reduce the number of shares of Junior Preferred
Stock to a number less than the number of shares
then outstanding plus the number of shares
reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon
the conversion of any outstanding securities
issued by the Company convertible into Junior
Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any
shares of any series of Preferred Stock (or
any similar stock) ranking prior and superior
to the Junior Preferred Stock with respect to
dividends, the holders of shares of Junior
Preferred Stock, in preference to the holders
of Common Stock, par value $.001 per share
(the "Common Stock"), of the Company, and
of 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 first day of
April, July, October and January in each year
(each such date being referred to herein as a
"Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend
Payment Date after the first issuance of a
share or fraction of a share of Junior
Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the
greater of (a) $l.00 or (b) subject to the
provision for adjustment hereinafter set
forth, 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 Junior
Preferred Stock. In the event the Company
shall at any time declare or pay any dividend
on the Common Stock payable in shares of
Common Stock, or effect a subdivision or
combination or consolidation of the
outstanding shares of Common Stock (by
reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into
a greater or lesser number of shares of
Common Stock, then in each such case the
amount to which holders of shares of Junior
Preferred Stock were entitled immediately
prior to such event under clause (b) of the
preceding sentence shall be adjusted by
multiplying such amount by a fraction, the
numerator of which is the number of shares of
Common Stock outstanding immediately after
such event and the denominator of which is
the number of shares of Common Stock that
were outstanding immediately prior to such
event.
(B) The Company shall declare a dividend or
distribution on the Junior Preferred Stock as
provided in paragraph (A) of this Section
immediately after it declares a dividend or
distribution on the Common Stock (other than
a dividend payable in shares of Common
Stock); provided, that in the event no
dividend or distribution shall have been
declared on the Common Stock during the
period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1.00
per share on the Junior Preferred Stock shall
nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be
cumulative on outstanding shares of Junior
Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue
of such shares, unless the date of issue of
such shares is prior to the record date for
the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall
begin to accrue from the date of issue of
such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date
after the record date for the determination
of holders of shares of Junior Preferred
Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend
Payment Date, in either of which events such
dividends shall begin to accrue and be
cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on
the shares of Junior Preferred Stock in an
amount less than the total amount of such
dividends at the time accrued and payable on
such shares shall be allocated pro rata on a
share-by-share basis among all such shares at
the time outstanding. The Board of Directors
may fix a record date for the determination
of holders of shares of Junior Preferred
Stock entitled to receive payment of a
dividend or distribution declared thereon,
which record date shall be not more than 60
days prior to the date fixed for the payment
thereof.
Section 3. Voting Rights. The holders of shares of
Junior Preferred Stock shall have the following
voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Junior
Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted
to a vote of the stockholders of the Company.
In the event the Company shall at any time
declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or
effect a subdivision or combination or
consolidation of the outstanding shares of
Common Stock (by reclassification or
otherwise than by payment of a dividend in
shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then
in each such case the number of votes per
share to which holders of shares of Junior
Preferred Stock were entitled immediately
prior to such event shall be adjusted by
multiplying such 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.
(B) Except as otherwise provided herein, in any
other Certificate of Designation creating a
series of Preferred Stock or any similar
stock, or by law, the holders of shares of
Junior Preferred Stock and the holders of
shares of Common Stock and any other capital
stock of the Company having general voting
rights shall vote together as one class on
all matters submitted to a vote of
stockholders of the Company.
(C) Except as set forth herein, or as otherwise
provided by law, holders of Junior 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
Junior 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 Junior Preferred Stock outstanding
shall have been paid in full, the Company
shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking
junior (either as to dividends or upon
liquidation, dissolution or winding up) to
the Junior Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking
on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with
the Junior Preferred Stock, except dividends
paid ratably on the Junior Preferred Stock
and all such parity stock on which dividends
are payable or in arrears in proportion to
the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking
junior (either as to dividends or upon
liquidation, dissolution or winding up) to
the Junior Preferred Stock, provided that the
Company may at any time redeem, purchase or
otherwise acquire shares of any such junior
stock in exchange for shares of any stock of
the Company ranking junior (either as to
dividends or upon dissolution, liquidation or
winding up) to the Junior Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Junior Preferred
Stock, or any shares of stock ranking on a
parity (either as to dividends or upon
liquidation, dissolution or winding up) with
the Junior Preferred Stock, except in
accordance with a purchase offer made in
writing or by publication (as determined by
the Board of Directors) to all holders of
such shares upon such terms as the Board of
Directors, after consideration of the
respective annual dividend rates and other
relative rights and preferences of the
respective series and classes, shall
determine in good faith will result in fair
and equitable treatment among the respective
series or classes.
(B) The Company shall not permit any subsidiary
of the Company to purchase or otherwise
acquire for consideration any shares of stock
of the Company unless the Company 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 Junior
Preferred Stock purchased or otherwise acquired by
the Company in any manner whatsoever shall be
retired and cancelled promptly after the
acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock subject to
the conditions and restrictions on issuance set
forth herein, in the Amended and Restated
Certificate of Incorporation, or in any other
Certificate of Designation creating a series of
Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon
any liquidation, dissolution or winding up of the
Company, no distribution shall be made (1) to the
holders of shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution
or winding up) to the Junior Preferred Stock
unless, prior thereto, the holders of shares of
Junior Preferred Stock shall have received $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, provided that the holders of shares of
Junior Preferred Stock shall be entitled to
receive an aggregate amount per share, subject to
the provision for adjustment hereinafter set
forth, equal to 100 times the aggregate amount to
be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of
stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up)
with the Junior Preferred Stock, except
distributions made ratably on the Junior Preferred
Stock and all such parity stock in proportion to
the total amounts to which the holders of all such
shares are entitled upon such liquidation,
dissolution or winding up. In the event the
Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or
combination or consolidation of the outstanding
shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case
the aggregate amount to which holders of shares of
Junior Preferred Stock were entitled immediately
prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the
numerator of which is the number of shares of
Common Stock outstanding immediately after such
event and the denominator of which is the number
of shares of Common Stock that were outstanding
immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Company shall enter into any consolidation,
merger, combination or other transaction in which
the shares of Common Stock are exchanged for or
changed into other stock or securities, cash
and/or any other property, then in any such case
each share of Junior Preferred Stock shall at the
same time be similarly exchanged or changed into
an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 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 Company shall at any time declare or
pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding
shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case
the amount set forth in the preceding sentence
with respect to the exchange or change of shares
of Junior Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the
numerator of which is the number of shares of
Common Stock outstanding immediately after such
event and the denominator of which is the number
of shares of Common Stock that were outstanding
immediately prior to such event.
Section 8. No Redemption. The shares of Junior
Preferred Stock shall not be redeemable.
Section 9. Rank. The Junior Preferred Stock shall rank,
with respect to the payment of dividends and the
distribution of assets, junior to all series of
any other class of the Company's Preferred Stock.
Section 10. Amendment. The Amended and Restated
Certificate of Incorporation of the Company shall
not be amended in any manner which would
materially alter or change the powers, preferences
or special rights of the Junior Preferred Stock so
as to affect them adversely without the
affirmative vote of the holders of at least two-
thirds of the outstanding shares of Junior
Preferred Stock, voting together as a single
class.
In Witness Whereof, the undersigned have executed this
certificate as of ________ ___, 1999.
A. Blaine Bowman
Chief Executive Officer
James C. Gaither
Secretary
FORM OF RIGHT CERTIFICATE
(EXHIBIT B TO RIGHTS AGREEMENT)
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER JULY 26, 2009 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT
TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
DIONEX CORPORATION
This certifies that ___________________ or registered
assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to
the terms, provisions and conditions of the Rights Agreement,
dated as of January 21, 1999 (the "Rights Agreement"), between
Dionex Corporation, a Delaware corporation (the "Company"), and
BankBoston, 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., Pacific
Time, on July 26, 2009 at the office of the Rights Agent
designated for such purpose, or at the office of its successor as
Rights Agent, one one-hundredth of a fully paid non-assessable
share of Series A Junior Participating Preferred Stock, par value
$.001 per share (the "Preferred Shares"), of the Company, at a
purchase price of $200.00 per one one-hundredth of a Preferred
Share (the "Purchase Price"), upon presentation and surrender
of this Right Certificate with the Form of Election to Purchase
duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths of a Preferred
Share which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and
Purchase Price as of January 21, 1999, based on the Preferred
Shares as constituted at such date.
From and after the time any Person becomes an Acquiring
Person, (as such terms are defined in the Rights Agreement), if
the Rights evidenced by this Right Certificate are beneficially
owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring
Person, Associate or Affiliate who becomes a transferee after the
Acquiring Person becomes such, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of
any such Acquiring Person, Associate or Affiliate who becomes a
transferee prior to or concurrently with the Acquiring Person
becoming such, such Rights shall become null and void without any
further action and no holder hereof shall have any right with
respect to such Rights from and after the time any Person becomes
an Acquiring Person.
As provided in the Rights Agreement, the Purchase Price and
the number of one one-hundredths of a Preferred Share which may
be purchased upon the exercise of the Rights evidenced by this
Right Certificate are subject to modification and adjustment upon
the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, as amended
from time to time, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations,
duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Right Certificates. Copies of the Rights
Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office of the Rights Agent
designated for such purpose, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like
aggregate number of Preferred Shares as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall
have entitled such holder to purchase. If this Right Certificate
shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate (i) may be redeemed by the
Company at a redemption price of $.01 per Right or (ii) may be
exchanged in whole or in part for shares of the Company's Common
Stock, par value $.001 per share, or, upon circumstances set
forth in the Rights Agreement, cash, property or other securities
of the Company, including fractions of a share of Preferred
Stock.
No fractional Preferred Shares 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
Preferred Share, 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 Right Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder
of the Preferred Shares or of any other securities of the Company
which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in
the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this
Right Certificate shall have been exercised as provided in the
Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
Witness the facsimile signature of the proper officers of
the Company and its corporate seal. Dated as of
__________________.
Attest: DIONEX CORPORATION
By:
Secretary Title:
Countersigned:
BANKBOSTON, N.A.
as Rights Agent
By:
Print Name:
Title:
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ______________________________________
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
_________________________________________________________________
____ this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint ________________________ Attorney, to transfer the within
Right Certificate on the books of the within-named Company, with
full power of substitution.
Dated: ____________________
______________________________
__
Signature
Form of Reverse Side of Right Certificate -- continued
Signature Guaranteed:
Signatures must be guaranteed by an "eligible guarantor
institution" as defined in Rule 17Ad-15 promulgated under the
Securities Exchange Act of 1934, as amended.
- ---------------------------------------------------------------
The undersigned hereby certifies that (1) the Rights
evidenced by this Right Certificate are not being sold, assigned
or transferred by or on behalf of a Person who is or was an
Acquiring Person, an Interested Stockholder or an Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement); and (2) after due inquiry and to the best of the
knowledge of the undersigned, the undersigned did not acquire the
Rights evidenced by this Right Certificate from any Person who is
or was an Acquiring Person, an Interested Stockholder, or an
Affiliate or Associate thereof.
______________________________
__
Signature
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To BankBoston, N.A.;
The undersigned hereby irrevocably elects to exercise
___________________________ Rights represented by this Right
Certificate to purchase the Preferred Shares issuable upon the
exercise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:
Please insert social security
or other identifying number: ______________
______________________________________________________________
(Please print name and address)
______________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance
remaining of such Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number: ______________
______________________________________________________________
(Please print name and address)
______________________________________________________________
Dated: _________________
______________________________
__
Signature
Form of Reverse Side of Right Certificate -- continued
Signature Guaranteed:
Signatures must be guaranteed by an "eligible guarantor
institution" as defined in Rule 17Ad-15 promulgated under the
Securities Exchange Act of 1934, as amended.
- ---------------------------------------------------------------
The undersigned hereby certifies that (1) the Rights
evidenced by this Right Certificate are not beneficially owned by
nor are they being exercised on behalf of an Acquiring Person, an
Interested Stockholder or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement); and (2) after
due inquiry and to the best of the knowledge of the undersigned,
the undersigned did not acquire the Rights evidenced by this
Right Certificate from any Person who is or was an Acquiring
Person, an Interested Stockholder, or an Affiliate or Associate
thereof.
______________________________
__
Signature
- ---------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election
to Purchase, as the case may be, must conform to the name as
written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form
of Assignment or the Form of Election to Purchase, as the case
may be, is not completed, the Company and the Rights Agent will
deem the beneficial owner of the Rights evidenced by this Right
Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
