SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (or Date of Earliest Event Reported): September 10, 1999
DALLAS SEMICONDUCTOR CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 1-10464 75-1935715
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation or organization) Identification No.)
4401 South Beltwood Parkway
Dallas, Texas 75244
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 371-4000
1
<PAGE>
ITEM 5. OTHER EVENTS.
------------
I. Rights Plan
The Board of Directors of DALLAS SEMICONDUCTOR CORPORATION (the
"Company") has declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $.02 per share,
of the Company (the "Common Stock"). The dividend is payable on September 21,
1999 (the "Record Date") to the stockholders of record on that date. Each Right
entitles the registered holder to purchase from the Company one one-thousandth
of a share of Series A Junior Participating Preferred Stock, par value $.10 per
share, of the Company (the "Preferred Stock") at a price of $250 per one
one-thousandth of a share of Preferred Stock (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement dated as of September 10, 1999, as the same may be amended from time
to time (the "Rights Agreement"), between the Company and CHASEMELLON
SHAREHOLDER SERVICES, L.L.C., as Rights Agent (the "Rights Agent").
Detachment of Rights: Exercise. Until the earlier to occur of (i) 10
days following a public announcement that a person or group of affiliated or
associated persons (with certain exceptions, an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the outstanding shares of Common Stock 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 group of affiliated
persons becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of the outstanding shares of Common Stock (the earlier of
such dates being called the "Distribution Date"), the Rights will be evidenced,
with respect to any of the Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificate together with a copy of the
Summary of Rights in substantially the form of Exhibit C to the Rights Agreement
(the "Summary of Rights").
The Rights Agreement provides that, until the Distribution Date (or
earlier expiration of the Rights), the Rights will be transferred with and only
with the Common Stock. Until the Distribution Date (or earlier expiration of the
Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuances of Common Stock will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
expiration of the Rights), the surrender for transfer of any certificates for
shares of Common Stock outstanding as of the Record Date, even without such
notation or a copy of the Summary of Rights, will also constitute the transfer
of the Rights associated with the shares of Common Stock represented by such
certificates. 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 Stock 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 September 9, 2009 (the "Final Expiration Date"), unless the Final
Expiration Date is advanced
2
<PAGE>
or extended or unless the Rights are earlier redeemed or exchanged by the
Company, in each case as described below.
If any person or group of affiliated or associated persons becomes an
Acquiring Person, each holder of a Right, other than Rights beneficially owned
by the Acquiring Person (which will thereupon become void), will thereafter have
the right to receive upon exercise of a Right that number of shares of Common
Stock having a market value of two times the exercise price of the Right.
If, after a person or group has become an Acquiring Person, 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, proper provisions will be
made so that each holder of a Right (other than Rights beneficially owned by an
Acquiring Person which will have become void) will thereafter have the right to
receive upon the exercise of a Right that number of shares of common stock of
the person with whom the Company has engaged in the foregoing transaction (or
its parent) that at the time of such transaction have a market value of two
times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and
prior to the earlier of one of the events described in the previous paragraph or
the acquisition by such Acquiring Person of 50% or more of the outstanding
shares of Common Stock, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such Acquiring Person which will have become
void), in whole or in part, for shares of Common Stock or Preferred Stock (or a
series of the Company's preferred stock having equivalent rights, preferences
and privileges), at an exchange ratio of one share of Common Stock, or a
fractional share of Preferred Stock (or other preferred stock) equivalent in
value thereto, per Right.
Preferred Shares. Shares of Preferred Stock purchasable upon exercise
of the Rights will not be redeemable. Each share of Preferred Stock will be
entitled, when, as and if declared, to a dividend payment per share equal to an
aggregate dividend of 1000 times the dividend declared per share of Common
Stock. Upon the liquidation, dissolution or winding up of the Company, the
holders of the Preferred Stock will be entitled to a minimum preferential
payment of $1.00 per share (plus any accrued but unpaid dividends) but will be
entitled to an aggregate payment of 1000 times the payment made per share of
Common Stock. Each share of Preferred Stock will have 1000 votes, voting
together with the Common Stock. Finally, upon any merger, consolidation or other
transaction in which outstanding shares of Common Stock are converted or
exchanged, each share of Preferred Stock will be entitled to receive 1000 times
the amount received per share of Common Stock. These Rights are protected by
customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-thousandth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
3
<PAGE>
The offer and sale of the Preferred Shares or Common Shares issuable
upon exercise of the Rights will be registered pursuant to the Securities Act of
1933, as amended; such registration will not become effective until the Rights
become exercisable.
Antidilution and Other Adjustments. The number of one one-thousandths
of a Preferred Share or other securities or property issuable upon exercise of
the Rights, and the Purchase Price payable, are subject to customary adjustments
from time to time to prevent dilution.
Redemption of Rights. At any time prior to the earlier of (i) the
Distribution Date or (ii) the Final Expiration Date, the Board of Directors of
the Company may redeem all but not less than all of the then outstanding Rights
at a price of $0.01 per Right (the "Redemption Price"). The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish. At
the effective time of such redemption, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
No Rights as Stockholder. 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.
Amendment of Rights. For so long as the Rights are then redeemable, the
Company may, except with respect to the redemption price, amend the Rights
Agreement in any manner. After the Rights are no longer redeemable, the Company
may, except with respect to the redemption price, amend the Rights Agreement in
any manner that does not adversely affect the interests of holders of the
Rights.
This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement filed
herewith as Exhibit 1, which is hereby incorporated by reference.
4
<PAGE>
ITEM 7. Financial Statements and Exhibits.
---------------------------------
(c) Exhibits
(4) Instruments defining rights of security
holders, including indentures:
4.1 Rights Agreement dated as of
September 10, 1999, between Dallas
Semiconductor Corporation and
ChaseMellon Shareholder Services,
L.L.C., which includes the form of
Certificate of Designation for
Designating Series A Junior
Participating Preferred Stock, $.10
par value, as Exhibit A, the form of
Right Certificate as Exhibit B, and
the Summary of Rights as Exhibit C.
4.2 Form of Certificate of Designation
for Designating Series A Junior
Participating Preferred Stock, $.10
par value (included as Exhibit A to
the Rights Agreement, which is
Exhibit 1 hereto).
4.3 Form of Right Certificate (included
as Exhibit B to the Rights
Agreement, which is Exhibit 1
hereto). Pursuant to the Rights
Agreement, printed Right
Certificates will not be mailed
until as soon as practicable after
the Distribution Date.
4.4 Form of Summary of Rights (included
as Exhibit C to the Rights
Agreement, which is Exhibit 1
hereto) that, together with
certificates representing the
outstanding Common Shares of the
Company, shall represent the Rights
until the Distribution Date.
4.5 Specimen of legend to be placed,
pursuant to Section 3(c) of the
Rights Agreement, on all new Common
Share certificates issued after
September 21, 1999 and prior to the
Distribution Date upon transfer,
exchange or new issuance (included
in Section 3(c) of the Rights
Agreement, which is Exhibit 1
hereto).
5
<PAGE>
SIGNATURE
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.
Dated: September 20, 1999
DALLAS SEMICONDUCTOR
CORPORATION
By: /s/ C.V. Prothro
-----------------------------------
Name: C.V. Prothro
-----------------------------------
Title: Chairman of the Board, President &
-----------------------------------
Chief Executive Officer
-----------------------------------
6
<PAGE>
EXHIBIT INDEX
Exhibit
No. Exhibit Description
------- -------------------
(4) Instruments defining the rights of security holders,
including indentures:
4.1 Rights Agreement dated as of September 10,
1999, between Dallas Semiconductor Corporation
and ChaseMellon Shareholder Services, L.L.C.,
which includes the form of Certificate of
Designation for Designating Series A Junior
Participating Preferred Stock, $.10 par value,
as Exhibit A, the form of Right Certificate as
Exhibit B, and the Summary of Rights as Exhibit
C.
4.2 Form of Certificate of Designation for
Designating Series A Junior Participating
Preferred Stock, $.10 par value (included as
Exhibit A to the Rights Agreement, which is
Exhibit 1 hereto).
4.3 Form of Right Certificate (included as Exhibit
B to the Rights Agreement, which is Exhibit 1
hereto). Pursuant to the Rights Agreement,
printed Right Certificates will not be mailed
until as soon as practicable after the
Distribution Date.
4.4 Form of Summary of Rights (included as Exhibit
C to the Rights Agreement, which is Exhibit 1
hereto) that, together with certificates
representing the outstanding Common Shares of
the Company, shall represent the Rights until
the Distribution Date.
4.5 Specimen of legend to be placed, pursuant to
Section 3(c) of the Rights Agreement, on all
new Common Share certificates issued after
September 21, 1999 and prior to the
Distribution Date upon transfer, exchange or
new issuance (included in Section 3(c) of the
Rights Agreement, which is Exhibit 1 hereto).
7
----------------------------
DALLAS SEMICONDUCTOR CORPORATION
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., AS RIGHTS AGENT
----------------------------
RIGHTS AGREEMENT
DATED AS OF SEPTEMBER 10, 1999
----------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
PAGE NO.
<S> <C>
Section 1. Certain Definitions..........................................................................1
Section 2. Appointment of Rights Agent..................................................................6
Section 3. Issue of Right Certificates..................................................................6
Section 4. Form of Right Certificates...................................................................8
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................................9
Section 8. Cancellation and Destruction of Right Certificates..........................................11
Section 9. Availability of Shares of Preferred Stock...................................................11
Section 10. Preferred Stock Record Date.................................................................12
Section 11. Adjustment of Purchase Price; Number and Kind of Shares and Number of
Rights................................................................................13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.................................21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.......................21
Section 14. Fractional Rights and Fractional Shares....................................................24
Section 15. Rights of Action...........................................................................26
Section 16. Agreement of Right Holders.................................................................26
Section 17. Right Certificate Holder Not Deemed a Stockholder..........................................27
Section 18. Concerning the Rights Agent................................................................27
i
<PAGE>
Section 19. Merger or Consolidation or Change of Name of Rights Agent..................................28
Section 20. Duties of Rights Agent.....................................................................28
Section 21. Change of Rights Agent.....................................................................30
Section 22. Issuance of New Right Certificates.........................................................31
Section 23. Redemption.................................................................................31
Section 24. Exchange...................................................................................32
Section 25. Notice of Certain Events...................................................................33
Section 26. Notices....................................................................................34
Section 27. Supplements and Amendments.................................................................35
Section 28. Successors.................................................................................35
Section 29. Benefits of this Agreement.................................................................35
Section 30. Determinations and Actions by the Board of Directors.......................................35
Section 31. Severability...............................................................................36
Section 32. Governing Law..............................................................................36
Section 33. Counterparts...............................................................................36
Section 34. Descriptive Headings.......................................................................36
</TABLE>
ii
<PAGE>
RIGHTS AGREEMENT
----------------
Rights Agreement, dated as of September 10, 1999 ("Agreement"), between
DALLAS SEMICONDUCTOR CORPORATION, a Delaware corporation (the "Company"), and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., a New Jersey limited liability
company, as Rights Agent (the "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 share of
Common Stock (as hereinafter defined) of the Company outstanding as of the Close
of Business (as defined below) on September 21, 1999 (the "Record Date"), each
Right representing the right to purchase one one-thousandth (subject to
adjustment) of a share of Preferred Stock (as hereinafter defined), upon the
terms and subject to the conditions herein set forth, and has further authorized
and directed the issuance of one Right (subject to adjustment as provided
herein) with respect to each share of Common Stock that shall become outstanding
between the Record Date and the earlier of the Distribution Date and the
Expiration Date (as such terms are hereinafter defined); provided, however, that
Rights may be issued with respect to shares of Common Stock that shall become
outstanding after the Distribution Date and prior to the Expiration Date in
accordance with SECTION 22.
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 meaning indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which shall be the Beneficial Owner
(as such term is hereinafter defined) of 15% or more of the
shares of Common Stock then outstanding, but shall not include
(i) an Exempt Person (as such term is hereinafter defined) or
(ii) any such Person who has reported or is required to report
such ownership (but less than 25% ) on Schedule 13G under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
(or any comparable or successor report) or on Schedule 13D under
the Exchange Act (or any comparable or successor report), which
Schedule 13D (including an amendment to Schedule 13D) does not
state any intention to or reserve the right to control or
influence the management or policies of the Company or engage in
any of the actions specified in Item 4 of such Schedule 13D
(other than the disposition of the Common Stock) and, within 10
Business Days (as such term is hereinafter defined) of being
requested by the Company to advise it regarding the same,
certifies to the Company that such Person acquired shares of
Common Stock in excess of 14.99% inadvertently or without
knowledge of the effect of the terms of the Rights and who,
together with all Affiliates and Associates, thereafter does not
acquire additional shares of Common Stock while the Beneficial
Owner of 15% or more of the shares of Common Stock then
1
<PAGE>
outstanding; provided, however, that (A) if the Person requested
to so certify fails to do so within 10 Business Days or (B) if
such Person thereafter becomes obligated to file a Schedule 13D
(including an amendment to a Schedule 13D) that would state any
intention to or reserve the right to control or influence the
management or policies of the Company or engage in any of the
actions specified in Item 4 of such Schedule 13D (other than the
disposition of the Common Stock), then such Person shall become
an Acquiring Person immediately thereafter. Notwithstanding the
foregoing, (x) if, as of the date hereof, any Person is the
Beneficial Owner of 15% or more of the shares of Common Stock
outstanding, such Person shall not be or become an "Acquiring
Person" unless and until such time as such Person shall become
the Beneficial Owner of an additional 1% of the shares of Common
Stock (other than pursuant to a dividend or distribution paid or
made by the Company on the outstanding Common Stock in shares of
Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), unless, upon becoming the Beneficial
Owner of such additional shares of Common Stock, either such
Person is not then the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding or such Person is
exempted from the definition of "Acquiring Person" pursuant to
SECTION 1(A)(II) hereof and (y) no Person shall become an
"Acquiring Person" as the result of an acquisition of shares of
Common Stock by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares
of Common Stock beneficially owned by such Person to 15% or more
of the shares of Common Stock then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of
15% or more of the shares of Common Stock then outstanding by
reason of such share acquisitions by the Company and shall
thereafter become the Beneficial Owner of any additional shares
of Common Stock (other than pursuant to a dividend or
distribution paid or made by the Company on the outstanding
Common Stock in shares of Common Stock or pursuant to a split or
subdivision of the outstanding Common Stock), then such Person
shall be deemed to be an "Acquiring Person" unless, upon becoming
the Beneficial Owner of such additional shares of Common Stock,
either such Person is not then the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding or such
Person is exempted from the definition of "Acquiring Person"
pursuant to SECTION 1(A)(II) hereof. For all purposes of this
Agreement, any calculation of the number of shares of Common
Stock outstanding at any particular time, including for purposes
of determining the particular percentage of such outstanding
shares of Common Stock 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 hereof.
(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 Exchange Act, as in effect on the date
hereof.
2
<PAGE>
(c) A Person shall be deemed the "Beneficial Owner" of, shall be
deemed to have "Beneficial Ownership" 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, directly or indirectly, within the
meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange
Act as in effect on the date hereof;
(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, warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own, (x)
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, (y) securities which such Person
has a right to acquire upon the exercise of Rights at any time prior to the time
that any Person becomes an Acquiring Person or (z) securities issuable upon the
exercise of Rights from and after the time that any Person becomes an Acquiring
Person if such Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to SECTION
3(A) or SECTION 22 hereof ("Original Rights") or pursuant to SECTION 11(I) or
SECTION 11(N) with respect to an adjustment to Original Rights; 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 by reason of such agreement, arrangement or
understanding 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 and with respect to 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)) or disposing of such securities of the Company;
provided, however, that no Person who is an officer, director or employee of an
Exempt Person shall be deemed, solely by reason of such Person's status or
authority as such, to be the "Beneficial Owner" of, to have "Beneficial
Ownership" of or to "beneficially own" any securities that are "beneficially
owned" (as defined in this SECTION 1(C)), including, without limitation, in a
fiduciary capacity, by an Exempt Person or by any other such officer, director
or employee of an Exempt Person.
3
<PAGE>
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of
New York, or the city in which the principal office of the
Rights Agent is located, 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.,
Dallas, Texas time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 p.m.,
Dallas, Texas time, on the next succeeding Business Day.
(f) "Common Stock" when used with reference to the Company shall
mean the Common Stock, presently par value $.02 per share, of
the Company. "Common Stock" when used with reference to any
Person other than the Company shall mean the common stock (or,
in the case of an unincorporated entity, the equivalent 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) "Common Stock Equivalents" shall have the meaning set forth in
SECTION 11(A)(III) hereof.
(h) "Current Value" shall have the meaning set forth in SECTION
11(A)(III) hereof.
(i) "Distribution Date" shall have the meaning set forth in
SECTION 3 hereof.
(j) "Equivalent Preferred Shares" shall have the meaning set forth
in SECTION 11(B) hereof.
(k) "Exempt Person" shall mean the Company or any Subsidiary (as
such term is hereinafter defined) of the Company, in each case
including, without limitation, in its fiduciary capacity, or
any employee benefit plan of the Company or of any Subsidiary
of the Company, or any entity or trustee holding Common Stock
for or pursuant to the terms of any such plan or for the
purpose of funding any such plan or funding other employee
benefits for employees of the Company or of any Subsidiary of
the Company.
(l) "Exchange Ratio" shall have the meaning set forth in SECTION
24 hereof.
(m) "Expiration Date" shall have the meaning set forth in SECTION
7 hereof.
(n) "Flip-In Event" shall have the meaning set forth in SECTION
11(A)(II) hereof.
(o) "Final Expiration Date" shall have the meaning set forth in
SECTION 7 hereof.
4
<PAGE>
(p) "NASDAQ" shall mean The Nasdaq National Market.
(q) "New York Stock Exchange" shall mean the New York Stock
Exchange, Inc.
(r) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, trust or other entity,
and shall include any successor (by merger or otherwise) to
such entity.
(s) "Preferred Stock" shall mean the Series A Junior Participating
Preferred Stock, par value $.10 per share, of the Company
having the rights and preferences set forth in the Form of
Certificate of Designation attached to this Agreement as
EXHIBIT A.
(t) "Principal Party" shall have the meaning set forth in SECTION
13(B) hereof.
(u) "Redemption Date" shall have the meaning set forth in SECTION
7 hereof.
(v) "Redemption Price" shall have the meaning set forth in SECTION
3 hereof.
(w) "Right Certificate" shall have the meaning set forth in
SECTION 3 hereof.
(x) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(y) "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in SECTION 11(A)(III) hereof.
(z) "Spread" shall have the meaning set forth in SECTION
11(A)(III) hereof.
(aa) "Stock Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition, shall
include, without limitation, a report filed pursuant to
Section 13(d) of the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such, or
such earlier date as a majority of the Board of Directors
shall become aware of the existence of an Acquiring Person.
(bb) "Subsidiary" of any Person shall mean any corporation or other
entity of which securities or other ownership interests having
ordinary voting power sufficient to elect a majority of the
board of directors or other persons performing similar
functions are beneficially owned, directly or indirectly, by
such Person, and any corporation or other entity that is
otherwise controlled by such Person.
(cc) "Substitution Period" shall have the meaning set forth in
SECTION 11(A)(III) hereof.
(dd) "Summary of Rights" shall have the meaning set forth in
SECTION 3 hereof.
5
<PAGE>
(ee) "Trading Day" shall have the meaning set forth in SECTION
11(D)(I) hereof.
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 coRights Agents as it may deem
necessary or desirable.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the Close of Business on the earlier of (i) the tenth day
after the Stock 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 by any
Person (other than an Exempt Person) of, or of the first public
announcement of the intention of such Person (other than an
Exempt Person) to commence, a tender or exchange offer the
consummation of which would result in any Person (other than an
Exempt Person) becoming the Beneficial Owner of shares of Common
Stock aggregating 15% or more of the Common Stock then
outstanding (the earlier of such dates being herein referred to
as the "Distribution Date"; provided, however, that if either of
such dates occurs after the date of this Agreement and on or
prior to the Record Date, then the Distribution Date shall be the
Record Date), (x) the Rights will be evidenced (subject to the
provisions of SECTION 3(B) hereof) by the certificates for Common
Stock registered in the names of the holders thereof and not by
separate Right Certificates, and (y) the Rights will be
transferable only in connection with the transfer of Common
Stock. 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
Stock as of the close of business on the Distribution Date (other
than any Acquiring Person or any Associate or Affiliate of an
Acquiring Person), 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 (subject to adjustment as provided herein) for each share
of Common Stock so held. 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 a copy of a Summary of Rights to Purchase
Shares of Preferred Stock, in substantially the form of EXHIBIT C
hereto (the "Summary of Rights"), by first-class, postage-
prepaid mail, to each record holder of Common Stock as of the
Close of Business on the Record Date (other than any Acquiring
Person or any Associate or Affiliate of any Acquiring Person), at
the address of such holder shown on the records of the Company.
With respect to certificates for Common Stock outstanding as of
the Record Date, until the Distribution Date, the Rights will be
evidenced by such
6
<PAGE>
certificates registered in the names of the holders thereof
together with the Summary of Rights. Until the Distribution
Date (or, if earlier, the Expiration Date), the surrender for
transfer of any certificate for Common Stock outstanding on
the Record Date, with or without a copy of the Summary of
Rights, shall also constitute the transfer of the Rights
associated with the Common Stock represented thereby.
(c) Certificates issued for Common Stock (including, without
limitation, upon transfer of outstanding Common Stock,
disposition of Common Stock out of treasury stock or issuance
or reissuance of Common Stock out of authorized but unissued
shares) after the Record Date but prior to the earlier of the
Distribution Date and the 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 ("Rights") as set forth in a Rights
Agreement between DALLAS SEMICONDUCTOR CORPORATION (the
"Company") and CHASEMELLON SHAREHOLDER SERVICES, L.L.C., as
Rights Agent, dated as of September 10, 1999, as the same may
be amended from time to time (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and
a copy of which is on file at the principal executive offices
of the Company. Under certain circumstances, as set forth in
the Rights Agreement such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights Agreement, Rights
owned by or transferred to any Person who is or becomes an
Acquiring Person (as defined in the Rights Agreement) and
certain transferees thereof will become null and void and will
no longer be transferable.
With respect to such certificates containing the foregoing legend, until the
Distribution Date the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby. If the Company purchases or otherwise acquires
any Common Stock after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Stock shall be deemed canceled and retired so
that the Company shall not be entitled to exercise any Rights associated with
the Common Stock that are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.
7
<PAGE>
SECTION 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially in the form set forth in 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 interdealer quotation system on which the Rights may from time to
time be listed or quoted, or to conform to usage. Subject to the provisions of
SECTIONS 11, 13 and 22 hereof, the Right Certificates shall entitle the holders
thereof to purchase such number of one one- thousandths of a share of Preferred
Stock as shall be set forth therein at the price per one one-thousandth of a
share of Preferred Stock set forth therein (the "Purchase Price"), but the
number of such one one-thousandths of a share of Preferred Stock and the
Purchase Price shall be subject to adjustment as provided herein.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the Company
by the President of the Company or any other duly authorized
officer, either manually or by facsimile signature, and shall be
attested by the 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.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at an office or agency 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.
8
<PAGE>
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of SECTIONS 7(E), 11(A)(II), 13 and 14
hereof, at any time after the Distribution Date and prior to the
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-thousandths of a
share of Preferred Stock 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 or
agency of the Rights Agent designated for such purpose. Thereupon
the Rights Agent shall 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.
(b) Subject to the provisions of SECTION 11(A)(II) hereof, at any
time after the Distribution Date and prior to the Expiration
Date, 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
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 make and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS, PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the
registered holder of any Right Certificate may, subject to
SECTION 11(A)(II) hereof and except as otherwise provided herein,
exercise the Rights evidenced thereby in whole or in part 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 or agency of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase
Price with respect to the total number of one one-thousandths of
a share of Preferred Stock (or other securities, cash or other
assets, as the case may be) as to which the Rights are exercised,
at any time that is both after the Distribution Date and prior to
the time (the "Expiration Date") that is the earliest of (i) the
Close of Business on September 9,
9
<PAGE>
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 shall be initially $250 for each one
one-thousandth of a share of Preferred Stock purchasable upon the
exercise of a Right. The Purchase Price and the number of one
one-thousandths of a share of Preferred Stock or other securities
or property to be acquired upon exercise of a Right shall be
subject to adjustment from time to time as provided in SECTIONS
11 and 13 hereof and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) of this
SECTION 7.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of
election to purchase duly executed, accompanied by payment of the
aggregate Purchase Price for the shares of Preferred Stock 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, in cash or by certified check,
cashier's check or money order payable to the order of the
Company, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Stock
certificates for the number of shares of Preferred Stock to be
purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B)
requisition from the depositary agent depositary receipts
representing interests in such number of one one-thousandths of a
share of Preferred Stock as are to be purchased (in which case
certificates for the Preferred Stock 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)
promptly 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, promptly deliver such cash to or
upon the order of the registered holder of such Right
Certificate.
(d) Except as otherwise provided herein, in case the registered
holder of any Right Certificate shall exercise less than all of
the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the exercisable 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) 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
10
<PAGE>
registered holder of Rights upon the occurrence of any
purported transfer or exercise of Rights pursuant to SECTION 6
hereof or this SECTION 7 unless such registered holder shall
have (i) completed and signed the Certificate contained in the
form of assignment or form of election to purchase set forth
on the reverse side of the Rights Certificate surrendered for
such transfer or exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) 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 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 SHARES OF PREFERRED STOCK.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued
shares of Preferred Stock or any shares of Preferred Stock held
in its treasury; the number of shares of Preferred Stock that
will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So long as the shares of Preferred Stock issuable upon the
exercise of Rights may be listed or admitted to trading on any
national securities exchange, or quoted on NASDAQ, 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 or admitted to trading on such exchange, or
quoted on NASDAQ, upon official notice of issuance upon such
exercise.
(c) From and after such time as the Rights become exercisable, the
Company shall use its best efforts, if then necessary to permit
the issuance of shares of Preferred Stock upon the exercise of
Rights, to register and qualify such shares of Preferred Stock
under the Securities Act and any applicable state securities or
"Blue Sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications
to become effective as soon as possible after such filing and
keep such registration and qualifications effective until the
earlier of the date as of which the Rights are no longer
exercisable for such securities and the Expiration Date. The
Company may temporarily suspend, for a period of time not to
exceed 90 days, the exercisability of the Rights in order to
prepare and file a registration statement under
11
<PAGE>
the Securities Act and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. Notwithstanding
any provision of this Agreement to the contrary, the Rights shall
not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained and
until a registration statement under the Securities Act (if
required) shall have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Preferred
Stock delivered upon exercise of Rights shall, at the time of
delivery of the certificates therefor (subject to payment of the
Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable shares.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and
charges that may be payable in respect of the issuance or
delivery of the Right Certificates or of any shares of Preferred
Stock upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax that 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 Stock in a name other than
that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or deliver
any certificates or depositary receipts for Preferred Stock upon
the exercise of any Rights until any such tax shall have been
paid (any such tax being payable by that 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.
SECTION 10. PREFERRED STOCK RECORD DATE. Each Person in whose name any
certificate for Preferred Stock is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the shares of
Preferred Stock represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Stock transfer books of the Company
are closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Stock transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Preferred Stock for which the
Rights shall be exercisable, including, without limitation, the right to vote or
to receive dividends or other distributions, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
12
<PAGE>
SECTION 11. ADJUSTMENT OF PURCHASE PRICE; NUMBER AND KIND OF SHARES AND
NUMBER OF RIGHTS. The Purchase Price, the number of shares of Preferred Stock or
other securities or property purchasable upon exercise of each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this SECTION 11.
(a) (i) If the Company shall at any time after the date of this
Agreement (A) declare and pay a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the
outstanding Preferred Stock, (C) combine the outstanding
Preferred Stock into a smaller number of shares of Preferred
Stock or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation),
except as otherwise provided in this SECTION 11(A), 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 that, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock
transfer books of the Company were open, the 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.
(ii) Subject to SECTION 24 of this Agreement, if any Person
becomes an Acquiring Person (the first occurrence of such event being referred
to hereinafter as the "Flip-In Event"), then (A) the Purchase Price shall be
adjusted to be the Purchase Price in effect immediately prior to the Flip-In
Event multiplied by the number of one one-thousandths of a share of Preferred
Stock for which a Right was exercisable immediately prior to such Flip-In Events
whether or not such Right was then exercisable, and (B) each holder of a Right,
except as otherwise provided in this SECTION 11(A)(II) and SECTION 11(A)(III)
hereof, shall thereafter have the right to receive, upon exercise thereof at a
price equal to the Purchase Price (as so adjusted), in accordance with the terms
of this Agreement and in lieu of shares of Preferred Stock, such number of
shares of Common Stock as shall equal the result obtained by dividing the
Purchase Price (as so adjusted) by 50% of the current per share market place of
the Common Stock (determined pursuant to SECTION 11(D) hereof) on the date of
such Flip- In Event; provided, however, that the Purchase Price (as so adjusted)
and the number of shares of Common Stock so receivable upon exercise of a Right
shall, following the Flip-In Event, be subject to further adjustment as
appropriate in accordance with SECTION 11(F) hereof. Notwithstanding anything in
this Agreement to the contrary, however, from and after the Flip-in-Event, any
Rights that are beneficially owned by (x) any Acquiring Person (or any Affiliate
or Associate of any Acquiring Person), (y) a transferee of any Acquiring Person
(or any such Affiliate or Associate) who becomes a transferee after the Flip-In
Event or (z) a transferee of any Acquiring Person (or any such Affiliate
13
<PAGE>
or Associate) who became a transferee prior to or concurrently with the Flip-In
Event pursuant to either (I) a transfer from the Acquiring Person to holders of
its equity securities or to any Person with whom it has any continuing
agreement, arrangement or understanding regarding the transferred Rights or (II)
a transfer that the Board of Directors has determined is part of the plan,
arrangement or understanding which has the purpose or effect of avoiding the
provisions of this paragraph and subsequent transferees of such Persons, shall
be void without any further action and any holder of such Rights shall
thereafter have no rights whatsoever with respect to such Rights under any
provision of this Agreement. The Company shall use all reasonable efforts to
ensure that the provisions of this SECTION 11(A)(II) 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. From and after
the Flip- In Event, no Right Certificate shall be issued pursuant to SECTION 3
or SECTION 6 hereof that represents Rights that are or have become void pursuant
to the provisions of this paragraph and any Right Certificate delivered to the
Rights Agent that represents Rights that are or have become void pursuant to the
provisions of this paragraph shall be canceled. From and after the occurrence of
an event specified in SECTION 13(A) hereof, any Rights that theretofore have not
been exercised pursuant to this SECTION 11(A)(II) shall thereafter be
exercisable only in accordance with SECTION 13 and not pursuant to this SECTION
11(A)(II).
(iii) The Company may at its option substitute for a share of
Common Stock issuable upon the exercise of Rights in accordance with the
foregoing subparagraph (ii) a number of shares of Preferred Stock or fraction
thereof such that the current per share market price of one share of Preferred
Stock multiplied by such number or fraction is equal to the current per share
market price of one share of Common Stock. If there shall not be sufficient
shares of Common Stock issued but not outstanding or authorized but unissued to
permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Board of Directors shall, to the extent permitted by
applicable law and any material agreements then in effect to which the Company
is a party (A) determine the excess (such excess, the "Spread") of (1) the value
of the shares of Common Stock issuable upon the exercise of a Right in
accordance with the foregoing subparagraph (ii) (the "Current Value") over (2)
the Purchase Price (as adjusted in accordance with the foregoing subparagraph
(ii)), and (B) with respect to each Right (other than Rights that have become
void pursuant to the foregoing subparagraph (ii)), make adequate provision to
substitute for the shares of Common Stock issuable in accordance with the
foregoing subparagraph (ii) upon exercise of the Right and payment of the
Purchase Price (as adjusted in accordance therewith), (1) cash, (2) a reduction
in such Purchase Price, (3) shares of Preferred Stock or other equity securities
of the Company (including, without limitation, shares or fractions of shares of
preferred stock that, by virtue of having dividend, voting and liquidation
rights substantially comparable to those of the shares of Common Stock, are
deemed in good faith by the Board of Directors to have substantially the same
value as the shares of Common Stock (such shares of Preferred Stock and shares
or fractions of shares of Preferred Stock are hereinafter referred to as "Common
Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or
(6) any combination of the foregoing, having a value that, when added to the
value of the shares of Common Stock issued upon exercise of such Right, shall
have an aggregate value equal to the Current Value (less the amount of any
reduction in such Purchase Price), where such
14
<PAGE>
aggregate value has been determined by the Board of Directors upon the advice of
a nationally recognized investment banking firm selected in good faith by the
Board of Directors; provided, however, that if the Company shall not make
adequate provision to deliver value pursuant to clause (B) above within thirty
(30) days following the Flip-In Event (the "Section 11(a)(ii) Trigger Date"),
then the Company shall be obligated to deliver, to the extent permitted by
applicable law and any material agreement then in effect to which the Company is
a party, upon the surrender for exercise of a Right and without requiring
payment of such Purchase Price, shares of Common Stock (to the extent
available), and then, if necessary, such number or fractions of shares of
Preferred Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If, upon the
occurrence of the Flip-In Event, the Board of Directors shall determine in good
faith that it is likely that sufficient additional shares of Common Stock could
be authorized for issuance upon exercise in full of the Rights, then, if the
Board of Directors so elects, the thirty (30) day period set forth above may be
extended to the extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such thirty (30) day
period, as it may be extended, is herein called the "Substitution Period"). To
the extent that the Company determines that some action need be taken pursuant
to the second and/or third sentence of this SECTION 11(A)(III), the Company (x)
shall provide, subject to SECTION 11(A)(II) hereof and the last sentence of this
SECTION 11(A)(III) hereof, that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of distribution to be
made pursuant to such second sentence and to determine the value thereof. Upon
any such suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect. For
purposes of this SECTION 11(A)(III), the value of the shares of Common Stock
shall be the current per share market price (as determined pursuant to SECTION
11(D)(I)) on the Section 11(a)(ii) Trigger Date and the per share or fractional
value of any "Common Stock Equivalent" shall be deemed to equal the current per
share market price of the Common Stock. The Board of Directors of the Company
may, but shall not be required to, establish procedures to allocate the right to
receive shares of Common Stock upon the exercise of the Rights among holders of
Rights pursuant to this SECTION 11(A)(III).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock
entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred
Stock (or shares having the same rights, privileges and
preferences as the Preferred Stock ("equivalent preferred
shares")) or securities convertible into Preferred Stock or
equivalent preferred shares at a price per share of Preferred
Stock or equivalent preferred shares (or having a conversion
price per share, if a security convertible into shares of
Preferred Stock or equivalent preferred shares) less than the
then current per share market price of the Preferred Stock
(determined pursuant to SECTION 11(D) hereof) 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
15
<PAGE>
such record date by a fraction, the numerator of which shall be
the number of shares of Preferred Stock and equivalent preferred
shares outstanding on such record date plus the number of shares
of Preferred Stock and equivalent preferred shares which the
aggregate offering price of the total number of shares of
Preferred Stock 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 shares of Preferred Stock and equivalent preferred
shares outstanding on such record date plus the number of
additional shares of Preferred Stock 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. Shares of
Preferred Stock and equivalent 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 if
such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price that 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 Stock (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 Stock) or subscription rights or warrants (excluding
those referred to in SECTION 11(B) hereof), the Purchase Price to
be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be
the then current per share market price of the Preferred Stock
(determined pursuant to SECTION 11(D) hereof) 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 share of Preferred Stock, and the denominator of which
shall be such current per share market price (determined pursuant
to SECTION 11(D) hereof) of the Preferred Stock; provided,
however, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company to be issued upon
exercise of one Right. Such adjustments shall be made
successively whenever
16
<PAGE>
such a record date is fixed; and if such distribution is not so
made, the Purchase Price shall again be adjusted to be the
Purchase Price that would then be in effect if such record date
had not been fixed.
(d) (i) Except as otherwise provided herein, 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, if 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, 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 by 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, if the Security is not listed or admitted
to trading on any national securities exchange, 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 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. 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, if the
Preferred Stock is publicly traded, the "current per share market
price" of the Preferred Stock shall be determined in accordance
with the method set forth in SECTION 11(D)(I). If the Preferred
Stock is not publicly traded but the Common Stock is publicly
traded, the "current per share market price" of the Preferred
Stock shall be conclusively deemed to be the current per share
market price of the Common Stock as determined pursuant to
SECTION 11(D)(I) multiplied by the then applicable Adjustment
Number (as defined in and determined in accordance with the
Certificate of Designation for the Preferred Stock).
17
<PAGE>
If neither the Common Stock nor the Preferred Stock is publicly 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 hundred-thousandth of a
share of Preferred Stock or one- hundredth of a share of Common
Stock or 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 that requires such adjustment or (ii) the Expiration
Date.
(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 the Preferred Stock, thereafter the Purchase Price and
the number of such other shares so receivable upon exercise of a
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 Stock contained in
SECTIONS 11(A), 11(B), 11(C), 11(E), 11(H), 11(I) and 11(M)
hereof, as applicable, and the provisions of SECTIONS 7, 9, 10,
13 and 14 hereof with respect to the Preferred Stock shall apply
on like terms, to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number
of one one-thousandths of a share of Preferred Stock purchasable
from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in SECTION 11(I), upon each adjustment of the Purchase Price as a
result of the calculations made in SECTIONS 11(B) and 11(C), each
Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at
the adjusted Purchase Price, that number of one one-thousandths
of a share of Preferred Stock (calculated to the nearest one
hundred-thousandth of a share of Preferred Stock) obtained by (i)
multiplying (x) the number of one one-thousandths of a share
purchasable upon the exercise of a Right immediately prior to
such adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii) dividing
the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
18
<PAGE>
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price pursuant to SECTIONS 11(B) or 11(C) hereof to
adjust the number of Rights, in substitution for any adjustment
in the number of one one-thousandths of a share of Preferred
Stock 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-thousandths of a
share of Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest one-hundredth)
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. Such 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 may, 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-thousandths of a share of Preferred Stock
issuable upon the exercise of a Right, the Right Certificates
theretofore and thereafter issued may continue to express the
Purchase Price and the number of one one-thousandths of a share
of Preferred Stock that were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the
fraction of Preferred Stock or other shares of capital stock
issuable upon exercise of a Right, the Company shall take any
corporate action that may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue
fully paid and nonassessable shares of Preferred Stock or other
such shares at such adjusted Purchase Price.
19
<PAGE>
(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 issuing to the holder of any Right
exercised after such record date the Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon
such exercise over and above the Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall
deliver to such holder a due -------- ------- bill or other
appropriate instrument evidencing such holder's right to receive
such additional shares upon the occurrence of the event requiring
such adjustment.
(m) Anything in this SECTION 11 to the contrary notwithstanding, the
Company shall be entitled to make such adjustments 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 Stock, issuance
wholly for cash of any shares of Preferred Stock at less than the
current market price, issuance wholly for cash of Preferred Stock
or securities which by their terms are convertible into or
exchangeable for Preferred Stock, dividends on Preferred Stock
payable in shares of Preferred Stock or issuance of rights,
options or warrants referred to hereinabove in SECTION 11(B),
hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such stockholders.
(n) Anything in this Agreement to the contrary notwithstanding, if at
anytime after the date of this Rights Agreement and prior to the
Distribution Date, the Company shall (i) declare and pay any
dividend on the Common Stock payable in Common Stock or (ii)
effect a subdivision, combination or consolidation of the Common
Stock (by reclassification or otherwise than by payment of a
dividend payable in Common Stock) into a greater or lesser number
of shares of Common Stock, then, in each such case, the number of
Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number
of Rights associated with each share of Common Stock immediately
prior to each event by a fraction, the numerator of which shall
be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of
such event.
(o) The Company agrees that, after the earlier of the Distribution
Date or the Stock Acquisition Date, it will not, except as
permitted by SECTION 23, 24 or 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is
taken it is
20
<PAGE>
reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be afforded
by the Rights.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in SECTION 11 or 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 Stock and the
Preferred Stock 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 (if
so required under 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 such adjustment unless and until it
shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) If, directly or indirectly, at any time after the Flip-In Event
(i) the Company shall consolidate with or shall merge into any
other Person, (ii) any Person shall merge with and into the
Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger,
all or part of the Common Stock shall be changed into or
exchanged for stock or other securities of any other Person (or
of the Company) or cash or any other property, or (iii) the
Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of
the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person (other than the Company or
one or more wholly owned Subsidiaries of the Company), then upon
the first occurrence of such event, proper provision shall be
made so that: (A) each holder of a Right (other than Rights that
have become void pursuant to SECTION 11(A)(II) hereof) shall
thereafter have the right to receive, upon the exercise thereof
at the Purchase Price (as theretofore adjusted in accordance with
SECTION 11(A)(II) hereof), in accordance with the terms of this
Agreement and in lieu of shares of Preferred Stock or Common
Stock of the Company, such number of validly authorized and
issued, fully paid, non- assessable and freely tradeable shares
of Common Stock of the Principal Party (as such term is
hereinafter defined), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall equal
the result obtained by dividing the Purchase Price (as
theretofore adjusted in accordance with SECTION 11(A)(II) hereof)
by 50% of the current per share market price of the Common Stock
of such Principal Party (determined pursuant to SECTION 11(D)
hereof) on the date of consummation of such consolidation,
merger, sale or transfer; provided, however, that the Purchase
Price (as theretofore adjusted in accordance with SECTION
11(A)(II) hereof) and the number of shares of Common Stock of
such Principal Party so receivable upon exercise of a Right shall
be subject to further adjustment as appropriate in accordance
with SECTION 11(F) hereof to reflect any events occurring in
respect of the Common
21
<PAGE>
Stock of such Principal Party after the occurrence of such
consolidation, merger, sale or transfer; (B) 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 Rights Agreement; (C)
the term "Company" shall thereafter be deemed to refer to such
Principal Party; and (D) such Principal Party shall take such
steps (including, but not limited to, the reservation of a
sufficient number of its shares of Common Stock in accordance
with SECTION 9 hereof) in connection with such consummation of
any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the shares of its Common Stock
thereafter deliverable upon the exercise of the Rights; provided,
however, that, upon the subsequent occurrence of any
consolidation, merger, sale or transfer of assets or other
extraordinary transaction in respect of such Principal Party,
each holder of a Right shall thereupon be entitled to receive,
upon exercise of a Right and payment of the Purchase Price as
provided in this SECTION 13(A), such cash, shares, rights,
warrants and other property that such holder would have been
entitled to receive had such holder, at the time of such
transaction, owned the Common Stock of the Principal Party
receivable upon the exercise of a Right pursuant to this SECTION
13(A), and such Principal Party shall take such steps (including,
but not limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights,
warrants and other property.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in (i) or (ii) of
the first sentence of SECTION 13(A) hereof: (A) the Person that is the issuer of
the securities into which the shares of Common Stock are converted in such
merger or consolidation, or, if there is more than one such issuer, the issuer
the shares of Common Stock of which have the greatest aggregate market value of
shares outstanding, or (B) if no securities are so issued, (x) the Person that
is the other party to the merger, if such Person survives said merger, or, if
there is more than one such Person, the Person the shares of Common Stock of
which have the greatest aggregate market value of shares outstanding or (y) if
the Person that is the other party to the merger does not survive the merger,
the Person that does survive the merger (including the Company if it survives)
or (z) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in (iii) of the
first sentence in SECTION 13(A) hereof, the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons is the
issuer of Common Stock having the greatest aggregate market value of shares
outstanding; provided, however, that in any such case described in the foregoing
clause (b)(i) or (b)(ii), if the Common Stock of such Person is not at such time
or has not
22
<PAGE>
been continuously over the preceding 12-month period registered under Section 12
of the Exchange Act, then (1) if such Person is a direct or indirect Subsidiary
of another Person the Common Stock of which is and has been so registered, the
term "Principal Party" shall refer to such other, or (2) if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Stock of
all of which is and has been so registered, the term "Principal Party" shall
refer to whichever of such Persons is the issuer of Common Stock having the
greatest aggregate market value of shares outstanding, or (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 clauses (1) and (2) above shall apply to each of the owners having an
interest in the venture as if the Person owned by the joint venture was a
Subsidiary of both or all of such joint venturers, and the Principal Party in
each such case shall bear the obligations set forth in this SECTION 13 in the
same ratio as its interest in such Person bears to the total of such interests.
(c) The Company shall not consummate any consolidation, merger, sale
or transfer referred to in SECTION 13(A) hereof unless prior
thereto the Company and the Principal Party involved therein
shall have executed and delivered to the Rights Agent an
agreement confirming that the requirements of SECTIONS 13(A) and
(B) hereof shall promptly be performed in accordance with their
terms and that such consolidation, merger, sale or transfer of
assets shall not result in a default by the Principal Party under
this Agreement as the same shall have been assumed by the
Principal Party pursuant to SECTIONS 13(A) and (B) hereof and
providing that, as soon as practicable after executing such
agreement pursuant to this SECTION 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Expiration Date and
similarly comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the New York Stock
Exchange or on another national securities exchange, to list or admit to trading
(or continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on the New York Stock Exchange or such securities
exchange, or, if the Common Stock of the Principal Party shall not be listed or
admitted to trading on the New York Stock Exchange or a national securities
exchange, to cause the Rights and the securities receivable upon exercise of the
Rights to be authorized for quotation on NASDAQ or on such other system then in
use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party that comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
23
<PAGE>
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the Principal Party subject
to purchase upon exercise of outstanding Rights.
(d) In case the Principal Party has a provision in any of its
authorized securities or in its certificate of incorporation or
by-laws or other instrument governing its corporate affairs,
which provision would have the effect of (i) causing such
Principal Party to issue (other than to holders of Rights
pursuant to this SECTION 13), in connection with, or as a
consequence of, the consummation of a transaction referred to in
this SECTION 13, shares of Common Stock or Common Stock
Equivalents of such Principal Party at less than the then current
market price per share thereof (determined pursuant to SECTION
11(D) hereof) or securities exercisable for, or convertible into,
Common Stock or Common Stock Equivalents of such Principal Party
at less than such then current market price, or (ii) providing
for any special payment, tax or similar provision in connection
with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of SECTION 13, then, in such event,
the Company hereby agrees with each holder of Rights that it
shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing
that the provision in question of such Principal Party shall have
been canceled, waived or amended, or that the authorized
securities shall be redeemed, so that the applicable provision
will have no effect in connection with, or as a consequence of,
the consummation of the proposed transaction.
(e) The Company covenants and agrees that it shall not, at any time
after the Flip-In Event, enter into any transaction of the type
described in clauses (i) through (iii) of SECTION 13(A) hereof if
(i) at the time of or immediately after such consolidation,
merger, sale, transfer or other transaction there are any rights,
warrants or other instruments or securities outstanding or
agreements in effect that would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the
Rights, (ii) prior to, simultaneously with or immediately after
such consolidation, merger, sale, transfer or other transaction,
the stockholders of the Person who constitutes, or would
constitute, the Principal Party for purposes of SECTION 13(B)
hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates or Associates or
(iii) the form or nature of organization of the Principal Party
would preclude or limit the exercisability of the Rights.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates that evidence fractional Rights
(except prior to the Distribution Date in accordance with SECTION
11(N) hereof). 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
24
<PAGE>
fraction of the current market value of a whole Right. For the
purposes of this SECTION 14(A), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the Rights are not listed
or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted
to trading on any national securities exchange, the 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
Stock (other than fractions that are integral multiples of one
one-thousandth of a share of Preferred Stock) or to distribute
certificates that evidence fractional shares of Preferred Stock
(other than fractions that are integral multiples of one
one-thousandth of a share of Preferred Stock) upon the exercise
or exchange of Rights. Interests in fractions of Preferred Stock
in integral multiples of one one-thousandth of a share of
Preferred Stock may, at the election of the Company be evidenced
by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it; provided,
however, that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges
and preferences to which they are entitled as beneficial owners
of the Preferred Stock represented by such depositary receipts.
In lieu of fractional shares of Preferred Stock that are not
integral multiples of one one-thousandth of a share of Preferred
Stock, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised or exchanged
as herein provided an amount in cash equal to the same fraction
of the current market value of a whole share of Preferred Stock
(as determined in accordance with SECTION 14(A) hereof) for the
Trading Day immediately prior to the date of such exercise or
exchange.
(c) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates that evidence
fractional shares of Common Stock upon the exercise or exchange
of Rights. In lieu of such fractional shares of Common Stock,
25
<PAGE>
the Company shall pay to the registered holder of the Right
Certificates with regard to which such fractional shares of
Common Stock would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of a whole share
of Common Stock (as determined in accordance with SECTION 14(A)
hereof) for the Trading Day immediately prior to the date of such
exercise or exchange.
(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 or exchange 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
SECTION 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), on his own behalf and for his own
benefit, may enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect to his
right to exercise the Rights evidenced by such Right Certificate (or, prior to
the Distribution Date, such Common Stock) in the manner provided therein and in
this Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office or agency of the Rights Agent
designated for such purpose, 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 Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Right Certificates or the Common Stock certificate made by anyone
other than the Company or the Rights
26
<PAGE>
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 Stock or any
other securities of the Company which may at any time be issuable on the
exercise or exchange 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 this Agreement), or to
receive dividends or subscription rights, or otherwise, until the Rights
evidenced by such Right Certificate shall have been exercised or exchanged in
accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Company also agrees
to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability or expense, incurred without 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 arising therefrom, directly or indirectly.
In no case will the Rights Agent be liable for special, indirect,
incidental or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights
Agent has been advised of the possibility of such damages.
(b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it
in connection with, its administration of this Agreement in
reliance upon any Right Certificate or certificate for the
Preferred Stock or Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in SECTION 20
hereof.
27
<PAGE>
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a
party, or any corporation succeeding to the stock transfer or
corporate trust powers of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto;
provided, however, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
SECTION 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any
of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates
either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in
its prior name or in its changed name and in all such cases such
Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and
in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the
28
<PAGE>
President and 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 provided for in SECTIONS 3, 11, 13, 23 and
24, 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 furnished pursuant to SECTION 12, 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 shares of Preferred Stock or
other securities to be issued pursuant to this Agreement or any
Right Certificate or as to whether any shares of Preferred Stock
or other securities 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 person reasonably believed by the Rights Agent
to be one of the President or the Secretary of the Company, and
to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any
action taken or suffered 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
29
<PAGE>
Company may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on and/or after which
such action shall be taken or such omission shall be effective.
The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified
in such application (which date shall not be less than five
Business Days after the date any officer of the Company actually
receives such application unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking
any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written
instructions in response to such application specifying the
action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained
in the form of assignment or the form of election to purchase set
forth on the reverse thereof, as the case may be, has not been
completed to certify the holder is not an Acquiring Person (or an
Affiliate or Associate thereof), the Rights Agent shall not take
any further action with respect to such requested exercise or
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
of the Common Stock or Preferred Stock by registered or certified mail, and,
following the Distribution Date, 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 of the
Common Stock or Preferred Stock by registered or certified mail, and, following
the Distribution Date, to the holder 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
30
<PAGE>
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 organized and doing business
under the laws of the United States or the laws of any state of the United
States or the District of Columbia, in good standing, having an office in the
State of Texas or the State of New York, 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) an affiliate of such corporation. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock or Preferred Stock, and, following
the Distribution Date, 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 forms
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 Stock following the Distribution Date and
prior to the Expiration Date, the Company may with respect to shares of Common
Stock so issued or sold pursuant to (i) the exercise of stock options, (ii)
under any employee plan or arrangement, (iii) upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company or (iv) a
contractual obligation of the Company, in each case existing prior to the
Distribution Date, issue Right Certificates representing the appropriate number
of Rights in connection with such issuance or sale.
SECTION 23. REDEMPTION.
(a) The Board of Directors of the Company may, at any time prior to
the Flip-In Event, 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 (the
redemption price being
31
<PAGE>
hereinafter referred to as the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board of Directors in
its sole discretion may establish. The Redemption Price shall be
payable, at the option of the Company, in cash, shares of Common
Stock, or such other form of consideration as the Board of
Directors shall determine.
(b) Immediately upon the action of the Board of Directors ordering
the redemption of the Rights pursuant to paragraph (a) of this
SECTION 23 (or at such later time as the Board of Directors may
establish for the effectiveness of such redemption), 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 (or such later time as the
Board of Directors may establish for the effectiveness of such
redemption), 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 Stock. Any notice which is
mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice
of redemption shall state the method by which the payment of the
Redemption Price will be made.
SECTION 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at any
time after the Flip- In Event, 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 Stock at an exchange ratio
of one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such amount per Right 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 an Acquiring Person shall
have become the Beneficial Owner of shares of Common Stock
aggregating 50% or more of the shares of Common Stock then
outstanding. From and after the occurrence of an event specified
in SECTION 13(A) hereof, any Rights that theretofore have not
been exchanged pursuant to this SECTION 24(A) shall thereafter be
exercisable only in accordance with SECTION 13 and may not be
exchanged pursuant to this SECTION 24(A). The exchange of the
Rights by the Board of Directors may be made effective at such
time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
32
<PAGE>
(b) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to paragraph (a) of this SECTION 24 and without any
further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of
Common Stock equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company shall
promptly mail a notice of any such exchange to all of the holders
of the Rights so exchanged at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice that 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
shares of Common Stock for Rights will be effected and, upon any
partial exchange, the number of Rights that will be exchanged.
Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights that have become void
pursuant to the provisions of SECTION 11(A)(II) hereof) held by
each holder of Rights.
(c) The Company may at its option substitute, and, if there shall not
be sufficient shares of Common Stock issued but not outstanding
or authorized but unissued to permit an exchange of Rights for
Common Stock as contemplated in accordance with this SECTION 24,
the Company shall substitute to the extent of such insufficiency,
for each share of Common Stock that would otherwise be issuable
upon exchange of a Right, a number of shares of Preferred Stock
or fraction thereof (or equivalent preferred shares, as such term
is defined in SECTION 11(B)) such that the current per share
market price (determined pursuant to SECTION 11(D) hereof) of one
share of Preferred Stock (or equivalent preferred share)
multiplied by such number or fraction is equal to the current per
share market price of one share of Common Stock (determined
pursuant to SECTION 11(D) hereof) as of the date of such
exchange.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall at any time after the earlier of the
Distribution Date or the Stock Acquisition Date propose (i) to
pay any dividend payable in stock of any class to the holders of
its Preferred Stock or to make any other distribution to the
holders of its Preferred Stock (other than a regular quarterly
cash dividend), (ii) to offer to the holders of its Preferred
Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, (iii) to effect
any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision or combination of
outstanding Preferred Stock), (iv) to effect the liquidation,
dissolution or winding up of the Company, or (v) to pay any
dividend on the Common Stock payable in Common Stock or to effect
a subdivision, combination or consolidation of the
33
<PAGE>
Common Stock (by reclassification or otherwise than by payment of
dividends in Common Stock), 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 purposes of such stock
dividend, or distribution of rights or warrants, or the date on
which such liquidation, dissolution or winding up is to take
place and the date of participation therein by the holders of the
Common Stock and/or Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 10 days prior
to the record date for determining holders of the Preferred Stock
for purposes of such action, and in the case of any such other
action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the
holders of the Common Stock and/or Preferred Stock, whichever
shall be the earlier.
(b) In case any event described in SECTION 11(A)(II) or SECTION 13
shall occur then the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate (or if
occurring prior to the Distribution Date, the holders of the
Common Stock) in accordance with SECTION 26 hereof, a notice of
the occurrence of such event, which notice shall describe such
event and the consequences of such event to holders of Rights
under SECTION 11(A)(II) and SECTION 13 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:
DALLAS SEMICONDUCTOR CORPORATION
4401 Beltwood Parkway
Dallas, Texas 75244
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:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
2323 Bryan Street, Suite 2300
Dallas, Texas 75201
Attention: Vice President
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
34
<PAGE>
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. Except as provided in the
penultimate sentence of this SECTION 27, for so long as the Rights are then
redeemable, the Company may in its sole and absolute discretion, and the Rights
Agent shall if the Company so directs, supplement or amend any provision of this
Agreement in any respect without the approval of any holders of the Rights. At
any time when the Rights are no longer redeemable, except as provided in the
penultimate sentence of this SECTION 27, the Company may, and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights in order to (i) cure any ambiguity, (ii)
correct or supplement any provision contained herein that may be defective or
inconsistent with any other provision herein, (iii) shorten or lengthen any time
period hereunder, or (iv) change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable; provided, however,
that no such supplement or amendment shall adversely affect the interests of the
holders of Rights as such (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person), and no such amendment may cause the Rights
again to become redeemable or cause the Agreement again to become amendable
other than in accordance with this sentence; further, provided, that this
Agreement may not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price. Upon
the delivery of a Certificate from an appropriate officer of the Company that
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.
SECTION 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Stock).
SECTION 30. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise the rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement and
35
<PAGE>
(ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including, without limitation, a determination
to redeem or not redeem the Rights or to amend this Agreement). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) that
are done or made by the Board of Directors of the Company in good faith, shall
(x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights, as such, and all other parties, and (y) not subject the
Board of Directors to any liability to the holders of the Rights.
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.
36
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
DALLAS SEMICONDUCTOR CORPORATION
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
CHASEMELLON SHAREHOLDER SERVICES,
L.L.C., AS RIGHTS AGENT,
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
37
<PAGE>
Exhibit A
---------
FORM OF
CERTIFICATE OF DESIGNATION
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
DALLAS SEMICONDUCTOR CORPORATION
Pursuant to Section 151 of the
Delaware General Corporation Law
DALLAS SEMICONDUCTOR CORPORATION, a corporation organized and existing
under the laws of the State of Delaware, in accordance with the provisions of
Section 103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in the Board of Directors in
accordance with the provisions of the Certificate of Incorporation of the said
Corporation, as amended, the said Board of Directors on May 20, 1999, adopted
the following resolution creating a series of shares of Preferred Stock
designated as "Series A Junior Participating Preferred Stock":
RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the provisions of
the Certificate of Incorporation, a series of Preferred Stock, par
value $.10 per share, of the Corporation be and hereby is created, and
that the designation and number of shares thereof and the voting and
other powers, preferences and relative, participating, optional or
other rights of the shares of such series and the qualifications,
limitations and restrictions thereof are as follows:
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
1. Designation and Amount. There shall be a series of Preferred Stock
that shall be designated as "Series A Junior Participating Preferred Stock," and
the number of shares constituting such series shall be 50,000. Such number of
shares may be increased or decreased by resolution of the Board of Directors;
provided, however, that no decrease shall reduce the number of shares of Series
A Junior Participating Preferred Stock to less than the number of shares then
issued and outstanding plus the number of shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Corporation.
A - 1
<PAGE>
2. Dividends and Distributions.
(A) Subject to the prior and superior right of the holders of
any shares of any class or series of stock of the Corporation ranking prior and
superior to the shares of Series A Junior Participating Preferred Stock with
respect to dividends, the holders of shares of Series A Junior Participating
Preferred Stock, 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 15th day of January, April, July and October,
in each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance, of a share or fraction of a share of Series A Junior
Participating Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the Adjustment Number (as defined below) times the aggregate per
share amount of all cash dividends, and the Adjustment Number 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, par value $.02 per share, of the
Corporation (the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Junior Participating Preferred Stock. The "Adjustment Number" shall initially be
1000. If the Corporation shall at any time after September 10, 1999 (the "Rights
Declaration Date"), (i) declare and pay any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Junior Participating Preferred Stock as provided in paragraph
(A) above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock).
(C) The Board of Directors may fix a record date for the
determination of holders of shares of Series A Junior Participating Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 60 days prior to the date fixed
for the payment thereof.
3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Each share of Series A Junior Participating Preferred
Stock shall entitle the holder thereof to a number of votes equal to the
Adjustment Number on all matters submitted to a vote of the stockholders of the
Corporation.
A - 2
<PAGE>
(B) Except as required by law and by SECTION 10 hereof,
holders of Series A Junior Participating Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the extent they
are entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred Stock as
provided in SECTION 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series
A Junior Participating Preferred Stock outstanding shall have been paid in full,
the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any
other distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Junior Participating Preferred Stock, except dividends paid ratably on the
Series A Junior Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled; or
(iii) purchase or otherwise acquire for considera-
tion any shares of Series A Junior Participating Preferred Stock, or any shares
of stock ranking on a parity with the Series A Junior Participating Preferred
Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of Series A
Junior Participating Preferred Stock, or to such holders and holders of any such
shares ranking on a parity therewith, upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this SECTION 4, purchase or otherwise acquire such shares at such time and in
such manner.
5. Reacquired Shares. Any shares of Series A Junior Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired promptly after the acquisition thereof. All such
shares shall upon their retirement become authorized
A - 3
<PAGE>
but unissued shares of Preferred Stock and may be reissued as part of a new
series of Preferred Stock to be created by resolution or resolutions of the
Board of Directors, subject to any conditions and restrictions on issuance set
forth herein.
6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation,
dissolution or winding up of the Corporation, voluntary or otherwise, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock unless, prior thereto, the holders
of shares of Series A Junior Participating Preferred Stock shall have received
an amount per share (the "Series A Liquidation Preference") equal to the greater
of (i) $1.00 plus an amount equal to accrued and unpaid dividends and
distributions thereon whether or not declared, to the date of such payment, or
(ii) the Adjustment Number times the per share amount of all cash and other
property to be distributed in respect of the Common Stock upon such liquidation,
dissolution or winding up of the Corporation.
(B) If, however, there are not sufficient assets available to
permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other classes and series of stock of the
Corporation, if any, that rank on a parity with the Series A Junior
Participating Preferred Stock in respect thereof, then the assets available for
such distribution shall be distributed ratably to the holders of the Series A
Junior Participating Preferred Stock and the holders of such parity shares in
proportion to their respective liquidation preferences.
(C) Neither the merger or consolidation of the Corporation
into or with another corporation nor the merger or consolidation of any other
corporation into or with the Corporation shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of this SECTION
6.
7. Consolidation, Merger, Etc. In case the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the
outstanding 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 Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share equal to the Adjustment
Number 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.
8. No Redemption. Shares of Series A Junior Participating Preferred
Stock shall not be subject to redemption by the Company.
9. Ranking. The Series A Junior Participating Preferred Stock shall
rank junior to all other series of the Preferred Stock as to the payment of
dividends, and as to the distribution of assets upon liquidation, dissolution or
winding up, unless the terms of any such series shall provide otherwise, and
shall rank senior to the Common Stock as to such matters.
A - 4
<PAGE>
10. Amendment. At any time that any shares of Series A Junior
Participating Preferred Stock are outstanding, the Certificate of Incorporation
of the Corporation shall not be amended in any manner that would materially
alter or change the powers, preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of two-thirds of the outstanding shares of
Series A Junior Participating Preferred Stock, voting separately as a class.
11. Fractional Shares. Series A Junior Participating Preferred Stock
may be issued in fractions of a share that shall entitle the holder, in
proportion to such holder's factional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series A Junior Participating Preferred Stock.
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
10th day of September, 1999.
DALLAS SEMICONDUCTOR CORPORATION
By: /s/ C.V. Prothro
-------------------------
Name: C.V. Prothro
Title: Chairman, President and
Chief Executive Officer
A - 5
<PAGE>
Exhibit B
Form of Right Certificate
Certificate No. R-__________ __________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 9, 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. UNDER CERTAIN CIRCUMSTANCES AS
SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR
TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO
LONGER BE TRANSFERABLE.
RIGHT CERTIFICATE
DALLAS SEMICONDUCTOR 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 September 10, 1999, as the same may be amended from time to time (the
"Rights Agreement"), between DALLAS SEMICONDUCTOR CORPORATION, a Delaware
corporation (the "Company"), and CHASEMELLON SHAREHOLDER SERVICES, L.L.C., as
Rights Agent (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., Dallas, Texas time, on September 9, 2009 at the office
or agency of the Rights Agent designated for such purpose, or of its successor
as Rights Agent, one one-thousandth of a fully paid non-assessable share of
Series A Junior Participating Preferred Stock, par value $.10 per share (the
"Preferred Stock"), of the Company at a purchase price of $250 per one
one-thousandth of a share of Preferred Stock (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-thousandths of a share of Preferred Stock
that may be purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of September 10,
1999, based on the Preferred Stock as constituted at such date. As provided in
the Rights Agreement, the Purchase Price, the number of one one- thousandths of
a share of Preferred Stock (or other securities or property) that may be
purchased upon the exercise of the Rights and the number of Rights evidenced by
this Right Certificate are subject to modification and adjustment upon the
happening of certain events.
B - 1
<PAGE>
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned office or agency of the Rights Agent. The
Company will mail to the holder of this Right Certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or agency 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 shares of Preferred Stock as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (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 $.02 per share, or shares of Preferred Stock.
No fractional shares of Preferred Stock or Common Stock will be issued
upon the exercise or exchange of any Right or Rights evidenced hereby (other
than fractions of Preferred Stock that are integral multiples of one
one-thousandth of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depository receipts), but in lieu thereof, a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise or exchange 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 or exchanged 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.
B - 2
<PAGE>
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of __________.
DALLAS SEMICONDUCTOR CORPORATION
By: /s/ C.V. Prothro
-------------------------
Name: C.V. Prothro
Title: Chairman of the Board,
President and Chief
Executive Officer
ATTEST:
Name:
-------------------------------------------
Title:
-------------------------------------------
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., AS RIGHTS AGENT
By:
-----------------------------------------------
Name:
-----------------------------------------------
Title:
-----------------------------------------------
B - 3
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED, _________________________ hereby sells, assigns and
transfers unto
-----------------------------------------------------------------
(Please print name and address of transferee)
- --------------------------------------------------------------------------------
Rights represented by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
_________________________, Attorney, to transfer said Rights on the books of the
within-named Company, with full power of substitution.
Dated:
-------------------------
----------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company, broker, dealer
or other eligible institution participating in a recognized signature guarantee
medallion program.
- --------------------------------------------------------------------------------
(To be completed)
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by, were not acquired by the
undersigned from, and are not being assigned to an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
----------------------------------------
Signature
B - 4
<PAGE>
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
To DALLAS SEMICONDUCTOR CORPORATION:
The undersigned hereby irrevocably elects to exercise _________ Rights
represented by this Right Certificate to purchase the shares of Preferred Stock
(or other securities or property) issuable upon the exercise of such Rights and
requests that certificates for such shares of Preferred Stock (or such other
securities) be issued in the name of:
- --------------------------------------------------------------------------------
(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 identification number
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
Dated:
-------------------------------
-----------------------------------
Signature
(Signature must conform to holder specified on Right Certificate)
Signature Guaranteed:
Signature must be guaranteed by a bank, trust company, broker, dealer
or other eligible institution participating in a recognized signature guarantee
medallion program.
B - 5
<PAGE>
Form of Reverse Side of Right Certificate - continued
- --------------------------------------------------------------------------------
(To be completed)
The undersigned certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by, and were not acquired by the
undersigned from, an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
---------------------------------------------
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.
If certification set forth above in the Form of Assignment or the Form
of Election to Purchase, as the case may be, is not completed, such Assignment
or Election to Purchase will not be honored.
B - 6
<PAGE>
Exhibit C
---------
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS
OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL
AND VOID AND WILL NO LONGER BE TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF PREFERRED STOCK OF
DALLAS SEMICONDUCTOR CORPORATION
The Board of Directors of DALLAS SEMICONDUCTOR CORPORATION (the
"Company") has declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $.02 per share,
of the Company (the "Common Stock"). The dividend is payable on September 21,
1999 (the "Record Date"), to the stockholders of record on that date. Each Right
entitles the registered holder to purchase from the Company one one-thousandth
of a share of Series A Junior Participating Preferred Stock, par value $.10 per
share, of the Company (the "Preferred Stock") at a price of $250 per one
one-thousandth of a share of Preferred Stock (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement dated as of September 10, 1999, as the same may be amended from time
to time (the "Rights Agreement"), between the Company and CHASEMELLON
SHAREHOLDER SERVICES, L.L.C., as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (with
certain exceptions, an "Acquiring Person") has acquired beneficial ownership of
15% or more of the outstanding shares of Common Stock 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 group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announcement of an intention
to make, a tender offer or exchange offer the consummation of which would result
in the beneficial ownership by a person or group of 15% or more of the
outstanding shares of Common Stock (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Common Stock certificates outstanding as of the Record Date, by such Common
Stock certificate together with a copy of this Summary of Rights.
The Rights Agreement provides that, until the Distribution Date (or
earlier expiration of the Rights), the Rights will be transferred with and only
with the Common Stock. Until the Distribution Date (or earlier expiration of the
Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuances of Common Stock will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
expiration of the Rights), the
C - 1
<PAGE>
surrender for transfer of any certificates for shares of Common Stock
outstanding as of the Record Date, even without such notation or a copy of this
Summary of Rights, will also constitute the transfer of the Rights associated
with the shares of Common Stock represented by such certificates. 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 Stock 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 September 9, 2009 (the "Final Expiration Date"), unless the Final
Expiration Date is advanced or extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of shares of Preferred Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) upon a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for or purchase Preferred Stock at a price, or
securities convertible into Preferred Stock with a conversion price, less than
the then-current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights is subject to adjustment upon the
occurrence of a stock dividend on the Common Stock payable in shares of Common
Stock or subdivisions, consolidations or combinations of the Common Stock
occurring, in any such case, prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights will
not be redeemable. Each share of Preferred Stock will be entitled, when, as and
if declared, to a dividend payment per share equal to an aggregate dividend of
1,000 times the dividend declared per share of Common Stock. Upon liquidation,
dissolution or winding up of the Company, the holders of the Preferred Stock
will be entitled to a minimum preferential payment of $1.00 per share (plus any
accrued but unpaid dividends) but will be entitled to an aggregate payment of
1,000 times the payment made per share of Common Stock. Each share of Preferred
Stock will have 1,000 votes, voting together with the Common Stock. Finally,
upon any merger, consolidation or other transaction in which outstanding shares
of Common Stock are converted or exchanged, each share of Preferred Stock will
be entitled to receive 1,000 times the amount received per share of Common
Stock. These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-thousandth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximately be
the value of one share of Common Stock.
C - 2
<PAGE>
If any person or group of affiliated or associated persons becomes an
Acquiring Person, each holder of a Right, other than Rights beneficially owned
by the Acquiring Person (which will thereupon become void), will thereafter have
the right to receive upon exercise of a Right that number of shares of Preferred
Stock having a market value of two times the exercise price of the Right.
If, after a person or group has become an Acquiring Person, 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, proper provisions will be
made so that each holder of a Right (other than Rights beneficially owned by an
Acquiring Person which will have become void) will thereafter have the right to
receive upon the exercise of a Right that number of shares of common stock of
the person with whom the Company has engaged in the foregoing transaction (or
its parent) that at the time of such transaction have a market value of two
times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and
prior to the earlier of one of the events described in the previous paragraphs
or the acquisition by such Acquiring Person of 50% or more of the outstanding
shares of Common Stock, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such Acquiring Person which will have become
void), in whole or in part, for shares of Common Stock or Preferred Stock (or a
series of the Company's preferred stock having equivalent rights, preferences
and privileges), at an exchange ratio of one share of Common Stock, or a
fractional share of Preferred Stock (or other preferred stock) equivalent in
value thereto, per Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock or Common Stock
will be issued (other than fractions of Preferred Stock that are integral
multiples of one one-thousandth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts), and in lieu
thereof an adjustment in cash will be made based on the current market price of
the Preferred Stock or the Common Stock.
At any time prior to the time an Acquiring Person becomes such, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
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.
For so long as the Rights are then redeemable, the Company may, except
with respect to the redemption price, amend the Rights Agreement in any manner.
After the Rights are no longer redeemable, the Company may, except with respect
to the redemption price, amend the Rights Agreement in any manner that does not
adversely affect the interests of holders of the Rights.
Until a Right is exercised or exchanged, 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.
C - 3
<PAGE>
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
September ___, 1999. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
as the same may be amended from time to time, which is hereby incorporated
herein by reference.
C - 4
