SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
AMENDMENT NO. 1 TO
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
CIRRUS LOGIC, INC.
------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 77-0024818
- --------------------------------------- -------------------------------
(State of incorporation or organization) (IRS Employer Identification No.)
3100 West Warren Avenue
Fremont, CA 94538
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
------------------- ------------------------------
None None
Securities to be registered pursuant to Section 12(g) of the Act:
PREFERRED SHARE PURCHASE RIGHTS
-------------------------------
(Title of Class)
<PAGE>
Item 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
Pursuant to a Preferred Shares Rights Agreement dated May 4,
1998 (the "Rights Agreement") between Cirrus Logic, Inc. (the "Company") and
BankBoston, N.A. as Rights Agent (the "Rights Agent"),the Company's Board of
Directors has declared a dividend of one right (a "Right") to purchase one
one-hundredth of a share of the Company's Series A Participating Preferred
Stock ("Series A Preferred") for each outstanding share of Common Stock, no
par value ("Common Shares"), of the Company. The dividend is payable on May 15,
1998 (the "Record Date") to shareholders of record as of the close of business
on that day. Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of Series A Preferred at an exercise price
of $60.00 (the "Purchase Price"), subject to adjustment.
The following summary of the principal terms of the Rights Agreement
is a general description only and is subject to the detailed terms and
conditions of the Rights Agreement. A copy of the Rights Agreement is
attached as Exhibit 1 to this Registration Statement and is incorporated
herein by reference.
Rights Evidenced by Common Share Certificates
The Rights will not be exercisable until the Distribution Date
(defined below). Certificates for the Rights ("Rights Certificates")
will not be sent to shareholders, and the Rights will attach to and
trade only together with the Common Shares. Accordingly, Common Share
certificates outstanding on the Record Date will evidence the Rights
related thereto, and Common Share certificates issued after the Record
Date will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender or transfer of any
certificates for Common Shares, outstanding as of the Record Date, even
without notation or a copy of the Summary of Rights being attached
thereto, also will constitute the transfer of the Rights associated
with the Common Shares represented by such certificate.
Distribution Date
The Rights will separate from the Common Shares, Rights
Certificates will be issued and the Rights will become exercisable upon
the earlier of: (i) ten days following the date of the first public
announcement by the Company or an Acquiring Person (as defined below)
that an Acquiring Person has become such (the "Shares Acquisition
Date") and (ii) ten business days (or such later date as may be
determined by the Board of Directors) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer,
the consummation of which would result in a person or group becoming an
Acquiring Person. The earlier of such dates is referred to as the
"Distribution Date." A person or group of affiliated or associated
persons that beneficially owns, or has the right to acquire beneficial
ownership of, 15% or more of the outstanding Common Shares is referred
to as an "Acquiring Person."
Issuance of Rights Certificates; Expiration of Rights
As soon as practicable following the Distribution Date, separate
Rights Certificates will be mailed to holders of record of the Common
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<PAGE>
Shares as of the close of business on the Distribution Date and such
separate Rights Certificates alone will evidence the Rights from and
after the Distribution Date. The Rights will expire on the earliest of
(i) May 4, 2008 (the "Final Expiration Date") or (ii) redemption or
exchange of the Rights as described below.
Initial Exercise of the Rights
Following the Distribution Date, and until one of the further
events described below, holders of the Rights will be entitled to
receive, upon exercise and the payment of the Purchase Price, one one-
hundredth of a share of the Series A Preferred.
Right to Buy Company Common Shares
Unless the Rights are earlier redeemed, in the event that a
person becomes an Acquiring Person (a "Triggering Event"), then proper
provision will be made so that each holder of a Right that has not
theretofore been exercised (other than Rights beneficially owned by the
Acquiring Person or any affiliate of the Acquiring Person, which will
thereafter be void) will thereafter have the right to receive, upon
exercise, Common Shares having a value equal to two times the Purchase
Price. In the event that the Company does not have sufficient Common
Shares available for all Rights to be exercised, or the Board decides
that such action is necessary and not contrary to the interests of
Rights holders, the Company may instead substitute cash, assets or
other securities for the Common Shares for which the Rights would have
been exercisable.
Right to Buy Acquiring Company Stock
Similarly, unless the Rights are earlier redeemed, in the event
that, after a Triggering Event, (i) the Company is acquired in a merger
or other business combination transaction, or (ii) 50% or more of the
Company's consolidated assets or earning power are sold (other than in
transactions in the ordinary course of business), proper provision must
be made so that each holder of a Right that has not theretofore been
exercised (other than Rights beneficially owned by the Acquiring Person
or any affiliate of the Acquiring Person, which will thereafter be
void) will thereafter have the right to receive, upon exercise, shares
of common stock of the acquiring company having a value equal to two
times the Purchase Price.
Exchange Provision
At any time after a Triggering Event and prior to the acquisition
by any person or entity of beneficial ownership of 50% or more of the
Company's outstanding Common Shares, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by the
Acquiring Person), in whole or in part, at an exchange ratio of one
Common Share per Right.
Redemption
At any time on or prior to the close of business on the earlier
of (i) the Shares Acquisition Date and (ii) the Final Expiration Date
of the Rights, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right.
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<PAGE>
Notwithstanding the foregoing, in the event that a majority of
the Board of Directors of the Company is elected by shareholder action
by written consent or at a special meeting of shareholders (a meeting
other than a regularly scheduled annual meeting), then until the
earlier to occur of (i) the 180th day following the effectiveness of
such election or (ii) the next regular annual meeting of shareholders
of the Company following the effectiveness of such election (including
any postponement or adjournment thereof), the Rights shall not be
redeemed if such redemption is reasonably likely to have the purpose or
effect of facilitating any Transaction (defined as merger,
consolidation or sale of assets or any acquisition of Common Shares
that would result in a person becoming an Acquiring Person) with an
Interested Person (defined as a person or group who (i) is or will
become an Acquiring Person if the Transaction were to be consummated,
and who (ii) was, is, or directly or indirectly proposed, nominated or
financially supported a director of the Company in office at the time
of consideration of the Transaction in question who was elected by
written consent of shareholders).
Adjustments to Prevent Dilution
The Purchase Price payable, the number of Rights, and the number
of Series A Preferred or Common Shares or other securities or property
issuable upon exercise of the Rights are subject to adjustment from
time to time in connection with the dilutive issuances by the Company
as set forth in the Rights Agreement. 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.
Cash Paid Instead of Issuing Fractional Shares
No fractional portion less than integral multiples of one Common
Share or one one-hundredth of a share of Series A Preferred will be
issued upon exercise of a Right and in lieu thereof, an adjustment in
cash will be made based on the market price of the security to be so
issued on the last trading date prior to the date of exercise.
No Shareholders' Rights Prior to Exercise
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company (other than any rights
resulting from such holder's ownership of Common Shares), including,
without limitation, the right to vote or to receive dividends.
Amendment of Rights Agreement
The provisions of the Rights Agreement may be supplemented or
amended by the Board of Directors in any manner prior to the
Distribution Date. After such date, the provisions of the Rights
Agreement may be amended by the Board in order to cure any ambiguity,
defect or inconsistency, to make changes that do not adversely affect
the interests of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to adjust the
time period governing redemption shall be made at such time as the
Rights are not redeemable.
In the event that a majority of the Board of Directors of the
Company is elected by shareholder action by written consent or at a
special meeting of shareholders (a meeting other than a regularly
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<PAGE>
scheduled annual meeting), then until the earlier to occur of (i) the
180th day following the effectiveness of such election or (ii) the next
regular annual meeting of shareholders of the Company following the
effectiveness of such election (including any postponement or
adjournment thereof), the Rights Agreement shall not be supplemented or
amended in any manner reasonably likely to have the purpose or effect
of facilitating a Transaction with an Interested Person.
Rights and Preferences of the Series A Preferred
Series A Preferred purchasable upon exercise of the Rights will
not be redeemable. Each share of Series A Preferred will be entitled
to an aggregate dividend of 100 times the dividend declared per Common
Share. In the event of liquidation, in preference to the holders of
shares of stock ranking junior to the Series A Preferred, the holders
of the Series A Preferred will be entitled to receive the greater of
(i) six thousand dollars ($6,000.00) per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, or (ii) 100 times the payment
made per share of Common Stock (the "Series A Liquidation Preference").
Each share of Series A Preferred will have 100 votes, voting together
with the Common Shares. These dividend, liquidation and voting rights
of the Series A Preferred are protected by customary anti-dilution
provisions.
Certain Anti-takeover Effects
The Rights approved by the Board are designed to protect and
maximize the value of the outstanding equity interests in the Company
in the event of an unsolicited attempt by an acquiror to take over the
Company, in a manner or on terms not approved by the Board of
Directors. Takeover attempts frequently include coercive tactics to
deprive the Company's Board of Directors and its shareholders of any
real opportunity to determine the destiny of the Company. The Rights
have been declared by the Board in order to deter such tactics,
including a gradual accumulation of shares in the open market of a 15%
or greater position to be followed by a merger or a partial or two-tier
tender offer that does not treat all shareholders equally. These
tactics unfairly pressure shareholders, squeeze them out of their
investment without giving them any real choice and deprive them of the
full value of their shares.
The Rights are not intended to prevent a takeover of the Company
and will not do so. The Rights may be redeemed by the Company at $0.01
per Right within ten days after the accumulation of 15% or more of the
Company's shares by a single acquiror or group. Accordingly, the Rights
should not interfere with any merger or business combination approved
by the Board of Directors.
Issuance of the Rights does not in any way weaken the financial
strength of the Company or interfere with its business plans. The
issuance of the Rights themselves has no dilutive effect, will not
affect reported earnings per share, should not be taxable to the
Company or to its shareholders, and will not change the way in which
the Company's shares are presently traded. The Company's Board of
Directors believes that the Rights represent a sound and reasonable
means of addressing the complex issues of corporate policy created by
the current takeover environment.
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<PAGE>
Item 2. EXHIBITS.
1. Amended and Restated Rights Agreement, dated as of
February 17, 1999 between Cirrus Logic, Inc. and
BankBoston, N.A., including the Certificate of
Determination, the form of Rights Certificate and the
Summary of Rights attached thereto as Exhibits A, B and
C, respectively
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<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized.
CIRRUS LOGIC, INC.
Date: February 26, 1999 /s/ Ron Shelton
----------------------
Signature of Authorized Signatory
Vice President & Chief Financial Officer
----------------------------------------
Print Name and Title
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<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. EXHIBIT
1 Amended and Restated Rights Agreement, dated as of February 17, 1999
between Cirrus Logic, Inc. and BankBoston, N.A., including the
Certificate of Determination, the form of Rights Certificate and the
Summary of Rights attached thereto as Exhibits A, B and C,
respectively
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<PAGE>
TABLE OF CONTENTS
Page
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent. 7
Section 3. Issuance of Rights Certificates 7
Section 4. Form of Rights Certificates 9
Section 5. Countersignature and Registration 10
Section 6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates 10
Section 7. Exercise of Rights; Exercise Price;
Expiration Date of Rights 11
Section 8. Cancellation and Destruction of Rights
Certificates 13
Section 9. Reservation and Availability of Preferred
Shares 13
Section 10. Record Date 15
Section 11. Adjustment of Exercise Price, Number of
Shares or Number of Rights 15
Section 12. Certificate of Adjusted Exercise Price or
Number of Shares 21
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power 22
Section 14. Fractional Rights and Fractional Shares 26
Section 15. Rights of Action 27
Section 16. Agreement of Rights Holders 27
Section 17. Rights Certificate Holder Not Deemed a
Shareholder 27
Section 18. Concerning the Rights Agent 28
Section 19. Merger or Consolidation or Change of Name
of Rights Agent 28
Section 20. Duties of Rights Agent 29
Section 21. Change of Rights Agent 31
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TABLE OF CONTENTS
Page
Section 22. Issuance of New Rights Certificates 31
Section 23. Redemption 32
Section 24. Exchange 33
Section 25. Notice of Certain Events 35
Section 26. Notices 35
Section 27. Supplements and Amendments 36
Section 28. Successors 37
Section 29. Determinations and Actions by the Board
of Directors, etc 37
Section 30. Benefits of this Agreement 37
Section 31. Severability 37
Section 32. Governing Law 37
Section 33. Counterparts 38
Section 34. Descriptive Headings 38
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<PAGE>
EXHIBIT 1
AMENDED AND RESTATED RIGHTS AGREEMENT
This Amended Agreement and Restated Rights Rights Agreement (the
"Agreement") dated as of February 17, 1999, between Cirrus Logic, Inc., a
Delaware corporation (the "Company"), and BankBoston, N.A. (the "Rights Agent").
On April 27, 1998 (the "Rights Dividend Declaration Date"), the Board
of Directors of the Company authorized and declared a dividend of one Preferred
Share Purchase Right (a "Right") for each Common Share (as hereinafter defined)
of the Company outstanding as of the Close of Business (as hereinafter defined)
on May 15, 1998 (the "Record Date"), each Right representing the right to
purchase one one-hundredth of a share of Series A Participating Preferred Stock
(as such number may be adjusted pursuant to the provisions of this Agreement),
having the Rights, preferences and privileges set forth in the form of
Certificate of Designation of Rights, Preferences and Privileges of Series A
Participating Preferred Stock attached hereto as Exhibit A, upon the terms and
subject to the conditions herein set forth, and further authorized and directed
the issuance of one Right (as such number may be adjusted pursuant to the
provisions of this Agreement) with respect to each Common Share 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), and in
certain circumstances after the Distribution Date.
On May 4, 1998, the Company and the Rights Agent entered into a Rights
Agreement which was declared effective by the United States Securities and
Exchange Commission on May 4, 1998.
The parties hereto wish to amend and restate said Rights Agreement
solely to reflect the Company's reincorporation in the State of Delaware. NOW,
THEREFORE, in consideration of the promises and the mutual agreements herein
set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
-------------------
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the Common Shares then outstanding, but
shall not include the Company, any Subsidiary of the Company or any employee
benefit plan of the Company or of any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall be deemed to be an Acquiring
Person as the result of an acquisition of Common Shares by the Company which,
by reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 15% or more of the
Common Shares of the Company then outstanding; provided, however, that if a
Person shall become the Beneficial Owner of 15% or more of the Common Shares
of the Company then outstanding by reason of share purchases by the Company
and shall, after such share purchases by the Company, become the Beneficial
Owner of any additional Common Shares of the Company (other than pursuant to a
dividend or distribution paid or made by
<PAGE>
the Company on the outstanding Common Shares in Common Shares or pursuant to a
split or subdivision of the outstanding Common Shares), then such Person shall
be deemed to be an Acquiring Person unless upon becoming the Beneficial Owner
of such additional Common Shares of the Company such Person does not
beneficially own 15% or more of the Common Shares of the Company then
outstanding. Notwithstanding the foregoing, (i) if the Company's Board of
Directors determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently (including, without limitation,
because (A) such Person was unaware that it beneficially owned a percentage
of the Common Shares that would otherwise cause such Person to be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), or (B) such Person was aware of the extent of the Common Shares
it beneficially owned but had no actual knowledge of the consequences of such
beneficial ownership under this Agreement) and without any intention of
changing or influencing control of the Company, and if such Person divested
or divests as promptly as practicable a sufficient number of Common Shares
so that such Person would no longer be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this paragraph (a), then such Person
shall not be deemed to be or to have become an "Acquiring Person" for any
purposes of this Agreement; and (ii) if, as of the date hereof, any Person
is the Beneficial Owner of 15% or more of the Common Shares outstanding,
such Person shall not be or become an "Acquiring Person," as defined pursuant
to the foregoing provisions of this paragraph (a), unless and until such time
as such Person shall become the Beneficial Owner of additional Common Shares
(other than pursuant to a dividend or distribution paid or made by the
Company on the outstanding Common Shares in Common Shares or pursuant to a
split or subdivision of the outstanding Common Shares), unless, upon becoming
the Beneficial Owner of such additional Common Shares, such Person is not
then the Beneficial Owner of 15% or more of the Common Shares then outstanding.
(b) "Adjustment Fraction" shall have the meaning set forth in
Section 11(a)(i) hereof.
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, for purposes of
Section 13d of the Exchange Act and Rule 13d-3 thereunder (or any
comparable or successor law or regulation);
(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
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respect to a bona fide public offering of securities), or upon the
exercise of conversion Rights, exchange Rights, Rights (other than the
Rights), warrants or options, or otherwise; provided, however, that a
Person shall not be deemed pursuant to this Section 1(d)(ii)(A) to be
the beneficial Owner of, or to beneficially own, (1) securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or (2)
securities which a Person or any of such Affiliates or Associates may
be deemed to have the right to pursuant to any merger or other
acquisition agreement between the and such Person (or one or more of
its Affiliates or Associates agreement has been approved by the Board
of Directors of the prior to there being an Acquiring Person; or (B)
the right to vote 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 under this Section 1(d)
(ii)(B) 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 of 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 (or any Affiliate or Associate thereof) with which
such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding, whether or not in writing
(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(d)(ii)(B)) or
disposing of any securities of the Company; provided, however, that
in no case shall an officer or director of the Company be deemed (x)
the Beneficial Owner of any securities beneficially owned by another
officer or director of the Company solely by reason of actions
undertaken by such persons in their capacity as officers or directors
of the Company or (y) the Beneficial Owner of securities held of record
by the trustee of any employee benefit plan of the Company or any
Subsidiary of the Company for the benefit of any employee of the
Company or any Subsidiary of the Company, other than the officer or
director, by reason of any influence that such officer or director may
have over the voting of the securities held in the plan.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in New York are authorized or
obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
New York time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York time, on the next succeeding
Business Day.
(g) "Common Shares" when used with reference to the Company shall
mean the shares of Common Stock of the Company, no par value. Common Shares
when used with reference to any Person other than the Company shall mean the
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capital stock (or equity interest) with the greatest voting power of such other
Person or, if such other Person is a Subsidiary of another Person, the Person
or Persons which ultimately control such first-mentioned Person.
(h) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(i) "Company" shall mean Cirrus Logic, Inc., a Delaware
corporation, subject to the terms of Section 13(a)(iii)(C) hereof.
(j) "Current Per Share Market Price" on any security (a "Security"
for purposes of this definition), for all computations other than those made
pursuant to Section 11(a)(iii) hereof, shall mean the average of the daily
closing prices per share of such Security for the thirty (30) consecutive
Trading Days immediately prior to such date, and for purposes of computations
made pursuant to Section 11(a)(iii) hereof, the Current Per Share Market Price
of any Security on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the ten (10) consecutive Trading
Days immediately prior to such date; provided, however, that in the event that
the Current Per Share Market Price of the Security is determined during a
period following the announcement by the issuer of such Security of (i) a
dividend or distribution on such Security payable in shares of such Security or
securities convertible into such shares or (ii) any subdivision, combination or
reclassification of such Security, and prior to the expiration of the
applicable thirty (30) Trading Day or ten (10) Trading Day period, after the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision,combination or reclassification, then, and in each such case, the
Current Per Share Market Price shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security. The closing price
for each day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted
to trading on the New York Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the last sale price
or, if such last sale price is not reported, 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. If on any such
date no market maker is making a market in the Security, the fair value of
such shares on such date as determined in good faith by the Board of
Directors of the Company shall be used. If the Preferred Shares are not
publicly traded, the Current Per Share Market Price of the Preferred Shares
shall be conclusively deemed to be the Current Per Share Market Price of the
Common Shares as determined pursuant to this Section 1(j), as appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof, multiplied by 100. If the Security is not
publicly held or so listed or traded, Current Per Share Market Price shall
mean the fair value per share as determined in good faith by the Board of
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Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(k) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(l) "Distribution Date" shall mean the earlier of (i) the Close of
Business on the tenth day after the Shares Acquisition Date (or, if the tenth
day after the Shares Acquisition Date occurs before the Record Date, the Close
of Business on the Record Date) or (ii) the Close of Business on the tenth
Business Day (or such later date as may be determined by action of the
Company's Board of Directors) after the date that a tender or exchange offer
by any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company, or
any Person or entity organized, appointed or established by the Company for
or pursuant to the terms of any such plan) is first published or sent or
given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if, assuming the successful consummation
thereof, such Person would be an Acquiring Person.
(m) "Equivalent Shares" shall mean Preferred Shares and any other
class or series of capital stock of the Company which is entitled to the same
Rights, privileges and preferences as the Preferred Shares.
(n) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(o) "Exchange Ratio" shall have the meaning set forth in
Section 24(a) hereof.
(p) "Exercise Price" shall have the meaning set forth in
Section 4(a) hereof.
(q) "Expiration Date" shall mean the earliest of (i) the Close of
Business on the Final Expiration Date, (ii) the Redemption Date, or (iii) the
time at which the Board of Directors orders the exchange of the Rights as
provided in Section 24 hereof.
(r) "Final Expiration Date" shall mean May 4, 2008.
(s) "Interested Person" with respect to a Transaction shall mean
any Person who (i) is or will become an Acquiring Person if the Transaction
were to be consummated or an Affiliate or Associate of such a Person, and (ii)
is, or directly or indirectly proposed, nominated or financially supported a
director of the Company in office at the time of consideration of the
Transaction in question who was elected by written consent of shareholders
or who was elected at a special meeting of shareholders (a meeting other
than a regularly scheduled annual meeting).
(t) "Nasdaq" shall mean the National Association of Securities
Dealers, Inc. Automated Quotations System.
(u) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
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(v) "Post-Event Transferee" shall have the meaning set forth in
Section 7(e) hereof.
(w) "Preferred Shares" shall mean shares of Series A Participating
Preferred Stock, no par value, of the Company.
(x) "Pre-Event Transferee" shall have the meaning set forth in
Section 7(e) hereof.
(y) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(z) "Record Date" shall have the meaning set forth in the recitals
at the beginning of this Agreement.
(aa) "Redemption Date" shall have the meaning set forth in
Section 23(a) hereof.
(bb) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(cc) "Rights Agent" shall mean BankBoston, N.A. or its successor or
replacement as provided in Sections 19 and 21 hereof.
(dd) "Rights Certificate" shall mean a certificate substantially in
the form attached hereto as Exhibit B.
(ee) "Rights Dividend Declaration Date" shall have the meaning set
forth in the recitals at the beginning of this Agreement.
(ff) "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(gg) "Section 13 Event" shall mean any event described in clause
(i), (ii) or (iii) of Section 13(a) hereof.
(hh) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(ii) "Shares 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) under the Exchange Act)
by the Company or an Acquiring Person that an Acquiring Person has become such;
provided that, if such Person is determined not to have become an Acquiring
Person pursuant to Section 1(a) hereof, then no Shares Acquisition Date shall
be deemed to have occurred.
(jj) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(kk) "Subsidiary" of any Person shall mean any corporation or other
entity of which an amount of voting securities sufficient to elect a majority
of the directors or Persons having similar authority of such corporation or
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other entity is beneficially owned, directly or indirectly, by such Person,
or any corporation or other entity otherwise controlled by such Person.
(ll) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(mm) "Summary of Rights" shall mean a summary of this Agreement
substantially in the form attached hereto as Exhibit C.
(nn) "Total Exercise Price" shall have the meaning set forth in
Section 4(a) hereof.
(oo) "Trading Day" shall mean a day on which the principal national
securities exchange on which a referenced security is listed or admitted to
trading is open for the transaction of business or, if a referenced security
is not listed or admitted to trading on any national securities exchange, a
Business Day.
(pp) "Transaction" shall mean any merger, consolidation or sale of
assets described in Section 13(a) hereof or any acquisition of Common Shares
which would result in a Person becoming an Acquiring Person.
(qq) A "Triggering Event" shall be deemed to have occurred upon any
Person becoming an Acquiring Person.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable upon ten (10) days prior written notice
to the Rights Agent. The Rights Agent shall have no duty to supervise, and
shall in no event be liable for, the acts or omissions of any such co-Rights
Agent.
Section 3. Issuance of Rights Certificates.
(a) Until the Distribution Date, (i) the Rights will be
evidenced (subject to the provisions of Sections 3(b) and 3(c) hereof) by
the certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be Rights Certificates)
and not by separate Rights Certificates and (ii) the right to receive Rights
Certificates will be transferable only in connection with the transfer of
Common Shares. Until the earlier of the Distribution Date or the Expiration
Date, the surrender for transfer of such certificates for Common Shares shall
also constitute the surrender for transfer of the Rights associated with the
Common Shares represented thereby. 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, postage-prepaid mail, to each
record holder of Common Shares as of the Close of Business on the Distribution
Date, at the address of such holder shown on the records of the Company, a
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Rights Certificate evidencing one Right for each Common Share so held,
subject to adjustment as provided herein. In the event that an adjustment in
the number of Rights per Common Share has been made pursuant to Section 11
hereof, then at the time of distribution of the Rights Certificates, the
Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates and may be transferred by the transfer of
the Rights Certificates as permitted hereby, separately and apart from any
transfer of Common Shares, and the holders of such Rights Certificates as
listed in the records of the Company or any transfer agent or registrar for
the Rights shall be the record holders thereof.
(b) On the Record Date or as soon as practicable thereafter,
the Company will send a copy of the Summary of Rights by first-class, postage-
prepaid mail, to each record holder of Common Shares as of the Close of
Business on the Record Date, at the address of such holder shown on the
records of the Company's transfer agent and registrar. With respect to
certificates for Common Shares outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates
registered in the names of the holders thereof 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 Shares 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 Shares
represented thereby.
(c) Unless the Board of Directors by resolution adopted at or
before the time of the issuance of any Common Shares specifies to the contrary,
Rights shall be issued in respect of all Common Shares that are issued after
the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date or, in certain circumstances provided in Section 22 hereof,
after the Distribution Date. Certificates representing such Common Shares
shall also be deemed to be certificates for Rights, and shall bear the
following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO
CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN CIRRUS LOGIC, INC.
AND BANKBOSTON, N.A. AS THE RIGHTS AGENT, DATED AS OF MAY 4, 1998, AS
AMENDED, (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 CIRRUS LOGIC, INC. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN
THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES
AND WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE. CIRRUS LOGIC, INC. WILL
MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT
CHARGE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN
CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD
BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT),
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<PAGE>
WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT
HOLDER, MAY BECOME NULL AND VOID.
With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration Date,
the Rights associated with the Common Shares represented by such certificates
shall be evidenced by such certificates alone, and the surrender for transfer
of any such certificate shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(d) In the event that the Company purchases or acquires any
Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated
with the Common Shares which are no longer outstanding.
Section 4. Form of Rights Certificates.
---------------------------
(a) The Rights Certificates (and the forms of election to purchase
Common Shares and of assignment to be printed on the reverse thereof) shall be
substantially in the form of 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 a national
market system, on which the Rights may from time to time be listed or
included, or to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Rights Certificates, whenever distributed, shall
be dated as of the Record Date (or in the case of Rights issued with respect
to Common Shares issued by the Company after the Record Date, as of the date
of issuance of such Common Shares) and on their face shall entitle the
holders thereof to purchase such number of one-hundredths of a Preferred
Share as shall be set forth therein at the price set forth therein (such
exercise price per one one-hundredth of a Preferred Share being hereinafter
referred to as the "Exercise Price" and the aggregate Exercise Price of all
Preferred Shares issuable upon exercise of one Right being hereinafter
referred to as the "Total Exercise Price"), but the number and type of
securities purchasable upon the exercise of each Right and the Exercise Price
shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which a majority of the
Company's Board of Directors has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect avoidance of
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<PAGE>
Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or adjustment of
any other Rights Certificate referred to in this sentence, shall contain
(to the extent feasible) the following legend:
THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.
Section 5. Countersignature and Registration.
---------------------------------
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its Chief
Financial Officer, its President or any Vice President, either manually or by
facsimile signature, and by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal (if any) or a facsimile thereof. The Rights
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 Rights Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the person who signed such
Rights Certificates on behalf of the Company had not ceased to be such
officer of the Company; and any Rights Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its office designated for such purposes, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face by each of
the Rights Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
------------------------------------------------------
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
- ----------------------------------------------------------------------
(a) Subject to the provisions of Sections 7(e), 14 and 24
hereof, at any time after the Close of Business on the Distribution Date, and
at or prior to the Close of Business on the Expiration Date, any Rights
Certificate or Rights Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Rights Certificates, entitling the
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<PAGE>
registered holder to purchase a like number of one-hundredths of a Preferred
Share (or, following a Triggering Event, other securities, cash or other
assets, as the case may be) as the Rights Certificate or Rights Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Rights Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any
such surrendered Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on
the reverse side of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to Sections
7(e), 14 and 24 hereof, countersign and deliver to the person entitled
thereto a Rights Certificate or Rights Certificates, as the case may be,
as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and,
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 Rights Certificate if mutilated, the
Company will make and deliver a new Rights Certificate of like tenor to the
Rights Agent for delivery to the registered holder in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration Date of
------------------------------------------------------
Rights.
------
(a) Subject to Sections 7(e), 23(b) and 24(b) hereof, the
registered holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date and prior to the Close of Business on the
Expiration Date by surrender of the Rights Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose, together
with payment of the Exercise Price for each one-hundredth of a Preferred
Share (or, following a Triggering Event, other securities, cash or other
assets as the case may be) as to which the Rights are exercised.
(b) The Exercise Price for each one-hundredth of a Preferred
Share issuable pursuant to the exercise of a Right shall initially be sixty
dollars ($60.00), shall be subject to adjustment from time to time as provided
in Sections 11 and 13 hereof and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Exercise Price for the number of one-hundredths
of a Preferred Share (or, following a Triggering Event, other securities, cash
or other assets as the case may be) to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Rights
Certificate in accordance with Section 9(e) hereof, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition from
any transfer agent of the Preferred Shares (or make available, if the Rights
Agent is the transfer agent for the Preferred Shares) a certificate or
certificates for the number of one-hundredths of a Preferred Share (or,
following a Triggering Event, other securities, cash or other assets as the
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<PAGE>
case may be) to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests or (B) if the Company shall
have elected to deposit the total number of one-hundredths of a Preferred Share
(or, following a Triggering Event, other securities, cash or other assets as
the case may be) issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary receipts
representing such number of one-hundredths of a Preferred Share (or, following
a Triggering Event, other securities, cash or other assets as the case may be)
as are to be purchased (in which case certificates for the Preferred Shares
(or, following a Triggering Event, other securities, cash or other assets as
the case may be) 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 11(a)(iii) hereof,
(iii) after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder and (iv) when appropriate, after receipt thereof, deliver such
cash to or upon the order of the registered holder of such Rights Certificate.
The payment of the Exercise Price (as such amount may be reduced (including
to zero) pursuant to Section 11(a)(iii) hereof) and an amount equal to any
applicable transfer tax required to be paid by the holder of such Rights
Certificate in accordance with Section 9(e) hereof, may be made in cash or
by certified bank check, cashier's check or bank draft payable to the order
of the Company. In the event that the Company is obligated to issue
securities of the Company other than Preferred Shares, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company
will make all arrangements necessary so that such other securities, cash
and/or other property are available for distribution by the Rights Agent,
if and when appropriate.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Rights
Certificate or to his or her duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such (a "Post-Event Transferee"), (iii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any continuing
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<PAGE>
agreement, arrangement or understanding regarding the transferred Rights or
(B) a transfer which a majority of the Company's Board of Directors has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e) (a "Pre-Event
Transferee") or (iv) any subsequent transferee receiving transferred Rights
from a Post-Event Transferee or a Pre-Event Transferee, either directly or
through one or more intermediate transferees, shall become null and void
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights
Certificates or to any other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or any of such Acquiring
Person's Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall, in addition to having complied with the requirements of
Section 7(a) above, have (i) completed and signed the certificate contained
in the form of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates.
---------------------------------------------------
All Rights 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 Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any Rights Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the Company, or
shall, at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Preferred Shares.
------------------------------------------------
(a) The Company covenants and agrees that it will use its best
efforts to cause to be reserved and kept available out of its authorized and
unissued Preferred Shares not reserved for another purpose (and, following the
occurrence of a Triggering Event, out of its authorized and unissued Common
Shares and/or other securities), the number of Preferred Shares (and, following
the occurrence of the Triggering Event, Common Shares and/or other securities)
that will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) If the Company shall hereafter list any of its Preferred
Shares on a national securities exchange, then so long as the Preferred Shares
(and, following the occurrence of a Triggering Event, Common Shares and/or
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<PAGE>
other securities) issuable and deliverable upon exercise of the Rights may be
listed on such exchange, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable (but only to the
extent that it is reasonably likely that the Rights will be exercised), all
shares reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence of
a Triggering Event in which the consideration to be delivered by the Company
upon exercise of the Rights is described in Section 11(a)(ii) or
Section 11(a)(iii) hereof, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act with respect to the securities purchasable upon exercise of
the Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities and
(B) the date of expiration of the Rights. The Company may temporarily
suspend, for a period not to exceed ninety (90) days after the date set forth
in clause (i) of the first sentence of this Section 9(c), the exercisability
of the Rights in order to prepare and file such registration statement and
permit it to become effective. Upon any such suspension, the Company shall
issue a public announcement stating, and notify the Rights Agent, that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement and notification to the Rights Agent at such time as the
suspension is no longer in effect. The Company will also take such action
as may be appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the
exercisability of the Rights. 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, or an exemption therefrom shall be available, and until a
registration statement has been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares (or other
securities of the Company) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such securities (subject to payment of the
Exercise 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
which may be payable in respect of the original issuance or delivery of the
Rights Certificates or of any Preferred Shares (or other securities of the
Company) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Rights Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares (or other securities of the Company) in a name other than that of, the
registered holder of the Rights Certificate evidencing Rights surrendered for
exercise or to issue or to deliver any certificates or depositary receipts
for Preferred Shares (or other securities of the Company) upon the exercise of
any Rights until any such tax shall have been paid (any such tax being payable
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by the holder of such Rights Certificate at the time of surrender) or until
it has been established to the Company's satisfaction that no such tax is due.
Section 10. Record Date. Each Person in whose name any
-----------
certificate for a number of one-hundredths of a Preferred Share (or other
securities of the Company) is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of Preferred Shares (or
other securities of the Company) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Total Exercise Price with
respect to which the Rights have been exercised (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the 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 transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Rights Certificate shall not be
entitled to any rights of a holder of Preferred Shares (or other securities
of the Company) for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or
to exercise any preemptive Rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Exercise Price, Number of Shares or Number of
-----------------------------------------------------------
Rights. The Exercise Price, the number and kind of shares or other property
- ------
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) Anything in this Agreement to the contrary notwithstanding, in
the event the Company shall at any time after the date of this Agreement (A)
declare a dividend on the Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares (by reverse stock split or otherwise) into a smaller number of
Preferred Shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), then, in each such event, except as
otherwise provided in this Section 11 and Section 7(e) hereof: (1) the
Exercise Price in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification
shall be adjusted so that the Exercise Price thereafter shall equal the
result obtained by dividing the Exercise Price in effect immediately prior to
such time by a fraction (the "Adjustment Fraction"), the numerator of which
shall be the total number of Preferred Shares (or shares of capital stock
issued in such reclassification of the Preferred Shares) outstanding
immediately following such time and the denominator of which shall be the
total number of Preferred Shares outstanding immediately prior to such time;
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 such Right; and (2)
the number of one-hundredths of a Preferred Share (or share of such other
capital stock) issuable upon the exercise of each Right shall equal the
number of one-hundredths of a Preferred Share (or share of such other capital
stock) as was issuable upon exercise of a Right immediately prior to the
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occurrence of the event described in clauses (A)-(D) of this Section 11(a)(i),
multiplied by the Adjustment Fraction; provided, however, that, no such
adjustment shall be made pursuant to this Section 11(a)(i) to the extent that
there shall have simultaneously occurred an event described in clause (A),
(B), (C) or (D) of Section 11(n) with a proportionate adjustment being made
thereunder. Each Common Share that shall become outstanding after an
adjustment has been made pursuant to this Section 11(a)(i) shall have
associated with it the number of Rights, exercisable at the Exercise Price
and for the number of one-hundredths of a Preferred Share (or shares of such
other capital stock) as one Common Share has associated with it immediately
following the adjustment made pursuant to this Section 11(a)(i).
(i) Subject to Section 24 of this Agreement, in the event a
Triggering Event shall have occurred, then promptly following such Triggering
Event each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive for each Right, upon exercise thereof in
accordance with the terms of this Agreement and payment of the Total Exercise
Price in effect immediately prior to the occurrence of the Triggering Event, in
lieu of a number of one-hundredths of a Preferred Share, such number of Common
Shares of the Company as shall equal the result obtained by multiplying the
Exercise Price in effect immediately prior to the occurrence of the Triggering
Event by the number of one-hundredths of a Preferred Share for which a Right
was exercisable (or would have been exercisable if the Distribution Date had
occurred) immediately prior to the first occurrence of a Triggering Event, and
dividing that product by 50% of the Current Per Share Market Price for Common
Shares on the date of occurrence of the Triggering Event; provided, however,
that the Exercise Price and the number of Common Shares of the Company so
receivable upon exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11(e) hereof to reflect any events
occurring in respect of the Common Shares of the Company after the occurrence
of the Triggering Event.
(ii) In lieu of issuing Common Shares in accordance with
Section 11(a)(ii) hereof, the Company may, if a majority of the Company's Board
of Directors determines that such action is necessary or appropriate and not
contrary to the interest of holders of Rights (and, in the event that the
number of Common Shares which are authorized by the Company's Articles of
Incorporation but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights are not sufficient to permit the exercise in
full of the Rights, or if any necessary regulatory approval for such issuance
has not been obtained by the Company, the Company shall): (A) determine the
excess of (1) the value of the Common Shares issuable upon the exercise of a
Right (the "Current Value") over (2) the Exercise Price (such excess, the
"Spread") and (B) with respect to each Right, make adequate provision to
substitute for such Common Shares, upon exercise of the Rights, (1) cash,
(2) a reduction in the Exercise Price, (3) other equity securities of the
Company (including, without limitation, shares or units of shares of any
series of preferred stock which a majority of the Company's Board of
Directors has deemed to have the same value as Common Shares (such shares
or units of shares of preferred stock are herein called "Common Stock
Equivalents")), except to the extent that the Company has not obtained any
necessary shareholder or regulatory approval for such issuance, (4) debt
securities of the Company, except to the extent that the Company has not
obtained any necessary shareholder or regulatory approval for such issuance,
(5) other assets or (6) any combination of the foregoing, having an aggregate
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value equal to the Current Value, where such aggregate value has been
determined by a majority of the Company's Board of Directors based upon the
advice of a nationally recognized investment banking firm selected by a
majority of the Company's Board of Directors; provided, however, if the
Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later of (x) the first
occurrence of a Triggering Event and (y) the date on which the Company's
right of redemption pursuant to Section 23(a) expires (the later of (x) and
(y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then
the Company shall be obligated to deliver, upon the surrender for exercise of
a Right and without requiring payment of the Exercise Price, Common Shares
(to the extent available), except to the extent that the Company has not
obtained any necessary shareholder or regulatory approval for such issuance,
and then, if necessary, cash, which shares and/or cash have an aggregate value
equal to the Spread. If a majority of the Company's Board of Directors shall
determine in good faith that it is likely that sufficient additional Common
Shares could be authorized for issuance upon exercise in full of the Rights
or that any necessary regulatory approval for such issuance will be obtained,
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 shareholder approval for
the authorization of such additional shares or take action to obtain such
regulatory approval (such period, as it may be extended, the "Substitution
Period"). To the extent that the Company determines that some action need
be taken pursuant to the first and/or second sentences of this
Section 11(a)(ii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights
and (y) may suspend the exercisability of the Rights until the expiration of
the Substitution Period in order to seek any authorization of additional
shares, to take any action to obtain any required regulatory approval and/or
to decide the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
For purposes of this Section 11(a)(ii), the value of the Common Shares shall
be the Current Per Share Market Price of the Common Shares on the
Section 11(a)(ii) Trigger Date and the value of any Common Stock Equivalent
shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall, at any time after the date of this
Agreement, fix a record date for the issuance of Rights, options or warrants to
all holders of Preferred Shares entitling such holders (for a period expiring
within forty-five (45) calendar days after such record date) to subscribe for
or purchase Preferred Shares or Equivalent Shares or securities convertible
into Preferred Shares or Equivalent Shares at a price per share (or having a
conversion price per share, if a security convertible into Preferred Shares or
Equivalent Shares) less than the then Current Per Share Market Price of the
Preferred Shares or Equivalent Shares on such record date, then, in each such
case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the number of
Preferred Shares and Equivalent Shares (if any) outstanding on such record
date, plus the number of Preferred Shares or Equivalent Shares, as the case
may be, which the aggregate offering price of the total number of Preferred
Shares or Equivalent Shares, as the case may be, to be offered or issued
(and/or the aggregate initial conversion price of the convertible securities
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<PAGE>
to be offered or issued) would purchase at such current market price, and the
denominator of which shall be the number of Preferred Shares and Equivalent
Shares (if any) outstanding on such record date, plus the number of additional
Preferred Shares or Equivalent Shares, as the case may be, 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 a majority
of the Company's Board of Directors, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Preferred Shares and Equivalent Shares
owned by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed, and in the event that such
Rights, options or warrants are not so issued, the Exercise Price shall be
adjusted to be the Exercise Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall, at any time after the date of this
Agreement, fix a record date for the making of a distribution to all holders of
the Preferred Shares or of any class or series of Equivalent Shares (including
any such distribution made in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend, if any,
or a dividend payable in Preferred Shares) or subscription Rights, options or
warrants (excluding those referred to in Section 11(b)), then, in each such
case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the Current
Per Share Market Price of a Preferred Share or an Equivalent Share on such
record date, less the fair market value per Preferred Share or Equivalent
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) of the portion of the cash, assets or evidences of indebtedness so to
be distributed or of such subscription Rights or warrants applicable to a
Preferred Share or Equivalent Share, as the case may be, and the denominator
of which shall be such Current Per Share Market Price of a Preferred Share
or Equivalent Share on such record date; 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. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that such
distribution is not so made, the Exercise Price shall be adjusted to be the
Exercise Price which would have been in effect if such record date had not
been fixed.
(d) Anything herein to the contrary notwithstanding, no adjustment
in the Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Exercise Price; provided, however,
that any adjustments which by reason of this Section 11(d) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest one-thousandth of a Common Share or other
share or one hundred-thousandth of a Preferred Share, as the case may be.
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Notwithstanding the first sentence of this Section 11(d), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three (3) years from the date of the transaction which requires such
adjustment or (ii) the Expiration Date.
(e) If as a result of an adjustment made pursuant to Section 11(a)
or 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right and, if required, the Exercise Price thereof, shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares contained in
Sections 11(a), 11(b), 11(c), 11(d), 11(g), 11(h), 11(i), 11(j), 11(k) and
11(l), and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Shares shall apply on like terms to any such other shares.
(f) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(g) Unless the Company shall have exercised its election as
provided in Section 11(h), upon each adjustment of the Exercise Price as a
result of the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Exercise Price,
that number of Preferred Shares (calculated to the nearest one hundred-
thousandth of a share) obtained by (i) multiplying (x) the number of Preferred
Shares covered by a Right immediately prior to this adjustment, by (y) the
Exercise Price in effect immediately prior to such adjustment of the Exercise
Price, and (ii) dividing the product so obtained by the Exercise Price in
effect immediately after such adjustment of the Exercise Price.
(h) The Company may elect on or after the date of any adjustment
of the Exercise Price as a result of the calculations made in Section 11(b) or
(c) to adjust the number of Rights, in substitution for any adjustment in the
number of Preferred Shares 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-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one hundred-thousandth) obtained
by dividing the Exercise Price in effect immediately prior to adjustment of
the Exercise Price by the Exercise Price in effect immediately after
adjustment of the Exercise Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Exercise
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(h), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Rights Certificates on such record date Rights Certificates evidencing,
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<PAGE>
subject to Section 14 hereof, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by
the Company, new Rights Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Exercise
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(i) Irrespective of any adjustment or change in the Exercise Price
or the number of Preferred Shares issuable upon the exercise of the Rights,
the Rights Certificates theretofore and thereafter issued may continue to
express the Exercise Price per one one-hundredth of a Preferred Share and
the number of one-hundredths of a Preferred Share which were expressed in the
initial Rights Certificates issued hereunder.
(j) Before taking any action that would cause an adjustment
reducing the Exercise Price below the par or stated value, if any, of the
number of one-hundredths of a Preferred Share issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue as fully paid and nonassessable shares such number of one-hundredths of
a Preferred Share at such adjusted Exercise Price.
(k) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
of the number of one-hundredths of a Preferred Share and other capital stock
or securities of the Company, if any, issuable upon such exercise over and
above the number of one-hundredths of a Preferred Share and other capital
stock or securities of the Company, if any, issuable upon such exercise on
the basis of the Exercise 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 (fractional or otherwise) upon the occurrence of the event
requiring such adjustment.
(l) Anything in this Section 11 to the contrary notwithstanding,
prior to the Distribution Date, the Company shall be entitled to make such
reductions in the Exercise 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 (i) consolidation
or subdivision of the Preferred or Common Shares, (ii) issuance wholly for
cash of any Preferred or Common Shares at less than the current market price,
(iii) issuance wholly for cash of Preferred or Common Shares or securities
which by their terms are convertible into or exchangeable for Preferred or
Common Shares, (iv) stock dividends or (v) issuance of Rights, options or
warrants referred to in this Section 11, hereafter made by the Company to
holders of its Preferred or Common Shares shall not be taxable to such
shareholders.
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<PAGE>
(m) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Sections 23, 24 or 27 hereof, take
(or permit to be taken) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
(n) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Common Shares payable in Common
Shares, (B) subdivide the outstanding Common Shares, (C) combine the
outstanding Common Shares (by reverse stock split or otherwise) into a smaller
number of Common Shares, or (D) issue any shares of its capital stock in a
reclassification of the Common Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), then, in each such event, except as
otherwise provided in this Section 11(a) and Section 7(e) hereof: (1) each
Common Share (or shares of capital stock issued in such reclassification of
the Common Shares) outstanding immediately following such time shall have
associated with it the number of Rights as were associated with one Common
Share immediately prior to the occurrence of the event described in clauses
(A)-(D) above; (2) the Exercise Price in effect at the time of the record date
for such dividend or of the effective date of such subdivision, combination
or reclassification shall be adjusted so that the Exercise Price thereafter
shall equal the result obtained by multiplying the Exercise Price in effect
immediately prior to such time by a fraction, the numerator of which shall be
the total number of Common Shares outstanding immediately prior to the event
described in clauses (A)-(D) above, and the denominator of which shall be the
total number of Common Shares outstanding immediately after such event;
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 such Right; and (3)
the number of one-hundredths of a Preferred Share (or shares of such other
capital stock) issuable upon the exercise of each Right outstanding after such
event shall equal the number of one-hundredths of a Preferred Share (or shares
of such other capital stock) as were issuable with respect to one Right
immediately prior to such event. Each Common Share that shall become
outstanding after an adjustment has been made pursuant to this Section 11(n)
shall have associated with it the number of Rights, exercisable at
the Exercise Price and for the number of one-hundredths of a Preferred Share
(or shares of such other capital stock) as one Common Share has associated
with it immediately following the adjustment made pursuant to this Section
11(n). If an event occurs which would require an adjustment under both this
Section 11(n) and Section 11(a)(ii) hereof, the adjustment provided for in
this Section 11(n) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
Section 12. Certificate of Adjusted Exercise Price or Number of Shares.
----------------------------------------------------------
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) file
with the Rights Agent and with each transfer agent for the Preferred Shares a
copy of such certificate and (c) mail a brief summary thereof to each holder
of a Rights Certificate in accordance with Section 26 hereof. Notwithstanding
the foregoing sentence, the failure of the Company to make such certification
or give such notice shall not affect the validity of such adjustment or the
force or effect of the requirement for such adjustment. The Rights Agent
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shall be fully protected in relying on any such certificate and on any
adjustment contained therein and shall not be deemed to have knowledge of
such adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
------------------------------------------------------
Earning Power.
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(a) In the event that, following a Triggering Event, directly
or indirectly:
(i) the Company shall consolidate with, or merge with and
into, any other Person (other than a wholly-owned Subsidiary of the
Company in a transaction the principal purpose of which is to change
the state of incorporation of the Company and which complies with
Section 11(m), 11(n) hereof);
(ii) any Person shall consolidate with the Company, or merge
with and into the Company and the Company shall be the continuing or
surviving corporation of such consolidation or merger and, in
connection with such merger, all or part of the Common Shares shall be
changed into or exchanged for stock or other securities of any other
person (or of the Company); 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 or Persons (other than the Company or
one or more of its wholly-owned Subsidiaries in one or more
transactions, each of which individually (and together) complies with
Section 11(m) hereof), then, concurrent with and in each such case,
(A) each holder of a Right (except as provided in
Section hereof) shall thereafter have the right to receive,
upon the exercise thereof at a price equal to the Total
Exercise Price applicable immediately prior to the occurrence
of the Section 13 Event in accordance with the terms of this
Agreement, such number of validly authorized and issued,
fully paid, nonassessable and freely tradeable Common Shares
of the Principal Party (as hereinafter defined), free of any
liens, encumbrances, Rights of first refusal or other adverse
claims, as shall be equal to the result obtained by dividing
such Total Exercise Price by 50% of the Current Per Share
Market Price of the Common Shares of such Principal Party on
the date of consummation of such Section 13 Event, provided,
however, that the Exercise Price and the number of Common
Shares of such Principal Party so receivable upon exercise of
a Right shall be subject to further adjustment as appropriate
in accordance with Section 11(e) hereof;
(B) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this
Agreement;
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<PAGE>
(C) the term "Company" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended
that the provisions of Section 11 hereof shall apply only to
such Principal Party following the first occurrence of a
Section 13 Event;
(D) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient
number of its Common Shares) in connection with the
consummation of any such transaction as may be necessary to
ensure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its
Common Shares thereafter deliverable upon the exercise of the
Rights; and
(E) 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 Total Exercise
Price as provided in this Section 13(a), such cash, shares,
Rights, warrants and other property which such holder would
have been entitled to receive had such holder, at the time of
such transaction, owned the Common Shares of the Principal
Party receivable upon the exercise of such 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.
(F) For purposes hereof, the "earning power" of the
Company and its Subsidiaries shall be determined in good faith
by the Company's Board of Directors on the basis of the
operating earnings of each business operated by the Company
and its Subsidiaries during the three fiscal years preceding
the date of such determination (or, in the case of any
business not operated by the Company or any Subsidiary during
three full fiscal years preceding such date, during the period
such business was operated by the Company or any Subsidiary).
(b) For purposes of this Agreement, the term "Principal Party"
shall mean:
(i) in the case of any transaction described in clause (i)
or (ii) of Section 13(a) hereof: (A) the Person that is the issuer of
the securities into which the Common Shares are converted in such
merger or consolidation, or, if there is more than one such issuer,
the issuer the Common Shares 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 Common Shares 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
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(ii) in the case of any transaction described in clause
(iii) of Section 13(a) hereof, the Person that is the party receiving
the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if more than one
Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power so transferred and each
such portion would, were it not for the other equal portions,
constitute the greatest 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 Shares 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 Shares of such Person are not at such time or
have not 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 Shares of which are and have been so
registered, the term "Principal Party" shall refer to such other Person, or (2)
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Shares of which are and have been so registered, the term "Principal
Party" shall refer to whichever of such Persons is the issuer of Common Shares
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 in the same ratio as its interest in such Person bears to the total
of such interests.
(c) The Company shall not consummate any Section 13 Event unless
the Principal Party shall have a sufficient number of authorized Common Shares
that have not been issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless prior thereto
the Company and such issuer shall have executed and delivered to the Rights
Agent a supplemental agreement confirming that such Principal Party shall, upon
consummation of such Section 13 Event, assume this Agreement in accordance with
Sections 13(a) and 13(b) hereof, that all Rights of first refusal or preemptive
Rights in respect of the issuance of Common Shares of such Principal Party upon
exercise of outstanding Rights have been waived, that there are no Rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights and that such transaction shall not result in a default by such
Principal Party under this Agreement, and further providing that, as soon as
practicable after the date of such Section 13 Event, such Principal Party will:
(i) prepare and file a registration statement under the
Securities Act 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
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Securities Act) until the Expiration Date, and similarly comply with
applicable state securities laws;
(ii) use its best efforts to list (or continue the listing
of) the Rights and the securities purchasable upon exercise of the
Rights on a national securities exchange or to meet the eligibility
requirements for quotation on Nasdaq and list (or continue the listing
of) the Rights and the securities purchasable upon exercise of the
Rights on Nasdaq; and
(iii) deliver to holders of the Rights historical financial
statements for such Principal Party which comply in all respects with
the requirements for registration on Form 10 (or any successor form)
under the Exchange Act.
In the event that at any time after the occurrence of a Triggering
Event some or all of the Rights shall not have been exercised at the time of a
transaction described in this Section 13, the Rights which have not theretofore
been exercised shall thereafter be exercisable in the manner described in
Section 13(a) (without taking into account any prior adjustment required by
Section 11:(a)(ii)).
(d) In case the "Principal Party" for purposes of Section 13(b)
hereof has provision in any of its authorized securities or in its Articles 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 Section 13 hereof), in
connection with, or as a consequence of, the consummation of a Section 13
Event, Common Shares or Equivalent Shares of such Principal arty at less than
the then Current Per Share Market Price thereof or securities exercisable for,
or convertible into, Common Shares or Equivalent Shares of such Principal
Party at less than such then Current Per Share Market Price, or (ii) providing
for any special payment, tax or similar provision in connection with the
issuance of the Common Shares of such Principal Party pursuant to the
provisions of Section 13 hereof, 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 Distribution Date, effect or permit to occur any Section 13
Event, if (i) at the time or immediately after such Section 13 Event there are
any Rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights, (ii) prior to,
simultaneously with or immediately after such Section 13 Event, the
shareholders 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.
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(f) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of
Rights or to distribute Rights Certificates which evidence fractional Rights.
In lieu of such fractional Rights, there shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of
the current market value of a whole Right. For 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, as determined pursuant
to the second sentence of Section 1(j) hereof.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions that are integral multiples of one one-
hundredth of a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
that are integral multiples of one one-hundredth of a Preferred Share).
Interests in fractions of Preferred Shares in integral multiples of one one-
hundredth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it; provided, that such
agreement shall provide that the holders of such depositary receipts shall
have all the Rights, privileges and preferences to which they are entitled
as beneficial owners of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not integral
multiples of one one-hundredth of a Preferred Share, the Company shall pay to
the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of
the current market value of a Preferred Share. For purposes of this Section
14(b), the current market value of a Preferred Share shall be one hundred
times the closing price of a Common Share (as determined pursuant to the
second sentence of Section 1(j) hereof) for the Trading Day immediately prior
to the date of such exercise.
(c) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares upon the exercise or exchange of Rights. In lieu of such fractional
Common Shares, the Company shall pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of a
Common Share. For purposes of this Section 14(c), the current market value
of a Common Share shall be the closing price of a Common Share (as determined
pursuant to the second sentence of Section 1(j) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Right
expressly waives his or her right to receive any fractional Rights or any
fractional shares (other than fractions that are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of a Right.
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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
Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common Shares), may,
in his or her own behalf and for his or her own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his or her right to exercise the
Rights evidenced by such Rights Certificate in the manner provided in such
Rights Certificate and in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at
law for any breach of this Agreement and 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 Rights Holders. Every holder of a Right, by
---------------------------
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed; and
(c) subject to Sections 6(a) and 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name the Rights
Certificate (or, prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
the Rights Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
Section 17. Rights Certificate Holder Not Deemed a Shareholder.
--------------------------------------------------
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose to be the holder of the
Preferred Shares or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed
to confer upon the holder of any Rights Certificate, as such, any of the
Rights of a shareholder of the Company or any right to vote for the election
of directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting shareholders (except as
provided in Section 25 hereof), or to receive dividends or subscription
Rights, or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions hereof.
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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 in the premises. In no event will
the Rights Agent be liable for special, indirect, incidental or consequential
loss or damage of any kind whatsoever, even if the Rights Agent has been
advised of the possibility of such loss or damage.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
Rights Certificate or certificate for the Preferred Shares or Common Shares or
for other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document reasonably believed by it to
be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
---------------------------------------------------------
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any of the
Rights Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.
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(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
----------------------
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any Acquiring Person
and the determination of Current Per Share Market Price) be proved or
established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Secretary or any Assistant Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder 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 Rights 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 Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
or any adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided for in Sections 3, 11, 13, 23 or 24, 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 Rights
Certificates after receipt by the Rights Agent of a certificate furnished
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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 Preferred Shares to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Financial Officer, the Secretary or
any Assistant Secretary of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered by it in good faith in accordance
with instructions of any such officer or for any delay in acting while waiting
for those instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken or omitted by the Rights Agent under
this Rights 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 (5)
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 shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not the Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the
Rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall
not be answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its Rights if there shall be reasonable grounds for believing that
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<PAGE>
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first 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 thirty (30) days' notice in writing mailed to the Company and to each
transfer agent of the Preferred Shares and the Common Shares by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon thirty (30) days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Preferred Shares and the Common Shares by registered or certified mail, and to
the holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30)
days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall, with such
notice, submit his or her Rights Certificate for inspection by the Company),
then the registered holder of any Rights Certificate may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the
United States or of any state of the United States, in good standing, which
is authorized under such laws to exercise corporate trust or shareholder
services 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. 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 Preferred Shares and
the Common Shares, and mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for
in this Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any
-----------------------------------
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights
in such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Exercise Price and the number or kind or class
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of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale of Common Shares
following the Distribution Date and prior to the redemption or expiration of
the Rights, the Company (a) shall, with respect to Common Shares so issued or
sold pursuant to the exercise of stock options or under any employee plan or
arrangement or upon the exercise, conversion or exchange of other securities
of the Company outstanding at the date hereof or upon the exercise, conversion
or exchange of securities hereinafter issued by the Company and (b) may, in
any other case, if deemed necessary or appropriate by the Board of Directors
of the Company, issue Rights Certificates representing the appropriate number
of Rights in connection with such issuance or sale; provided, however, that
(i) no such Rights Certificate shall be issued and this sentence shall be null
and void ab initio if, and to the extent that, such issuance or this sentence
would create a significant risk of or result in material adverse tax
consequences to the Company or the Person to whom such Rights Certificate
would be issued or would create a significant risk of or result in such
options' or employee plans' or arrangements' failing to qualify for otherwise
available special tax treatment and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
Section 23. Redemption.
----------
(a) The Company may, at its option and with the approval of the
Board of Directors, at any time prior to the Close of Business on the earlier
of (i) the tenth day following the Shares Acquisition Date (or such later date
as may be determined by action of a majority of the Company's Board of
Directors and publicly announced by the Company) and (ii) the Final Expiration
Date, redeem all but not less than all the then outstanding Rights at a
redemption price of $0.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being herein referred to as the "Redemption
Price") and the Company may, at its option, pay the Redemption Price either
in Common Shares (based on the Current Per Share Market Price thereof at the
time of redemption) or cash. Such redemption of the Rights by the Company
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 date on which
the Board of Directors elects to make the redemption effective shall be
referred to as the "Redemption Date."
(b) Notwithstanding the provision of Section 23(a), in the
event that a majority of the Board of Directors of the Company is elected by
shareholder action by written consent or at a special meeting of shareholders
(a meeting other than a regularly scheduled annual meeting), then until the
earlier to occur of (i) the 180th day following the effectiveness of such
election or (ii) the next regular annual meeting of shareholders of the
Company following the effectiveness of such election (including any
postponement or adjournment thereof), the Rights shall not be redeemed if
such redemption is reasonably likely to have the purpose or effect of
facilitating a Transaction with an Interested Person.
(c) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, evidence of which shall
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have been filed with the Rights Agent, and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. 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 ten
(10) days after the action of the Board of Directors ordering the redemption
of the Rights, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made. Neither
the Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof, and other
than in connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24. Exchange.
--------
(a) Subject to applicable laws, rules and regulations, and
subject to subsection 24(c) below, the Company may, at its option, by action
of the Board of Directors, at any time after the occurrence of a Triggering
Event, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for Common Shares at an exchange ratio of
one Common Share per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered
to effect such exchange at any time after any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or
any such Subsidiary, or any entity holding Common Shares for or pursuant to
the terms of any such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the Common Shares
then outstanding.
(b) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to subsection 24(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 Common Shares equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall 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 mail a notice of any
such exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the
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number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with Section 24(a), the
Company shall either take such action as may be necessary to authorize
additional Common Shares for issuance upon exchange of the Rights or
alternatively, at the option of a majority of the Board of Directors, with
respect to each Right (i) pay cash in an amount equal to the Current Value
(as hereinafter defined), in lieu of issuing Common Shares in exchange
therefor, or (ii) issue debt or equity securities or a combination thereof,
having a value equal to the Current Value, in lieu of issuing Common Shares
in exchange for each such Right, where the value of such securities shall be
determined by a nationally recognized investment banking firm selected by
majority vote of the Board of Directors, or (iii) deliver any combination of
cash, property, Common Shares and/or other securities having a value equal to
the Current Value in exchange for each Right. For purposes of this Section
24(c) only, the Current Value shall mean the product of the Current Per Share
Market Price of Common Shares on the date of the occurrence of the event
described above in subparagraph (a), multiplied by the number of Common
Shares for which the Right otherwise would be exchangeable if there were
sufficient shares available. To the extent that the Company determines that
some action need be taken pursuant to clauses (i), (ii) or (iii) of this
Section 24(c), the Board of Directors may temporarily suspend the
exercisability of the Rights for a period of up to sixty (60) days following
the date on which the event described in Section 24(a) shall have occurred, in
order to seek any authorization of additional Common Shares and/or to decide
the appropriate form of distribution to be made pursuant to the above
provision and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.
(d) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional Common Shares would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole Common Share (as
determined pursuant to the second sentence of Section 1(j) hereof).
(e) The Company may, at its option, by majority vote of the
Board of Directors, at any time before any Person has become an Acquiring
Person, exchange all or part of the then outstanding Rights for Rights of
substantially equivalent value, as determined reasonably and with good faith
by the Board of Directors, based upon the advice of one or more nationally
recognized investment banking firms.
(f) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to subsection 24(e) 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 Rights in exchange
therefor as has been determined by the Board of Directors in accordance with
subsection 24(e) above. The Company shall give public notice of any such
-34-
<PAGE>
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
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the transfer
agent for the Common Shares of the Company. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the Rights will be effected.
Section 25. Notice of Certain Events.
------------------------
(a) In case the Company shall propose to effect or permit to
occur any Triggering Event or Section 13 Event, the Company shall give notice
thereof to each holder of Rights in accordance with Section 26 hereof at
least twenty (20) days prior to occurrence of such Triggering Event or such
Section 13 Event.
(b) In case any Triggering Event or Section 13 Event shall
occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights
under Sections 11(a)(ii) and 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 Rights
Certificate to or on the Company shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed (until another address is filed
in writing with the Rights Agent) as follows:
CIRRUS LOGIC, INC.
3100 W. Warren Avenue
Fremont, CA 94538
Attention: General Counsel
with a copy to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Attention: Arthur F. Schneiderman
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 Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
-35-
<PAGE>
BankBoston, N.A.
c/o Boston EquiServe, L.P.
150 Royal Street
Canton, MA 02021
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. Supplements and Amendments.
--------------------------
(a) Prior to the occurrence of a Distribution Date, the Company
may supplement or amend this Agreement in any respect without the approval of
any holders of Rights and the Rights Agent shall, if the Company so directs,
execute such supplement or amendment. From and after the occurrence of a
Distribution Date, the Company and the Rights Agent may from time to time
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 which may be defective or inconsistent with any
other provisions herein, (iii) shorten or lengthen any time period hereunder,
or (iv) to change or supplement the provisions hereunder in any manner that
the Company may deem necessary or desirable and that shall not adversely
affect the interests of the holders of Rights (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person); provided, 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
(other than an Acquiring Person or an Affiliate or Associate of an Acquiring
Person). 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. Prior to the Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the interests of the
holders of Common Shares.
(b) Notwithstanding the provisions of Section 27(a), in the
event that a majority of the Board of Directors of the Company is elected by
shareholder action by written consent or at a special meeting of shareholders
(a meeting other than a regularly scheduled annual meeting), then until the
earlier to occur of (i) the 180th day following the effectiveness of such
election or (ii) the next regular annual meeting of shareholders of the
Company following the effectiveness of such election (including any
postponement or adjournment thereof), this Rights Agreement shall not be
supplemented or amended in any manner reasonably likely to have the purpose
or effect of facilitating a Transaction with an Interested Person.
-36-
<PAGE>
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. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares 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. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise
all Rights and powers specifically granted to the Board, or the Company, or
as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including
a determination to redeem or not redeem the Rights or to amend the Agreement).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights Certificates and all other parties and (y) not subject the Board to any
liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement
--------------------------
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders
of the Rights Certificates (and, prior to the Distribution Date, the Common
Shares).
Section 31. Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board of Directors of the Company determines in its
good faith judgment that severing the invalid language from this Agreement
would adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth day following the date of
such determination by the Board of Directors.
Section 32. Governing Law. This Agreement and each Right and each
-------------
Rights 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.
-37-
<PAGE>
Section 33. Counterparts. This Agreement may be executed in any
------------
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
--------------------
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
"COMPANY" CIRRUS LOGIC, INC.
By:
Name:
Title:
"RIGHTS AGENT" BANKBOSTON, N.A.
By:
Name:
Title:
-39-
<PAGE>
EXHIBIT A
---------
CERTIFICATE OF DESIGNATION OF RIGHTS,
PREFERENCES AND PRIVILEGES OF
SERIES A PARTICIPATING PREFERRED STOCK
OF CIRRUS LOGIC, INC.
The undersigned, Ron Shelton and Robert F. Donohue do hereby certify:
1. That they are the duly elected and acting Vice President and
Chief Financial Officer and Secretary of Cirrus Logic, Inc., a Delaware
corporation (the "Corporation").
2. That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the said Corporation, the
said Board of Directors on September 30, 1998 adopted the following resolution
creating a series of 1,500,000 shares of Preferred Stock designated as Series A
Participating Preferred Stock:
"RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation by the Certificate of Incorporation, the Board
of Directors does hereby provide for the issue of a series of Preferred Stock
of the Corporation, to be designated "Series A Participating Preferred Stock,"
no par value, initially consisting of 1,500,000 shares, and to the extent
that the designations, powers, preferences and relative and other special
Rights and the qualifications, limitations and restrictions of the Series A
Participating Preferred Stock are not stated and expressed in the Certificate
of Incorporation does hereby fix and herein state and express the
designations, powers, preferences and relative and other special Rights and
the qualifications, limitations and restrictions of such series of Preferred
Stock as follows (all terms used herein which are defined in the Certificate
of Incorporation shall be deemed to have the meanings provided herein):
Section 1. Designation and Amount. The shares of such series shall
----------------------
be designated as "Series A Participating Preferred Stock," and the number of
shares constituting such series shall be 1,500,000.
Section 2. Proportional Adjustment. In the event the Corporation
-----------------------
shall at any time after the issuance of any share or shares of Series A
Participating Preferred Stock (i) declare any dividend on Common Stock of
the Corporation ("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
Corporation shall simultaneously effect a proportional adjustment to the
number of outstanding shares of Series A Participating Preferred Stock.
Section 3. Dividends and Distributions.
---------------------------
(a) Subject to the prior and superior right of the holders of
any series of any series of Preferred Stock ranking prior and superior to the
shares of Series A Participating Preferred Stock with respect to dividends,
<PAGE>
the holders of shares of Series A 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 last day of March, June, September and December, in each year (each
such date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to 100 times
the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Participating Preferred Stock.
(b) The Corporation shall declare a dividend or distribution on
the Series A 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) Dividends shall begin to accrue on outstanding shares of
Series A Participating Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series A Participating
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series A
Participating Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Participating Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Participating Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 30 days prior to the date fixed for
the payment thereof.
Section 4. Voting Rights. The holders of shares of Series A
-------------
Participating Preferred Stock shall have the following voting Rights:
(a) Each share of Series A Participating Preferred Stock
shall entitle the holder thereof to 100 votes on all matters submitted to a
vote of the stockholders of the Corporation.
(b) Except as otherwise provided herein or by law, the holders
of shares of Series A Participating Preferred Stock and the holders of shares
of Common Stock shall vote together as one class on all matters submitted to a
vote of the stockholders of the Corporation.
-2-
<PAGE>
(c) Except as required by law, holders of Series A
Participating Preferred Stock shall have no special voting Rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 5. Certain Restrictions.
--------------------
(a) The Corporation shall not declare any dividend on, make
any distribution on, or redeem or purchase or otherwise acquire for
consideration any shares of Common Stock after the first issuance of a share
or fraction of a share of Series A Participating Preferred Stock unless
concurrently therewith it shall declare a dividend on the Series A
Participating Preferred Stock as required by Section 3 hereof.
(b) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Participating Preferred Stock as
provided in Section 3 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of
Series A 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 Participating Preferred Stock;
(ii) declare or pay dividends on, 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
Series A Participating Preferred Stock, except dividends paid ratably
on the Series A Participating Preferred Stock and all such parity
stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Participating Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares of any
such parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Participating
Preferred Stock;
(iv) purchase or otherwise acquire for consideration
anyshares of Series A Participating Preferred Stock, or any shares of
stock ranking on a parity with the Series A Participating Preferred
Stock, except in accordance with a purchase offer made in writing or
by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative Rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
-3-
<PAGE>
(c) 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 5, purchase or otherwise acquire such shares at such time and in
such manner.
Section 6. Reacquired Shares. Any shares of Series A Participating
-----------------
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein and, in the Amended and Restated Articles of Incorporation, as then
amended.
Section 7. Liquidation, Dissolution or Winding Up.
--------------------------------------
(a) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution shall be made
to the holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Participating
Preferred Stock unless, prior thereto, the holders of shares of Series A
Participating Preferred Stock shall have received six thousand dollars
($6,000) per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment
(the "Series A Liquidation Preference"). Following the payment of the full
amount of the Series A Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series A Participating Preferred
Stock unless, prior thereto, the holders of shares of Common Stock shall have
received an amount per share (the "Common Adjustment") equal to the quotient
obtained by dividing (i) the Series A Liquidation Preference by (ii) 100 (as
appropriately adjusted as set forth in subparagraph (c) below to reflect such
events as stock splits, stock dividends and recapitalization with respect to
the Common Stock) (such number in clause (ii) of this sentence, the
"Adjustment Number"). Following the payment of the full amount of the Series
A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Participating Preferred Stock and Common Stock,
respectively, holders of Series A Participating Preferred Stock and holders of
shares of Common Stock shall receive their ratable and proportionate share of
the remaining assets to be distributed in the ratio of the Adjustment Number
to 1 with respect to such Preferred Stock and Common Stock, on a per share
basis, respectively.
(b) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of Preferred
Stock, if any, which rank on a parity with the Series A Participating
Preferred Stock, then such remaining assets shall be distributed ratably to
the holders of such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are not sufficient
assets available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
(c) In the event the Corporation shall at any time after the
Rights Dividend Declaration Date (i) declare any dividend on Common Stock
-4-
<PAGE>
payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the Adjustment Number in effect immediately
prior to such event shall be adjusted by multiplying such Adjustment Number
by a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. Consolidation, Merger, etc. In case the Corporation shall
--------------------------
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case the
shares of Series A Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 100 times the
aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at
any time after the Rights Dividend Declaration Date (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into
a smaller number of shares, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of shares of
Series A Participating Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior
to such event.
Section 9. No Redemption. The shares of Series A Participating
-------------
Preferred Stock shall not be redeemable.
Section 10. Ranking. The Series A Participating Preferred Stock
-------
shall rank junior to all other series of the Corporation's Preferred Stock
as to the payment of dividends and the distribution of assets, unless the
terms of any such series shall provide otherwise.
Section 11. Amendment. The Amended and Restated Articles of
---------
Incorporation of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preference or special
Rights of the Series A Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a majority of the
outstanding shares of Series A Participating Preferred Stock, voting
separately as a class.
Section 12. Fractional Shares. Series A Participating Preferred
-----------------
Stock may be issued in fractions of a share which shall entitle the holder,
in proportion to such holder's fractional shares, to exercise voting Rights,
receive dividends, participate in distributions and to have the benefit of
all other Rights of holders of Series A Participating Preferred Stock.
-5-
<PAGE>
RESOLVED FURTHER, that the President or any Vice President and the
Secretary or any Assistant Secretary of this corporation be, and they hereby
are, authorized and directed to prepare and file a Certificate of Designation
of Rights, Preferences and Privileges in accordance with the foregoing
resolution and the provisions of Delaware law and to take such actions as
they may deem necessary or appropriate to carry out the intent of the
foregoing resolution."
3. That the authorized number of shares of Preferred
Stock of the Corporation is 5,000,000 and that no such Preferred Stock has
been issued.
We further declare under penalty of perjury that the matters set
forth in the foregoing Certificate of Determination are true and correct of
our own knowledge.
Executed at Fremont, California on February 17, 1999.
Ron Shelton
Vice President and Chief Financial
Officer
Robert F. Donohue
Secretary
<PAGE>
EXHIBIT B
---------
FORM OF RIGHTS CERTIFICATE
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER THE EARLIER OF (i) MAY 4, 2008, (ii) THE DATE
TERMINATED BY THE COMPANY OR (iii) THE DATE THE COMPANY EXCHANGES THE
RIGHTS PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY,
THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
RIGHTS AGREEMENT.]*
* The portion of the legend in bracket shall be inserted only if
applicable and shall replace the preceding sentence.
RIGHTS CERTIFICATE
CIRRUS LOGIC, INC.
This certifies that ______________________________, or registered
assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement dated as of May 4, 1998 (the "Rights
Agreement"), between Cirrus Logic, Inc., a Delaware corporation (the "
Company"), and BankBoston, N.A. ( the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M., New York time, on May 4, 2008
at the office of the Rights Agent designated for such purpose, or at the
office of its successor as Rights Agent, one one-hundredth (1/100) of a fully
paid non-assessable share of Series A Participating Preferred Stock, no par
value, (the "Preferred Shares"), of the Company, at an Exercise Price of sixty
Dollars ($60.00) per one-hundredth of a Preferred Share (the "Exercise
Price"), upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase and related Certificate duly executed. The
number of Rights evidenced by this Rights Certificate (and the number of
one-hundredths of a Preferred Share which may be purchased upon exercise
hereof) set forth above are the number and Exercise Price as of May 4, 1998,
based on the Preferred Shares as constituted at such date. As provided in
the Rights Agreement, the Exercise Price and the number and kind of Preferred
Shares or other securities which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the Rights,
limitations of Rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of Rights include the temporary suspension of the exercisability
of such Rights under the specific circumstances set forth in the Rights
Agreement. Copies of the Rights Agreement are on file at the principal
executive offices of the Company and the above-mentioned office of the Rights
Agent.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Rights Certificate (i) may be redeemed by the Company, at
its option, at a redemption price of $0.01 per Right or (ii) may be exchanged
by the Company in whole or in part for Common Shares, substantially equivalent
Rights or other consideration as determined by the Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate amount of securities as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled such holder
to purchase. If this Rights Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole Rights not
exercised.
No fractional portion of less than one one-hundredth of a
Preferred Share will be issued upon the exercise of any Right or Rights
evidenced hereby but in lieu thereof a cash payment will be made, as provided
in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the
Preferred Shares or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the Rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action,
or to receive notice of meetings or other actions affecting shareholders
(except as provided in the Rights Agreement), or to receive dividends or
subscription Rights, or otherwise, until the Right or Rights evidenced by
this Rights Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of February 17, 1999.
ATTEST: CIRRUS LOGIC, INC.
By:
Robert F. Donohue Name:
Secretary Title:
Countersigned:
BANKBOSTON, N.A.
as Rights Agent
By:
Its:
<PAGE>
Form of Reverse Side of Rights Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED _______________________ hereby sells, assigns and
transfers unto
______________________________________________________________________________
_(Please print name and address of transferee)
______________________________________________________________________________
_
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _______________, 19___
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution
(a bank, stockbroker, savings and loan association or credit union with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person,
or an Affiliate or Associate of any such Person (as such terms are defined in
the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of any such Person.
Dated: _______________, 19___
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution
(a bank, stockbroker, savings and loan association or credit union with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
<PAGE>
Form of Reverse Side of Rights Certificate -- continued
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Rights Certificate)
To: ___________________________
The undersigned hereby irrevocably elects to exercise
_________________________ Rights represented by this Rights Certificate to
purchase the number of one-hundredths of a Preferred Share issuable upon the
exercise of such Rights and requests that certificates for such number of one-
hundredths of a Preferred Share issued in the name of:
Please insert social security
or other identifying number
- ----------------------------------------------------------------------------
(Please print name and address)
- ----------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
- ----------------------------------------------------------------------------
(Please print name and address)
- ----------------------------------------------------------------------------
Dated: ___________________, 19___
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution
(a bank, stockbroker, savings and loan association or credit union with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
<PAGE>
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of any such Person.
Dated: _______________, 19___
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution
(a bank, stockbroker, savings and loan association or credit union with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
<PAGE>
Form of Reverse Side of Rights Certificate -- continued
NOTICE
------
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
<PAGE>
EXHIBIT C
SHAREHOLDER RIGHTS PLAN
CIRRUS LOGIC, INC.
Summary of Rights
Distribution and The Board of Directors has declared
Transfer of Rights; a dividend of one Right for each share
Rights Certificate: of Cirrus Logic, Inc. Common Stock
outstanding. Prior to the
Distribution Date referred to below,
the Rights will be evidenced by and
trade with the certificates for the
Common Stock. After the Distribution
Date, Cirrus Logic, Inc. (the
"Company") will mail Rights
certificates to the Company's
stockholders and the Rights will become
transferable apart from the Common
Stock.
Distribution Date: Rights will separate from the Common
Stock and become exercisable following
(a) the tenth day (or such later date
as may be determined by a majority of
the Board of Directors) after a person
or group acquires beneficial ownership
of 15% or more of the Company's Common
Stock or (b) the tenth business day (or
such later date as may be determined by
a majority of the Board of Directors)
after a person or group announces a
tender or exchange offer, the
consummation of which would result in
ownership by a person or group of 15%
or more of the Company's Common Stock.
Preferred Stock After the Distributon Date, each Right
Purchasable Upon will entitle the holder to purchase for
Exercise of Rights: $50.00, a fraction of a share of the
Company's Preferred Stock with economic
terms similar to that of one share of
the Company's Common Stock.
Flip-In: If an acquiror (an "Acquiring Person")
obtains 15% or more of the Company's
Common Stock, then each Right (other
than Rights owned by an Acquiring
Person or its affiliates) will entitle
the holder thereof to purchase, for the
Exercise Price, a number of shares of
the Company's Common Stock having a
then current market value of twice the
Exercise Price.
Flip-Over: If, after an Acquiring Person obtains
15% or more of the Company's Common
Stock, (a) the Company merges into
another entity, (b) an acquiring entity
merges into the Company or (c) the
Company sells more than 50% of the
Company's assets or earning power, then
each Right (other than Rights owned by
an Acquiring Person or its affiliates)
will entitle the holder thereof to
purchase, for the Exercise Price, a
number of shares of Common Stock of the
Person engaging in the transaction
having a then current market value of
twice the Exercise Price.
Exchange Provision: At any time after the date an Acquiring
Person obtains 15% or more of the
Company's Common Stock and prior to the
acquisition by the Acquiring Person of
50% of the outstanding Common Stock, a
majority of the Board of Directors of
the Company may exchange the Rights
(other than Rights owned by the
Acquiring Person or its affiliates), in
whole or in part, for shares of Common
Stock of the Company at an exchange
ratio of one share of Common Stock per
Right (subject to adjustment).
Redemption of Rights will be redeemable at the
the Rights: Company's option for $0.01 per Right at
any time on or prior to the tenth day
(or such later date as may be
determined by a majority of the Board
of Directors) after public announcement
that a Person has acquired beneficial
ownership of 15% or more of the
Company's Common Stock.
Expiration of The Rights expire on the earliest of
the Rights: (a) April 27, 2008, (b) exchange or
redemption of the Rights as described
above.
Amendment of The terms of the Rights and the Rights
Terms of Rights: Agreement may be amended in any
respect without the consent of the
Rights holders on or prior to the
Distribution Date; thereafter, the
terms of the Rights and the Rights
Agreement may be amended without the
consent of the Rights holders in order
to cure any ambiguities or to make
changes which do not adversely affect
the interests of Rights holders
(other than the Acquiring Person).
Voting Rights: Rights will not have any voting Rights.
Anti-Dilution Rights will have the benefit of certain
Provisions: customary anti-dilution provisions.
Taxes: The Rights distribution should not be
taxable for federal income tax
purposes. However, following an event
which renders the Rights exercisable or
upon redemption of the Rights,
shareholders may recognize taxable
income.
The foregoing is a summary of certain principal terms of the Shareholder
Rights Plan only and is qualified in its entirety by reference to the detailed
terms of the Rights Agreement dated as of May 4, 1998, between the Company and
the Rights Agent.
