<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
STERIS CORPORATION
- -------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 34-1482024
- ---------------------------------------- -------------------
(State of incorporation or organization) (I.R.S. Employer
Identification No.)
5960 Heisley Road, Mentor, Ohio 44060
- -------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
If this Form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), please check the following box.|_|
If this Form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), please check the following box.|X|
Securities Act registration statement file number to which this form
relates:_____________________
(If applicable)
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
------------------- ------------------------------
-------------------------------- ---------------------------------
-------------------------------- ---------------------------------
Securities to be registered pursuant to Section 12(g) of the Act:
Rights issued under Amended and Restated Rights Agreement, dated as of
----------------------------------------------------------------------
October 24, 1996, as subsequently amended
-----------------------------------------
(Title of Class)
<PAGE> 2
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 was paid on November 7, 1996 (the "Record Date") to the
stockholders of record on the Record Date. On January 21, 1999 the Board of
Directors of the Company authorized the execution of an Amended and Restated
Rights Agreement to amend and restate in its entirety the original Rights
Agreement between the Company and KeyBank National Association and to substitute
for Harris Trust and Savings Bank for KeyBank National Association as Rights
Agent. 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 $60.00 (the "Purchase Price"), taking into account the two-for-one split of
the Company's Common Shares effected on August 24, 1998 and subject to further
adjustment, or, under conditions described below, to acquire one Common Share
for an exercise price of $0.50 per share (the "Exercise Price"). The description
and terms of the Rights are set forth in the Amended and Restated Rights
Agreement (the "Rights Agreement") between the Company and Harris Trust and
Savings Bank, as Rights Agent (the "Rights Agent"), adopted by the Company as of
January 21, 1999.
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.
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.
-2-
<PAGE> 3
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 $.005 per Right (the "Redemption Price"). Immediately upon the action
of the Board of Directors of the Company 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.
The Rights could have the effect of discouraging a tender offer or
exchange offer for the Common Shares or the accumulation of a substantial number
of Common Shares, unless the Board of Directors redeems the Rights.
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
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, as it may be amended from time to time, which
is included as Exhibit 4.2 to this Form 8-A/A.
-3-
<PAGE> 4
ITEM 2. EXHIBITS.
Exhibit No. Exhibit Description
- ----------- -------------------
4.1 Rights Agreement dated as of October 24, 1996, between STERIS
Corporation and KeyBank National Association, Rights Agent *
4.2 Amended and Restated Rights Agreement, dated as of January 21, 1999,
between STERIS Corporation and Harris Trust and Savings Bank, Rights
Agent.
* Incorporated by reference to Exhibit 4.1 filed with the Registrant's
Registration Statement on Form 8-A filed with the Securities and
Exchange Commission on November 4, 1996.
-4-
<PAGE> 5
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.
Date: April 16, 1999 STERIS Corporation
By: /s/ Bill R. Sanford
------------------------------
Bill R. Sanford,
Chairman, President and Chief
Executive Officer
-5-
<PAGE> 1
Exhibit 4.2
- --------------------------------------------------------------------------------
STERIS CORPORATION
and
HARRIS TRUST AND SAVINGS BANK, Rights Agent
AMENDED AND RESTATED RIGHTS AGREEMENT
Dated as of
January 21, 1999
- --------------------------------------------------------------------------------
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
Page
----
<S> <C>
Section 1. Certain Definitions...............................................................................1
Section 2. Appointment of Rights Agent.......................................................................3
Section 3. Issue of Right Certificates.......................................................................3
Section 4. Form of Right Certificates........................................................................4
Section 5. Countersignature and Registration.................................................................5
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates......................................................6
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights; Null and Void
Rights............................................................................................7
Section 8. Cancellation and Destruction of Right Certificates................................................8
Section 9. Reservation and Availability of Shares of Capital Stock...........................................9
Section 10. Common Share Record Date.........................................................................10
Section 11. Adjustment of Purchase Price, Exercise Price, Number and Type of Shares or
Number of Rights.................................................................................10
Section 12. Certificates of Adjusted Purchase Price, Exercise Price or Number of Shares......................16
Section 13. Fractional Rights and Fractional Shares..........................................................16
Section 14. Rights of Action.................................................................................17
Section 15. Agreement of Right Holders.......................................................................17
Section 16. Right Certificate Holder Not Deemed a Stockholder................................................18
Section 17. Concerning the Rights Agent......................................................................18
Section 18. Merger or Consolidation or Change of Name of Rights Agent........................................19
Section 19. Duties of Rights Agent...........................................................................19
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
Section 20. Change of Rights Agent...........................................................................21
Section 21. Issuance of New Right Certificates...............................................................22
Section 22. Redemption.......................................................................................22
Section 23. Notice of Certain Events.........................................................................23
Section 24. Notices..........................................................................................23
Section 25. Supplements and Amendments.......................................................................24
Section 26. Successors.......................................................................................24
Section 27. Determination and Actions by the Board of Directors, etc.........................................25
Section 28. Benefits of this Agreement.......................................................................25
Section 29. Severability.....................................................................................25
Section 30. Governing Law....................................................................................25
Section 31. Counterparts.....................................................................................26
Section 32. Descriptive Headings.............................................................................26
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)
<PAGE> 4
AMENDED AND RESTATED RIGHTS AGREEMENT
-------------------------------------
This amended and restated Agreement, dated as of January 21, 1999, is
between STERIS Corporation, an Ohio corporation (the "Company"), and Harris
Trust and Savings Bank, 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.
On August 24, 1998, the Company effected a two-for-one split of the
Company's Common Shares through a 100% stock dividend at the rate of one Common
Share for each Common Share held by shareholders of record on August 10, 1998.
On January 21, 1999, the Board of Directors of the Company resolved to
adopt this Amended and Restated Rights Agreement to make certain amendments to
and to restate in its entirety the Rights Agreement initially adopted by the
Company on October 24, 1996.
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
-1-
<PAGE> 5
purchases by the Company and, after such share purchases by the Company, becomes
the 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
(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 Illinois are authorized or
obligated by law or executive order to close.
-2-
<PAGE> 6
(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) "Exercise Price" shall mean the exercise price per share set forth
in Section 11(a)(ii)
(h) "Person" shall mean any individual, firm, corporation or other
entity.
(i) "Purchase Price" shall mean the purchase price per share set forth
in Section 7(b).
(j) "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.
(k) "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.
(l) "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.
(m) "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, at the expense of the Company, 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
-3-
<PAGE> 7
of Exhibit B hereto, evidencing one Right for each Common Share held of record
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) Following the execution of this Amended and Restated Rights
Agreement on behalf of the Company and on behalf of the Rights Agent, the
Company will file with the Securities and Exchange Commission on Form 8-A the
information contained in the Summary of Rights to Purchase Common Shares
attached hereto as Exhibit C (the "Summary of Rights"). Until the Shares
Acquisition Date (or the earlier redemption or expiration of the Rights), the
Rights will be evidenced by the 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 an Amended and Restated Rights Agreement
between STERIS Corporation and Harris Trust and Savings Bank, Rights
Agent, dated as of January 21, 1999 (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.
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
-4-
<PAGE> 8
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, 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
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
-5-
<PAGE> 9
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 Chicago, Illinois, 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 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
-6-
<PAGE> 10
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 principal office in Chicago, Illinois, 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 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 (taking
into account the two-for-one split of the Company's Common Shares effected on
August 24, 1998) shall be $60.00, subject to further 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
-7-
<PAGE> 11
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 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 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
-8-
<PAGE> 12
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) The Company shall, as soon as practicable following a Triggering
Event, use its best efforts to cause all Common Shares (or Series A Preferred
Shares or other securities, as the case may be) reserved for issuance upon
exercise of the Rights to be listed on the New York Stock 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 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
-9-
<PAGE> 13
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 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
-10-
<PAGE> 14
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 (taking
into account the two-for-one split of the Company's Common Shares effected on
August 24, 1998) of $.50 per share; the number of such Common Shares and the
Exercise Price shall be subject to adjustment as provided in this Section 11.
(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)
(taking into account the two-for-one split of the Company's Common Shares
effected on August 24, 1998), one-two hundredth (1/200th) 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 has heretofore caused 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
-11-
<PAGE> 15
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.
(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
-12-
<PAGE> 16
reporting system with respect to securities listed on the principal national
securities 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 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 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 traded, "current market price" per share of the Series A Preferred Shares
shall mean the value per share as determined in good faith 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.
-13-
<PAGE> 17
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
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
-14-
<PAGE> 18
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.
(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.
-15-
<PAGE> 19
(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.
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 and
shall not be obligated or responsible for calculating any adjustment nor shall
it be deemed to have knowledge of such adjustment unless and until it shall have
received such certificate.
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
-16-
<PAGE> 20
on such date as determined in good faith by an independent investment banking
firm selected by the Board of Directors.
(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 instrument of transfer and with the
appropriate forms and certificates fully executed; and
-17-
<PAGE> 21
(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 subject to the last sentence of Section 7(e), nor the
Rights Agent, shall 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 costs and expenses of enforcing this right of
indemnification shall also be paid by the Company. The indemnification provided
for hereunder shall survive the expiration of the Rights and the Termination of
this Agreement.
The Rights Agent may conclusively rely upon and 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 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.
-18-
<PAGE> 22
Notwithstanding anything in this Agreement to the contrary, in no event
shall the Rights Agent be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Rights Agent has been advised of the likelihood of such loss or damage
and regardless of the form of the action.
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, and no implied duties or obligations shall be read into this
Agreement against the Rights Agent, by all of which the Company and the holders
of Right Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting, 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 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
-19-
<PAGE> 23
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
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 or for any delay in acting while waiting
for those instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken or omitted by the Rights Agent under
this Agreement and the date on or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date
-20-
<PAGE> 24
specified in such application (which date shall not be less than ten Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in
the case of an omission), the Rights Agent shall have received written
instructions in response to such application subject to the proposed action or
omission and/or specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other 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) The Rights Agent shall not be required to take notice or be deemed
to have notice of any fact, event or determination (including, without
limitation, any dates or events defined in this Agreement or the designation of
any Person as an Acquiring Person, Affiliate or Associate) under this Agreement
unless and until the Rights Agent shall be specifically notified in writing by
the Company of such fact, event or determination.
(l) 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.
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, at the expense of the Company, to the holders of the Right
Certificates by first class mail. If the Rights Agent resigns or is removed or
-21-
<PAGE> 25
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 any other state of the United States, in good standing, 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.
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 (taking into account the two-for-one split of the
Company's Common Shares effected on August 24, 1998) of $.005 per Right
appropriately further adjusted to reflect any stock split, stock dividend or
similar trans action occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price").
(b) Immediately upon the action of the Board of Directors of the
Company 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 ordering the redemption of the Rights, the Company shall give notice
of such
-22-
<PAGE> 26
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 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:
-23-
<PAGE> 27
STERIS Corporation
5960 Heisley Road
Mentor, Ohio 44060-1834
Attention: David C. Dvorak, Vice President,
Secretary and General Counsel
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 registered or certified mail and shall be deemed
given upon receipt, addressed (until another address is filed in writing with
the Company) as follows:
Harris Trust and Savings Bank
600 Superior Avenue
Suite 600
Cleveland, Ohio 44114
Attention: Laura Kress
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. 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. Notwithstanding anything in this Agreement to the contrary, no
supplement or amendment that changes the rights and duties of the Rights Agent
under this agreement will be effective against the Rights Agent without the
execution of such supplement or amendment by the Rights Agent.
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.
-24-
<PAGE> 28
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 shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board, or the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend 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 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 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 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.
-25-
<PAGE> 29
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.
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.
Attest: STERIS CORPORATION
By By
----------------------------- -----------------------------
David C. Dvorak Bill R. Sanford
Vice President, Secretary Chairman, President and Chief
and General Counsel Executive Officer
HARRIS TRUST AND SAVINGS BANK,
as Rights Agent
By By
----------------------------- ------------------------------
Assistant Vice-President Assistant Vice-President
-26-
<PAGE> 30
INDEX OF DEFINED TERMS
----------------------
<TABLE>
<CAPTION>
Term Page
- ---- ----
<S> <C>
Acquiring Person ................................................................................................1
Affiliate ................................................................................................2
Associate ................................................................................................2
Beneficial Owner ................................................................................................2
Business Day ................................................................................................2
Close of business ................................................................................................3
Common Shares ................................................................................................3
Company ................................................................................................1
Current market price.............................................................................................12
Exchange Act ................................................................................................2
Exercise Price ................................................................................................3
Expiration Date ................................................................................................7
NASDAQ ...............................................................................................13
Person ................................................................................................3
Purchase Price ................................................................................................3
Record Date ................................................................................................1
Redemption Price ...............................................................................................22
Right ................................................................................................1
Rights Agent ................................................................................................1
Securities Act ................................................................................................9
Series A Preferred Shares.........................................................................................3
Shares Acquisition Date...........................................................................................3
Subsidiary ................................................................................................3
Summary of Rights ................................................................................................4
Trading Day ...............................................................................................13
Triggering Event ................................................................................................3
</TABLE>
<PAGE> 31
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 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
A-1
<PAGE> 32
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 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
A-2
<PAGE> 33
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 24th day of
October, 1996.
-----------------------------------------------
Bill R. Sanford
Chairman, President and Chief Executive Officer
Attest:
- ----------------------------
David C. Dvorak
Vice President, Secretary and
General Counsel
A-3
<PAGE> 34
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 $.005 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
Amended and Restated Rights Agreement, dated as of January 21, 1999 and as
amended to date (the "Rights Agreement"), between STERIS Corporation, an Ohio
corporation (the "Company"), and Harris Trust and Savings Bank, (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 principal office of the Rights
Agent, or its successors as Rights Agent, in Chicago, Illinois, one Common Share
of the Company (the "Common Share"), at a purchase price of $60.00 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 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 January 21, 1999, 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
- --------
The portion of the legend in brackets shall be inserted only
if applicable.
B-1
<PAGE> 35
this Right Certificate with the Form of Election to Purchase duly executed, one
Common Share for an Exercise Price of $.50 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.
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 $.005 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
B-2
<PAGE> 36
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.
WITNESS the facsimile signature of the proper officers of the Company.
Dated as of __________________, 19___.
ATTEST: STERIS CORPORATION
___________________________ By____________________________
Secretary Title:
Countersigned:
By_________________________
B-3
<PAGE> 37
[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-4
<PAGE> 38
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-5
<PAGE> 39
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-6
<PAGE> 40
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-7
<PAGE> 41
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 was paid on November 7, 1996 (the "Record Date") to the
stockholders of record on the Record Date. On January 21, 1999 the Board of
Directors of the Company authorized the execution of an Amended and Restated
Rights Agreement to amend and restate in its entirety the original Rights
Agreement between the Company and KeyBank National Association and to substitute
for Harris Trust and Savings Bank for KeyBank National Association as Rights
Agent. 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 the Amended and Restated Rights Agreement (the "Rights Agreement")
between the Company and Harris Trust and Savings Bank, as Rights Agent (the
"Rights Agent"), adopted by the Company as of January 21, 1999.
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.
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.
C-1
<PAGE> 42
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 $.005 per Right (the "Redemption Price"). Immediately upon the action
of the Board of Directors of the Company 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.
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
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, as it may be amended from time to time.
C-2
