SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR 12(G) OF THE
SECURITIES EXCHANGE ACT OF 1934
LOGIC DEVICES INCORPORATED
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-2893789
(state of incorporation or organization) (IRS Employer I.D. No.)
1320 ORLEANS DRIVE, SUNNYVALE, CA 94089
(Address of principal executive offices) (Zip Code)
If this Form relates to the If this Form relates to the registration
registration of a class of debt of a class of debt securities and is to
securities and is effective upon become effective simultaneously with
filing pursuant to General the effectiveness of a concurrent
Instruction A(c)(1), please registration statement under the
check the following box. Securities Act of 1933 pursuant to
General Instruction A(c)(2), please
check the following box.
____________________________
Securities to be registered pursuant to Section 12(g) of the Act:
Name of each on
TITLE OF EACH CLASS WHICH REGISTERED
None None
Securities to be registered pursuant to Section 12(g) of the Act:
PREFERRED SHARE PURCHASE RIGHTS
(Title of Class)
<PAGE>
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On April 29, 1997, the Board of Directors of Logic Devices
Incorporated (the "Company") declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of common stock,
no par value per share, of the Company (the "Common Stock"). The
dividend of the Rights is payable on May l, 1997, to the shareholders of
record as of May 1, 1997 (the "Record Date"). Each Right entitles the
registered holder thereof, under certain limited circumstances, to
purchase from the Company one one-hundredth of a share of Series B
Junior Participating Preferred Stock, no par value, of the Company (the
"Preferred Stock") at a price of $12.00 per one one-hundredth of a share
of Preferred Stock (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement
dated as of April 30, 1997, as the same may be amended from time to time
(the "Rights Agreement"), between the Company and American Securities
Transfer & Trust, Inc., as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons
(with certain exceptions, an "Acquiring Person") has acquired beneficial
ownership of 15% or more of the outstanding shares of Common Stock or
(ii) 10 business days (or such later date as may be determined by action
of the Board of Directors prior to such time as any person or group of
affiliated persons becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer
or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of the
outstanding shares of Common Stock (the earlier of such dates being
called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificate together with a copy of a
Summary of Rights which is being mailed to holders of record of the
Company's common stock on the Record Date or as soon thereafter as is
practicable.
The Rights Agreement provides that, until the Distribution Date (or
earlier expiration of the Rights), the Rights will be transferred with
and only with the Common Stock. Until the Distribution Date (or earlier
expiration of the Rights), new Common Stock certificates issued after
the Record Date upon transfer or new issuances of Common Stock will
contain a notation incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier expiration of the Rights), the
surrender for transfer of any certificates for shares of Common Stock
outstanding as of the Record Date, even without such notation or a copy
of this Summary of Rights, will also constitute the transfer of the
Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will
be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on April 29, 2007 (the "Final Expiration Date"),
unless the Final Expiration Date is advanced or extended or unless the
Rights are earlier redeemed or exchanged by the Company, in each case as
described below.
<PAGE>
The Purchase Price payable and the number of shares of Preferred
Stock or other securities or property issuable, if the Rights become
exercisable and they are properly exercised, is subject to adjustment
from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) upon the grant to holders of the Preferred Stock
of certain rights or warrants to subscribe for or purchase Preferred
Stock at a price, or securities convertible into Preferred Stock with a
conversion price, less than the then-current market price of the
Preferred Stock or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding
regular periodic cash dividends or dividends payable in Preferred Stock)
or of subscription rights or warrants (other than those referred to
above).
The number of outstanding Rights is subject to adjustment in the
event of a stock dividend on the Common Stock payable in shares of
Common Stock or subdivisions, consolidations or combinations of the
Common Stock occurring, in any such case, prior to the Distribution
Date.
Shares of Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Each one one-hundredth of a share of Preferred
Stock will be entitled, when, as and if declared, to a preferential
quarterly dividend payment equal to the greater of: (a) $0.01 per one
one-hundredth of a share and (b) an amount equal to the dividend
declared per share of Common Stock. In the event of liquidation,
dissolution or winding up of the Company, the holders of the each one
one-hundredth of a share of Preferred Stock will be entitled to a
preferential payment equal to the greater of: (a) $1.00 per one one-
hundredth of a share (plus any accrued but unpaid dividends) and (b) the
payment to be made per share of Common Stock. Each one one-hundredth of
a share of Preferred Stock will have one vote, voting together with the
Common Stock. Finally, in the event of any merger, consolidation or
other transaction in which outstanding shares of Common Stock are
converted or exchanged, each one one-hundredth of a share of Preferred
Stock will be entitled to receive an amount equal to the amount received
per share of Common Stock. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a
share of Preferred Stock purchasable upon exercise of each Right (if and
when it becomes excercisable and is properly exercised) should
approximate the value of one share of Common Stock.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than
Rights beneficially owned by the Acquiring Person (which will thereupon
become void), will thereafter have the right to receive upon exercise of
a Right that number of shares of Common Stock having a market value of
two times the exercise price of the Right.
In the event that, after a person or group has become an Acquiring
Person, the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or
earning power are sold, proper provisions will be made so that each
holder of a Right, other than Rights beneficially owned by an Acquiring
Person (which will have become void), will thereafter have the right to
receive upon the exercise of a Right that number of shares of common
stock of the person with whom the Company has engaged in the foregoing
transaction (or its parent) that at the time of such transaction have a
market value of two times the exercise price of the Right.
<PAGE>
At any time after any person or group becomes an Acquiring Person
and prior to the earlier of one of the events described in the previous
paragraph or the acquisition by such Acquiring Person of 50% or more of
the outstanding shares of Common Stock, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such
Acquiring Person which will have become void), in whole or in part, for
shares of Common Stock or Preferred Stock (or a series of the Company's
preferred stock having equivalent rights, preferences and privileges),
at an exchange ratio of one share of Common Stock, or a fractional share
of Preferred Stock (or other preferred stock) equivalent in value
thereto, per Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares of Preferred Stock or
Common Stock will be issued (other than fractions of Preferred Stock
which are integral multiples of one one-hundredth of a share of
Preferred Stock, which may, at the election of the Company, be evidenced
by depository receipts), and in lieu thereof an adjustment in cash will
be made based on the current market price of the Preferred Stock or the
Common Stock.
At any time prior to the time an Acquiring Person becomes such, the
Board of Directors of the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on such
basis and with such conditions as the Board of Directors in its sole
discretion may establish. Immediately upon any redemption of the
Rights, the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price.
For so long as the Rights are then redeemable, the Company may,
except with respect to the redemption price, amend the Rights Agreement
in any manner. After the Rights are no longer redeemable, the Company
may, except with respect to the redemption price, amend the Rights
Agreement in any manner that does not adversely affect the interests of
holders of the Rights.
Until a Right becomes exercisable and is properly exercised or
exchanged, the holder thereof, as the holder of a Right, will have no
rights as a shareholder of the Company, including, without limitation,
no right to vote or to receive dividends.
The form of Rights Agreement between the Corporation and the Rights
Agent specifying the terms of the Rights, together the Exhibit A
thereto, the form of Certificate of Determination specifying the terms
of the Series B Junior Participating Preferred Stock; Exhibit B thereto,
the form of Right Certificate; and Exhibit C thereto, the form of
Summary of Rights to Purchase Series B Junior Participating Preferred
Stock, are attached hereto as exhibits and incorporated herein by
reference. The foregoing description of the Rights is qualified by
reference to those exhibits.
<PAGE>
ITEM 2. EXHIBITS.
(1) Rights Agreement dated as of April 30, 1997, between Logic
Devices Incorporated and American Securities Transfer & Trust,
Inc., as Rights Agent. The Rights Agreement includes as
Exhibit A the form of Certificate of Determination of Series B
Junior Participating Preferred Stock; as Exhibit B, the form of
Right Certificate; and as Exhibit C, the form of the Summary of
Rights to Purchase Series B Junior Participating Preferred
Stock.
(2) Press Release dated April 29, 1997.
SIGNATURES
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.
LOGIC DEVICES INCORPORATED
By: /s/ Todd J. Ashford
Todd J. Ashford
Print Name and Title
Date:May 2, 1997
<PAGE>
EXHIBIT 1
LOGIC DEVICES INCORPORATED
AND
AMERICAN SECURITIES TRANSFER & TRUST, INC.,
AS RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF APRIL 30, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions ..........................1
Section 2. Appointment of Rights Agent ..................5
Section 3. Issue of Right Certificates ..................5
Section 4. Form of Right Certificates ...................7
Section 5. Countersignature and Registration ............7
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates ....................................8
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights........................8
Section 8. Cancellation and Destruction of Right
Certificates.....................................9
Section 9. Availability of Shares of Preferred Stock ...10
Section 10. Preferred Stock Record Date ................11
Section 11. Adjustment of Purchase Price, Number and Kind of Shares and
Number of Rights ...............................11
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares.......................................18
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power ..................................18
Section 14. Fractional Rights and Fractional Shares ....21
Section 15. Rights of Action ...........................22
Section 16. Agreement of Right Holders .................23
Section 17. Right Certificate Holder Not Deemed a
Shareholder.................................... 23
Section 18. Concerning the Rights Agent ................23
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.......................................... 24
<PAGE>
Section 20. Duties of Rights Agent .....................24
Section 21. Change of Rights Agent .....................26
Section 22. Issuance of New Right Certificates .........27
Section 23. Redemption .................................27
Section 24. Exchange ...................................28
Section 25. Notice of Certain Events ...................29
Section 26. Notices ....................................29
Section 27. Supplements and Amendments .................30
Section 28. Successors .................................30
Section 29. Benefits of this Agreement .................31
Section 30. Determinations and Actions by the Board of
Directors...................................... 31
Section 31. Severability ...............................31
Section 32. Governing Law ..............................31
Section 33. Counterparts ...............................31
Section 34. Descriptive Headings .......................31
<PAGE>
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT, dated as of April 30, 1997 (this "Agreement"),
is by and between LOGIC DEVICES INCORPORATED, a California corporation (the
"Company"), and AMERICAN SECURITIES TRANSFER & TRUST, INC., a Colorado
corporation, as Rights Agent (the "Rights Agent").
RECITALS
The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each share
of Common Stock (as hereinafter defined) of the Company outstanding as of
the Close of Business (as defined below) on May 1, 1997 (the "Record
Date"), each Right representing the right to purchase one one-hundredth
(subject to adjustment) of a share of Preferred Stock (as hereinafter
defined), upon the terms and subject to the conditions herein set forth,
and has further authorized and directed the issuance of one Right (subject
to adjustment as provided herein) with respect to each share of Common
Stock that shall become outstanding between the Record Date and the earlier
of the Distribution Date and the Expiration Date (as such terms are
hereinafter defined); PROVIDED, HOWEVER, that Rights may be issued with
respect to shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the Expiration Date in accordance with
Section 22.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meaning indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which shall be the Beneficial Owner (as such
term is hereinafter defined) of 15% or more of the shares of Common Stock
then outstanding, but shall not include an Exempt Person (as such term is
hereinafter defined); PROVIDED, HOWEVER, that (i) if the Board of Directors
of the Company determines in good faith that a Person who would otherwise
be an "Acquiring Person" became such inadvertently (including, without
limitation, because (A) such Person was unaware that it beneficially owned
a percentage of Common Stock that would otherwise cause such Person to be
an "Acquiring Person" or (B) such Person was aware of the extent of its
Beneficial Ownership of Common Stock 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 as promptly as practicable divested or divests itself of
Beneficial Ownership of a sufficient number of shares of Common Stock so
that such Person would no longer be an "Acquiring Person," then such Person
shall not be deemed to be or to have become an "Acquiring Person" for any
purposes of this Agreement; (ii) if, as of the date hereof, any Person is
the Beneficial Owner of 15% or more of the shares of Common Stock
outstanding, such Person shall not be or become an "Acquiring Person"
unless and until such time as such Person shall become the Beneficial Owner
of an additional 1% or more of the shares of Common Stock (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Stock in shares of Common Stock or pursuant to a split
or subdivision of the outstanding Common Stock), unless, upon becoming the
Beneficial Owner of such additional shares of Common Stock, such Person is
not then the Beneficial Owner of 15% or more of the shares of Common Stock
<PAGE>
then outstanding; (iii) no person shall become an "Acquiring Person" of
shares of Common Stock of the Company which are acquired by such person
pursuant to a transaction or series of related transactions approved, in
advance, by a majority of the Continuing Directors (as such term is
hereinafter defined) of the Company provided that such majority of the
Continuing Directors also constitutes a majority of the Board of Directors;
(iv) no Person shall become an "Acquiring Person" as the result of an
acquisition of shares of Common Stock by the Company or a Subsidiary of
the Company which, by reducing the number of shares outstanding, increases
the proportionate number of shares of Common Stock beneficially owned by
such Person to 15% or more of the shares of Common Stock then outstanding,
PROVIDED, HOWEVER, that if a Person shall become the Beneficial Owner of
15% or more of the shares of Common Stock then outstanding by reason of
such share acquisitions by the Company or a Subsidiary of the Company and
shall thereafter become the Beneficial Owner of an additional 1% or more of
the shares of Common Stock (other than pursuant to a dividend or
distribution paid or made by the Company on the outstanding Common Stock in
shares of Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), then such Person shall be deemed to be an
"Acquiring Person" unless upon becoming the Beneficial Owner of such
additional shares of Common Stock such Person does not beneficially own 15%
or more of the shares of Common Stock then outstanding. For all purposes
of this Agreement, any calculation of the number of shares of Common Stock
outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding shares of Common Stock of
which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date hereof. Notwithstanding the
foregoing, neither Stephen A. Hellerstein, as trustee of various trusts
existing as of the date of this Agreement, BRT Partnership, an Illinois
general partnership, Windy City, Inc., a Delaware corporation, Walnut
Capital Corp., a Delaware corporation, nor any of their respective
officers, directors, trustees, 10% or greater beneficial owners, Affiliates
and Associates, either individually or together, shall be deemed to be an
Acquiring Person.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act, as in effect on the date hereof.
(c) A Person shall be deemed the "Beneficial Owner" of, shall be
deemed to have "Beneficial Ownership" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates is deemed to beneficially own, directly or indirectly, within
the meaning of Rule l3d-3 of the General Rules and Regulations under the
Exchange Act as in effect on the date hereof;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and
between underwriters and selling group members with respect to a bona fide
public offering of securities), or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise; PROVIDED,
HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, (x) securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
<PAGE>
Affiliates or Associates until such tendered securities are accepted for
purchase, (y) securities which such Person has a right to acquire upon the
exercise of Rights at any time prior to the time that any Person becomes an
Acquiring Person or (z) securities issuable upon the exercise of Rights
from and after the time that any Person becomes an Acquiring Person if such
Rights were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof ("Original Rights") or pursuant to Section 11(i) or
Section 11(n) with respect to an adjustment to Original Rights; or (B) the
right to vote pursuant to any agreement, arrangement or understanding;
PROVIDED, HOWEVER, that a Person shall not be deemed the Beneficial Owner
of, or to beneficially own, any security by reason of such agreement,
arrangement or understanding if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person and with respect to which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring, holding, voting
(except to the extent contemplated by the proviso to Section 1(c)(ii)(B))
or disposing of such securities of the Company; PROVIDED, HOWEVER, that no
Person who is an officer, director, trustee or employee of an Exempt Person
shall be deemed, solely by reason of such Person's status or authority as
such, to be the "Beneficial Owner" of, to have "Beneficial Ownership" of or
to "beneficially own" any securities that are "beneficially owned" (as
defined in this Section l(c)), including, without limitation, in a
fiduciary capacity, by an Exempt Person or by any other such officer,
director, trustee or employee of an Exempt Person.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of California or
the city in which the principal office of the Rights Agent is located are
authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
San Jose, California time, on such date; PROVIDED, HOWEVER, that if such
date is not a Business Day it shall mean 5:00 P.M., San Jose, California
time, on the next succeeding Business Day.
(f) "Common Stock" when used with reference to the Company shall
mean the Common Stock, presently no par value per share, of the Company.
"Common Stock" when used with reference to any Person other than the
Company shall mean the common stock (or, in the case of an unincorporated
entity, the equivalent equity interest) with the greatest voting power of
such other Person or, if such other Person is a subsidiary of another
Person, the Person or Persons which ultimately control such first-mentioned
Person.
(g) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(h) "Continuing Director" shall mean any member of the Board of
Directors of the Company, while such person is a member of the Board of
Directors, who is not an Acquiring Person, or an Affiliate or Associate of
an Acquiring Person, and who either (i) was a member of the Board of
<PAGE>
Directors prior to the Stock Acquisition Date, or (ii) subsequently became
a member of the Board of Directors and whose nomination for election or
election to the Board of Directors was recommended or approved by a
majority of the Continuing Directors then on the Board of Directors.
(i) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(j) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(k) "Equivalent Preferred Shares" shall have the meaning set forth
in Section 11(b) hereof.
(l) "Exempt Person" shall mean the Company or any Subsidiary (as
such term is hereinafter defined) of the Company, in each case including,
without limitation, in its fiduciary capacity, or any employee benefit plan
or employee stock plan of the Company or of any Subsidiary of the Company,
or any entity or trustee holding Common Stock for or pursuant to the terms
of any such plan or for the purpose of funding any such plan or funding
other employee benefits for employees of the Company or of any Subsidiary
of the Company.
(m) "Exchange Ratio" shall have the meaning set forth in Section
24 hereof.
(n) "Expiration Date" shall have the meaning set forth in Section
7 hereof.
(o) "Flip-In Event" shall have the meaning set forth in Section
11(a)(ii) hereof.
(p) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(q) "Nasdaq" shall mean The Nasdaq Stock Market.
(r) "New York Stock Exchange" shall mean the New York Stock
Exchange, Inc.
(s) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, trust, bank or other entity, and
shall include any successor (by merger or otherwise) to such entity.
(t) "Preferred Stock" shall mean the Series B Junior Participating
Preferred Stock, no par value, of the Company having the rights and
preferences set forth in the Form of Certificate of Determination attached
to this Agreement as Exhibit A.
(u) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(v) "Redemption Date" shall have the meaning set forth in Section
7 hereof.
(w) "Redemption Price" shall have the meaning set forth in Section
23 hereof.
(x) "Right Certificate" shall have the meaning set forth in
Section 3 hereof.
(y) "Securities Act" shall mean the Securities Act of 1933, as
amended.
<PAGE>
(z) "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(aa) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(bb) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such, or such earlier date as a majority of the Board of
Directors shall become aware of the existence of an Acquiring Person.
(cc) "Subsidiary" of any Person shall mean any corporation, bank or
other entity of which securities or other ownership interests having
ordinary voting power sufficient to elect a majority of the board of
directors or other persons performing similar functions are beneficially
owned, directly or indirectly, by such Person, and any corporation, bank or
other entity that is otherwise controlled by such Person.
(dd) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ee) "Summary of Rights" shall have the meaning set forth in
Section 3 hereof.
(ff) "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders
of the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date be the holders of Common Stock) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the Close of Business on the earlier of (i) the tenth
day after the Stock Acquisition Date or (ii) the tenth Business Day (or
such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) after the
date of the commencement by any Person (other than an Exempt Person) of, or
of the first public announcement of the intention of such Person (other
than an Exempt Person) to commence, a tender or exchange offer the
consummation of which would result in any Person (other than an Exempt
Person) becoming the Beneficial Owner of shares of Common Stock aggregating
15% or more of the Common Stock then outstanding (including any such date
which is after the date of this Agreement and prior to the issuance of the
Rights; the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Stock
registered in the names of the holders thereof and not by separate Right
Certificates, and (y) the Rights will be transferable only in connection
with the transfer of Common Stock. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, postage-prepaid mail
(insured if so elected by the Company), to each record holder of Common
<PAGE>
Stock as of the close of business on the Distribution Date (other than any
Acquiring Person or any Associate or Affiliate of an Acquiring Person), at
the address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right (subject to adjustment as provided
herein) for each share of Common Stock so held. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Shares of
Preferred Stock, in substantially the form of Exhibit C hereto (the
"Summary of Rights"), by first-class, postage-prepaid mail, to each record
holder of Common Stock as of the Close of Business on the Record Date
(other than any Acquiring Person or any Associate or Affiliate of any
Acquiring Person), at the address of such holder shown on the records of
the Company. With respect to certificates for Common Stock outstanding as
of the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates registered in the names of the holders
thereof together with the Summary of Rights. Until the Distribution Date
(or, if earlier, the Expiration Date), the surrender for transfer of any
certificate for Common Stock outstanding on the Record Date, with or
without a copy of the Summary of Rights, shall also constitute the transfer
of the Rights associated with the Common Stock represented thereby.
(c) Certificates issued for Common Stock (including, without
limitation, upon transfer of outstanding Common Stock, disposition of
Common Stock out of treasury stock if then permitted under the California
General Corporation Law or issuance or reissuance of Common Stock out of
authorized but unissued shares) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Logic
Devices Incorporated (the "Company") and American Securities
Transfer & Trust, Inc., as Rights Agent, dated as of April 30,
1997 as the same may be amended from time to time (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal
executive offices of the Company. Under certain circumstances,
as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor. UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN
ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER
BE TRANSFERABLE.
With respect to such certificates containing the foregoing legend, until
the Distribution Date the Rights associated with the Common Stock
<PAGE>
represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate, except as
otherwise provided herein, shall also constitute the transfer of the Rights
associated with the Common Stock represented thereby. In the event that
the Company purchases or otherwise acquires any Common Stock after the
Record Date but prior to the Distribution Date, any Rights associated with
such Common Stock shall be deemed canceled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common
Stock which are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend shall
not affect the enforceability of any part of this Agreement or the rights
of any holder of the Rights.
SECTION 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and
the forms of election to purchase shares and of assignment to be printed on
the reverse thereof) shall be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or interdealer quotation system on which
the Rights may from time to time be listed or quoted, or to conform to
usage. Subject to the provisions of Sections 11, 13 and 22 hereof, the
Right Certificates shall entitle the holders thereof to purchase such
number of one one-hundredths of a share of Preferred Stock as shall be set
forth therein at the price per one one-hundredth of a share of Preferred
Stock set forth therein (the "Purchase Price"), but the number of such one
one-hundredths of a share of Preferred Stock and the Purchase Price shall
be subject to adjustment as provided herein.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the
Company by the Chairman of the Board, Chief Executive Officer, President,
any Vice President or the Chief Financial Officer of the Company, either
manually or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned
by the Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall have signed
any of the Right Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery by
the Company, such Right Certificates, nevertheless, may be countersigned by
the Rights Agent and issued and delivered by the Company with the same
force and effect as though the Person who signed such Right Certificates
had not ceased to be such officer of the Company; and any Right Certificate
may be signed on behalf of the Company by any Person who, at the actual
date of the execution of such Right Certificate, shall be a proper officer
of the Company to sign such Right Certificate, although at the date of the
execution of this Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at an office or agency designated for such purpose, books
for registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of
the Right Certificates, the number of Rights evidenced on its face by each
of the Right Certificates and the date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 7(e), 11(a)(ii), 13 and
14 hereof, at any time AFTER the Distribution Date and prior to the
<PAGE>
Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right Certificate
or Right Certificates, entitling the registered holder to purchase a like
number of one one-hundredths of a share of Preferred Stock as the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the
Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the office or agency of the Rights Agent
designated for such purpose. Thereupon the Rights Agent shall countersign
and deliver to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
(b) Subject to the provisions of Section 11(a)(ii) hereof, at any
time after the Distribution Date and prior to the Expiration Date, upon
receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a
Right Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered holder
of any Right Certificate may, subject to Section 11(a)(ii) hereof and
except as otherwise provided herein, exercise the Rights evidenced thereby
in whole or in part upon surrender of the Right Certificate, with the form
of election to purchase on the reverse side thereof duly executed, to the
Rights Agent at the office or agency of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase Price with
respect to the total number of one one-hundredths of a share of Preferred
Stock (or other securities, cash or other assets, as the case may be) as to
which the Rights are exercised, at any time which is both after the
Distribution Date and prior to the time (the "Expiration Date") that is the
earliest of (i) the Close of Business on April 29, 2007 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the "Redemption Date") or (iii) the time at
which such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price shall be initially $12.00 for each one one-
hundredths of a share of Preferred Stock purchasable upon the exercise of a
Right. The Purchase Price and the number of one one-hundredths of a share
of Preferred Stock or other securities or property to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in lawful money
of the United States of America in accordance with paragraph (c) of this
Section 7.
<PAGE>
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase
Price for the shares of Preferred Stock to be purchased and an amount equal
to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 9 hereof, in cash or by
certified check, cashier's check or money order payable to the order of the
Company, the Rights Agent shall thereupon promptly (i) (A) requisition from
any transfer agent of the Preferred Stock certificates for the number of
shares of Preferred Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests,
or (B) requisition from the depositary agent depositary receipts
representing interests in such number of one one-hundredths of a share of
Preferred Stock as are to be purchased (in which case certificates for the
Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company hereby directs
the depositary agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of
issuance of fractional shares in accordance with Section 14 hereof, (iii)
promptly after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt,
promptly deliver such cash to or upon the order of the registered holder of
such Right Certificate.
(d) Except as otherwise provided herein, in case the registered
holder of any Right Certificate shall exercise less than all of the Rights
evidenced thereby, a new Right Certificate evidencing Rights equivalent to
the exercisable Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder of Rights upon the
occurrence of any purported transfer or exercise of Rights pursuant to
Section 6 hereof or this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of
assignment or form of election to purchase set forth on the reverse side of
the Right Certificate surrendered for such transfer or exercise and (ii)
provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) thereof as the Company shall reasonably
request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any
of its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be canceled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the
Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
<PAGE>
SECTION 9. AVAILABILITY OF SHARES OF PREFERRED STOCK.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock or, if then permitted, any shares of Preferred Stock held
in its treasury the number of shares of Preferred Stock that will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock issuable upon the
exercise of Rights may be listed or admitted to trading on any national
securities exchange, or quoted on Nasdaq, the Company shall use its best
efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed or admitted
to trading on such exchange, or quoted on Nasdaq, upon official notice of
issuance upon such exercise.
(c) From and after such time as the Rights become
exercisable, the Company shall use its best efforts, if then necessary to
permit the issuance of shares of Preferred Stock upon the exercise of
Rights, to register and qualify such shares of Preferred Stock under the
Securities Act and any applicable state securities or "Blue Sky" laws (to
the extent exemptions therefrom are not available), cause such registration
statement and qualifications to become effective as soon as possible after
such filing and keep such registration and qualifications effective until
the earlier of the date as of which the Rights are no longer exercisable
for such securities and the Expiration Date. The Company may temporarily
suspend, for a period of time not to exceed 90 days, the exercisability of
the Rights in order to prepare and file a registration statement under the
Securities Act and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained and until a
registration statement under the Securities Act (if required) shall have
been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Preferred Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates therefor (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable shares.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares of Preferred Stock upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer
tax which may be payable in respect of any transfer or delivery of Right
Certificates to a Person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Stock in a name other
than that of, the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or to issue or deliver any certificates or
depositary receipts for Preferred Stock upon the exercise of any Rights
until any such tax shall have been paid (any such tax being payable by that
holder of such Right Certificate at the time of surrender) or until it has
been established to the Company's reasonable satisfaction that no such tax
is due.
SECTION 10. PREFERRED STOCK RECORD DATE. Each Person in whose name
any certificate for Preferred Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
<PAGE>
shares of Preferred Stock represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; PROVIDED, HOWEVER, that if the date of
such surrender and payment is a date upon which the Preferred Stock
transfer books of the Company are closed, such Person shall be deemed to
have become the record holder of such shares on, and such certificate shall
be dated, the next succeeding Business Day on which the Preferred Stock
transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred Stock for which the Rights
shall be exercisable, including, without limitation, the right to vote or
to receive dividends or other distributions, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided
herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES
AND NUMBER OF RIGHTS. The Purchase Price, the number of shares of
Preferred Stock or other securities or property purchasable upon exercise
of each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of
this Agreement (A) declare and pay a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller
number of shares of Preferred Stock or (D) issue any shares of its capital
stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time of
the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock transfer books of the Company
were open, the holder would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination or
reclassification; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in the event any
Person becomes an Acquiring Person (the first occurrence of such event
being referred to hereinafter as the "Flip-In Event"), then (A) the
Purchase Price shall be adjusted to be the Purchase Price in effect
immediately prior to the Flip-In Event multiplied by the number of one one-
hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to such Flip-In Event, whether or not such Right was then
exercisable, and (B) each holder of a Right, except as otherwise provided
in this Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter
have the right to receive, upon exercise thereof at a price equal to the
Purchase Price (as so adjusted), in accordance with the terms of this
Agreement and in lieu of shares of Preferred Stock, such number of shares
of Common Stock as shall equal the result obtained by dividing the Purchase
Price (as so adjusted) by 50% of the current per share market price of the
Common Stock (determined pursuant to Section 11(d) hereof) on the date of
such Flip-In Event; PROVIDED, HOWEVER, that the Purchase Price (as so
adjusted) and the number of shares of Common Stock so receivable upon
<PAGE>
exercise of a Right shall, following the Flip-In Event, be subject to
further adjustment as appropriate in accordance with Section 11(f) hereof.
Notwithstanding anything in this Agreement to the contrary, however, from
and after the Flip-In Event, any Rights that are beneficially owned by (x)
any Acquiring Person (or any Affiliate or Associate of any Acquiring
Person), (y) a transferee of any Acquiring Person (or any such Affiliate or
Associate) who becomes a transferee after the Flip-In Event or (z) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-In Event
pursuant to either (I) a transfer from the Acquiring Person to holders of
its equity securities or to any Person with whom it has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(II) a transfer which the Board of Directors has determined is part of a
plan, arrangement or understanding which has the purpose or effect of
avoiding the provisions of this paragraph, and subsequent transferees of
such Persons, shall be void without any further action and any holder of
such Rights shall thereafter have no rights whatsoever with respect to such
Rights under any provision of this Agreement. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 11(a)(ii)
are complied with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. From and after the Flip-In Event, no
Right Certificate shall be issued pursuant to Section 3 or Section 6 hereof
that represents Rights that are or have become void pursuant to the
provisions of this paragraph, and any Right Certificate delivered to the
Rights Agent that represents Rights that are or have become void pursuant
to the provisions of this paragraph shall be canceled. From and after the
occurrence of an event specified in Section 13(a) hereof, any Rights that
theretofore have not been exercised pursuant to this Section 11(a)(ii)
shall thereafter be exercisable only in accordance with Section 13 and not
pursuant to this Section 11(a)(ii).
(iii) The Company may at its option substitute for a share of
Common Stock issuable upon the exercise of Rights in accordance with the
foregoing subparagraph (ii) a number of shares of Preferred Stock or
fraction thereof such that the current per share market price of one share
of Preferred Stock multiplied by such number or fraction is equal to the
current per share market price of one share of Common Stock. In the event
that there shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii), the Board of
Directors shall, to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party (A) determine the
excess (such excess, the "Spread") of (1) the value of the shares of Common
Stock issuable upon the exercise of a Right in accordance with the
foregoing subparagraph (ii) (the "Current Value") over (2) the Purchase
Price (as adjusted in accordance with the foregoing subparagraph (ii)), and
(B) with respect to each Right (other than Rights which have become void
pursuant to the foregoing subparagraph (ii)), make adequate provision to
substitute for the shares of Common Stock issuable in accordance with the
foregoing subparagraph (ii) upon exercise of the Right and payment of the
Purchase Price (as adjusted in accordance therewith), (1) cash, (2) a
reduction in such Purchase Price, (3) shares of Preferred Stock or other
equity securities of the Company (including, without limitation, shares or
fractions of shares of preferred stock which, by virtue of having dividend,
voting and liquidation rights substantially comparable to those of the
shares of Common Stock, are deemed in good faith by the Board of Directors
to have substantially the same value as the shares of Common Stock (such
shares of Preferred Stock and shares or fractions of shares of preferred
stock are hereinafter referred to as "Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any combination of the
foregoing, having a value which, when added to the value of the shares of
Common Stock issued upon exercise of such Right, shall have an aggregate
value equal to the Current Value (less the amount of any reduction in such
Purchase Price), where such aggregate value has been determined by the
Board of Directors upon the advice of a nationally recognized investment
banking firm selected in good faith by the Board of Directors; PROVIDED,
<PAGE>
HOWEVER, that if the Company shall not make adequate provision to deliver
value pursuant to clause (B) above within thirty (30) days following the
Flip-In Event (the "Section 11(a) (ii) Trigger Date"), then the Company
shall be obligated to deliver, to the extent permitted by applicable law
and any material agreements then in effect to which the Company is a party,
upon the surrender for exercise of a Right and without requiring payment of
such Purchase Price, shares of Common Stock (to the extent available), and
then, if necessary, such number or fractions of shares of Preferred Stock
(to the extent available) and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread. If, upon the occurrence
of the Flip-In Event, the Board of Directors shall determine in good faith
that it is likely that sufficient additional shares of Common Stock could
be authorized for issuance upon exercise in full of the Rights, then, if
the Board of Directors so elects, the thirty (30) day period set forth
above may be extended to the extent necessary, but not more than ninety
(90) days after the Section 11(a) (ii) Trigger Date, in order that the
Company may seek shareholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be extended, is
herein called the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the second and/or
third sentence of this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 11(a)(ii) hereof and the last sentence of this Section
11(a)(iii) hereof, that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such second sentence and to determine
the value thereof. In the event of any such suspension, the Company shall
issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the shares of Common Stock shall be the
current per share market price (as determined pursuant to Section 11(d)(i))
on the Section 11(a)(ii) Trigger Date and the per share or fractional value
of any "Common Stock Equivalent" shall be deemed to equal the current per
share market price of the Common Stock. The Board of Directors of the
Company may, but shall not be required to, establish procedures to allocate
the right to receive shares of Common Stock upon the exercise of the Rights
among holders of Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Stock entitling
them (for a period expiring within 45 calendar days after such record date)
to subscribe for or purchase Preferred Stock (or shares having the same
rights, privileges and preferences as the Preferred Stock ("equivalent
preferred shares")) or securities convertible into Preferred Stock or
equivalent preferred shares at a price per share of Preferred Stock or
equivalent preferred shares (or having a conversion price per share, if a
security convertible into shares of Preferred Stock or equivalent preferred
shares) less than the then current per share market price of the Preferred
Stock (determined pursuant to Section 11(d) hereof) on such record date,
the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the number
of shares of Preferred Stock and equivalent preferred shares outstanding on
such record date plus the number of shares of Preferred Stock and
equivalent preferred shares which the aggregate offering price of the total
number of shares of Preferred Stock and/or equivalent preferred shares so
to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current
market price, and the denominator of which shall be the number of shares of
Preferred Stock and equivalent preferred shares outstanding on such record
date plus the number of additional shares of Preferred Stock and/or
equivalent preferred shares to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially
<PAGE>
convertible); PROVIDED, HOWEVER, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company issuable upon exercise
of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the
Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent. Shares of Preferred Stock and
equivalent preferred shares owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is
fixed; and in the event that such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of
a distribution to all holders of the Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price
to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share market
price of the Preferred Stock (determined pursuant to Section 11(d) hereof)
on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one share of Preferred Stock,
and the denominator of which shall be such current per share market price
(determined pursuant to Section 11(d) hereof) of the Preferred Stock;
PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company to be issued upon exercise of one
Right. Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(d)(i) Except as otherwise provided herein, for the purpose of any
computation hereunder, the "current per share market price " of any
security (a "Security " for the purpose of this Section 11(d)(i)) on any
date shall be deemed to be the average of the daily closing prices per
share of such Security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER,
that in the event that the current per share market price of the Security
is determined during a period following the announcement by the issuer of
such Security of (A) a dividend or distribution on such Security payable in
shares of such Security or securities convertible into such shares, or (B)
any subdivision, combination or reclassification of such Security, and
prior to the expiration of 30 Trading Days after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the current
per share market price shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security. The closing
price for each day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported by the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the Security
<PAGE>
is not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or, if the Security
is not listed or admitted to trading on any national securities exchange,
the last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by Nasdaq or
such other system then in use, or, if on any such date the Security is not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Security selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Security is listed or admitted to trading is open for
the transaction of business or, if the Security is not listed or admitted
to trading on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, if the Preferred
Stock is publicly traded, the "current per share market price" of the
Preferred Stock shall be determined in accordance with the method set forth
in Section 11(d)(i). If the Preferred Stock is not publicly traded but the
Common Stock is publicly traded, the "current per share market price" of
the Preferred Stock shall be conclusively deemed to be the current per
share market price of the Common Stock as determined pursuant to Section
11(d)(i) multiplied by the then applicable Adjustment Number (as defined in
and determined in accordance with the Certificate of Determination for the
Preferred Stock). If neither the Common Stock nor the Preferred Stock is
publicly traded, "current per share market price" shall mean the fair value
per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with
the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; PROVIDED, HOWEVER, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest one-
thousandth of a share of Preferred Stock or one-hundredth of a share of
Common Stock or other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction which requires such adjustment
or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than the
Preferred Stock, thereafter the Purchase Price and the number of such other
shares so receivable upon exercise of a Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent
as practicable to the provisions with respect to the Preferred Stock
contained in Sections 11(a), 11(b), 11(c), 11(e), 11(h), 11(i) and 11(m)
hereof, as applicable, and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths
of a share of Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.
<PAGE>
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and 11(c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredth of a share of Preferred Stock (calculated
to the nearest one-thousandth of a share of Preferred Stock) obtained by
(i) multiplying (x) the number of one one-hundredths of a share purchasable
upon the exercise of a Right immediately prior to such adjustment by (y)
the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price pursuant to Sections 11(b) or 11(c) hereof to adjust
the number of Rights, in substitution for any adjustment in the number of
one one-hundredths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment
of the number of Rights shall be exercisable for the number of one one-
hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to
such adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one-hundredth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by
the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. Such
record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be
at least 10 days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company may, as promptly as
practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company,
new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a share of Preferred Stock issuable
upon the exercise of a Right, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number
of one one-hundredths of a share of Preferred Stock which were expressed in
the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the
fraction of Preferred Stock or other shares of capital stock issuable upon
exercise of a Right, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of Preferred
Stock or other such shares at such adjusted Purchase Price.
<PAGE>
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event issuing to the holder of any Right exercised after such record
date the Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Preferred
Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; PROVIDED, HOWEVER, that the Company shall deliver
to such holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such adjustments in the Purchase
Price, in addition to those adjustments expressly required by this Section
11, as and to the extent that it in its sole discretion shall determine to
be advisable in order that any consolidation or subdivision of the
Preferred Stock, issuance wholly for cash of any shares of Preferred Stock
at less than the current market price, issuance wholly for cash of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for Preferred Stock, dividends on Preferred Stock payable in
shares of Preferred Stock or issuance of rights, options or warrants
referred to hereinabove in Section 11(b), hereafter made by the Company to
holders of its Preferred Stock shall not be taxable to such shareholders.
(n) Anything in this Agreement to the contrary notwithstanding, in
the event that at any time after the date of this Rights Agreement and
prior to the Distribution Date, the Company shall (i) declare and pay any
dividend on the Common Stock payable in Common Stock or (ii) effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of a dividend payable in
Common Stock) into a greater or lesser number of shares of Common Stock,
then, in each such case, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter, shall be
proportionately adjusted so that the number of Rights thereafter associated
with each share of Common Stock following any such event shall equal the
result obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event.
(o) The Company agrees that, after the earlier of the Distribution
Date or the Stock Acquisition Date, it will not, except as permitted by
Sections 23, 24 or 27 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably foreseeable
that such action will diminish substantially or eliminate the benefits
intended to be afforded by the Rights.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or 13
hereof, the Company shall promptly (a) prepare a certificate setting forth
such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Stock and the Preferred Stock a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 25 hereof (if so required under Section 25 hereof).
The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not be deemed
<PAGE>
to have knowledge of any such adjustment unless and until it shall have
received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event, directly or indirectly, at any time after the
Flip-In Event (i) the Company shall consolidate with or shall merge into
any other Person, (ii) any Person shall merge with and into the Company and
the Company shall be the continuing or surviving corporation of such merger
and, in connection with such merger, all or part of the Common Stock shall
be changed into or exchanged for stock or other securities of any other
Person (or of the Company) or cash or any other property, or (iii) the
Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to
any other Person (other than the Company or one or more wholly-owned
Subsidiaries of the Company), then upon the first occurrence of such event,
proper provision shall be made so that: (A) each holder of a Right (other
than Rights which have become void pursuant to Section 11(a)(ii) hereof)
shall thereafter have the right to receive, upon the exercise thereof at
the Purchase Price (as theretofore adjusted in accordance with Section
11(a)(ii) hereof), in accordance with the terms of this Agreement and in
lieu of shares of Preferred Stock or Common Stock of the Company, such
number of validly authorized and issued, fully paid, non-assessable and
freely tradeable shares of Common Stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall equal the result
obtained by dividing the Purchase Price (as theretofore adjusted in
accordance with Section 11(a)(ii) hereof) by 50% of the current per share
market price of the Common Stock of such Principal Party (determined
pursuant to Section 11(d) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; PROVIDED, HOWEVER, that the
Purchase Price (as theretofore adjusted in accordance with Section
11(a)(ii) hereof) and the number of shares of Common Stock of such
Principal Party so receivable upon exercise of a Right shall be subject to
further adjustment as appropriate in accordance with Section 11(f) hereof
to reflect any events occurring in respect of the Common Stock of such
Principal Party after the occurrence of such consolidation, merger, sale or
transfer; (B) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or transfer,
all the obligations and duties of the Company pursuant to this Rights
Agreement; (C) the term "Company" shall thereafter be deemed to refer to
such Principal Party; and (D) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of
its shares of Common Stock in accordance with Section 9 hereof) in
connection with such consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the shares of
its Common Stock thereafter deliverable upon the exercise of the Rights;
provided that, upon the subsequent occurrence of any consolidation, merger,
sale or transfer of assets or other extraordinary transaction in respect of
such Principal Party, each holder of a Right shall thereupon be entitled to
receive, upon exercise of a Right and payment of the Purchase Price as
provided in this Section 13(a), such cash, shares, rights, warrants and
other property which such holder would have been entitled to receive had
such holder, at the time of such transaction, owned the Common Stock of the
Principal Party receivable upon the exercise of a Right pursuant to this
Section 13(a), and such Principal Party shall take such steps (including,
but not limited to, reservation of shares of stock) as may be necessary to
permit the subsequent exercise of the Rights in accordance with the terms
hereof for such cash, shares, rights, warrants and other property.
<PAGE>
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in (i) or (ii)
of the first sentence of Section 13(a) hereof: (A) the Person that is the
issuer of the securities into which the shares of Common Stock are
converted in such merger or consolidation, or, if there is more than one
such issuer, the issuer the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding, or (B) if no
securities are so issued, (x) the Person that is the other party to the
merger, if such Person survives said merger, or, if there is more than one
such Person, the Person the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding or (y) if the Person
that is the other party to the merger does not survive the merger, the
Person that does survive the merger (including the Company if it survives)
or (z) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in (iii) of the
first sentence in Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person receiving the
greatest portion of the assets or earning power cannot be determined,
whichever of such Persons is the issuer of Common Stock having the greatest
aggregate market value of shares outstanding; PROVIDED, HOWEVER, that in
any such case described in the foregoing clause (b)(i) or (b)(ii), if the
Common Stock of such Person is not at such time or has not been
continuously over the preceding 12-month period registered under Section 12
of the Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, the term "Principal Party" shall refer to such other Person, or
(2) if such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stock of all of which is and has been so registered,
the term "Principal Party" shall refer to whichever of such Persons is the
issuer of Common Stock having the greatest aggregate market value of shares
outstanding, or (3) if such Person is owned, directly or indirectly, by a
joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in clauses (1) and (2)
above shall apply to each of the owners having an interest in the venture
as if the Person owned by the joint venture was a Subsidiary of both or all
of such joint venturers, and the Principal Party in each such case shall
bear the obligations set forth in this Section 13 in the same ratio as its
interest in such Person bears to the total of such interests.
(c) The Company shall not consummate any consolidation, merger,
sale or transfer referred to in Section 13(a) hereof unless prior thereto
the Company and the Principal Party involved therein shall have executed
and delivered to the Rights Agent an agreement confirming that the
requirements of Sections 13(a) and (b) hereof shall promptly be performed
in accordance with their terms and that such consolidation, merger, sale or
transfer of assets shall not result in a default by the Principal Party
under this Agreement as the same shall have been assumed by the Principal
Party pursuant to Sections 13(a) and (b) hereof and providing that, as soon
as practicable after executing such agreement pursuant to this Section 13,
the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its
best efforts to cause such registration statement to become effective as
soon as practicable after such filing and use its best efforts to cause
such registration statement to remain effective (with a prospectus at all
<PAGE>
times meeting the requirements of the Securities Act) until the Expiration
Date and similarly comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the New York
Stock Exchange or on another national securities exchange, to list or admit
to trading (or continue the listing of) the Rights and the securities
purchasable upon exercise of the Rights on the New York Stock Exchange or
such securities exchange, or, if the Common Stock of the Principal Party
shall not be listed or admitted to trading on the New York Stock Exchange
or a national securities exchange, to cause the Rights and the securities
receivable upon exercise of the Rights to be authorized for quotation on
Nasdaq or on such other system then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the Principal Party
subject to purchase upon exercise of outstanding Rights.
(d) In case the Principal Party has a provision in any of its
authorized securities or in its certificate of incorporation or by-laws or
other instrument governing its corporate affairs, which provision would
have the effect of (i) causing such Principal Party to issue (other than to
holders of Rights pursuant to this Section 13), in connection with, or as a
consequence of, the consummation of a transaction referred to in this
Section 13, shares of Common Stock or Common Stock Equivalents of such
Principal Party at less than the then current market price per share
thereof (determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Stock or Common Stock
Equivalents of such Principal Party at less than such then current market
price, or (ii) providing for any special payment, tax or similar provision
in connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 13, then, in such event, the Company
hereby agrees with each holder of Rights that it shall not consummate any
such transaction unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a supplemental
agreement providing that the provision in question of such Principal Party
shall have been canceled, waived or amended, or that the authorized
securities shall be redeemed, so that the applicable provision will have no
effect in connection with, or as a consequence of, the consummation of the
proposed transaction.
(e) The Company covenants and agrees that it shall not, at any
time after the Flip-In Event, enter into any transaction of the type
described in clauses (i) through (iii) of Section 13(a) hereof if (i) at
the time of or immediately after such consolidation, merger, sale, transfer
or other transaction there are any rights, warrants or other instruments or
securities outstanding or agreements in effect 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
consolidation, merger, sale, transfer or other transaction, the
stockholders of the Person who constitutes, or would constitute, the
Principal Party for purposes of Section 13(b) hereof shall have received a
distribution of Rights previously owned by such Person or any of its
Affiliates or Associates or (iii) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the Rights.
<PAGE>
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights
(except prior to the Distribution Date in accordance with Section 11(n)
hereof). In lieu of such fractional Rights, there shall be paid to the
registered holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a whole Right
shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use or, if on
any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to issue fractions of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock) or to distribute certificates
which evidence fractional shares of Preferred Stock (other than fractions
which are integral multiples of one one-hundredth of a share of Preferred
Stock) upon the exercise or exchange of Rights. Interests in fractions of
Preferred Stock in integral multiples of one one-hundredth of a share of
Preferred Stock may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the
Company and a depositary selected by it; PROVIDED, that such agreement
shall provide that the holders of such depositary receipts shall have all
the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Stock represented by such depositary
receipts. In lieu of fractional shares of Preferred Stock that are not
integral multiples of one one-hundredth of a share of Preferred Stock, the
Company shall pay to the registered holders of Right Certificates at the
time such Rights are exercised or exchanged as herein provided an amount in
cash equal to the same fraction of the current market value of a whole
share of Preferred Stock (as determined in accordance with Section 14(a)
hereof but with Common Stock replacing Rights in such formulation) for the
Trading Day immediately prior to the date of such exercise or exchange.
(c) The Company shall not be required to issue fractions of shares
of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock upon the exercise or exchange of Rights. In lieu of
such fractional shares of Common Stock, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in
cash equal to the same fraction of the current market value of a whole
share of Common Stock (as determined in accordance with Section 14(a)
<PAGE>
hereof but with Common Stock replacing rights in such formulation) for the
Trading Day immediately prior to the date of such exercise or exchange.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise or exchange of a Right (except as provided above).
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Stock),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Stock), on
his own behalf and for his own benefit, may enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by
such Right Certificate (or, prior to the Distribution Date, such Common
Stock) in the manner provided therein and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights,
it is specifically acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of, the obligations of any
Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the office or agency of the Rights Agent designated for such purpose,
duly endorsed or accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the Person
in whose name the Right Certificate (or, prior to the Distribution Date,
the Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the Common Stock
certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent shall
be affected by any notice to the contrary.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Preferred
Stock or any other securities of the Company which may at any time be
issuable on the exercise or exchange of the Rights represented thereby, nor
shall anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights
of a 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
<PAGE>
receive notice of meetings or other actions affecting shareholders (except
as provided in this Agreement), or to receive dividends or subscription
rights, or otherwise, until the Rights evidenced by such Right Certificate
shall have been exercised or exchanged in accordance with the provisions
hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and execution
of this Agreement and the exercise and performance of its duties hereunder.
The Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability arising therefrom,
directly or indirectly.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it
in connection with, its administration of this Agreement in reliance upon
any Right Certificate or certificate for the Preferred Stock or Common
Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any bank or corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated,
or any corporation or bank resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or
any bank or corporation succeeding to the stock transfer or corporate trust
powers of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties
hereto; PROVIDED, that such bank or corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Right Certificates shall
have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of
the predecessor Rights Agent or in the name of the successor Rights Agent;
and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
<PAGE>
Certificates either in its prior name or in its changed name and in all
such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the
Board, Chief Executive Officer, President, any Vice President or the Chief
Financial Officer and 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 negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant
to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights
provided for in Sections 3, 11, 13, 23 and 24, or the ascertaining of the
existence of facts that would require any such change or adjustment (except
with respect to the exercise of Rights evidenced by Right Certificates
after receipt of a certificate furnished pursuant to Section 12, describing
such change or adjustment); nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation
of any shares of Preferred Stock or other securities to be issued pursuant
to this Agreement or any Right Certificate or as to whether any shares of
Preferred Stock or other securities will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
<PAGE>
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any person reasonably believed by the Rights Agent to be one of the
Chairman of the Board, President, Chief Executive Officer, Chief Financial
Officer or the Secretary of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered by it in good faith in accordance
with instructions of any such officer or for any delay in acting while
waiting for those instructions. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or omitted by
the Rights Agent under this Agreement and the date on and/or after which
such action shall be taken or such omission shall be effective. The Rights
Agent shall not be liable for any action taken by, or omission of, the
Rights Agent in accordance with a proposal included in any such application
on or after the date specified in such application (which date shall not be
less than five Business Days after the date any officer of the Company
actually receives such application unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the Rights Agent
shall have received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the
form of assignment or the form of election to purchase set forth on the
reverse thereof, as the case may be, has not been completed to certify the
holder is not an Acquiring Person (or an Affiliate or Associate thereof),
the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock or Preferred Stock by registered or
certified mail, and, following the Distribution Date, to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock or Preferred Stock by registered or
certified mail, and, following the Distribution Date, to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation
<PAGE>
or incapacity by the resigning or incapacitated Rights Agent or by the
holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be
a bank or corporation organized and doing business under the laws of the
United States or the laws of any state of the United States or the District
of Columbia, in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at
the time of its appointment as Rights Agent a combined capital and surplus
of at least $50 million. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or
deed; but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock or
Preferred Stock, and, following the Distribution Date, mail a notice
thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Right Certificates evidencing
Rights in such forms as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or
kind or class of shares or other securities or property purchasable under
the Right Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of Common
Stock following the Distribution Date and prior to the Expiration Date, the
Company may with respect to shares of Common Stock so issued or sold
pursuant to (i) the exercise of stock options, (ii) under any employee plan
or arrangement, (iii) upon the exercise, conversion or exchange of
securities, notes or debentures issued by the Company or (iv) a contractual
obligation of the Company, in each case existing prior to the Distribution
Date, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale.
SECTION 23. REDEMPTION.
(a) The Board of Directors of the Company may, at any time prior
to the Flip-In Event, redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (the redemption price being hereinafter referred to
as the "Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board
of Directors in its sole discretion may establish. The Redemption Price
shall be payable, at the option of the Company, in cash, shares of Common
Stock, or such other form of consideration as the Board of Directors shall
determine.
(b) Immediately upon the action of the Board of Directors ordering
the redemption of the Rights pursuant to paragraph (a) of this Section 23
(or at such later time as the Board of Directors may establish for the
effectiveness of such redemption), and without any further action and
<PAGE>
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. The Company shall promptly give public notice of any
such redemption; PROVIDED, HOWEVER, that the failure to give, or any defect
in, any such notice shall not affect the validity of such redemption.
Within 10 days after such action of the Board of Directors ordering the
redemption of the Rights (or such later time as the Board of Directors may
establish for the effectiveness of such redemption), the Company shall mail
a notice of redemption to all the holders of the then outstanding Rights at
their last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method
by which the payment of the Redemption Price will be made.
SECTION 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at
any time after the Flip-In Event, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 11(a)(ii) hereof)
for Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such amount per Right
being hereinafter referred to as the "Exchange Ratio"). Notwithstanding
the foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after an Acquiring Person shall have become the
Beneficial Owner of shares of Common Stock aggregating 50% or more of the
shares of Common Stock then outstanding. From and after the occurrence of
an event specified in Section 13(a) hereof, any Rights that theretofore
have not been exchanged pursuant to this Section 24(a) shall thereafter be
exercisable only in accordance with Section 13 and may not be exchanged
pursuant to this Section 24(a). The exchange of the Rights by the Board of
Directors may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of the Board
of Directors of the Company ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24 and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive that number
of shares of Common Stock equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; PROVIDED, HOWEVER, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. The Company shall promptly mail a notice of any such exchange to
all of the holders of the Rights so exchanged at their last addresses as
they appear upon the registry books of the Rights Agent. Any notice 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 shares of Common Stock for
Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which
have become void pursuant to the provisions of Section 11(a)(ii) hereof)
held by each holder of Rights.
(c) The Company may at its option substitute, and, in the event
that there shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit an exchange of Rights for
Common Stock as contemplated in accordance with this Section 24, the
Company shall substitute to the extent of such insufficiency, for each
<PAGE>
share of Common Stock that would otherwise be issuable upon exchange of a
Right, a number of shares of Preferred Stock or fraction thereof (or
equivalent preferred shares, as such term is defined in Section 11(b)) such
that the current per share market price (determined pursuant to Section
11(d) hereof) of one share of Preferred Stock (or equivalent preferred
share) multiplied by such number or fraction is equal to the current per
share market price of one share of Common Stock (determined pursuant to
Section 11(d) hereof) as of the date of such exchange.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall at any time after the earlier of the
Distribution Date or the Stock Acquisition Date propose (i) to pay any
dividend payable in stock of any class to the holders of its Preferred
Stock or to make any other distribution to the holders of its Preferred
Stock (other than a regular quarterly cash dividend), (ii) to offer to the
holders of its Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision or combination of outstanding Preferred
Stock), (iv) to effect the liquidation, dissolution or winding up of the
Company, or (v) to pay any dividend on the Common Stock payable in Common
Stock or to effect a subdivision, combination or consolidation of the
Common Stock (by reclassification or otherwise than by payment of dividends
in Common Stock), then, in each such case, the Company shall give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, or distribution of rights or warrants, or
the date on which such liquidation, dissolution or winding up is to take
place and the date of participation therein by the holders of the Common
Stock and/or Preferred Stock, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i) or
(ii) above at least 10 days prior to the record date for determining
holders of the Preferred Stock for purposes of such action, and in the case
of any such other action, at least 10 days prior to the date of the taking
of such proposed action or the date of participation therein by the holders
of the Common Stock and/or Preferred Stock, whichever shall be the earlier.
(b) In case any event described in Section 11(a)(ii) or Section 13
shall occur, then the Company shall as soon as practicable thereafter give
to each holder of a Right Certificate (or if occurring prior to the
Distribution Date, the holders of the Common Stock), in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice
shall describe such event and the consequences of such event to holders of
Rights under Section 11(a)(ii) and Section 13 hereof.
SECTION 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
LOGIC DEVICES INCORPORATED
1320 Orleans Drive
Sunnyvale, CA 94089
Attention: Mr. William Volz
President and CEO
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
AMERICAN SECURITIES TRANSFER & TRUST, INC.
1825 Lawrence Street
Suite 444
Denver, CO 80202
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
<PAGE>
SECTION 27. SUPPLEMENTS AND AMENDMENTS. Except as provided in the
penultimate sentence of this Section 27, for so long as the Rights are then
redeemable, the Company may in its sole and absolute discretion, and the
Rights Agent shall if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any
holders of the Rights. At any time when the Rights are no longer
redeemable, except as provided in the penultimate sentence of this Section
27, the Company may, and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of
Rights in order to (i) cure any ambiguity, (ii) correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provision herein, (iii) shorten or lengthen any time period
hereunder, or (iv) change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable; PROVIDED that no
such supplement or amendment shall adversely affect the interests of the
holders of Rights as such (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person), and no such amendment may cause the
Rights again to become redeemable or cause this Agreement again to become
amendable other than in accordance with this sentence. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or
amendment shall be made which changes the Redemption Price. Upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such supplement or
amendment.
SECTION 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock).
SECTION 30. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise the rights and
powers specifically granted to the Board of Directors of the Company or to
the Company, or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including, without limitation, a determination to redeem or not redeem the
Rights or to amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) that are done or made
by the Board of Directors of the Company in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights, as such, and all other parties, and (y) not subject the Board of
Directors to any liability to the holders of the Rights.
SECTION 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated.
<PAGE>
SECTION 32. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of California and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State.
SECTION 33. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the day and year first above written.
LOGIC DEVICES INCORPORATED
By:
Name:
Title:
AMERICAN SECURITIES TRANSFER & TRUST, INC.
AS RIGHTS AGENT
By:
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF CERTIFICATE OF DETERMINATION
OF
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
OF
LOGIC DEVICES INCORPORATED
PURSUANT TO SECTION 401 OF THE GENERAL CORPORATION LAW
OF THE STATE OF CALIFORNIA
The undersigned, being the President and Secretary, respectively, of
LOGIC DEVICES INCORPORATED, a corporation organized and existing under
the General Corporation Law ("Corporations Code") of the State of
California in accordance with the provisions of Section 401 thereof, DO
HEREBY CERTIFY THAT:
A. Pursuant to the authority vested in the Board of Directors in
accordance with the provisions of the Restated Articles of Incorporation
of the said Corporation, the said Board of Directors on April 29, 1997,
adopted the following resolution creating a series of 70,000 shares of
Preferred Stock designated as "Series B Junior Participating Preferred
Stock":
RESOLVED, that pursuant to the authority vested in the
Board of Directors of this Corporation in accordance with the
provisions of the Restated Articles of Incorporation, a series
of Preferred Stock, no par value, of the Corporation be and
hereby is created, and that the designation and number of
shares thereof and the voting and other powers, preferences and
relative, participating, optional or other rights of the shares
of such series and the qualifications, limitations and
restrictions thereof are as follows:
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
1. DESIGNATION AND AMOUNT. There shall be a series of Preferred
Stock that shall be designated as "Series B Junior Participating
Preferred Stock," and the number of shares constituting such series
shall be 70,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; PROVIDED, HOWEVER, that no
decrease shall reduce the number of shares of Series B Junior
Participating Preferred Stock to less than the number of shares then
issued and outstanding plus the number of shares issuable upon exercise
of outstanding rights, options or warrants or upon conversion of
outstanding securities issued by the Corporation.
2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders of
any shares of any class or series of stock of the Corporation ranking
prior and superior to the shares of Series B Junior Participating
Preferred Stock with respect to dividends, the holders of shares of
Series B Junior Participating Preferred Stock, in preference to the
holders of shares of any class or series of stock of the Corporation
ranking junior to the Series B Junior Participating Preferred Stock in
respect thereof, 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 20th day of April,
July, October and January, in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series B Junior Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the
greater of (a) $1.00 and (b) the Adjustment Number (as defined below)
times the aggregate per share amount of all cash dividends, and the
Adjustment Number times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on
the Common Stock, no par value per share, of the Corporation (the
"Common Stock") since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series B Junior Participating Preferred Stock. The "Adjustment Number"
shall initially be 100. In the event the Corporation shall at any time
after May 1, 1997 (the "Rights Declaration Date") (i) declare and pay
any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution
on the Series B Junior Participating Preferred Stock as provided in
paragraph (A) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock).
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Junior Participating Preferred Stock from
the Quarterly Dividend Payment Date next preceding the date of issue of
such shares of Series B Junior 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 B Junior 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 and be
cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares
of Series B Junior 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 B
Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no
more than 60 days prior to the date fixed for the payment thereof.
3. VOTING RIGHTS. The holders of shares of Series B Junior
Participating Preferred Stock shall have the following voting rights:
(A) Each share of Series B Junior Participating Preferred
Stock shall entitle the holder thereof to a number of votes equal to the
Adjustment Number on all matters submitted to a vote of the shareholders
of the Corporation.
(B) Except as required by law and by Section 10 hereof,
holders of Series B Junior Participating Preferred Stock shall have no
special voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Junior Participating Preferred
Stock as provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared,
on shares of Series B Junior Participating Preferred Stock outstanding
shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series B Junior
Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series B Junior Participating Preferred Stock, except dividends paid
ratably on the Series B Junior Participating Preferred Stock and all
such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares
are then entitled; or
(iii) purchase or otherwise acquire for consideration any
shares of Series B Junior Participating Preferred Stock, or any shares
of stock ranking on a parity with the Series B Junior Participating
Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to
all holders of Series B Junior Participating Preferred Stock, or to such
holders and holders of any such shares ranking on a parity therewith,
upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
<PAGE>
5. REACQUIRED SHARES. Any shares of Series B Junior
Participating Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired promptly after the
acquisition thereof. All such shares shall upon their retirement become
authorized but unissued shares of Preferred Stock and may be reissued
as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors, subject to any conditions and
restrictions on issuance set forth herein.
6. LIQUIDATION, DISSOLUTION OR WINDING UP. (A) Upon any
liquidation, dissolution or winding up of the Corporation, voluntary or
otherwise, no distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Junior Participating
Preferred Stock unless, prior thereto, the holders of shares of Series B
Junior Participating Preferred Stock shall have received an amount per
share (the "Series B Liquidation Preference") equal to the greater of
(i) $100 plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such
payment, or (ii) the Adjustment Number times the per share amount of all
cash and other property to be distributed in respect of the Common Stock
upon such liquidation, dissolution or winding up of the Corporation.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series B Liquidation
Preference and the liquidation preferences of all other classes and
series of stock of the Corporation, if any, that rank on a parity with
the Series B Junior Participating Preferred Stock in respect thereof,
then the assets available for such distribution shall be distributed
ratably to the holders of the Series B Junior Participating Preferred
Stock and the holders of such parity shares in proportion to their
respective liquidation preferences.
(C) Neither the merger or consolidation of the
Corporation into or with another corporation nor the merger or
consolidation of any other corporation into or with the Corporation
shall be deemed to be a liquidation, dissolution or winding up of the
Corporation within the meaning of this Section 6.
7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction
in which the outstanding shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property,
then in any such case each share of Series B Junior Participating
Preferred Stock shall at the same time be similarly exchanged or changed
in an amount per share equal to the Adjustment Number times the
aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged.
8. NO REDEMPTION. Shares of Series B Junior Participating
Preferred Stock shall not be subject to redemption by the Company.
9. RANKING. The Series B Junior Participating Preferred
Stock shall rank junior to all other series of the Preferred Stock as to
the payment of dividends and as to the distribution of assets upon
liquidation, dissolution or winding up, unless the terms of any such
series shall provide otherwise, and shall rank senior to the Common
Stock as to such matters.
10. AMENDMENT. At any time that any shares of Series B Junior
Participating Preferred Stock are outstanding, the Restated Articles of
Incorporation of the Corporation shall not be amended in any manner
which would materially alter or change the powers, preferences or
special rights of the Series B Junior 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 B Junior Participating
Preferred Stock, voting separately as a class.
11. FRACTIONAL SHARES. Series B Junior Participating
Preferred Stock may be issued in fractions of a share that 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 B
Junior Participating Preferred Stock.
12. CONSENT FOR CERTAIN REPURCHASES OF COMMON STOCK DEEMED TO
BE DISTRIBUTIONS. Each holder of an outstanding shares of Series B
Junior Participating Preferred Stock shall be deemed to have consented,
for purposes of Sections 502, 503 and 506 of the Corporations Code, to
distributions made by the Corporation in connection with the repurchase
of shares of Common issued to or held by employees, consultants,
officers and directors upon termination of their employment or services
pursuant to agreements providing for the rights of repurchase between
the Corporation and such persons.
B. The number of shares constituting the Series B Junior
Participating Preferred Stock shall be 70,000. Such number of shares
may be increased or decreased by resolution of the Board of Directors;
provided, however, that no decrease shall reduce the number of Series B
Junior Participating Preferred Stock to less than the number of shares
then issued and outstanding plus the number of shares issuable upon
exercise of outstanding rights, options or warrants or upon conversion
of outstanding securities issued by the Corporation.
C. None of the shares of Series B Junior Participating
Preferred Stock has been issued.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this
Certificate of Determination this 29th day of April, 1997 and declares
under penalty of perjury that the matters set forth in the foregoing
certificate are true to their knowledge.
Name: Name:
Title: PRESIDENT Title: SECRETARY
<PAGE>
EXHIBIT B
FORM OF RIGHT CERTIFICATE
CERTIFICATE NO. R-______ NO. OF RIGHTS:_______
NOT EXERCISABLE AFTER ___________ __, 2007 OR EARLIER
IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON
WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN
THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF
WILL BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE.
RIGHT CERTIFICATE
LOGIC DEVICES INCORPORATED
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 April 29 1997, as the
same may be amended from time to time (the "Rights Agreement"), between
Logic Devices Incorporated, a California corporation (the "Company"), and
American Securities Transfer & Trust, Inc., as Rights Agent (the "Rights
Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00
P.M., San Jose, California time, on April 29, 2007 at the office or agency
of the Rights Agent designated for such purpose, or of its successor as
Rights Agent, one one-hundredth of a fully paid non-assessable share of
Series B Junior Participating Preferred Stock, no par value (the
"Preferred Stock"), of the Company at a purchase price of $12.00 per one
one-hundredth of a share of Preferred Stock (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly executed. The number of Rights evidenced by
this Right Certificate (and the number of one one-hundredths of a share of
Preferred Stock which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase
Price as of May 1, 1997, based on the Preferred Stock as constituted at
such date. As provided in the Rights Agreement, the Purchase Price, the
number of one one-hundredths of a share of Preferred Stock (or other
securities or property) which may be purchased upon the exercise of the
Rights and the number of Rights evidenced by this Right Certificate are
subject to modification and adjustment upon the happening of certain
events.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Right Certificates. Copies of the Rights Agreement are on file at the
principal executive offices of the Company and the above-mentioned office
or agency of the Rights Agent. The Company will mail to the holder of
this Right Certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor.
This Right Certificate, with or without other Right Certificates,
upon surrender at the office or agency of the Rights Agent designated for
such purpose, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number of shares of Preferred Stock as the
Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged in whole or in
part for shares of the Company's Common Stock, no par value per share,
and/or shares of Preferred Stock.
No fractional shares of Preferred Stock or Common Stock will be
issued upon the exercise or exchange of any Right or Rights evidenced
hereby (other than fractions of Preferred Stock which are integral
multiples of one one-hundredth of a share of Preferred Stock, which may,
at the election of the Company, be evidenced by depository receipts), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate, as such, shall be entitled
to vote or receive dividends or be deemed for any purpose the holder of
the Preferred Stock or of any other securities of the Company which may at
any time be issuable on the exercise or exchange hereof, nor shall
anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a 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 Right Certificate shall have
been exercised or exchanged as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
<PAGE>
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ___________ __, 199__.
LOGIC DEVICES INCORPORATED
By:__________________________________
[Title]
ATTEST:
____________________________________
[Title]
Countersigned:
AMERICAN SECURITIES TRANSFER & TRUST, INC., as Rights Agent
By:__________________________________
[Title]
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED __________________________ hereby sells,
assigns and transfers unto
______________________________________________________
_________________________________________________________________________
(Please print name and address of transferee)
_________________________________________________________________________
Rights represented by this Right Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and
appoint
Attorney, to transfer said Rights on the books of the within-named
Company, with full power of substitution.
Dated: ____________________________
____________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company, broker,
dealer or other eligible institution participating in a recognized
signature guarantee medallion program.
(To be completed)
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by, were not acquired by
the undersigned from, and are not being assigned to an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement).
____________________________________
Signature
<PAGE>
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate)
To LOGIC DEVICES INCORPORATED:
The undersigned hereby irrevocably elects to exercise ________
Rights represented by this Right Certificate to purchase the shares of
Preferred Stock (or other securities or property) issuable upon the
exercise of such Rights and requests that certificates for such shares of
Preferred Stock (or such other securities) be issued in the name of:
_________________________________________________________________________
(Please print name and address)
_________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
_________________________________________________________________________
(Please print name and address)
_________________________________________________________________________
Dated:________________________
____________________________________
Signature
(Signature must conform to holder specified on Right Certificate)
Signature Guaranteed:
Signature must be guaranteed by a bank, trust company, broker,
dealer or other eligible institution participating in a recognized
signature guarantee medallion program.
<PAGE>
Form of Reverse Side of Right Certificate - continued
_________________________________________________________________________
(To be completed)
The undersigned certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by, and were not acquired by the
undersigned from, an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
____________________________________
Signature
_________________________________________________________________________
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the
face of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, such Assignment or Election to Purchase will not be honored.
<PAGE>
EXHIBIT C
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON
WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN
THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF
WILL BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF PREFERRED STOCK OF
LOGIC DEVICES INCORPORATED
On April 29, 1997, the Board of Directors of Logic Devices
Incorporated (the "Company") declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of common stock, no
par value per share, of the Company (the "Common Stock"). The dividend is
payable on May 1, 1997 (the "Record Date") to the shareholders of record
on that date. Each Right entitles the registered holder to purchase from
the Company one one-hundredth of a share of Series B Junior Participating
Preferred Stock, no par value, of the Company (the "Preferred Stock") at a
price of $12.00 per one one-hundredth of a share of Preferred Stock (the
"Purchase Price"), subject to adjustment. The description and terms of
the Rights are set forth in a Rights Agreement dated as of April 30, 1997,
as the same may be amended from time to time (the "Rights Agreement"),
between the Company and American Securities Transfer & Trust, Inc., as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons
(with certain exceptions as set forth in the Rights Agreement, an
"Acquiring Person") has acquired beneficial ownership of 15% or more of
the outstanding shares of Common Stock or (ii) 10 business days (or such
later date as may be determined by action of the Board of Directors prior
to such time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or group of 15%
or more of the outstanding shares of Common Stock (the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced,
with respect to any of the Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificate together with a copy of this
Summary of Rights.
The Rights Agreement provides that, until the Distribution Date
(or earlier expiration of the Rights), the Rights will be transferred with
and only with the Common Stock. Until the Distribution Date (or earlier
expiration of the Rights), new Common Stock certificates issued after the
Record Date upon transfer or new issuances of Common Stock will contain a
notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier expiration of the Rights), the surrender for
transfer of any certificates for shares of Common Stock outstanding as of
the Record Date, even without such notation or a copy of this Summary of
Rights, will also constitute the transfer of the Rights associated with
the shares of Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of
record of the Common Stock as of the close of business on the Distribution
Date and such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on April 29, 2007 (the "Final Expiration Date"), unless
the Final Expiration Date is advanced or extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case as described
below.
The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the
Rights is subject to adjustment from time to time to prevent dilution (i)
in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders
of the Preferred Stock of certain rights or warrants to subscribe for or
purchase Preferred Stock at a price, or securities convertible into
Preferred Stock with a conversion price, less than the then-current market
price of the Preferred Stock or (iii) upon the distribution to holders of
the Preferred Stock of evidences of indebtedness or assets (excluding
regular periodic cash dividends or dividends payable in Preferred Stock)
or of subscription rights or warrants (other than those referred to
above).
The number of outstanding Rights is subject to adjustment in the
event of a stock dividend on the Common Stock payable in shares of Common
Stock or subdivisions, consolidations or combinations of the Common Stock
occurring, in any such case, prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Each share of Preferred Stock will be entitled,
when, as and if declared, to a preferential quarterly dividend payment
equal to the greater of: (a) $1.00 per share and (b) 100 times the
dividend declared per share of Common Stock. In the event of liquidation,
dissolution or winding up of the Company, the holders of the Preferred
Stock will be entitled to a preferential payment equal to the greater of:
(a) $100 per share (plus any accrued but unpaid dividends) and (b) 100
times the payment made per share of Common Stock. Each share of Preferred
Stock will have 100 votes, voting together with the Common Stock.
Finally, in the event of any merger, consolidation or other transaction in
which outstanding shares of Common Stock are converted or exchanged, each
share of Preferred Stock will be entitled to receive 100 times the amount
received per share of Common Stock. These rights are protected by
customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-hundredth interest
in a share of Preferred Stock purchasable upon exercise of each Right
should approximate the value of one share of Common Stock.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than
Rights beneficially owned by the Acquiring Person (which will thereupon
become void), will thereafter have the right to receive upon exercise of a
Right that number of shares of Common Stock having a market value of two
times the exercise price of the Right or shares of Preferred Stock (or a
series of the Company's preferred stock having equivalent rights,
preferences and privileges) equivalent in value thereto.
In the event that, after a person or group has become an
Acquiring Person, the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or
earning power are sold, proper provisions will be made so that each holder
of a Right (other than Rights beneficially owned by an Acquiring Person
which will have become void) will thereafter have the right to receive
upon the exercise of a Right that number of shares of common stock of the
person with whom the Company has engaged in the foregoing transaction (or
its parent) that at the time of such transaction have a market value of
two times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person
and prior to the earlier of one of the events described in the previous
paragraph or the acquisition by such Acquiring Person of 50% or more of
the outstanding shares of Common Stock, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such Acquiring
Person which will have become void), in whole or in part, for shares of
Common Stock or Preferred Stock (or a series of the Company's preferred
stock having equivalent rights, preferences and privileges), at an
exchange ratio of one share of Common Stock, or a fractional share of
Preferred Stock (or other preferred stock) equivalent in value thereto,
per Right.
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares of Preferred Stock or
Common Stock will be issued (other than fractions of Preferred Stock which
are integral multiples of one one-hundredth of a share of Preferred Stock,
which may, at the election of the Company, be evidenced by depositary
receipts), and in lieu thereof an adjustment in cash will be made based on
the current market price of the Preferred Stock or the Common Stock.
At any time prior to the time an Acquiring Person becomes such,
the Board of Directors of the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on such basis
and with such conditions as the Board of Directors in its sole discretion
may establish. Immediately upon any redemption of the Rights, the right
to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
For so long as the Rights are then redeemable, the Company may,
except with respect to the redemption price, amend the Rights Agreement in
any manner. After the Rights are no longer redeemable, the Company may,
except with respect to the redemption price, amend the Rights Agreement in
any manner that does not adversely affect the interests of holders of the
Rights.
Until a Right is exercised or exchanged, the holder thereof, as
such, will have no rights as a shareholder of the Company, including,
without limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form
8-A dated May 2, 1997. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the Rights
does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, as the same may be amended from time to
time, which is hereby incorporated herein by reference.
<PAGE>
EXHIBIT 2
PRESS RELEASE
LOGIC DEVICES INCORPORATED
ADOPTS SHAREHOLDERS' RIGHTS PLAN
April 29, 1997, Sunnyvale, California. Logic Devices Incorporated
(NASDAQ: LOGC) announced today that it has adopted a Shareholders' Rights
Plan. The Plan is intended to discourage persons, groups and entities
from acquiring large stakes in Logic Devices or making a tender offer for
its stock without first convincing the Board of Directors that such action
is in the best interests of Logic Devices and its shareholders.
In general, the Rights Plan provides that if a person, group or entity
acquires a 15% or larger stake in Logic Devices, or announces a tender
offer and Logic Devices' Board chooses not to redeem the Rights within a
specified time period, all holders of Rights, other than the 15% or more
shareholder or the tender offeror, will be able to purchase a certain
amount of Logic Devices' common stock for one half of its market price.
The Rights Plan provides for the distribution of one Right for each
share of Logic Devices' outstanding common stock as of May 1, 1997. The
Rights presently have no economic value because they cannot be exercised
unless and until a person, group or entity acquires 15% or more of Logic
Devices' common stock or announces a tender offer. The Plan also permits
Logic Devices' Board of Directors to redeem the Rights for one cent per
Right under various circumstances.
William Volz, Logic Devices' President, said "Studies have shown that
Rights Plans can enhance shareholder value in a variety of ways. That is
why hundreds of publicly-held companies have adopted them. Logic Devices'
Rights Plan was adopted simply as a precautionary measure to better
position our shareholders to realize the long term value of their
investment, and to provide an additional level of protection against
coercive or abusive tactics."
Mr. Volz also said that Logic Devices' Rights Plan was not adopted in
response to any specific event or circumstance. The Rights will expire no
later than ten years from the date of the Plan's adoption. The creation
of the Rights is not a taxable event for Logic Devices' shareholders.
For additional information, please contact William Volz, President or
Todd Ashford, CFO at (408) 542 5400.
LOGIC Devices develops and markets high performance integrated
circuits which address computational intensive digital signal processing
application in industrial and military markets. Interested customer or
investors may contact the Company at: Logic Devices Incorporated, 1320
Orleans Drive, Sunnyvale, CA 94089, (408) 542-5400.
