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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
STERIS CORPORATION
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(Exact name of registrant as specified in its charter)
Ohio 0-20165 34-1482024
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(State of incorporation (Commission File Number) (IRS Employer
or organization) Identification No.)
5960 Heisley Road, Mentor, Ohio 44060
-------------------------------------
(Address, Including Zip Code, of Principal Executive Offices)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
------------------- ------------------------------
None None
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instruction A.(c)(1), please check the
following box. [ ]
If this Form relates to the registration of a class of debt securities and is to
become effective simultaneously with the effectiveness of a concurrent
registration statement under the 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:
Rights issued under Rights Agreement dated as of October 24, 1996
------------------------------------------------------------------------
(Title of class)
Exhibit Index located on page 4 of 56
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On October 24, 1996, the Board of Directors of STERIS
Corporation (the "Company") declared a dividend consisting of one Right for each
outstanding Common Share without par value (the "Common Shares") of the Company.
The distribution will be paid on November 7, 1996 (the "Record Date") to the
stockholders of record on the Record Date. Following the Shares Acquisition Date
(as hereinafter defined), each Right entitles the registered holder (other than
an Acquiring Person (as hereinafter defined)) to purchase from the Company one
Common Share at a price of $120.00 (the "Purchase Price"), subject to
adjustment, or, under conditions described below, to acquire one Common Share
for an exercise price of $1.00 per share (the "Exercise Price"). The description
and terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and KeyBank National Association, as Rights
Agent (the "Rights Agent"), adopted by the Company on October 24, 1996.
Until such time as a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") has acquired,
or obtained the right to acquire, beneficial ownership of 15% or more of the
Common Shares then outstanding (the "Shares Acquisition Date"), the Rights will
be evidenced, with respect to any of the Common Share certificates outstanding
as of the Record Date, by such Common Share certificates with a copy of a
Summary of Rights attached thereto.
The Rights Agreement provides that, until the Shares
Acquisition Date, the Rights will be transferred with and only with the Common
Shares. Until the Shares Acquisition Date (or the earlier redemption or
expiration of the Rights), the surrender for transfer of any of the Common Share
certificates, even without a copy of the Summary of Rights attached thereto,
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificates. As soon as practicable following the
Shares Acquisition Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Shares Acquisition Date, and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Shares Acquisition
Date. The Rights will expire at the close of business on November 7, 2006,
unless earlier redeemed by the Company as described below.
Upon the occurrence of a Triggering Event (as defined in the
Rights Agreement), each holder of a Right, other than Rights that were or are
beneficially owned by the Acquiring Person (which will thereafter be void),
shall have the right to receive, upon exercise of the Right and payment of the
Exercise Price, one Common Share of the Company.
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The Purchase Price and the Exercise Price, and the number of
Common Shares or other securities issuable upon exercise of the Rights, are
subject to adjustment from time to time to prevent dilution.
With certain exceptions, no adjustment in the Purchase Price
or the Exercise Price will be required until cumulative adjustments require an
adjustment of at least 1% in the Purchase Price or the Exercise Price. No
fractional shares will be issued and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Common Shares on the last trading
date prior to the date of exercise.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
At any time prior to the Shares Acquisition Date, 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"); except that, the Rights may
not be redeemed on or after the date of the commencement by any Person (as
defined in the Rights Agreement) of a tender or exchange offer if, upon
consummation thereof, such Person would be an Acquiring Person unless such
redemption is approved by a majority of the Continuing Directors (as defined in
the Rights Agreement) and the Continuing Directors constitute a majority of the
Board of Directors. Immediately upon the action of the Board of Directors of
the Company, or the Continuing Directors, as the case may be, electing to
redeem the Rights, the Company shall make announcement thereof, and the right
to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
The provisions of the Rights Agreement may be amended by the
Board of Directors in order to cure any ambiguity, to correct any defect or
inconsistency or, prior to the Shares Acquisition Date, to make changes deemed
to be not adverse to the interests of the holders of the Rights, except that,
the Rights Agreement may not be amended (other than to cure an ambiguity or to
correct a defect or inconsistency) on or after the date of the commencement by
any Person of a tender or exchange offer if, upon consummation thereof, such
Person would be an Acquiring Person unless such amendment is approved by a
majority of the Continuing Directors and the Continuing Directors constitute a
majority of the Board of Directors.
The Rights could have the effect of discouraging a tender
offer or exchange offer for Common Shares or the accumulation of a substantial
number of Common Shares, unless the Board of Directors redeems the Rights.
This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is included as Exhibit 4.1 to this Form 8-A.
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ITEM 2. EXHIBITS.
Exhibit No. Exhibit Description Page No.
- ----------- ------------------- --------
4.1 Rights Agreement dated as of October 24, 1996, 6
between STERIS Corporation and KeyBank National
Association, Rights Agent
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereto duly authorized.
STERIS CORPORATION
Date: November 4, 1996 By: /s/ Bill R. Sanford
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Bill R. Sanford
Chairman, President and Chief
Executive Officer
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EXHIBIT 4.1
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STERIS CORPORATION
and
KEYBANK NATIONAL ASSOCIATION, Rights Agent
RIGHTS AGREEMENT
Dated as of
October 24, 1996
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TABLE OF CONTENTS
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<TABLE>
<CAPTION>
Page
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<S> <C> <C>
Section 1. CERTAIN DEFINITIONS......................................................... 1
Section 2. APPOINTMENT OF RIGHTS AGENT.................................................. 4
Section 3. ISSUE OF RIGHT CERTIFICATES.................................................. 4
Section 4. FORM OF RIGHT CERTIFICATES................................................... 6
Section 5. COUNTERSIGNATURE AND REGISTRATION............................................ 7
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.......................... 7
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS; NULL
AND VOID RIGHTS.................................................................. 8
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.......................... 10
Section 9. RESERVATION AND AVAILABILITY OF SHARES OF CAPITAL STOCK..................... 11
Section 10. COMMON SHARE RECORD DATE................................................... 12
Section 11. ADJUSTMENT OF PURCHASE PRICE, EXERCISE PRICE, NUMBER AND TYPE OF
SHARES OR NUMBER OF RIGHTS...................................................... 13
Section 12. CERTIFICATES OF ADJUSTED PURCHASE PRICE, EXERCISE PRICE OR NUMBER OF
SHARES.......................................................................... 20
Section 13. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.................................... 20
Section 14. RIGHTS OF ACTION........................................................... 21
Section 15. AGREEMENT OF RIGHT HOLDERS................................................. 21
Section 16. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.......................... 22
Section 17. CONCERNING THE RIGHTS AGENT................................................ 22
Section 18. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.................. 23
Section 19. DUTIES OF RIGHTS AGENT..................................................... 23
Section 20. CHANGE OF RIGHTS AGENT..................................................... 26
Section 21. ISSUANCE OF NEW RIGHT CERTIFICATES......................................... 26
Section 22. REDEMPTION................................................................. 27
Section 23. NOTICE OF CERTAIN EVENTS................................................... 27
Section 24. NOTICES.................................................................... 28
Section 25. SUPPLEMENTS AND AMENDMENTS..................................................29
Section 26. SUCCESSORS................................................................. 29
Section 27. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC................... 30
Section 28. BENEFITS OF THIS AGREEMENT................................................. 30
Section 29. SEVERABILITY............................................................... 30
Section 30. GOVERNING LAW.............................................................. 31
Section 31. COUNTERPARTS............................................................... 31
Section 32. DESCRIPTIVE HEADINGS....................................................... 31
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit A - FORM OF CERTIFICATE OF AMENDMENT OF AMENDED ARTICLES OF
INCORPORATION...................................................................A-1
Exhibit B - FORM OF RIGHT CERTIFICATE...................................................B-1
Exhibit C - SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES.................................C-1
</TABLE>
ii
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RIGHTS AGREEMENT
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This Agreement, dated as of October 24, 1996, is between STERIS
Corporation, an Ohio corporation (the "Company"), and KeyBank National
Association, as Rights Agent (the "Rights Agent").
The Board of Directors of the Company on October 24, 1996
authorized and declared a dividend consisting of one right ("Right") for each
Common Share (as hereinafter defined) of the Company outstanding on November 7,
1996 (the "Record Date") and authorized the issuance of one Right in respect of
each Common Share of the Company issued between the Record Date and the earlier
of the Shares Acquisition Date or the Expiration Date (as such terms are
hereinafter defined), including but not limited to Common Shares which are
treasury shares as of the Record Date and subsequently become outstanding. Each
Right represents the right to purchase one Common Share.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, is the Beneficial Owner
(as such term is hereinafter defined) of a number of Common Shares which equals
or exceeds 15% of the number of Common Shares then outstanding, but shall not
include the Company, any subsidiary of the Company, any employee benefit plan or
employee stock ownership plan of the Company or of any subsidiary of the Company
or any person organized, appointed or established by the Company or any
subsidiary of the Company for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common Shares by the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or more
of the Common Shares then outstanding; EXCEPT THAT, if a Person becomes the
Beneficial Owner of 15% or more of the Common Shares then outstanding by reason
of share purchases by the Company and, after such share purchases by the
Company, becomes the
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Beneficial Owner of any additional Common Shares, then such Person 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 Securities Exchange Act of 1934, as amended (the "Exchange
Act") as in effect on the date hereof.
(c) A Person shall be deemed to be the "Beneficial Owner" of
and shall be deemed to "beneficially own" any securities:
(i) which such Person, or any of such Person's Affiliates or
Associates, beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether
or not in writing), or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; EXCEPT THAT, a
Person shall not be deemed to be the "Beneficial Owner" of or to
"beneficially own" (1) securities tendered pursuant to a tender offer
made by such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase, or (2)
securities issuable upon exercise of these Rights;
(iii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of, pursuant to any agreement, arrangement or understanding (whether or
not in writing); EXCEPT THAT, a Person shall not be deemed to be the
Beneficial Owner of or to "beneficially own" any security under this
subparagraph (iii) if the agreement, arrangement or understanding to
vote such security (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations of the
Exchange Act and (B) is not then reportable by such Person on Schedule
13D under the Exchange Act (or any comparable or successor report); or
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(iv) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in
subparagraph (iii) of this paragraph (c)) or disposing of any
securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in State of Ohio 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.,
Cleveland time, on such date; EXCEPT THAT, if such date is not a Business Day it
shall mean 5:00 P.M., Cleveland time, on the next succeeding Business Day.
(f) "Common Shares" shall mean the Common Shares without par
value of the Company.
(g) "Continuing Director" shall mean any individual who is a
member of the Board of Directors of the Company, is not, while such individual
is a member of the Board, an Acquiring Person, an Affiliate or Associate of an
Acquiring Person or a representative or nominee of an Acquiring Person or of any
such Affiliate or Associate and was a member of the Board prior to the earlier
of (i) a Shares Acquisition Date (as hereinafter defined) and (ii) the date of
the commencement of, or first public announcement of the intent to commence, by
any Person (other than the Company, any subsidiary of the Company, any employee
benefit plan or employee stock ownership plan of the Company or of any
subsidiary of the Company or any Person organized, appointed or established by
the Company or any subsidiary of the Company for or pursuant to the terms of any
such plan), a tender or exchange offer if, upon consummation thereof, such
Person would be an Acquiring Person, and any successor of a Continuing Director
who, while such successor is a member of the Board, is not an Acquiring Person,
an Affiliate or Associate of an Acquiring Person or a representative or nominee
of an Acquiring Person or of any such Affiliate or Associate and was recommended
or elected to succeed the Continuing Director by a majority of the Continuing
Directors.
(h) "Exercise Price" shall mean the exercise price per share
set forth in Section 11(a)(ii)
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(i) "Person" shall mean any individual, firm, corporation or
other entity.
(j) "Purchase Price" shall mean the purchase price per share
set forth in Section 7(b).
(k) "Series A Preferred Shares" shall mean the Series A
Preferred Shares, without par value, of the Company having the rights and
preferences set forth in Exhibit A to this Agreement.
(l) "Shares Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person (by press release,
filing made with the Securities and Exchange Commission or otherwise) that an
Acquiring Person has become such.
(m) "Subsidiary" shall mean any corporation or other entity of
which a majority of the voting power of the voting equity securities or other
equity interests is owned, directly or indirectly, by the Company.
(n) "Triggering Event" shall mean any event described in
Section 11(a)(ii).
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents as
it may deem necessary or desirable. Any actions which may be taken by the Rights
Agent pursuant to the terms of this Agreement may be taken by any such Co-Rights
Agent.
Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the Shares
Acquisition Date, (i) the Rights will be evidenced (subject to the provisions of
Section 3(b)) by the certificates for the Common Shares registered in the names
of the holders of the Common Shares (which certificates for the Common Shares
shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and (ii) the right to receive Right Certificates will be
transferable only in connection with the transfer of the Common Shares. As soon
as practicable after receipt of written notice from the Company that the Shares
Acquisition Date has occurred, the Rights Agent will send, by first-class,
insured, postage prepaid mail, to each record holder of the Common Shares as of
the close of business on the Shares Acquisition Date, at the address of such
holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit B hereto, evidencing one Right for each Common
Share held of record
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as of the close of business on the Shares Acquisition Date. As of the close of
business on the Shares Acquisition Date, the Rights will be evidenced solely by
such Right Certificates.
(b) As soon as practicable following the execution of this
Agreement, the Company will send a copy of a Summary of Rights to Purchase
Common Shares, in substantially the form attached hereto as Exhibit C (the
"Summary of Rights"), by first-class, postage prepaid mail, to each record
holder of the Common Shares, at the address of such holder shown on the records
of the Company. Until the Shares Acquisition Date (or the earlier redemption or
expiration of the Rights), the Rights will be evidenced by such certificates for
the Common Shares registered in the names of the holders of the Common Shares.
Until the Shares Acquisition Date (or the earlier redemption or expiration of
the Rights), the surrender for transfer of any of the certificates for the
Common Shares shall also constitute the surrender for transfer of the Rights
associated with the Common Shares represented by such certificate.
(c) Rights shall be issued in respect of all Common Shares
issued (including but not limited to Common Shares which are treasury shares as
of the Record Date and subsequently become outstanding) or surrendered for
transfer or exchange after the Record Date but prior to the earlier of the
Shares Acquisition Date or the Expiration Date (as such term is defined in
Section 7). Certificates representing such Common Shares 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 STERIS
Corporation and KeyBank National Association, Rights Agent, dated as of
October 24, 1996 (the "Rights Agreement"), as such Rights Agreement may
be amended from time to time thereafter, a copy of which is on file at
the principal executive offices of STERIS Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
by this certificate. STERIS Corporation will mail to the holder of this
certificate a copy of the Rights Agreement (as in effect on the date of
mailing) without charge promptly after receipt of a written request
therefor. Under certain circumstances, Rights which are or were
beneficially owned by Acquiring Persons or their Affiliates or
Associates (as such terms are defined in the Rights Agreement) and any
subsequent holder of such Rights may become null and void.
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Until the Shares Acquisition Date, the Rights associated with the Common Shares
represented by certificates containing the foregoing legend shall be evidenced
by such certificates alone, and the surrender for transfer of any of such
certificates shall also constitute the surrender for transfer of the Rights
associated with the Common Shares represented by such certificate.
Section 4. FORM OF RIGHT CERTIFICATES. (a) The Right
Certificates (and the forms of election to purchase shares and of assignment to
be printed on the reverse thereof) shall be substantially the same as Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law, with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed or of any
association on which the Rights may from time to time be authorized for
quotation, or to conform to usage. Subject to the provisions of Section 21
hereof, the Right Certificates, whenever issued, shall be dated as of the Record
Date and, on their face, shall entitle the holders thereof to purchase such
number of Common Shares (or, following a Triggering Event, Common Shares, other
securities, cash or other assets, as the case may be) as shall be set forth
therein at the Purchase Price (or, upon the occurrence of a Triggering Event, at
the Exercise Price), but the number of such shares, the Purchase Price and the
Exercise Price shall be subject to adjustment as provided herein.
(b) Notwithstanding any other provision of this Agreement, any
Right Certificate issued pursuant to Section 3 or Section 21 hereof that
represents Rights beneficially owned by (i) an Acquiring Person or any Associate
or Affiliate of such Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person became an Acquiring Person or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming an
Acquiring Person and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to any Person who
holds an equity interest in such Acquiring Person or with whom such Acquiring
Person has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding which has a
primary purpose or effect the avoidance of Section 7(e) hereof, any Right
Certificate issued at any time to any nominee of an Acquiring Person or any
Associate or Affiliate of such Acquiring Person, and any Right Certificate
issued pursuant to Section 6 or Section 11 upon transfer,
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exchange, replacement or adjustment of any other Right Certificate referred to
in this sentence, shall contain the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Right Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of the Rights Agreement.
Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, President or any Vice President, either manually or by facsimile
signature, and have affixed thereto the Company's seal or a facsimile thereof
which 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 so countersigned. In case any officer of the Company who has
signed any of the Right Certificates ceases to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates may nevertheless be countersigned by the Rights
Agent, issued and delivered 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, is a
proper officer of the Company to sign such Right Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
Following the Shares Acquisition Date, the Rights Agent will
keep or cause to be kept, at one of its offices in Cleveland, Ohio, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
Subject to the provisions of Section 4(b), Section 7(e) and Section 13 hereof,
at any time after the close of business on the Shares Acquisition Date, and at
or prior to the close of business on the Expiration Date, any Right Certificate
or Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Right
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Certificates, entitling the registered holder to purchase a like number of
Common Shares (or, following a Triggering Event, a like number or amount of
Common Shares, other securities, cash or other assets, as the case may be) as
the Right Certificate or Right Certificates surrendered then entitled such
holder (or former holder in the case of a transfer) 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 principal office of the
Rights Agent for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder has completed and
signed the certificate contained in the form of assignment on the reverse side
of such Right Certificate and has provided such additional evidence of the
identity of the Beneficial Owner or former Beneficial Owner, or Affiliates or
Associates thereof, as the Company may reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e) and Section 13 hereof,
countersign and deliver to the person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of the loss, theft or destruction of a Right
Certificate, of indemnity or security reasonably satisfactory to them and
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and, in case of the mutilation of a Right Certificate, upon
surrender to the Rights Agent and cancellation of the mutilated Right
Certificate, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS; NULL AND VOID RIGHTS. (a) Subject to Section 7(e) hereof, the
registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Shares Acquisition Date upon surrender of the Right Certificate, with
the form of election to purchase on the reverse side thereof duly executed, to
the Rights Agent at its office in Cleveland, Ohio, together with payment of the
aggregate Purchase Price with respect to the total number of Common Shares (or
the aggregate Exercise Price with respect to the total number of Common Shares
or other securities, cash or other assets, as the case may
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be) as to which such surrendered Rights are then exercised, at or prior to the
close of business on November 7, 2006 (the "Expiration Date").
(b) Each Right shall initially represent the right to purchase
one Common Share, subject to adjustment as provided in Section 11 hereof. The
Purchase Price for each Common Share pursuant to the exercise of a Right shall
initially be $120.00, shall be subject to adjustment from time to time as
provided in Section 11 hereof, and shall be payable in lawful money of the
United States of America in accordance with Section 7(c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment of the Purchase Price for the Common
Shares (or the Exercise Price for the Common Shares, other securities, cash or
assets, as the case may be) to be purchased and an amount equal to any
applicable transfer tax in cash, or by certified check or bank draft payable to
the order of the Company, the Rights Agent shall, subject to Section 19(k)
hereof, promptly (i) requisition from any transfer agent of the Common Shares
certificates for the total number of Common Shares to be purchased, and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests, (ii) if the Company has elected to deposit the total number of Common
Shares issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of Common Shares as are to be purchased (in which case certificates for
the Common Shares represented by such receipts shall be deposited by the
transfer agent with the depositary agent), and the Company shall direct the
depositary agent to comply with all such requests, (iii) when appropriate,
requisition from any transfer agent of the Series A Preferred Shares
certificates for the total number of Series A Preferred Shares to be purchased
in accordance with Section 11(a)(iii), (iv) when appropriate, requisition from
the Company the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 13, (v) 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 (vi) when appropriate,
after receipt promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate. In the event that the Company is obligated to
issue securities, pay cash or distribute assets pursuant to Sections 11(a)(iii)
and 13 hereof, the Company will make all arrangements necessary so that such
securities, cash and assets are available for issuance, payment or distribution
by the Rights Agent, as and when appropriate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing
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<PAGE> 13
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 13 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
any Rights that are or were beneficially owned by (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to any Person who holds an equity interest in such Acquiring
Person or with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has, as a primary purpose or effect, the
avoidance of this Section 7(e), shall become null and void upon the occurrence
of a Triggering Event and no holder of such Rights shall have any right with
respect to such Rights under any provision of this Agreement from and after the
occurrence of the Triggering Event. The Company shall use all reasonable efforts
to insure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of 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.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder has (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company may 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 cancelled
form or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and
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retirement, and the Rights Agent shall cancel and retire, any Right Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Right Certificates to the Company
or shall, at the written request of the Company, destroy such cancelled Right
Certificates and, in such case, shall deliver a certificate of destruction
thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF SHARES OF CAPITAL
STOCK. (a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Common Shares or any
authorized and issued Common Shares held in its treasury, the number of Common
Shares that will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) Unless the Common Shares have been theretofore listed on a
national securities exchange, the Company shall, as soon as practicable
following a Triggering Event, use its best efforts to cause transactions in the
Rights to be quoted in the National Association of Securities Dealers Automated
Quotation National Market ("NASDAQ National Market") and in the event that
Series A Preferred Shares are to be issued under Section 11(a)(iii) shall, as
soon as practicable after the rights become exercisable, use its best efforts to
cause transactions in any Series A Preferred Shares or other securities of the
Company issuable upon exercise of the Rights to be quoted in NASDAQ National
Market. In the event that the Common Shares are listed on a national securities
exchange, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all Common Shares (or Series A Preferred
Shares or other securities, as the case may be) reserved for such issuance upon
exercise of the Rights to be listed on such exchange upon official notice of
issuance.
(c) The Company shall, as soon as practicable following the
first occurrence of a Triggering Event, (i) prepare and file a registration
statement under the Securities Act of 1933 (the "Securities Act") with respect
to the Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) use its best efforts to cause such registration statement
to become effective as soon as practicable after such filing and (iii) use its
best efforts to cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the date of the expiration of the Rights. The Company will also take such action
as may be appropriate under the blue sky laws of the various states. The Company
may temporarily suspend, for a period of time not to exceed ninety (90) days,
the exercisability of the Rights in order to prepare and file such registration
statement. Upon any such suspension, the Company shall issue a public
announcement and notice to the Rights Agent stating that the exercisability of
the Rights has been temporarily suspended, and the Company shall issue a public
announcement and
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<PAGE> 15
notice to the Rights Agent 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 in which any requisite
registration or qualification shall not have been obtained.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Common Shares and all Series A
Preferred Shares, as the case may be, delivered upon exercise of Rights shall,
at the time of delivery of the certificates therefor (subject to payment of the
Purchase Price or the Exercise Price, as the case may be), be duly and validly
authorized and issued, fully paid and nonassessable, freely tradeable, free and
clear of any liens, encumbrances or other adverse claims and not subject to call
or first refusal.
(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 Common Shares (or Series A Preferred Shares or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required (a) to pay any transfer tax which may be payable in
respect of any transfer involved in the transfer or delivery of Right
Certificates or the issuance or delivery of certificates for the Common Shares
(or Series A Preferred Shares or other securities, as the case may be) in a name
other than that of the registered holder of the Right Certificate evidencing the
Rights surrendered for exercise or (b) to issue or deliver any certificates for
a number of Common Shares (or Series A Preferred Shares or other securities, as
the case may be) upon the exercise of any Rights until any such tax shall have
been paid (any such tax being payable by the holder of such Right Certificate at
the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. COMMON SHARE RECORD DATE. Each person in whose name
any certificate for a number of Common Shares (or Series A Preferred Shares or
other securities, as the case may be) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of such
Common Shares (or Series A Preferred Shares or other securities, as the case may
be) 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 (or the Exercise Price, as the case may be) and
any applicable transfer taxes was made; EXCEPT THAT, if the date of such
surrender and payment is a date upon which the Common Share (or Series A
Preferred Share or other security, as the case may be) transfer books of the
Company are closed, such person shall be deemed to have become the record holder
thereof on, and such certificate shall be dated, the next succeeding Business
Day on which the Common Shares (or Series A Preferred Shares
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<PAGE> 16
or other securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a stockholder of the Company
with respect to shares for which the Rights are exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, EXERCISE PRICE,
NUMBER AND TYPE OF SHARES OR NUMBER OF RIGHTS. The Purchase Price and the
Exercise Price, the number of shares covered by each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Common Shares payable in
Common Shares, (B) subdivide the outstanding Common Shares, (C) combine the
outstanding Common Shares into a smaller number of shares or (D) issue any
shares of its capital stock in a reclassification of the Common Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price and
the Exercise Price in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification, and
the number and kind of Common Shares or capital stock, as the case may be,
issuable on such date, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to receive the aggregate
number and kind of Common Shares or capital stock, as the case may be, which, if
such Right had been exercised immediately prior to such date and at a time when
the Common Share transfer books of the Company were open, such holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs which
would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii),
the adjustment provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to any adjustment required pursuant to Section
11(a)(ii).
(ii) In the event any Person becomes an Acquiring Person each
holder of a Right (except as provided in Section 7(e)) shall thereafter have the
right to receive, upon exercise of the Right in accordance with the terms of
this Agreement, one Common Share of the Company for an Exercise Price of $1.00
per share; the number of such Common Shares and the Exercise Price shall be
subject to adjustment as provided in this Section 11.
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<PAGE> 17
(iii) In the event that the number of Common Shares which is
authorized by the Company's articles of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance with
subparagraph (ii) of this Section 11(a), the Company shall issue to each holder
who exercised a Right in accordance with subparagraph (ii) of this Section
11(a), one-one hundredth (1/100th) of a Series A Preferred Share in lieu of each
Common Share that would otherwise have been issuable to such holder in respect
of such exercise. In order to create the Series A Preferred Shares, the Company
shall, promptly after the date of this Agreement, cause to be executed and filed
with the Ohio Secretary of State a Certificate of Amendment of Amended Articles
of Incorporation of STERIS Corporation substantially in the form attached hereto
as Exhibit A. The Company shall not issue or deliver any Series A Preferred
Shares except upon exercise of the Rights.
(b) In case the Company shall fix a record date for the
issuance of rights or warrants to all holders of Common Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Common Shares at a price per Common Share (or having a
conversion price per share, if a security convertible into Common Shares) less
than the current market price (as defined in Section 11(d)) per Common Share on
such record date, the Purchase Price and the Exercise Price to be in effect
after such record date shall be determined by multiplying the Purchase Price and
the Exercise Price in effect immediately prior to such record date by a
fraction, of which the numerator shall be the number of Common Shares
outstanding on such record date plus the number of Common Shares which the
aggregate offering price of the total number of Common 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 of which the
denominator shall be the number of Common Shares outstanding on such record date
plus the number of additional Common Shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). 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. Common 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 or warrants are not so issued,
the Purchase Price and the Exercise Price shall be adjusted to be the Purchase
Price and the Exercise Price which would then be in effect if such record date
has not been fixed.
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<PAGE> 18
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular periodic cash dividend or a dividend payable in
Common Shares, but including any dividend payable in stock other than Common
Shares) or subscription rights or warrants (excluding those referred to in
Section 11(b)), the Purchase Price and the Exercise Price to be in effect after
such record date shall be determined by multiplying the Purchase Price or the
Exercise Price, as the case may be, in effect immediately prior to such record
date by a fraction, of which the numerator shall be the current market price (as
defined in Section 11(d)) per Common Share 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 Common
Share and of which the denominator shall be such current market price of one
Common Share. 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 and the Exercise Price shall be adjusted to be the Purchase Price
and the Exercise Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current market price" or "value" per share of the Common Shares on any date of
determination shall be deemed to be the average of the daily closing prices per
share of such Common Shares for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; EXCEPT THAT, in the event
that the "current market price" or "value" per share of the Common Shares is
determined during the period following the announcement by the issuer of such
Common Shares of (A) a dividend or distribution on such Common Shares payable in
such Common Shares or securities convertible into such Common Shares or (B) any
sub-division, combination or reclassification of such Common Shares 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 sub-division, combination or
reclassification, then, and in each such case, the "current market price" or
"value" shall be appropriately adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the NASDAQ National Market or, if the Common
Shares are not listed or admitted to trading on the NASDAQ National Market, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities
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<PAGE> 19
exchange on which the Common Shares are listed or admitted to trading or, if the
Common Shares 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 the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use or, if on any such date the Common
Shares are not quoted by such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Common Shares selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Common Shares, the closing price
on such date shall be the value of a Common Share on such date as determined in
good faith by the Continuing Directors if the Continuing Directors constitute a
majority of the Board of Directors or, if the Continuing Directors do not
constitute a majority of the Board of Directors, by an independent investment
banking firm selected by the Board of Directors. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which Common
Shares are listed or admitted to trading is open for the transaction of business
or, if the Common Shares are not listed or admitted to trading on any national
securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday on which
banking institutions in the State of Ohio are not authorized or obligated by law
or executive order to close. If the Common Shares is not publicly held or not so
listed or traded, "current market price" or "value" per share shall mean the
value per share as determined in good faith by the Continuing Directors of the
Company if the Continuing Directors constitute a majority of the Board of
Directors or, if the Continuing Directors do not constitute a majority of the
Board of Directors, by an independent investment banking firm selected by the
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current
market price" per share of Series A Preferred Shares shall be determined in the
same manner as set forth above for the Common Shares in subparagraph (i) of this
Section 11(d) (other than the last sentence thereof); EXCEPT THAT, if the
"current market price" per share of Series A Preferred Shares cannot be
determined in the manner provided above or if the Series A Preferred Shares are
not publicly held or listed or traded in a manner described in subparagraph (i)
of this Section 11(d), the "current market price" per share of Series A
Preferred Shares shall be conclusively deemed to be an amount equal to the
product of one hundred (100) (as such number may be appropriately adjusted for
such events as stock splits, stock dividends and recapitalizations with respect
to the Common Shares occurring after the date of this Agreement) and the current
market price per share of the Common Shares. If neither the Common Shares nor
the Series A Preferred Shares are publicly held or so listed or
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<PAGE> 20
traded, "current market price" per share of the Series A Preferred Shares shall
mean the value per share as determined in good faith by the Continuing Directors
of the Company if the Continuing Directors constitute a majority of the Board of
Directors or, if the Continuing Directors do not constitute a majority of the
Board of Directors, by an independent investment banking firm selected by the
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.
(e) No adjustment in the Purchase Price or the Exercise Price
shall be required unless such adjustment would require an increase or decrease
of at least 1% in such price; PROVIDED, HOWEVER, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the nearest ten
thousandth of a Series A Preferred Share or ten-thousandth of a Common Share, 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 mandates such
adjustment or (ii) the date of the expiration of the right to exercise any
Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a), the holder of any Right exercised after such adjustment becomes entitled
to receive upon exercise of such Right any shares of capital stock of the
Company other than Common Shares, thereafter the number of, and the Purchase
Price and the Exercise Price for, such other shares 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 Common Shares contained in
Section 11(a) through (m) inclusive, and the provisions of Sections 7, 9, 10 and
13 with respect to the Common Shares shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price or the Exercise Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price or the adjusted
Exercise Price, as the case may be, the number of Common Shares or the number of
Series A Preferred Shares or other securities, as the case may be, purchasable
from time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price or the
Exercise Price as a result of the calculations made in Sections 11(b) and (c),
each Right
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<PAGE> 21
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price or the adjusted
Exercise Price, as the case may be, that number of Common Shares (calculated to
the nearest ten-thousandth) or that number of Series A Preferred Shares
(calculated to the nearest ten-thousandth), as the case may be, obtained by (i)
multiplying (x) the number of Common Shares or the number of Series A Preferred
Shares, as the case may be, covered by a Right immediately prior to this
adjustment by (y) the Purchase Price or the Exercise Price, as the case may be,
in effect immediately prior to such adjustment and (ii) dividing the product so
obtained by the Purchase Price or the Exercise Price, as the case may be, in
effect immediately after such adjustment.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price or the Exercise Price to adjust the number of
Rights, in substitution for any adjustment in the number of Common Shares or the
number of Series A Preferred Shares, as the case may be, 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 Common Shares or the
number of Series A Preferred Shares, as the case may be, 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 ten-thousandth), obtained by dividing the
Purchase Price or the Exercise Price, as the case may be, in effect immediately
prior to such adjustment by the Purchase Price or the Exercise Price, as the
case may be, in effect immediately after such adjustment. The Company shall make
a public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment to be made. This record date may be the date
on which the Purchase Price or the Exercise Price, as the case may be, is
adjusted or any day thereafter but, if the Right Certificates have been issued,
shall be at least 10 days later than the date of the public announcement. If
Right Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of Right Certificates on such
record date Right Certificates evidencing, subject to Section 13, 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 may bear, at the option of the Company, the adjusted
Purchase Price or the adjusted Exercise Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
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<PAGE> 22
(j) Notwithstanding any adjustment or change in the Purchase
Price, the Exercise Price or the number of Common Shares or the number of Series
A Preferred Shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price, the Exercise Price and the number of Common Shares and the
number of Series A Preferred Shares which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price or the Exercise Price below the stated capital, if
any, of a Common Share or a Series A Preferred Share issuable upon exercise of
the Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Common Shares at such adjusted
Purchase Price and fully paid and nonassessable Series A Preferred Shares at
such adjusted Exercise Price.
(l) In any case in which this Section 11 requires that an
adjustment in the Purchase Price or the Exercise Price be made effective as of a
record date for a specified event, the Company may elect to defer until the
occurrence of such event the issuing to the holder of any Right exercised after
such record date the number of Common Shares and the number of Series A
Preferred Shares, if any, issuable upon such exercise over and above the number
of Common Shares and the number of Series A Preferred Shares, if any, issuable
upon such exercise on the basis of the Purchase Price or the Exercise Price in
effect prior to such adjustment; PROVIDED, HOWEVER, that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional Common Shares or additional
Series A Preferred 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 reduction in the
Purchase Price or the Exercise Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole discretion
determines to be advisable in order that any consolidation or sub-division of
Common Shares or Series A Preferred Shares, issuance wholly for cash of any
Common Shares or Series A Preferred Shares at less than the current market
price, issuance wholly for cash of securities which by their terms are
convertible into or exchangeable for Common Shares or Series A Preferred Shares,
stock dividends or issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Common Shares or
Series A Preferred Shares shall not be taxable to such holders.
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<PAGE> 23
Section 12. CERTIFICATES OF ADJUSTED PURCHASE PRICE, EXERCISE
PRICE OR NUMBER OF SHARES. Whenever an adjustment is made as provided in Section
11, the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Shares and the Series A Preferred Shares a copy of such certificate and
(c) mail a brief summary thereof to each holder of a Right Certificate (or, if
prior to the Shares Acquisition Date, to each holder of a certificate
representing Common Shares) in accordance with Section 24. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained.
Section 13. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 13(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 current market value of a whole Right shall be the value of the
Rights on such date as determined in good faith by the Continuing Directors if
the Continuing Directors constitute a majority of the Board of Directors or, if
the Continuing Directors do not constitute a majority of the Board of Directors,
by an independent investment banking firm selected by the Board of Directors.
20
<PAGE> 24
(b) The Company shall not be required to issue fractions of
Common Shares or Series A Preferred Shares upon exercise of the Rights or to
distribute certificates which evidence fractional shares. In lieu of fractional
shares of a Common Share or a Series A Preferred Share, the Company may pay to
the registered holders of Right Certificates at the time such Right Certificates
are exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one Common Share or one Series A Preferred Shares,
as the case may be. For purposes of this Section 13(b), the current market value
of one Common Share shall be the closing price of a Common Share or a Series A
Preferred Share (as determined pursuant to Section 11(d)(i) or Section
11(d)(ii)) for the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right.
Section 14. RIGHTS OF ACTION. All rights of action in respect
of this Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Shares Acquisition Date, the registered holders
of the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Shares Acquisition Date, of any Common Share), without the consent
of the Rights Agent or of the holder of any other Right Certificate (or, prior
to the Shares Acquisition Date, of the Common Shares), may, in his own behalf
and for his own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right Certificate.
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 15. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right
by accepting such Right consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Shares Acquisition Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Shares Acquisition Date, the Right Certificates
are transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent, duly endorsed or accompanied by a
proper
21
<PAGE> 25
instrument of transfer and with the appropriate forms and certificates fully
executed; and
(c) subject to Section 6, Section 7(e) and Section 7(f), the
Company and the Rights Agent may deem and treat the Person in whose name the
Right Certificate (or, prior to the Shares Acquisition Date, the associated
Common Share certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificates or the associated Common Share certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e), shall be required to be affected by any notice to the contrary.
Section 16. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of a Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of Common Shares
or Series A Preferred Shares which may at any time be issuable on the exercise
of the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate give to any holder, as such, of a Right Certificate any of the
rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in Section
23), or to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate have been exercised in
accordance with the provisions of this Agreement.
Section 17. CONCERNING THE RIGHTS AGENT. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time on demand of the Rights Agent, to reimburse it
for or pay 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 as a result of anything done or omitted to be done by the
Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises.
The 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
22
<PAGE> 26
Common Shares, Series A Preferred Shares or other securities, 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.
Section 18. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT. Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation, succeeding to the shareholder
services business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 20. 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 so
countersigned; in case at that time any of the Right Certificates shall not have
been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases, such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; in case at
that time any of the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in its prior name or
in its changed name; and in all such cases, such Right Certificates shall have
the full force provided in the Right Certificates and in this Agreement.
Section 19. 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 the legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel shall be
full and
23
<PAGE> 27
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 deems 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
is specifically prescribed in this Agreement) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman of the
Board, the President, any Vice President, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or omitted in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify such statements or recitals, 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 adjustment required under the provisions of
Section 11 or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Common Shares or Series A Preferred Shares
to be issued pursuant to this Agreement or any Right Certificate or as to
whether any Common Shares or Series A Preferred Shares will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such
24
<PAGE> 28
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the President, any Vice President, the
Treasurer 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 to be taken by it in good faith in accordance
with instructions of any such officer.
(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 Person.
(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 attorney
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1 or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
25
<PAGE> 29
Section 20. 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 Shares and Series A Preferred Shares by registered
or certified mail, and to the holders of the Right Certificates by first class
mail. If the Rights Agent resigns or is removed or otherwise becomes incapable
of acting, the Company shall appoint a successor to the Rights Agent. If the
Company fails to make such appointment within a period of 30 days after giving
notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a successor Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the law of the United States or of the State of Ohio
(or of any other state of the United States so long as such corporation is
authorized to do business as a banking institution in the State of Ohio), in
good standing, having an office in the State of Ohio, which is authorized under
such laws to exercise corporate trust powers and is subject to supervision or
examination by federal or state authority or 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 Shares
and Series A Preferred Shares and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 20 or any defect therein, however, 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 21. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price or the Exercise Price per share and the number,
kind or class of shares or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Agreement.
26
<PAGE> 30
Section 22. REDEMPTION. (a) The Board of Directors of the
Company may, at its option, at any time prior to the earlier of the Shares
Acquisition Date or the Expiration Date, redeem all but not less than all of the
then outstanding Rights at a redemption price of $.01 per Right appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); EXCEPT THAT, the Rights may not be
redeemed on or after the date of the commencement of, or the first public
announcement of an intent to commence, by any Person (other than the Company,
any subsidiary of the Company, any employee benefit plan or employee stock
ownership plan of the Company or of any subsidiary of the Company or any Person
organized, appointed or established by the Company or any subsidiary of the
Company for or pursuant to the terms of any such plan), a tender or exchange
offer if, upon consummation thereof, such Person would be an Acquiring Person
unless such redemption is approved by a majority of the Continuing Directors and
the Continuing Directors constitute a majority of the Board of Directors.
(b) Immediately upon the action of the Board of Directors of
the Company, or the Continuing Directors, as the case may be, ordering the
redemption of the Rights, and without any further action and without any notice,
the right to exercise the Rights shall terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price. Within ten
calendar days after the action of the Board of Directors, or the Continuing
Directors, as the case may be, ordering the redemption of the Rights, the
Company shall give notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Shares Acquisition Date, on the registry books of the Transfer Agent for
the Common Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption shall state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any of the Rights at any
time in any manner other than that specifically set forth in this Section 22 or
in connection with the repurchase of Common Shares prior to the Shares
Acquisition Date.
Section 23. NOTICE OF CERTAIN EVENTS. In case the Company
proposes at any time following the Shares Acquisition Date (a) to pay any
dividend payable in stock of any class to the holders of Common Shares or to
make any other distribution to the holders of Common Shares, or (b) to offer to
the holders of Common Shares rights or warrants to subscribe for or to purchase
any additional Common Shares or shares of stock of any class or any other
securities, rights or options, or (c) to effect any reclassification of its
Common Shares, or (d) to effect any consolidation or
27
<PAGE> 31
merger into or with, or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person, or (e) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to the Rights Agent and to each holder of a
Right, in accordance with Section 24, a notice of such proposed action, which
shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up is
to take place and the date of participation therein by the holders of the Common
Shares, if any such date is to be fixed, and such notice shall be so given, in
the case of any action described in clause (a) or (b) above, at least twenty
days prior to the record date for determining holders of the Common Shares for
purposes of such action and, in the case of any such other action, at least
twenty days prior to the date of the taking of such proposed action or the date
of participation therein by the holders of the Common Shares, whichever shall be
the earlier.
In case any of the events set forth in Section 11(a)(ii) of
this Agreement shall occur, then, in any such case, the Company shall as soon as
practicable thereafter give to the Rights Agent and to each holder of a Right,
in accordance with Section 24, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of Rights
under Section 11(a)(ii).
Section 24. NOTICES. Notice 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
personally delivered or sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent) as follows:
STERIS Corporation
5960 Heisley Road
Mentor, Ohio 44060-1834
Attention: David C. Dvorak, Vice President,
General Counsel and Secretary
Subject to the provisions of Section 20, 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
personally delivered or sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Company) as follows:
28
<PAGE> 32
KeyBank National Association
127 Public Square
15th Floor
Cleveland, Ohio 44114
Attention: Laura S. Kress, Assistant Vice-President
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to or on the holder of any Right
Certificate shall be sufficiently given or made if personally delivered or sent
by first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 25. SUPPLEMENTS AND AMENDMENTS. The Company may from
time to time supplement or amend this Agreement without the approval of any
holders of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contain herein which may be defective or
inconsistent with any other provision herein, or (iii) prior to the Shares
Acquisition Date, to change or supplement the provisions hereunder which the
Company may deem necessary or desirable and not adverse to the interests of the
holders of the Rights; EXCEPT THAT, this Agreement may not be supplemented or
amended in any way (other than pursuant to clauses (i) and (ii) above) on or
after the date of the commencement of, or first public announcement of the
intent to commence, by any Person (other than the Company, any subsidiary of the
Company, any employee benefit plan or employee stock ownership plan of the
Company or of any subsidiary of the Company or any Person organized, appointed
or established by the Company or any subsidiary of the Company for or pursuant
to the terms of any such plan), a tender or exchange offer if, upon consummation
thereof, such Person would be an Acquiring Person unless such amendment is
approved by a majority of the Continuing Directors and the Continuing Directors
constitute a majority of the Board of Directors. 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
25, the Rights Agent shall execute such supplement or amendment unless the
Rights Agent shall have determined in good faith that such supplement or
amendment would adversely affect its interests under this Agreement. Prior to
the Shares Acquisition Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Shares.
Section 26. 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.
29
<PAGE> 33
Section 27. DETERMINATION AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC. For all purposes of this Agreement, any calculation of the
number of Common Shares outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding Common
Shares of which any Person is the Beneficial Owner, shall be made in accordance
with the provisions of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Company (and, where
expressly provided for herein, the Continuing Directors) shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board, or the Company (or, as
expressly provided herein, the Continuing Directors), or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend or supplement this Agreement). All such actions,
calculations, interpretations and determinations (including, for the purpose of
clause (ii) below, all omissions with respect to the foregoing) which are done
or made by the Board (or, as expressly provided herein, by the Continuing
Directors) in good faith, shall (i) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Right Certificates and all other
parties, and (ii) not subject the Board or the Continuing Directors to any
liability to the holders of the Right Certificates.
Section 28. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Shares Acquisition Date, the Common Shares) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates.
Section 29. 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;
EXCEPT THAT, notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or authority
to be invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 22 hereof shall be
30
<PAGE> 34
reinstated and shall not expire until the close of business on the tenth day
following the date of such determination by the Board of Directors.
Section 30. 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 Ohio 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 31. 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 32. DESCRIPTIVE HEADINGS. Descriptive headings of the
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.
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<PAGE> 35
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and year first
above written.
STERIS CORPORATION
Attest:
By /s/ David C. Dvorak By /s/ Bill R. Sanford
-------------------------- -----------------------------
David C. Dvorak Bill R. Sanford
Vice President, Secretary Chairman, President and Chief
and General Counsel Executive Officer
KEYBANK NATIONAL ASSOCIATION
By /s/ Debra A. Kindred By /s/ Laura S. Kress
-------------------------- -----------------------------
Assistant Vice-President Assistant Vice-President
32
<PAGE> 36
INDEX OF DEFINED TERMS
----------------------
<TABLE>
<CAPTION>
Term Page
- ---- ----
<S> <C>
Acquiring Person...............................................................1
Affiliate ...............................................................2
Associate ...............................................................2
Beneficial Owner...............................................................2
Business Day ...............................................................3
Close of business..............................................................3
Common Shares ...............................................................3
Company ...............................................................1
Continuing Director............................................................3
Current market price..........................................................15
Exchange Act ...............................................................2
Exercise Price ...............................................................3
Expiration Date ...............................................................9
NASDAQ ..............................................................16
NASDAQ National Market........................................................11
Person ...............................................................4
Purchase Price ...............................................................4
Record Date ...............................................................1
Redemption Price..............................................................27
Right ...............................................................1
Rights Agent ...............................................................1
Securities Act ..............................................................11
Series A Preferred Shares......................................................4
Shares Acquisition Date........................................................4
Subsidiary ...............................................................4
Summary of Rights..............................................................5
Trading Day ..............................................................16
Triggering Event...............................................................4
</TABLE>
iii
<PAGE> 37
Exhibit A
---------
FORM OF
CERTIFICATE OF AMENDMENT OF
AMENDED ARTICLES OF INCORPORATION
OF
STERIS CORPORATION
Bill R. Sanford, Chairman, President and Chief Executive
Officer, and David C. Dvorak, Vice President, General Counsel and Secretary, of
STERIS Corporation, an Ohio corporation with its principal place of business at
Mentor, Ohio (the "Corporation") hereby certifies that at a meeting of the Board
of Directors of the Corporation (the "Board of Directors") called and held on
October 24, 1996, the following resolution was adopted pursuant to Section
1701.70(B)(1) of the Ohio General Corporation Law:
RESOLVED, that pursuant to the authority vested in the Board of
Directors in accordance with the provisions of the Ohio General Corporation Law,
as amended, and by Article Fourth of the Corporation's Amended Articles of
Incorporation, such Article Fourth is amended to add a new Section 8 providing
for a series A of Serial Preferred Shares, without par value, of the Corporation
(the "Series A Preferred Shares") and that the designation and the authorized
number of shares of, and the relative rights, preferences, and limitations of
such series are as follows:
ADDITIONAL EXPRESS TERMS OF SERIES A PREFERRED SHARES
SECTION 8. Series A Preferred Shares
-------------------------
a) Of the 3,000,000 Serial Preferred Shares without par value,
1,000,000 shall be Series A Preferred Shares. Series A Preferred Shares 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 have the benefit of all other rights of holders
of Series A Preferred Shares. The express terms of Series A Preferred Shares, in
addition to those set forth in Sections 1 through 7 of this Article Fourth,
shall be as hereinafter set forth in this Section 8.
b) The holders of Series A Preferred Shares shall be entitled
to receive, out of any funds legally available and when and as declared by the
Board of
A-1
<PAGE> 38
Directors, dividends and other distributions of the same kind as, but at a rate
equal to one hundred (100) times the amount per share of, the dividends or other
distributions received by the holders of Common Shares, subject to the provision
for adjustment hereinafter set forth. The record date and payment date of the
dividends and other distributions payable to the holders of the Series A
Preferred Shares shall be the same as the record date and the payment date of
the dividends and other distributions payable to the holders of the Common
Shares. Dividends on the Series A Preferred Shares shall not accrue or be
cumulative. In the event the Corporation at any time declares or pays any
dividend on the Common Shares payable in Common Shares, or effects a subdivision
or combination or consolidation of the outstanding Common Shares (by
reclassification or otherwise than by payment of a dividend in Common Shares)
into a greater or lesser number of Common Shares, then in each such case the
amount of dividends payable to holders of the Series A Preferred Shares under
this paragraph (b) shall be adjusted by multiplying the amount to which such
holders were entitled immediately prior to such event by a fraction, the
numerator of which is the number of Common Shares outstanding immediately after
such event and the denominator of which is the number of Common Shares
outstanding immediately prior to such event.
c) The outstanding Series A Preferred Shares shall not be
redeemable.
d) The holders of Series A Preferred Shares shall, in case of
liquidation, dissolution, or winding up of the affairs of the Corporation, be
entitled to receive in full, out of the assets of the Corporation, including its
capital, an amount equal to one hundred (100) times the amount to be distributed
per share to holders of Common Shares, subject to the provision for adjustment
hereinafter set forth. In the event the Corporation at any time declares or pays
any dividend on the Common Shares payable in Common Shares, or effects a
subdivision or combination or consolidation of the outstanding Common Shares (by
reclassification or otherwise than by payment of a dividend in Common Shares)
into a greater or lesser number of Common Shares, then in each such case the
amount to be distributed to holders of the Series A Preferred Shares under this
paragraph (d) shall be adjusted by multiplying amount to which such holders were
entitled immediately prior to such event by a fraction, the numerator of which
is the number of Common Shares outstanding immediately after such event and the
denominator of which is the number of Common Shares outstanding immediately
prior to such event. Except as set forth above, the holders of Series A
Preferred Shares shall have the same rights and shall be treated in
A-2
<PAGE> 39
the same manner with respect to any liquidation, dissolution or winding up as
holders of Common Shares.
e) In the event that the Corporation enters into any
consolidation, merger, combination or other transaction in which the Common
Shares are exchanged for or changed into other stock (and other securities and
assets, if any), then in any such case each Series A Preferred Share shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to one
hundred (100) times the aggregate amount of stock (and other securities and
assets, if any), as the case may be, into which or for which each Common Share
is changed or exchanged. In the event the Corporation at any time declares or
pays any dividend on the Common Shares payable in Common Shares, or effects a
subdivision or combination or consolidation of the outstanding Common Shares (by
reclassification or otherwise than by payment of a dividend in Common Shares)
into a greater or lesser number of Common Shares, then in each such case the
amount to be distributed to holders of the Series A Preferred Shares under this
paragraph (e) shall be adjusted by multiplying amount to which such holders were
entitled immediately prior to such event by a fraction, the numerator of which
is the number of Common Shares outstanding immediately after such event and the
denominator of which is the number of Common Shares outstanding immediately
prior to such event.
IN WITNESS WHEREOF, this Certificate of Amendment is executed
on behalf of the Corporation by its Chairman, President, and Chief Executive
Officer and attested by its Vice President, General Counsel and Secretary this
_______ day of October, 1996.
-----------------------------
Bill R. Sanford
Chairman, President and
Chief Executive Officer
Attest:
- -------------------------------
David C. Dvorak
Vice President, General Counsel
and Secretary
A-3
<PAGE> 40
Exhibit B
---------
[Form of Right Certificate]
Certificate No. R - ___________ Rights
NOT EXERCISABLE AFTER NOVEMBER 7, 2006 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.]*
RIGHT CERTIFICATE
-----------------
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 October 24, 1996 and as amended to date (the
"Rights Agreement"), between STERIS Corporation, an Ohio corporation (the
"Company"), and KeyBank National Association, (the "Rights Agent"), to purchase
from the Company at any time after the Shares Acquisition Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M., Cleveland time, on
November 7, 2006, at the office of the Rights Agent, or its successors as Rights
Agent, in Cleveland, Ohio, one Common Share of the Company (the "Common Share"),
at a purchase price of $120.00 per share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this
- --------
The portion of the legend in brackets shall be inserted only if
applicable.
B-1
<PAGE> 41
Right Certificate, the number of Common Shares which may be purchased upon
exercise thereof and the Purchase Price per share set forth above are the
numbers and Purchase Price as of November 7, 1996, based on the Common Shares of
the Company as constituted at such date.
Upon the occurrence of a Triggering Event (as such term is
defined in the Rights Agreement), each Right shall entitled the holder to
receive, upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase duly executed, one Common Share for an Exercise Price of
$1.00 per share (the "Exercise Price").
If the Rights evidenced by this Right Certificate are or at any
time were beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Triggering Event.
As provided in the Rights Agreement, the Purchase Price, the
Exercise Price and number and kind of Common Shares or other securities which
may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement; reference is made to the
Rights Agreement for a full description of the rights, limitations of rights,
obligations, duties and immunities of the Rights Agent, the Company and the
holders of the Right Certificates. Copies of the Rights Agreement are on file at
the office of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, 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 Common Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate is 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.
B-2
<PAGE> 42
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at its option
at a redemption price of $.01 per Right.
The Company will not issue any fractional Common Shares upon
the exercise of any Right or Rights evidenced hereby, but in lieu thereof may
make a cash payment, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Common
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
B-3
<PAGE> 43
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of __________________, 19___.
ATTEST: STERIS CORPORATION
By
- ------------------------ -----------------------------
Secretary Title:
Countersigned:
By
---------------------
B-4
<PAGE> 44
[Form of Reverse Side of Right Certificate]
Form of Assignment
------------------
(To be executed by the registered holder if the holder
desires to transfer the Right Certificate)
FOR VALUE RECEIVED ________________ hereby sells, assigns and
transfers unto _________________________
- ----------------------------------------------------------------------
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint __________________ as attorney,
to transfer the Right Certificate on the books of the STERIS Corporation, with
full power of substitution.
Dated: , 19
------------------ ---
--------------------------------
Signature
Signature Guaranteed:
B-5
<PAGE> 45
Certificate
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights evidenced by
this Right Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated:
----------------- --------------------------------
Signature
Notice
------
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-6
<PAGE> 46
Form of Election to Purchase Common Shares
------------------------------------------
(To be executed if the holder desires to
exercise the Right Certificate in accordance with
Section 11(a)(ii) of the Rights Agreement)
To STERIS Corporation:
The undersigned hereby irrevocably elects to exercise
________________ Rights represented by this Right Certificate to purchase the
Common Shares issuable upon the exercise of such Rights and requests that
certificates for such shares be issues in the name of:
- -----------------------------------------------------------
(Please print name and address)
- -----------------------------------------------------------
Please insert social security
or other identifying number:
------------------------------
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 print name and address)
Please insert social security
or other identifying number:
------------------------------
Dated: , 19
------------------ ---
--------------------------------
Signature
(Signature must conform in all respects to name of
the holder as specified on the face of this Right
Certificate)
Signature Guaranteed:
B-7
<PAGE> 47
Certificate
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: , 19
----------- --- --------------------------
Signature
Notice
------
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the fact of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
B-8
<PAGE> 48
Exhibit C
---------
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
On October 24, 1996, the Board of Directors of STERIS
Corporation (the "Company") declared a dividend consisting of one Right for each
outstanding Common Share without par value (the "Common Shares") of the Company.
The distribution will be paid on November 7, 1996 (the "Record Date") to the
stockholders of record on the Record Date. Following the Shares Acquisition Date
(as hereinafter defined), each Right entitles the registered holder (other than
an Acquiring Person (as hereinafter defined)) to purchase from the Company one
Common Share at a price of $120.00 (the "Purchase Price"), subject to
adjustment, or, under conditions described below, to acquire one Common Share
for an exercise price of $1.00 per share (the "Exercise Price"). The description
and terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and KeyBank National Association, as Rights
Agent (the "Rights Agent"), adopted by the Company on October 24, 1996.
Until such time as a public announcement that a person or group
of affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 15% or more of the Common
Shares then outstanding (the "Shares Acquisition Date"), the Rights will be
evidenced, with respect to any of the Common Share certificates outstanding as
of the Record Date, by such Common Share certificates with a copy of this
Summary of Rights attached thereto.
The Rights Agreement provides that, until the Shares
Acquisition Date, the Rights will be transferred with and only with the Common
Shares. Until the Shares Acquisition Date (or the earlier redemption or
expiration of the Rights), the surrender for transfer of any of the Common Share
certificates, even without a copy of this Summary of Rights attached thereto,
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificates. As soon as practicable following the
Shares Acquisition Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Shares Acquisition Date, and such separate Right
Certificates alone will evidence the Rights.
C-1
<PAGE> 49
The Rights are not exercisable until the Shares Acquisition
Date. The Rights will expire at the close of business on November 7, 2006 unless
earlier redeemed by the Company as described below.
Upon the occurrence of a Triggering Event (as defined in the
Rights Agreement), each holder of a Right, other than Rights that were or are
beneficially owned by the Acquiring Person (which will thereafter be void),
shall have the right to receive, upon exercise of the Right and payment of the
Exercise Price, one Common Share of the Company.
The Purchase Price and the Exercise Price, and the number of
Common Shares or other securities issuable upon exercise of the Rights, are
subject to adjustment from time to time to prevent dilution.
With certain exceptions, no adjustment in the Purchase Price or
the Exercise Price will be required until cumulative adjustments require an
adjustment of at least 1% in the Purchase Price or the Exercise Price. No
fractional shares will be issued and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Common Shares on the last trading
date prior to the date of exercise.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
At any time prior to the Shares Acquisition Date, 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"); except that, the Rights may
not be redeemed on or after the date of the commencement by any Person of a
tender or exchange offer if, upon consummation thereof, such Person would be an
Acquiring Person unless such redemption is approved by a majority of the
Continuing Directors (as defined in the Rights Agreement) and the Continuing
Directors constitute a majority of the Board of Directors. Immediately upon the
action of the Board of Directors of the Company, or the Continuing Directors, as
the case may be, electing to redeem the Rights, the Company shall make
announcement thereof, and the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
The provisions of the Rights Agreement may be amended by the
Board of Directors in order to cure any ambiguity, to correct any defect or
inconsistency or, prior to the Shares Acquisition Date, to make changes deemed
to be not adverse to the interests of the holders of the Rights, except that,
the Rights Agreement may not be
C-2
<PAGE> 50
amended (other than to cure an ambiguity or to correct a defect or
inconsistency) on or after the date of the commencement by any Person of a
tender or exchange offer if, upon consummation thereof, such Person would be an
Acquiring Person unless such amendment is approved by a majority of the
Continuing Directors and the Continuing Directors constitute a majority of the
Board of Directors.
A copy of the Rights Agreement has been, and any amendments
thereto will be, filed with the Securities and Exchange Commission as an Exhibit
to the Company's Application for Registration of Rights to Purchase Common
Shares on Form 8-A or amendments thereto. A copy of the Rights Agreement, as
amended, is available free of charge from the Company. This summary description
of the Amended Rights does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, as amended.
C-3
