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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
----------
Date of Report (Date of earliest
event reported): April 8, 1996
ANGEION CORPORATION
-------------------
(Exact name of registrant as specified in its charter)
Minnesota 0-17019 41-1579150
--------- ------- ----------
(State of incorporation) (Commission (I.R.S. Employer
File Number) Identification No.)
3650 Annapolis Lane, Suite 170, Plymouth, MN 55447-5434
- -------------------------------------------- ----------
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: 612/550-9388
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ITEM 5. OTHER EVENTS
On April 8, 1996 the Board of Directors of Angeion Corporation Systems,
Inc. (the "Company") declared a dividend distribution of one Right for each
outstanding share of common stock, $.01 par value (the "Common Stock") of the
Company to holders of record at the close of business on April 30, 1996 (the
"Record Date"), and one Right for each Common Share into which Series A
Preferred Shares of the Company (as defined) are convertible; PROVIDED THAT
immediately upon conversion of such Series A Preferred Shares into Common
Shares, the Rights previously attached to the Series A Preferred shall
automatically and without any further action become attached to the Common
Shares, so that following conversion the holders of Series A Preferred Shares
hold the same number of Rights as were held before conversion. Except as set
forth below, each Right, when exercisable, entitles the registered holder to
purchase from the Company one one-thousandth share of a new series of preferred
stock, designated as Series B Junior Preferred Stock, par value $0.01 per share
(the "Preferred Stock"), at a price of $70.00 per share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") dated as of April 8, 1996 between
the Company and Norwest Bank Minnesota, N.A., as Rights Agent.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of the tenth business day after:
(i) 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 securities having 15% or more of the voting power of all
outstanding voting securities of the Company, or (ii) the commencement of (or a
public announcement of an intention to make) a tender offer or exchange offer
which would result in any Person or group and related Persons becoming an
Acquiring Person, or (iii) a majority of the members of the Board of Continuing
Directors determines that any Person or group is an Adverse Person. A Board of
continuing directors may make an Adverse Person determination if it finds that a
substantial shareholder (the holder of at least 10% of the Company's outstanding
shares) (i) acquired such shares either to cause the Company to repurchase the
shares or to enter into a transaction intended to provide such person with
short-term financial gain under circumstances that are not in the best long-term
interests of the Company's shareholders, or (ii) is causing or is reasonably
likely to cause a material adverse impact on the business or prospects of the
Company.
Until the Distribution Date the Rights will be evidenced, with respect to
any of the Common Stock certificates outstanding as of the Record Date, by such
Common Stock certificate together with this Summary of Rights. The Rights
Agreement provides that, until the Distribution Date, the Rights will be
transferred with and only with certificates representing Common Stock and/or
shares of the Company's Series A Preferred Shares, as the case may be. From as
soon as practicable after the Record Date and until the Distribution Date (or
earlier redemption or expiration of the Rights), new Common Stock certificates
issued after the Record Date upon transfer or new issuance of the Common Stock
will contain a notation incorporating the Rights Agreement by reference. Until
the Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Stock outstanding as of
the Record Date (with or without this Summary of Rights attached) will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders
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of record of the Common Stock as of the close of business on the Distribution
Date, and the separate Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on the earliest of (i) April 7, 2006, (ii) consummation of a merger
transaction with a Person or group who acquired Common Stock pursuant to a
Permitted Offer (as defined below), and is offering in the merger the same price
per share and form of consideration paid in the Permitted Offer, or (iii)
redemption of the Rights by the Company as described below.
The Purchase Price payable, and the number of shares of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for Preferred Stock, certain convertible securities or
securities having the same or more favorable rights, privileges and preferences
as the Preferred Stock at less than the current market price of the Preferred
Stock, or (iii) upon the distribution to holders of the Preferred Stock of
evidences of indebtedness or assets (excluding regular quarterly cash dividends
out of earnings or retained earnings) or of subscription rights or warrants
(other than those referred to above).
In the event that, after the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such, the
Company is involved in a merger or other business combination transaction
(whether or not the Company is the surviving corporation ) or 50% or more of the
Company's assets or earning power are sold (in one transaction or a series of
transactions), proper provision shall be made so that each holder of a Right
(other than an Acquiring Person) shall thereafter have the right to receive,
upon the exercise thereof at the then current exercise price of the Right, that
number of shares of common stock of either the Company, in the event that it is
the surviving corporation of a merger or consolidation, or the acquiring company
(or, in the event there is more than one acquiring company, the acquiring
company receiving the greatest portion of the assets or earning power
transferred) which at the time of such transaction would have a market value of
two times the exercise price of the Right *such right being called the "Merger
Right"). In the event that a Person becomes the beneficial owner of securities
having 15% or more of the voting power of all then outstanding voting securities
of the Company (unless pursuant to a tender offer or exchange offer for all
outstanding shares of Common Stock at a price and on terms determined prior to
the date of the first acceptance of payment for any of such shares by at least a
majority of the members of the Board of Directors who are not officers of the
Company and are not Acquiring Persons or Affiliates or Associates thereof to be
both adequate and otherwise in the best interests of the Company and its
stockholders (a "Permitted Offer")), then proper provision shall be made so that
each holder of a Right will for a 60-day period (subject to extension under
certain circumstances) thereafter have the right to receive upon exercise that
number of shares of Common Stock having a market value of two times the exercise
price of the Right, to the extent available, and then (after all authorized and
unreserved shares of Common Stock have been issued) a common stock equivalent
(such as Preferred Stock or another equity security with at least the same
economic value as the Common Stock) having market value of two times the
exercise price of the Right, with Common Stock to the extent available being
issued first (such right being called the "Subscription Right"). The holder of
a Right will continue to have the Merger Right whether or not such holder
exercises the Subscription Right. Notwithstanding the foregoing, upon the
occurrence of any of the events giving rise to the exercisability of the Merger
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Right or the Subscription Right, any Rights that are or were at any time after
the Distribution D ate owned by an Acquiring Person shall immediately become
null and void.
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractions of shares will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Common Stock on the last trading date prior to the date of exercise.
At any time prior to the earlier to occur of (i) a Person becoming an
Acquiring Person or (ii) the expiration of the Rights, the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"), which redemption shall be effective upon the action of the
Board of Directors. Additionally, the Company may thereafter redeem the then
outstanding Rights in whole, but not in part, at the Redemption Price (i) if
such redemption is incidental to a merger or other business combination
transaction or series of transactions involving the Company but not involving an
Acquiring Person or certain related Persons or (ii) following an event giving
rise to, and the expiration of the exercise period for, the Subscription Right
if and for as long as an Acquiring Person beneficially owns securities
representing less than 15% of the voting power of the Company's voting
securities. The redemption of Rights described in the preceding sentence shall
be effective only as of such time when the Subscription Right is not
exercisable, and in any event, only after ten Business Days' prior notice. Upon
the effective date of the redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Subject to applicable law, the Board of Directors, at its option, may at
any time after a Person becomes an Acquiring Person (but not after the
acquisition by such Person of 50% or more of the outstanding Common Stock),
exchange all or part of the then outstanding and exercisable rights (except for
Rights which have become void) for shares of Common Stock equivalent to one
share of Common Stock per Right or, alternatively, for substitute consideration
consisting of cash, securities of the Company or other assets (or any
combination thereof).
The Preferred Stock purchasable upon exercise of the Rights will be
nonredeemable and junior to any other series of preferred stock the Company may
issue (unless otherwise provided in the terms of such stock). Each share of
Preferred Stock will have a preferential quarterly dividend in an amount equal
to 1,000 times the dividend declared on each share of Common Stock, but in no
event less than $100. In the event of liquidation, the holders of Preferred
Stock will receive a preferred liquidation payment equal to the greater of 1,000
times $1.00 or 1,000 times the payment made per each share of Common Stock.
Each share of Preferred Stock will have 1,000 votes, voting together with the
shares of Common Stock. In the event of any merger, consolidation or other
transaction in which shares of Common Stock are ex changed, each share of
Preferred Stock will be entitled to receive 1,000 times the amount and type of
consideration received per share of Common Stock. The rights of the Preferred
Stock as to dividends, liquidation and voting, and in the event of mergers and
consolidations, are protected by customary antidilution provisions. Fractional
shares of Preferred Stock will be issuable; however, the Company may elect to
distribute depositary receipts in lieu of such fractional shares. In lieu of
fractional shares other than fractions that are multiples of one one-thousandth
of a share, an adjustment in cash will be made based on the market price of the
Preferred Stock 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.
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Any of the provisions of the Rights Agreement, including the definition of
Acquiring Person or the Purchase Price, may be amended by at least a majority of
the Continuing Directors prior to the Distribution Date. After the Distribution
Date, the provisions of the Rights Agreement may be amended by at least a
majority of the Continuing Directors in order to cure any ambiguity, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person or Adverse Person), or to
shorten or lengthen certain time periods under the Rights Agreement. However,
no amendment to adjust the time period governing redemption can be made at such
time as the Rights are not redeemable.
Issuance of the Rights and the distribution of Rights Certificates should
not be a taxable event for the Company or its stockholders under the federal
income tax laws. In the event that the Rights become rights to purchase (i)
additional common stock of the Company or (ii) an acquiror's common stock, it is
uncertain whether holders of Rights would have a taxable event even if the
Rights were not exercised. It is also uncertain whether the lapse of the right
of redemption would be a taxable event to the holders of the Rights. If the
Rights become rights to receive upon exercise or redemption thereof, cash, debt
securities, or stock of the Company other than stock considered to be "common
stock" for purposes of section 305 of the Internal Revenue Code of 1986, holders
of the Rights probably would have a taxable event even if the rights were not
exercised or exchanged.
Prior to any Distribution Date, the Rights will probably not have an impact
on tax-free reorganizations involving the Company and will probably not be
treated as taxable "boot." If the Company has a net operating loss carryover,
transactions relating to the Rights may limit use of that loss once the Rights
are no longer redeemable at the Redemption Price without stockholder approval.
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Item 7. EXHIBITS.
(i) Form of Rights Agreement dated as of April 8, 1996 between
Angeion Corporation and Norwest Bank Minnesota, N.A., which
includes as Exhibit B the form of Rights Certificate. Pursuant
to the Rights Agreement, Rights Certificates will not be mailed
until the earlier of ten business days after (i) a public
announcement that a person or a group of affiliated or associated
persons has acquired beneficial ownership of securities
representing 15% or more of the outstanding common stock, or (ii)
a person or a group of affiliated or associated persons has
commenced or announced an intent to commence a tender offer or
exchange offer which, upon consummation thereof, would cause such
person or group to own beneficially securities representing 15%
or more of the outstanding common stock, or (iii) a majority of
the members of the Board of Continuing Directors determines that
a person or group is an Adverse Person (as defined).
(ii) Press Release announcing Angeion Corporation's Adoption of a
Shareholders' Rights Plan.. . . . . . . . . . . . . . . . . . . .
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ANGEION CORPORATION
/s/ Whitney A. McFarlin
------------------------------
Whitney A. McFarlin
Chairman of the Board,
President and Chief Executive
Officer
Dated: April 8, 1996
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INDEX TO EXHIBITS
EXHIBIT PAGE
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4.1 Form of Rights Agreement dated as of April 8,
1996 between Angeion Corporation and Norwest
Bank Minnesota, N.A., which includes as
Exhibit B the form of Rights Certificate.
Pursuant to the Rights Agreement, Rights
Certificates will not be mailed until the
earlier of ten business days after (i) a
public announcement that a person or a group
of affiliated or associated persons has
acquired beneficial ownership of securities
representing 15% or more of the outstanding
common stock, or (ii) a person or a group of
affiliated or associated persons has
commenced or announced an intent to commence
a tender offer or exchange offer which, upon
consummation thereof, would cause such person
or group to own beneficially securities
representing 15% or more of the outstanding
common stock, or (iii) a majority of the
members of the Board of Continuing Directors
determines that a person or group is an
Adverse Person (as defined).. . . . . . . .
99.1 Press Release announcing Angeion
Corporation's Adoption of a Shareholders'
Rights Plan.. . . . . . . . . . . . . . . . .
<PAGE>
RIGHTS AGREEMENT
between
ANGEION CORPORATION
and
NORWEST BANK MINNESOTA, N.A.
dated as of April 8, 1996
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
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1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Acquiring Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Adjustment Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Adverse Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate" and "Associate . . . . . . . . . . . . . . . . . . . . . . . 2
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Beneficial Owner. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Close of business . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Common stock equivalents. . . . . . . . . . . . . . . . . . . . . . . . 4
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Continuing Director . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Current Market Price. . . . . . . . . . . . . . . . . . . . . . . . . . 4
Current Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Equivalent preferred shares . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Expiration Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Final Expiration Date . . . . . . . . . . . . . . . . . . . . . . . . . 4
Original Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Preferred Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Preferred Share Fraction. . . . . . . . . . . . . . . . . . . . . . . . 5
Principal Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Redemption Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Rights Dividend Declaration Date. . . . . . . . . . . . . . . . . . . . 5
Section 11(a)(ii) Election. . . . . . . . . . . . . . . . . . . . . . . 5
Section 11(a)(ii) Event . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 11(a)(ii) Trigger Date. . . . . . . . . . . . . . . . . . . . . 6
Section 13 Event. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 24(a) Election. . . . . . . . . . . . . . . . . . . . . . . . . 6
Spread. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Stock Acquisition Date. . . . . . . . . . . . . . . . . . . . . . . . . 6
Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Substitute Consideration. . . . . . . . . . . . . . . . . . . . . . . . 6
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Substitution Period . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trading Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Triggering Event. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . 6
3. Issue of Rights Certificates. . . . . . . . . . . . . . . . . . . . . . 6
4. Form of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . 8
5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . 9
6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates. . . . . . . . 10
7. Exercise of Rights; Purchase Price; Expiration Date . . . . . . . . . . 10
8. Cancellation and Destruction of Rights Certificates . . . . . . . . . . 12
9. Reservation and Availability of Capital Stock; Registration. . . . . . 12
10. Capital Stock Record Date . . . . . . . . . . . . . . . . . . . . . . . 13
11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
12. Certificate of Adjusted Purchase Price or Number of Shares. . . . . . . 21
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. . 21
14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . 23
15. Rights of Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
16. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . 24
17. Rights Certificate Holder Not Deemed a Stockholder. . . . . . . . . . . 25
18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . 25
19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . 26
20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . 26
21. Change of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . 28
22. Issuance of New Rights Certificates . . . . . . . . . . . . . . . . . . 29
23. Redemption and Termination. . . . . . . . . . . . . . . . . . . . . . . 29
-ii-
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24. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
25. Notice of Certain Events. . . . . . . . . . . . . . . . . . . . . . . . 31
26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
27. Supplements and Amendment . . . . . . . . . . . . . . . . . . . . . . . 33
28. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
29. Determinations and Actions by the Board . . . . . . . . . . . . . . . . 33
30. Benefits of this Agreement. . . . . . . . . . . . . . . . . . . . . . . 34
31. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
33. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
34. Descriptive Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 34
Exhibits
A - Form of Certificate of Designation, Preferences and Rights of Series A
Junior Preferred Stock
B - Form of Rights Certificate
C - Summary of Rights Agreement
-iii-
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RIGHTS AGREEMENT
This RIGHTS AGREEMENT, dated as of April 8, 1996 (this "Agreement"), is
between ANGEION CORPORATION, a Minnesota corporation (the "Company"), and
Norwest Bank Minnesota, N.A., a national banking association, as Rights Agent
(the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on April 8, 1996 (the "Rights Dividend Declaration Date"), the
Board of Directors of the Company (the "Board") authorized and declared a
dividend distribution of: (a) one Right for each Common Share (as hereinafter
defined) of the Company outstanding at the close of business on April 30, 1996
(the "Record Date"), and (b) one Right for each Common Share into which Series A
Preferred Shares (as hereinafter defined) outstanding on the Record Date are
convertible; PROVIDED THAT immediately upon conversion of such Series A
Preferred Shares into Common Shares, the Rights previously attached to the
Series A Preferred Shares shall automatically and without any further action
become attached to the Common Shares, so that following conversion the holders
of Series A Preferred Shares will hold the same number of Rights as were held
before conversion, and the Board has authorized the issuance of one Right (as
such number may hereinafter be adjusted pursuant to the provisions of Section
11(i) and/or Section 11(p)) for each Common Share issued between the Record Date
and the earlier of the Distribution Date or the Expiration Date (both as
hereinafter defined), each Right initially representing the right to purchase
one one-thousandth of a Preferred Share (as hereinafter defined) of the Company
having the rights, powers and preferences set forth in the form of the
Certificate of Designation, Preferences and Rights attached hereto as Exhibit A,
upon the terms and subject to the conditions hereinafter set forth (the
"Rights").
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto, intending to be legally bound, hereby
agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial
Owner of 15% or more of the Common Shares then outstanding (other than as a
result of a Permitted Offer (as hereinafter defined)), but shall not include the
Company, any Subsidiary of the Company, or any employee benefit plan of the
Company or of any Subsidiary of the Company or any Person organized, appointed
or established by the Company for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an "Acquiring Person":
(i) as the result of an acquisition of Common Shares by the Company which, by
reducing the number of Common Shares outstanding, increases the proportionate
number of Common Shares beneficially owned by such Person to 15% or more of the
Common Shares then outstanding; provided, however, that if a Person shall become
the Beneficial Owner of 15% or more of the Common Shares then outstanding by
reason of Common Share purchases by the Company and shall thereafter become the
Beneficial Owner of any additional Common Shares, other than pursuant to the
receipt of stock dividends or stock splits on a pro rata basis on Common Shares
already beneficially owned by such Person, then such Person shall be deemed to
be an "Acquiring Person" or (ii) who is a Person who
- 1 -
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is the Beneficial Owner of 15% or more of the outstanding Common Shares but who
acquired Beneficial Ownership of Common Shares without any plan or intention to
seek or affect control of the Company, if such Person promptly enters into an
irrevocable commitment promptly to divest, and thereafter promptly divests
(without exercising or retaining any power, including voting, with respect to
such shares), sufficient shares of Common Shares (or securities convertible
into, exchangeable into or exercisable for Common Shares) so that such Person
ceases to be the Beneficial Owner of 15% or more of the outstanding shares of
Common Shares or (iii) who Beneficially Owns Common Shares consisting solely of
one or more of (A) Common Shares Beneficially Owned pursuant to the grant for
exercise of an option granted to such Person by the Company in connection with
an agreement to merge with, or acquire, the Company entered into prior to a
Section 11(a)(ii) Trigger Date, (B) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Shares),
beneficially Owned by such Person or its Affiliates or Associates at the time of
grant of such option or (C) shares of Common Shares (or securities convertible
into, exchangeable into or exercisable for Common Shares) acquired by Affiliates
or Associates of such Person after the time of such grant which, in the
aggregate, amount to less than 1% of the outstanding shares of Common Stock.
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii).
(d) "Adverse Person" shall mean any Person determined to be an
Adverse Person pursuant to the criteria set forth in Section 11(a)(ii)(B).
(e) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act as in effect on the date hereof.
(f) "Agreement" shall have the meaning set forth in the preamble
clause at the beginning hereof.
(g) (i) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(A) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, beneficially owns;
(B) 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, other rights, warrants or
options or otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (1) securities tendered
pursuant to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, (2) securities issuable upon exercise of Rights at any
time prior to the occurrence of a Triggering Event, or (3) securities issuable
upon exercise of Rights from and after the occurrence of a Triggering Event
which Rights were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or
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pursuant to Section 3(a) or Section 22 (the "Original Rights") or pursuant to
Section 11(i) in connection with an adjustment made with respect to any Original
Rights;
(C) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right (sole or shared) to vote or
dispose of or has "beneficial ownership" of (as determined pursuant to Rule 13d-
3 of the General Rules and Regulations under the Exchange Act, or any comparable
or successor rule, whether or not the Company is subject to the Exchange Act),
including, without limitation, pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially own," any security
under this Section 1(f)(i)(C) as a result of an oral or written agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding (1) arises solely from a revocable proxy given in
response to a proxy or consent solicitation made pursuant to and in accordance
with, the applicable provisions of the General Rules and Regulations under the
Exchange Act (and if such provisions are not applicable by law such proxy or
solicitation is made in substantially the same manner as if such provisions were
applicable), and (2) is not also then reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor report) (and if the
Company is not subject to the Exchange Act, would not be then reportable if the
Company was subject to the Exchange Act); or
(D) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any agreement,
arrangement or understanding, whether or not in writing, for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as described in
Section 1(f)(i)(C)(1)) or disposing of such securities.
(ii) Notwithstanding anything in this definition to the contrary,
a Person engaged in business as an underwriter of securities shall not be deemed
to be the "Beneficial Owner" of, or to "beneficially own," any securities
acquired through such Person's participation in good faith in a firm commitment
underwriting until the expiration of 40 days after the date of such acquisition.
(iii) Notwithstanding anything in this definition to the
contrary, the phrase "then outstanding," when used with reference to a Person's
Beneficial Ownership of securities, shall mean the number of such securities
then issued and outstanding together with the number of such securities not then
actually issued and outstanding which such Person is deemed to own beneficially
hereunder.
(h) "Board" shall have the meaning set forth in the WHEREAS clause at
the beginning of this Agreement.
(i) "Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in the State of Minnesota are authorized
or obligated by law or executive order to close.
(j) "Close of business" on any given date shall mean 5:00 p.m.
Minnesota time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m. Minnesota time on the next succeeding
Business Day.
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(k) "Common Shares" when used with reference to the Company shall
mean the shares of Common Stock, par value $.01 per share, of the Company.
"Common Shares" when used with reference to any Person other than the Company
shall mean: (i) in the case of Persons organized in corporate form, the shares
of capital stock or units of equity security with the greatest voting power of
such Person or, if such Person is a Subsidiary of another Person, of the Person
or Persons which ultimately control or direct the management of such first-
mentioned Person, and (ii) in the case of Persons not organized in corporate
form, the units of beneficial interest which (A) represent the right to
participate generally in the profits and losses of such Person (including
without limitation any flow-through tax benefits resulting from an ownership
interest in such Person) and (B) are entitled to exercise the greatest voting
power of such Person or, in the case of a limited partnership, shall have the
power to remove the general partner or partners.
(l) "Common stock equivalents" shall have the meaning set forth in
Section 11(a)(iii).
(m) "Company" shall have the meaning set forth in the preamble clause
at the beginning of this Agreement.
(n) "Continuing Director" shall mean (i) any member of the Board,
while such Person is a member of the Board, who is not an Acquiring Person or an
Adverse Person, or an Affiliate or Associate of any such Person, or a
representative or designee of an Acquiring Person or an Adverse Person or of any
such Affiliate or Associate, and was a member of the Board prior to the date of
this Agreement, or (ii) any Person who subsequently becomes a member of the
Board, while such Person is a member of the Board, who is not an Acquiring
Person or an Adverse Person, or an Affiliate or Associate of any such Person, or
a representative or designee of an Acquiring Person or an Adverse Person or of
any such Affiliate or Associate, if such Person's nomination for election or
election to the Board is recommended or approved by a majority of the Continuing
Directors.
(o) "Current Market Price" shall have the meaning set forth in
Section 11(d).
(p) "Current Value" shall have the meaning set forth in Section
11(a)(iii).
(q) "Distribution Date" shall have the meaning set forth in Section
3(a).
(r) "Equivalent preferred shares" shall have the meaning set forth in
Section 11(b).
(s) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(t) "Exchange Ratio" shall have the meaning set forth in Section
24(a).
(u) "Expiration Date" shall have the meaning set forth in Section
7(a).
(v) "Final Expiration Date" shall mean the close of business on
April 7, 2006.
(w) "Original Rights" shall have the meaning set forth in Section
1(g)(i)(B)(3).
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<PAGE>
(x) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(y) "Permitted Offer" shall mean a tender or exchange offer which is
for all outstanding Common Shares at a price and on terms determined, prior to
the purchase of shares under such tender or exchange offer, by at least a
majority of the members of the Board of Continuing Directors who are not
officers of the Company and who are not Acquiring Persons or Affiliates,
Associates, nominees or representatives of an Acquiring Person, to be adequate
(taking into account all factors that such Directors deem relevant including,
without limitation, prices that could reasonably be achieved if the Company or
its assets were sold on an orderly basis designed to realize maximum value) and
otherwise in the best interests of the Company and its stockholders (other than
the Person or any Affiliate or Associate thereof on whose basis the offer is
being made) taking into account all factors that such directors may deem
relevant.
(z) "Preferred Share" shall mean a share of Series B Junior Preferred
Stock, par value $.01 per share, of the Company and, to the extent that there
are not a sufficient number of shares of Series B Junior Preferred Stock
authorized to permit the full exercise of the Rights, shares of any other series
of Preferred Stock of the Company designated for such purpose containing terms
substantially similar to the terms of the Series B Junior Preferred Stock.
(aa) "Preferred Share Fraction" shall mean one one-thousandth of a
Preferred Share.
(bb) "Principal Party" shall have the meaning set forth in Section
13(b).
(cc) "Purchase Price" shall have the meaning set forth in Section
4(a).
(dd) "Record Date" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.
(ee) "Redemption Price" shall have the meaning set forth in Section
23(a).
(ff) "Rights" shall have the meaning set forth in the WHEREAS clause
at the beginning of this Agreement.
(gg) "Rights Agent" shall have the meaning set forth in the preamble
clause at the beginning of this Agreement until a successor Rights Agent shall
have become such pursuant to the applicable provisions of this Agreement, and
thereafter "Rights Agent" shall mean such successor Rights Agent. If at any
time there is more than one Person appointed by the Company as Rights Agent
pursuant to the provisions of this Agreement, "Rights Agent" shall mean and
include each such Person.
(hh) "Rights Certificates" shall have the meaning set forth in Section
3(a).
(ii) "Rights Dividend Declaration Date" shall have the meaning set
forth in the WHEREAS clause at the beginning of this Agreement.
(jj) "Section 11(a)(ii) Election" shall mean the election described in
Sections 11(a)(ii)(x) and (y).
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<PAGE>
(kk) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii)(A) or (B).
(ll) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii).
(mm) "Section 13 Event" shall mean any event described in clauses (i),
(ii) or (iii) of Section 13(a).
(nn) "Section 24(a) Election" shall have the meaning set forth in
Section 24(a).
(oo) "Series A Preferred Shares" shall mean shares of Preferred Stock,
Series A, par value $.01 per share, of the Company.
(pp) "Spread" shall have the meaning set forth in Section 11(a)(iii).
(qq) "Stock Acquisition Date" shall mean the date of first public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act), that
an Acquiring Person has become an Acquiring Person.
(rr) "Subsidiary" shall mean, with reference to any Person, any other
Person of which at least a majority of the voting power of the voting equity
securities or equity interests is beneficially owned, directly or indirectly, or
otherwise controlled by such first-mentioned Person.
(ss) "Substitute Consideration" shall have the meaning set forth in
Section 11(a)(iii).
(tt) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii).
(uu) "Trading Day" shall have the meaning set forth in Section
11(d)(i).
(vv) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such additional Rights Agents as it may
deem necessary or desirable.
Section 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the first to occur of (i) the close of business on the
tenth Business Day after the Stock Acquisition Date (or, if the tenth Business
Day after the Stock Acquisition Date occurs before the Record Date, the close of
business on the Record Date), (ii) the close of business on the tenth Business
Day (or such later date as may be determined by the Board, acting by a majority
of the Continuing Directors, prior to such time as any Person has become an
Acquiring Person) after the date that a tender or exchange offer by any Person
(other than the Company, any
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<PAGE>
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan) is
first published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act (or any comparable or
successor rule) (and if such provisions are not applicable, such offer is
published, sent or given in substantially the same manner as if such provisions
were applicable), if upon consummation thereof, such Person would be the
Beneficial Owner of 15% or more of the Common Shares then outstanding, or (iii)
the close of business on the tenth Business Day after a determination, pursuant
to Section 11(a)(ii)(B), that a Person is an Adverse Person (the first to occur
of (i), (ii), and (iii) being herein referred to as the "Distribution Date"),
(A) the Rights will be evidenced (subject to the provisions of Section 3(b)) by
the certificates for the Common Shares (or for the Series A Preferred Shares
until such convert into Common Shares) registered in the names of the holders
thereof (which certificates for Common Shares shall be deemed also to be
certificates for Rights) and not by separate certificates and (B) the Rights
will be transferable only in connection with the transfer of the underlying
Common Shares (including a transfer to the Company). As soon as practicable
after the Company has notified the Rights Agent of the occurrence of the
Distribution Date, the Rights Agent will send by first-class, insured, postage
prepaid mail, to each record holder of Common Shares as of the close of business
on the Distribution Date, at the address of such holder shown on the records of
the Company, one or more Rights certificates, in substantially the form of
Exhibit B hereto (the "Rights Certificates"), evidencing one Right for each
Common Share so held, subject to adjustment as provided herein. In the event
that an adjustment in the number of Rights per Common Share has been made
pursuant to Section 11(p), at the time of distribution of the Right
Certificates, the Company shall make and notify the Rights Agent of the
necessary and appropriate rounding adjustments (in accordance with Section
14(a)) so that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights Agreement, in substantially the form
attached hereto as Exhibit C, by first-class, postage prepaid mail, to each
record holder of Common Shares as of the close of business on the Record Date at
the address of such holder shown on the records of the Company. With respect to
certificates for the Common Shares outstanding as of the Record Date, until the
Distribution Date, ownership of and beneficial interests in the Rights will be
evidenced by such certificates for the Common Shares and the registered holders
of the Common Shares shall also be the registered holders of the associated
Rights. Until the earlier of the Distribution Date or the Expiration Date, the
transfer of any certificates representing Common Shares in respect of which
Rights have been issued shall also constitute the transfer of the Rights
associated with such Common Shares. Certificates issued after the Record Date
upon the transfer of Common Shares outstanding on the Record Date shall bear the
legend set forth in Section 3(c).
(c) Rights shall be issued in respect of all Common Shares which are
issued after the Record Date but prior to the earlier of the Distribution Date
or the Expiration Date. Rights shall also be issued to the extent provided in
Section 22 in respect of all Common Shares which are issued after the
Distribution Date and prior to the Expiration Date. Certificates representing
Common Shares (including, without limitation, certificates issued upon transfer
or exchange of Common Shares) issued after the Record Date but prior to the
earlier of the Distribution Date or the Expiration Date shall also be deemed to
be certificates for the associated Rights, and shall bear the following legend:
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<PAGE>
"This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement between
Angeion Corporation (the "Company") and Norwest Bank Minnesota,
N.A. (the "Rights Agent") dated as of April 8, 1996 (the "Rights
Agreement"), and as the same may be amended from time to time,
the terms of which are hereby incorporated herein by reference
and a copy of which is on file at the principal offices of the
Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. The Company
will mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. Under
certain circumstances set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was or becomes an
Acquiring Person, an Adverse Person or any Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such Person or by any
subsequent holder, may become null and void."
Until the earlier of the Distribution Date or the Expiration Date, the Rights
associated with the Common Shares represented by certificates for Common Shares
shall be evidenced by such certificates alone and registered holders of Common
Shares shall also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the transfer of the
Rights associated with such Common Shares, whether or not containing the
foregoing legend.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to purchase,
certification and assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange, national market system or over-the-
counter market on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 11 and Section 22, the
Rights Certificates, whenever distributed, shall entitle the holders thereof to
purchase such number of Preferred Share Fractions as shall be set forth therein
at the price per Preferred Share Fraction set forth therein (the "Purchase
Price"), but the amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof shall be subject to adjustment as
provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section
22 that represents Rights beneficially owned by a Person reasonably believed by
at least a majority of the Continuing Directors to be (i) an Acquiring Person,
an Adverse Person or any Associate or Affiliate of any such Person, (ii) a
transferee of an Acquiring Person or an Adverse Person (or of any such Associate
or Affiliate) who becomes a transferee after the Acquiring Person or Adverse
Person becomes such, or (iii) a transferee of an Acquiring Person or an Adverse
Person (or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person or Adverse Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person (or from any such
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<PAGE>
Associate or Affiliate) to holders of equity interests in such Acquiring Person
or Adverse Person (or any such Associate or Affiliate) or to any Person with
whom such Acquiring Person or Adverse Person (or any such Associate or
Affiliate) has any continuing oral or written plan, agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which at least
a majority of the Continuing Directors has determined is part of an oral or
written plan, arrangement or understanding that has as a primary purpose or
effect avoidance of Section 7(e), and any Rights Certificate issued to any such
Person pursuant Section 6 or Section 11 upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
"The Rights represented by the Rights Certificate are or
were beneficially owned by a person who was or became an
[Acquiring] [Adverse] Person or an Affiliate or Associate of
an [Acquiring] [Adverse] Person (as such terms are defined
in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become
null and void in the circumstances specified in Section 7(e)
of such Agreement."
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board and Chief Executive Officer, its President
and Chief Operating Officer or any Vice President, either manually or by
facsimile signature, and shall have affixed thereto the Company's seal or a
facsimile thereof, which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Rights
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 shall have signed any of the Rights Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated by the Rights Agent as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates, the date of each of the Rights Certificates
and whether each such Rights Certificate contains a legend as set forth in
Section 4(b).
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Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e), Section
14 and Section 20(k), at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the Expiration
Date, any Rights Certificate or Certificates may be transferred, split up,
combined or exchanged for another Rights Certificate or Certificates, entitling
the registered holder to purchase a like number of Preferred Share Fractions
(or, following a Triggering Event, Common Shares, other securities, cash or
other assets, as the case may be) as the Rights Certificate or 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 Rights Certificate or Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or exchanged,
with the form of assignment and certificate appropriately executed, at the
office of the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Rights Certificate and shall
have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e), Section 14 and Section 20(k), countersign and deliver to
each Person entitled thereto a Rights Certificate or Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and, if so requested by the
Company, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE.
(a) Subject to Section 7(e), the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a))
in whole or in part at any time after the Distribution Date upon surrender of
the Rights Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights Agent at
the office of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price with respect to the total number of
Preferred Share Fractions (or Common Shares, other securities, cash or other
assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the first to occur of: (i) the Final Expiration
Date; (ii) the time at which such Rights expire as provided in Section 13(d);
(iii) the time at which such Rights are redeemed as provided in Section 23; or
(iv) the time
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at which such Rights are exchanged as provided in Section 24 (the first to occur
of (i), (ii), (iii) and (iv) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each Preferred Share Fraction pursuant to
the exercise of a Right shall initially be $70.00 and shall be subject to
adjustment from time to time as provided in Section 11 and 13(a) and shall be
payable in accordance with Section 7(c).
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate on the reverse
side thereof duly executed, accompanied by payment, with respect to each Right
so exercised, of the Purchase Price per Preferred Share Fraction (or Common
Share, other securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any applicable tax or
governmental charge, the Rights Agent shall, subject to Section 14(b) and
Section 20(k), thereupon promptly (i) requisition from any transfer agent of the
Preferred Shares (or make available, if the Rights Agent is the transfer agent
for such Preferred Shares) certificates for the total number of Preferred Shares
to be purchased and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, (ii) requisition from the Company the amount
of cash, if any, to be paid in lieu of fractional shares in accordance with
Section 14, (iii) promptly after receipt of such certificates, cause the same to
be delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) promptly after receipt thereof, deliver such cash, if any, to
or upon the order of the registered holder of such Rights Certificate. The
payment of the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii)) may be made by cash, certified bank check or money order payable to
the order of the Company. In the event that the Company is obligated to issue
other securities of the Company (including without limitation, upon an
appropriate Section 11(a)(ii) Election or Section 24(a) Election, Common
Shares), pay cash and/or distribute other assets pursuant to Section 11(a), the
Company will make all arrangements necessary so that such other securities, cash
and/or other assets are available for distribution by the Rights Agent, if and
when appropriate. The Company reserves the right to require prior to the
occurrence of a Triggering Event that, upon any exercise of Rights, a number of
Rights be exercised so that only whole Preferred Shares would be issued.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person, an Adverse Person or any
Associate or Affiliate of any such Person, (ii) a transferee of an Acquiring
Person or an Adverse Person (or of any such Associate or Affiliate) who becomes
a transferee after the Acquiring Person or Adverse Person becomes such, or (iii)
a transferee of an Acquiring Person or an Adverse Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person or Adverse Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person or Adverse Person (or from any such Associate or Affiliate) to
holders of equity interests in such Acquiring Person or Adverse Person (or any
such Associate or Affiliate) or to any Person with whom the Acquiring Person or
Adverse Person (or any such Associate or Affiliate) has
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any continuing oral or written plan, agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which at least a majority of
the Continuing Directors has determined is part of an oral or written plan,
agreement, arrangement or understanding that has as a primary purpose or effect
the avoidance of this Section 7(e), shall become null and void without any
further action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) are complied with, but shall
have no liability to any holder of a Rights Certificate or other Person as a
result of its failure to make any determinations with respect to an Acquiring
Person or Adverse Person or any of their respective 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 transfer or
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate following the form of assignment or
election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such assignment or exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other
Rights Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Rights Certificates in accordance with the rules and
regulations of the Securities and Exchange Commission, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK;
REGISTRATION.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available for issuance upon the exercise of outstanding Rights
as many of its authorized and unissued Preferred Shares (and, following the
occurrence of a Triggering Event, if applicable, out of its authorized and
unissued Common Shares and/or other securities or out of its authorized and
issued shares held in its treasury), which together at all times after the
Distribution Date as provided in this Agreement, including Section 11(a)(iii),
will be sufficient to permit the exercise in full of all outstanding Rights.
(b) If the Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares or other securities, if applicable) issuable and
deliverable upon the exercise of the Rights are listed or admitted for trading
on any national securities exchange or included for quotation on any national
market system, the Company shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all shares and other securities
reserved for such issuance to be listed or admitted for trading on such national
securities exchange or included for quotation on any such national market system
upon official notice of issuance upon such exercise.
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(c) The Company shall use its best efforts to (i) file, as soon as is
required by law after the first occurrence of a Section 11(a)(ii) Event on which
the consideration to be delivered by the Company upon exercise of the Rights has
been determined in accordance with this Agreement, or as soon as is required by
law following the Distribution Date, as the case may be, a registration
statement or statements under the Act, with respect to the securities
purchasable upon exercise of the Rights on an appropriate form or forms, (ii)
cause such registration statement or statements to become effective as soon as
practicable after such filing, and (iii) cause such registration statement or
statements to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities or (B) the Expiration Date.
The Company will also take such action as may be appropriate under, or to ensure
compliance with, the securities or "Blue Sky" laws of all states required in
connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed 90 days after the date set forth in
clause (i) of the first sentence of this Section 9(c), the exercisability of the
Rights in order to prepare and file such registration statement or statements
and permit it or them to become effective. Upon any such suspension, the
Company shall either advise in writing all shareholders of record as of that
date or issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as either advise in writing all
shareholders of record as of that date or issue a public announcement at such
time as the suspension is no longer in effect. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction, if any,
shall have been obtained, the exercise thereof shall not be permitted under
applicable law or a registration statement (if required by law) shall not have
been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares (and, following
the occurrence of a Triggering Event, Common Shares or other securities, if
applicable) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares or other securities (subject to payment of the
Purchase Price), be duly and validly authorized and issued and, with respect to
Preferred Shares, Common Shares or other shares of capital stock, fully paid and
non-assessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state taxes and governmental charges
that may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for Preferred Share Fractions (or Common
Shares or other securities, as the case may be) upon the exercise of Rights.
The Company shall not, however, be required (i) to pay any tax or governmental
charge that may be payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of a number of
Preferred Share Fractions (or Common Shares or other securities, as the case may
be) in respect of a name other than that of the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise or (ii) to issue or
deliver any certificates for a number of Preferred Share Fractions (or Common
Shares or other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax or charge shall
have been paid (any such tax or charge being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax or charge is due.
Section 10. CAPITAL STOCK RECORD DATE. Each Person in whose name any
certificate for a number of Preferred Share Fractions (or Common 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
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of record of such Preferred Share Fractions (or Common Shares or other
securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and all
applicable taxes or governmental charges) was made; provided, however, that if
the date of such surrender and payment is a date upon which the applicable
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares (or other securities, as the case may
be), fractional or otherwise, on, and such certificate shall be dated, the next
succeeding Business Day on which the applicable transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder of
a Rights Certificate, as such, shall not be entitled to any rights of a
stockholder of the Company with respect to shares (or other securities, as the
case may be) for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares or other
securities 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 any security of the Company payable in
Preferred Shares, (B) subdivide or split the outstanding Preferred Shares, (C)
combine or consolidate the outstanding Preferred Shares into a smaller number of
shares or effect a reverse stock split of the outstanding Preferred Shares, or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e), the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, split, combination, consolidation or
reclassification, and the number and kind of shares of capital stock issuable on
such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Company's transfer books for the Preferred Shares
(or other capital stock, as the case may be) were open, he would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, split, combination, consolidation or reclassification. If an event
occurs that would require an adjustment under both this 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) Subject to Section 24 of this Agreement, in the event:
(A) Any Person shall, at any time after the Rights Dividend
Declaration Date, become an Acquiring Person, unless the event causing
such Person to become an Acquiring Person is a transaction set forth
in Section 13(a), or
(B) the Board shall declare any Person to be an Adverse
Person, upon a determination by at least a majority of the Continuing
Directors, that such
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Person, alone or together with its Affiliates or Associates, has, at
any time after the Rights Dividend Declaration Date, become the
Beneficial Owner of a substantial amount of Common Shares (which
amount shall in no event be less than 10% of the Common Shares then
outstanding) and a determination by at least a majority of the
Continuing Directors, after reasonable inquiry and investigation,
including consultation with such Persons as such directors shall deem
appropriate, that (1) such Beneficial Ownership by such Person is
intended to cause the Company to repurchase the Common Shares
beneficially owned by such Person or to cause pressure on the Company
to take action or enter into a transaction or series of transactions
intended to provide such Person or its Affiliates or Associates with
short-term financial gain under circumstances where at least a
majority of the Continuing Directors determines that the best long-
term interests of the Company and its stockholders would not be served
by taking such action or entering into such transaction or series of
transactions at that time or (2) such Beneficial Ownership is causing
or reasonably likely to cause a material adverse impact (including,
but not limited to, impairment of relationships with customers or
impairment of the Company's ability to maintain its competitive
position) on the business or prospects of the Company,
then, promptly following the first occurrence of a Section 11(a)(ii) Event,
proper provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e)) shall thereafter have the right to receive,
upon exercise thereof at the then current Purchase Price in accordance with the
terms of this Agreement, (x) such number of Preferred Share Fractions, or (y) at
the election of at least a majority of the Continuing Directors and in lieu of a
number of Preferred Share Fractions (a "Section 11(a)(ii) Election"), such
number of Common Shares, that equals the result obtained by (xx) multiplying the
then current Purchase Price by the then number of Preferred Share Fractions for
which a Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, and (yy) dividing that product (which, following such
first occurrence, shall thereafter be referred to as the "Purchase Price" for
each Right for all purposes of this Agreement) by one one-thousandth of 50% of
the Current Market Price (determined pursuant to Section 11(d)(ii) per Preferred
Share (or 50% of the current market price (determined pursuant to
Section 11(d)(ii)) per Common Share, as the case may be) on the date of such
first occurrence (such number of shares, the "Adjustment Shares").
(iii) In the event that the number of Preferred Shares (or
Common Shares, if applicable) that are authorized by the Company's Articles of
Incorporation but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights are not sufficient to permit the exercise in
full of the Rights in accordance with Section 11(a)(ii), the Company shall: (A)
determine the excess of (1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") over (2) the Purchase Price (such
excess, the "Spread"), and (b) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Preferred Shares, Common Shares and/or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred stock
which based on, among other things, the dividend and liquidation rights of such
preferred shares, have substantially the same economic value as Common Shares
(such shares of preferred stock, "common stock equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any combination of the
foregoing (whichever substituted, the "Substitute Consideration"), having an
aggregate value equal to the Current Value, where such aggregate value has been
determined by at least a majority of the Continuing Directors
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<PAGE>
based upon the advice of an investment banking firm selected by at least a
majority of the Continuing Directors; provided, however, if the Company shall
not have made adequate provision to deliver substitute consideration pursuant to
clause (B) above within 30 days following the later of (x) the date of the
occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's
right of redemption pursuant to Section 23(a) expires (the later of (x) and (y)
being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, Preferred Shares (or
Common Shares, as the case may be), to the extent available and then, if
necessary, cash, which shares and/or cash have an aggregate value equal to the
Spread. If at least a majority of the Continuing Directors shall determine in
good faith that it is likely that sufficient additional Preferred Shares (or
Common Shares, as the case may be) could be authorized for issuance upon
exercise in full of the Rights, the 30 day period set forth above may be
extended to the extent necessary, but not more than 90 days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval
for the authorization of such additional shares (such period, as it may be
extended, the "Substitution Period"). To the extent that some action need be
taken pursuant to the first and/or second sentences of this Section 11(a)(iii),
the Company (xx) shall provide, subject to Section 7(e), that such action shall
apply uniformly to all outstanding Rights, and (yy) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension, the
Company shall give notice to the Rights Agent and either advise in writing all
shareholders of record as of that date or issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as well as
a notice to the Rights Agent and either a written notice to all shareholders of
record or a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), (xxx) the value of the
Preferred Shares shall be the Current Market Price (as determined pursuant to
Section 11(d)(ii)) per Preferred Share on the Section 11(a)(ii) Trigger Date,
(yyy) the value of the Common Shares (if applicable) shall be the Current Market
Price (as determined pursuant to Section 11(d)(i)) per Common Share on the
Section 11(a)(ii) Trigger Date, and (zzz) the value of any other "common stock
equivalent" shall be deemed to have the same value as a Common Share on such
date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of any security of the Company
entitling them to subscribe for or purchase (for a period expiring within 45
calendar days after such record date) Preferred Shares (or shares having the
same rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than the
Current Market Price (as determined pursuant to Section 11(d)(ii)) per Preferred
Share on such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of Preferred Shares outstanding on such record date, plus the number of
Preferred Shares which the aggregate offering price of the total number of
preferred Shares and/or equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the denominator of
which shall be the number of Preferred Shares outstanding on such record date,
plus the number of additional Preferred Shares and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the convertible
securities so to be offered are
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<PAGE>
initially convertible). In case such subscription price may be paid by delivery
of consideration part or all of which may in a form other than cash, the value
of such consideration shall be as determined in good faith by at least a
majority of the Continuing Directors, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Preferred Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustments shall be made successively whenever such a
record date is fixed, and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of Preferred Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
dividend out of the earnings or retained earnings of the Company), assets (other
than a regular quarterly dividend referred to above or a dividend payable in
Preferred Shares, but including any dividend payable in stock other than
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 11(b)), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
Current Market Price (as determined pursuant to Section 11(d)(ii) per Preferred
Share on such record date, less the fair market value (as determined in good
faith by at least a majority of the Continuing Directors, whose determination
shall be described in a statement filed with the Rights Agent) of the portion of
the cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a Preferred Share and the
denominator of which shall be such Current Market Price (as determined pursuant
to Section 11(d)(ii)) per Preferred 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 shall be adjusted to be the
Purchase Price which would have been in effect if such record date had not been
fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), the "Current Market Price" per
Common Share on any date shall be deemed to be the average of the daily closing
prices per share of such Common Shares for the 30 consecutive Trading Days
immediately prior to such date, and for purposes of computations made pursuant
to Section 11(a)(iii), the "Current Market Price" per share of Common Shares on
any date shall be deemed to be the average of the daily closing prices per share
of such Common Shares for the 10 consecutive Trading Days immediately following
such date; provided, however, that in the event that the Current Market Price
per share of the Common Shares is determined during a 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 (other than the Rights), or (B) any
subdivision, split, combination or reclassification of such Common Shares, and
prior to the expiration of the requisite 30 Trading Day or 10 Trading Day
period, as set forth above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, split, combination or
reclassification, then, and in each such case, the "Current Market Price" shall
be properly adjusted to take into account ex-dividend trading. The closing
price for each Trading 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 on
the principal national securities exchange on which the Common Shares are listed
or admitted to trading or, if the Common Shares
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<PAGE>
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 any 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 Continuing Directors. If on any such date
no market maker is making a market in the Common Shares, the "Current Market
Price" per share shall mean the fair value per share as determined in good
faith by at least a majority of the Continuing Directors, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. The term "Trading Day" shall mean a day on which
the principal national securities exchange or national market system on which
the 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
or national market system, a Business Day.
(ii) For the purpose of any computation hereunder, the "Current
Market Price" per Preferred Share shall be determined in the same manner as set
forth above for the Common Shares in Section 11(d)(i) (other than the last
sentence thereof). If the Current Market Price per Preferred Share cannot be
determined in the manner provided above or if the Preferred Shares are not
publicly held or listed or traded in a manner described in Section 11(d)(i), the
"Current Market Price" per Preferred Share shall be conclusively deemed to be an
amount equal to one thousand (1000) (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)
multiplied by the Current Market Price per Common Share. If neither the Common
Shares nor the Preferred Shares are publicly held or so listed or traded,
"Current Market Price" per Preferred Share shall mean the fair value per share
as determined in good faith by at least a majority of the Continuing Directors,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. For all purposes of this
Agreement, the "Current Market Price" of a Preferred Share Fraction shall be
equal to the "Current Market Price" of one Preferred Share divided by one
thousand (1000).
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandths of a Common Share or other share or one-
millionth of a Preferred Share, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three years from the date of the
transaction or event which mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Preferred
Shares, thereafter the number of such other shares so receivable upon exercise
of any Right and the Purchase Price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Shares contained in Sections 11(a),
(b), (c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections
7, 9, 10, 13 and 14 with respect to the Preferred Shares shall apply on like
terms to any such other shares.
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<PAGE>
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Preferred Share
Fractions purchasable from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of Preferred Share
Fractions (calculated to the nearest one-millionth of a Preferred Share)
obtained by (i) multiplying (A) the number of Preferred Share Fractions covered
by a Right immediately prior to this adjustment, by (B) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price, and (ii)
dividing the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company, acting by the decision of at least a majority of the
Continuing Directors, may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of Preferred Share Fractions purchasable upon the exercise of a Right.
Each of the Rights outstanding after the adjustment in the number of Rights
shall be exercisable for the number of Preferred Share Fractions for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one-ten-thousandth of a Preferred Share)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall either advise in
writing all shareholders of record as of that date or make a public announcement
of its election to adjust the number of Rights, indicating the record date of
the adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is adjusted
or any day thereafter, but, if the Rights Certificates have been issued, shall
be at least 10 Business Days later than the date of written advice to all
shareholders of record or the public announcement. If Rights 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 record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or at the
option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates 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) and
shall be registered in the names of the holders of record of Rights Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of Preferred Share Fractions issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Purchase Price per Preferred Share Fraction and the number of
Preferred Share Fractions which were expressed in the initial Rights
Certificates issued hereunder.
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(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then stated or par value, if any, of the number of
Preferred Share Fractions 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
non-assessable Preferred Share Fractions at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the Preferred Share Fractions and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the number of
Preferred Share Fractions and other capital stock or securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) or securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment at least a majority of the
Continuing Directors shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Shares, (ii) issuance wholly for
cash of any Preferred Shares at less than the Current Market Price, or (iii)
issuance wholly for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares, (iv) stock dividends
or (v) issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Shares shall not be
taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)),
(ii) merge with or into any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o)), or (iii) sell or transfer
(or permit any Subsidiary to sell or transfer), in one transaction, or a series
of related transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(o)), if (A) at the time of or immediately after such consolidation, merger,
sale or transfer there are any rights, warrants or other instruments or
securities outstanding or agreements in effect that would substantially diminish
or otherwise eliminate the benefits intended to be afforded by the Rights or (B)
prior to, simultaneously with or immediately after such consolidation, merger,
sale or transfer, the stockholders of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) shall have
received a distribution of Rights previously owned by such Person or any of its
Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23, Section 24 or Section 27,
take (or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
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(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare or pay any
dividend on the outstanding Common Shares payable in Common Shares, (ii)
subdivide the outstanding Common Shares, or (iii) combine the outstanding Common
Shares into a smaller number of Common Shares, the number of Rights associated
with each Common Share then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted so that the
number of Rights thereafter associated with each Common Share following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each Common Share immediately prior to such event by a fraction,
the numerator of which shall be the number of Common Shares outstanding
immediately prior to the occurrence of such event and the denominator of which
shall be the total number of Common Shares outstanding following the occurrence
of such event.
(q) If neither the Common Shares nor the Preferred Shares are
publicly held or listed or admitted to trading on any national securities
exchange or national market system, in determining "Current Market Price" per
Common Share or Preferred Share under any section of this Agreement, the
Continuing Directors shall aggregate (i) the value of any claims the Company may
then have in pending litigation, valued separately from the remainder of the
Company's assets and business, with (ii) the value of the remainder of the
Company's assets and business.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or Section 13, 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 Preferred
Shares and the Common Shares, a copy of such Certificate, and (c) mail a brief
summary thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing Common Shares)
in accordance with Section 26. The Rights Agent shall be fully authorized to
rely and be protected in relying on any such certificate and on any adjustment
therein contained.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, following the Stock Acquisition Date, directly
or indirectly, (i) the Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o)), and the Company shall not be the continuing or
surviving corporation of such consolidation or merger, (ii) any Person (other
than a Subsidiary of the Company in a transaction that complies with Section
11(o)) shall consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all or part of
the outstanding Common Shares shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other property, or (iii) the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one transaction or a series of related
transactions, assets, or earning power aggregating more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to any
Person or Persons (other than the Company or any Subsidiary of the Company in
one or more transactions each of which complies with Section 11(o)), then, and
in each such case, except as contemplated by Section 13(d), proper provision
shall be made so that: (A) each holder of a Right, except as provided in
Section 7(e), shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance with the terms of this
Agreement,
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such number of validly authorized and issued, fully paid, non-assessable and
freely tradeable Common Shares of the Principal Party, not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be equal
to the result obtained by (1) multiplying the then current Purchase Price by the
number of Preferred Share Fractions for which a Right is exercisable immediately
prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii)
Event has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such Preferred Share Fractions for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such first
occurrence), and dividing that product (which, following the first occurrence of
a Section 13 Event, shall be referred to as the "Purchase Price" for each Right
for all purposes of this Agreement) by (2) 50% of the Current Market Price
(determined pursuant to Section 11(d)) per Common Share of such Principal Party
on the date of consummation of such Section 13 Event; (B) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this Agreement;
(C) the term "Company" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 shall
apply only to such Principal Party following the first occurrence of a Section
13 Event; (D) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares) in
connection with the consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights; and (E) the provisions of Section 11(a)(ii) shall be
of no effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean (i) in the case of any transaction
described in Section 13(a)(i) or (ii), the Person that is the issuer of any
securities into which Common Shares are converted in such merger or
consolidation, and if no securities are so issued, the Person that is the other
party to such merger or consolidation, and (ii) in the case of any transaction
described in Section 13(a)(iii), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions; provided, however, that in any such case, (A) if
the Common Shares of such Person are not at such time and have not been
continuously over the preceding 12 month period registered under Section 12 of
the Exchange Act, and such Person is a direct or indirect Subsidiary of another
Person the Common Shares of which are and have been so registered, "Principal
Party" shall refer to such other Person; and (B) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Shares
of two or more of which are and have been so registered, "Principal Party" shall
refer to whichever of such Persons is the issuer of the Common Shares having the
greatest aggregate market value.
(c) (i) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized Common Shares which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in Section 13(a) and (b) and further providing
that, as soon as practicable after the date of any consolidation, merger, sale
or transfer of assets mentioned in Section 13(a), the Principal Party will (A)
prepare and file a registration statement under the Act with respect to the
Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such registration
statement to (1) become effective as soon as practicable after such filing and
(2) remain effective (with a prospectus at all times meeting the requirements of
the Act) until the Expiration Date, and (B) will deliver to holders of the
Rights
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<PAGE>
historical financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements for registration on
Form 10 under the Exchange Act.
(ii) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparagraphs
(i) and (ii) of Section 13(a) if: (i) such transaction is consummated with a
Person or Persons who acquired Common Shares pursuant to a Permitted Offer (or a
wholly owned Subsidiary of any such Person or Persons); (ii) the price per
Common Share offered in such transaction is not less than the price per Common
Share paid to all holders of Common Shares whose shares were purchased pursuant
to such Permitted Offer, and (iii) the form of consideration offered in such
transaction is the same as the form of consideration paid pursuant to such
Permitted Offer. Upon consummation of any such transaction contemplated by this
Section 13(d), all Rights hereunder shall expire.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(p), or to
distribute Rights Certificates that evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights 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 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 at least a
majority of the Continuing Directors. If on any such date no such market maker
is making a market in the Rights, the fair value of the Rights on such date
shall be as determined in good faith by at least a majority of the Continuing
Directors, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(b) The Company shall not be required to issue fractions of Preferred
Shares upon exercise of the Rights or to distribute certificates that evidence
fractional preferred Shares, except in each case for fractions which are
integral multiples of Preferred Share Fractions. In lieu of fractional
Preferred Shares which are not integral multiples of Preferred Share Fractions,
the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market
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<PAGE>
value of one Preferred Share. For purposes of this Section 14(b), the current
market value of a Preferred Share shall be as determined pursuant to Section
11(d)(ii) for the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event and at or after a
Section 11(a)(ii) Election or Section 24(a) Election, the Company shall not be
required to issue fractions of Common Shares upon exercise of the Rights or to
distribute certificates that evidence fractional Common Shares. In lieu of
fractional Common Shares, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of one
Common Share. For purposes of this Section 14(c), the current market value of
one Common Share shall be as determined pursuant to Section 11(d)(i) for the
Trading Day immediately prior to the date of such exercise.
(d) In the event the Company determines it advisable to issue
fractions of Rights, fractions of Preferred Shares for fractions which are not
integral multiples of Preferred Share Fractions or fractions of Common Shares as
permitted in this Agreement, the Company shall immediately so notify the Rights
Agent, and in no event later than five Business Days prior to the date such
fractions are to be issued. The Company and the Rights Agent shall then adopt
mutually agreeable procedures with respect to any such issuance. In the event
the Company and the Rights Agent are unable to agree upon such procedures, the
Rights Agent may resign and be discharged from its duties under this Agreement
or the Company may remove the Rights Agent, both as set forth in Section 21;
provided, however, that only one day's prior written notice need be given of
such resignation or removal.
(e) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights, or any fractions of Preferred
Shares for fraction which are not integral multiples of a Preferred Share
Fraction, or any fractional Common Shares (if applicable) upon exercise of a
Right, except as permitted by this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares). Any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his 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 in the manner provided in this Agreement. Without limiting
the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this
Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
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(a) prior to the Distribution Date, the Rights will be transferrable
only in connection with the transfer of Common Shares;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates duly completed and fully executed and otherwise complying with
any other requirements set forth in this Agreement;
(c) subject to Section 6(a) and Section 7(f), the Company and the
Rights Agent may deem and treat the Person in whose name a Rights Certificate
(or, prior to the Distribution 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 Rights Certificate
or the associated Common Share Certificate made by anyone other than the Company
or the Rights Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent, subject to the last sentence of Section 7(e), shall be
required to be affected by any notice or knowledge to the contrary; and
(d) Notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of Preferred
Share Fractions or any other securities of the Company (including the Common
Shares) which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a 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 25), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Rights Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with
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the administration and execution of this Agreement and the exercise and
performance of its duties hereunder, including without limitation the costs and
expenses of defending against and appealing any such claim of liability.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, instruction, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, however, that such Person would be eligible
for appointment as a successor Rights Agent under the provisions of Section 21.
In case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken, suffered or omitted by it in good faith and in accordance with such
advice.
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(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including without limitation, the identity of any Acquiring Person or Adverse
Person and the determination of "Current Market Price") be proved or established
by the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and any
such certificate shall be full authorization to the Rights Agent for any action
taken, suffered or omitted in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall not be liable or responsible hereunder
except 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 Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of Section 11,
Section 13 or Section 24 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
Rights Certificates after receipt of a certificate delivered pursuant to Section
12 describing any such adjustment); nor shall it be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares or Common Shares to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any Preferred Shares or Common shares will,
when so issued, be validly authorized and issued, fully paid and non-assessable.
(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 or direction with respect to the administration of this Agreement
and the exercise and performance of its duties hereunder from the Chairman of
the Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company, and to apply
to such officers for advice, instructions or direction 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 or direction of any such
officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or
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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 or any stockholder, director, officer or employee of
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 by or
through its attorneys or agents, and the Rights Agent shall not be liable or
responsible for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss or damages to the Company resulting from any such act,
default, neglect or misconduct; provided, however, reasonable care was exercised
in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer until it has received instructions with respect
thereto from the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company, and to each transfer
agent of the Common Shares and the Preferred Shares the existence of which the
Rights Agent has received notice from the Company, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Shares and the Preferred
Shares, by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights Certificate
(who shall, with such notice, submit his Rights Certificate for inspection by
the Company), then any registered holder of any Rights Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States, the State of Minnesota or the State of New York (or of any other
state of the United States so long as such corporation is authorized to do
business as a bank or trust company in the State of Minnesota or the State of
New York) in good standing, having an office in the State of Minnesota or the
State of New York, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus adequate in the judgment of at least
a majority of the Continuing Directors to assure the
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<PAGE>
performance of its duties hereunder and the protection of the interests of the
Company and the holders of Rights, or (b) an Affiliate of a corporation
described in clause (a) of this sentence. 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 such 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 the Preferred Shares, and
mail a notice thereof in writing to the registered holders of the Rights
Certificates or, prior to the Distribution Date, to the registered holders of
the Common Shares. Failure to give any notice provided for in this Section 21
or to appoint a successor Rights Agent, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be specified by at least a majority of the Continuing Directors to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of Common Shares following the
Distribution Date and prior to the Expiration Date, the Company (a) shall, with
respect to Common Shares so issued or sold pursuant to the exercise of stock
options, grants or awards outstanding as of the Distribution Date under any
benefit plan or arrangement for employees or directors, or upon the exercise,
conversion or exchange of securities issued by the Company prior to the
Distribution Date, and (b) may, in any other case, if deemed necessary or
appropriate by at least a majority of the Continuing Directors, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance could create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu
of issuance thereof.
Section 23. REDEMPTION AND TERMINATION.
(a) The Board, acting by at least a majority of the Continuing
Directors, may, at its option, at any time prior to the first to occur of the
close of business on (i) the tenth Business Day following the Stock Acquisition
Date (or, if the Stock Acquisition Date shall have occurred prior to the Record
Date, the close of business on the tenth Business Day following the Record
Date), (ii) the tenth Business Day after a determination, pursuant to Section
11(a)(ii)(B), that a person is an Adverse Person, or (iii) the Final Expiration
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.005 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price") and the Company may, at its option, pay
the Redemption Price in Preferred Shares (based on the "Current Market Price,"
as defined in Section 11(d)(ii) of the Preferred Shares at the time of
redemption), Common Shares (based on the "Current Market Price," as defined in
Section 11(d)(i) of the Common Shares at the time of redemption), cash or any
other form of consideration deemed
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<PAGE>
appropriate by the Board, acting by a majority of the Continuing Directors.
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event
until such time as the Company's right of redemption hereunder has expired. The
Company shall promptly notify the Rights Agent following the action of the Board
ordering redemption of the Rights.
(b) Immediately upon the action of the Board ordering the redemption
of the Rights, and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so
held. Within ten days after the action of the Board ordering the redemption of
the Rights, the Company shall give notice of such redemption to the holders of
the then outstanding Rights by mailing such notice to all such holders at each
holder's last address as it appears upon the registry books of the Rights Agent
for the Common Shares; provided, however, the failure to give or any defect in
any such notice shall not affect the validity of such redemption. Any notice
which is mailed in the manner provided in Section 26 shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be made.
Section 24. EXCHANGE.
(a) The Board, acting by at least a majority of the Continuing
Directors, may, at its option, at any time after a Section 11(a)(ii) Event,
exchange all or part of the then outstanding and exercisable Rights (which (i)
shall not include Rights that have become void pursuant to the provisions of
Section 7(e)) for Preferred Share Fractions (or, at the election of at least a
majority of the Continuing Directors (a "Section 24(a) Election"), Common
Shares) at an exchange ratio of one Preferred Share Fraction (or Common Share,
as the case may be) per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Board ordering the exchange of
any Rights pursuant to Section 24(a) and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of
Preferred Share Fractions (or Common Shares, as the case may be) equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly notify the Rights Agent and give public notice of any
such exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry book of the
Rights Agent. Any notice which is mailed in the manner provided in Section 26
shall be deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of Preferred
Share Fractions (or Common Shares, as the case may be) for Rights will be
effected and, in the event of any partial exchange, shall be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant
to the provision of Section 7(e)) held by each holder of Rights.
(c) In the event that there shall not be sufficient Preferred Shares
(or Common Shares, if applicable) issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action
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<PAGE>
as may be necessary to authorize additional Preferred Shares (or Common Shares,
as the case may be) for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of Common
Shares or Preferred Shares or to distribute certificates which evidence
fractional Common Shares or Preferred Shares, except in each case for fractions
of Preferred Shares which are integral multiples of Preferred Share Fractions.
In lieu of such fractional Preferred Shares which are not integral multiples of
Preferred Share Fractions, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Preferred Shares would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Preferred Share, as determined pursuant to the
second sentence of Section 11(d)(ii), for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24.
(e) If applicable, the Company shall not be required to issue
fractions of Common Shares or to distribute certificates which evidence
fractional Common Shares. In lieu of such fractional Common Shares, there shall
be paid to the registered holders of the Rights Certificates with regard to
which such fractional Common Shares would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a whole Common
Share. For the purposes of this Section 24(e), the current market value of a
whole Common Share shall be as determined pursuant to Section 11(d)(i) for the
Trading Day immediately prior to the date of exchange pursuant to this Section
24.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Shares or to make any other distribution to the holders of
Preferred Shares (other than a regular quarterly cash dividend out of earnings
or retained earnings of the Company), (ii) to offer to the holders of Preferred
Shares rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other securities, rights
or options, (iii) to effect any reclassification of the Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o)), 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
transaction or a series of related 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 Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o)), or (v)
to effect the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Rights Certificate,
to the extent feasible and in accordance with Section 26, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation therein
by the holders of Preferred Shares, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by Section 25(a)(i)
or (ii) at least ten Business Days prior to the record date for determining
holders of Preferred Shares for purposes of such action, and in the case of any
such other action, at least ten Business Days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of
Preferred Shares, whichever shall be the earlier.
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<PAGE>
(b) In case any Triggering Events shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 26, 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) or Section 13, and (ii) in the event of an appropriate Section
11(a)(ii) Election or Section 24(a) Election, all references, in Section 25(a)
shall be deemed thereafter to refer to Common Shares and/or, if appropriate,
other securities.
Section 26. NOTICES.
(a) Notices, communications or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Angeion Corporation
3650 Annapolis Lane, Suite 170
Minneapolis, MN 55447-5434
Attention: Whitney A. McFarlin
Chairman of the Board and
Chief Executive Officer
with a copy to:
Outside Counsel for Angeion Corporation
Attn: Thomas C. Thomas
Oppenheimer Wolff & Donnelly
Plaza VII, Suite 3400
45 South Seventh Street
Minneapolis, Minnesota 55402
(b) Subject to the provisions of Section 21, notices, communications
or demands authorized by this Agreement to be given or made by the Company or by
the holder of any Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
Norwest Bank Minnesota, N.A.
161 North Concord Exchange
South St. Paul, Minnesota 55075-0738
Attention: Stock Transfer Department
(c) Notices, communications or demands authorized by this Agreement
to be given or made by the Company or the Rights Agent to the holder of any
Rights Certificate (or, if prior to the Distribution Date, to the holder of
certificates representing Common Shares) shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed to such holder at
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<PAGE>
the address of such holder as shown on the registry books of the Company, the
transfer agent for the Common Shares or the Rights Agent, as appropriate.
Section 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 27, the Company may
(acting by at least a majority of the Continuing Directors), and the Rights
Agent shall, if the Company so directs, supplement or amend any provision of
this Agreement, including without limitation to modify or amend the definition
of Acquiring Person set forth in Section 1(a) hereof and to change the Purchase
Price set forth in Section 4(a) hereof, without the approval of any holders of
certificates representing Common Shares and without the approval of any holders
of Rights or holders of certificates representing Rights. From and after the
Distribution Date and subject to the penultimate sentence of this Section 27,
the Company may (acting by at least a majority of the Continuing Directors), and
the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order
(a) to cure any ambiguity, (b) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provision herein,
(c) to shorten or lengthen any time period hereunder, or (d) to change or
supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person, an Adverse
Person or an Affiliate or Associate of any such Person); provided, this
Agreement may not be supplemented or amended to lengthen (i) a time period
relating to when the rights may be redeemed at such time as the Rights are not
then redeemable, or (ii) any other time period unless such lengthening is for
the purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights (other than an Acquiring Person, an Adverse
Person or an Affiliate or Associate of any such Person). Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price, the
Final Expiration Date or the number of Preferred Share Fractions for which a
Right is exercisable. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Common Shares.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD. For all purposes
of this Agreement, any calculation of the number of Common Shares outstanding at
any particular time, including for purposes of determining the particular
percentage of such outstanding Common Shares of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of Rule
13d-3d(d)(1)(i) of the General Rules and Regulations under the Exchange Act,
whether or not the Common Shares are registered under the Exchange Act. The
Board (where specifically provided for herein, acting by at least a majority of
the Continuing Directors) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board (where specifically provided for herein, acting by at least
a majority of the Continuing Directors) or to the Company (where specifically
provided for herein, acting by at least a majority of the Continuing Directors),
or as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (a) interpret the
provisions of this Agreement, and (b) make all calculations and determinations
deemed
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<PAGE>
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 purposes of clause (ii) below, all omissions with respect to the
foregoing) which are done or made by the Board (where specifically provided for
herein, acting by at least a majority of the Continuing Directors) in good faith
shall (i) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (ii) not subject the Board or
any director to any liability to the holders of the Rights.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Shares) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Shares).
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable for any purpose or under
any set of circumstances or as applied to any Person, such invalid, void or
unenforceable term, provision, covenant or restriction shall continue in effect
to the maximum extent possible for all other purposes, under all other
circumstances and as applied to all other Persons, and the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and at least a majority
of the Continuing Directors determines in its good faith judgment that severing
the invalid language from this Agreement would adversely affect the purpose of
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth Business Day following the date of such determination by such Continuing
Directors. Without limiting the foregoing, if any provisions requiring that a
determination be made by less than the entire Board (or at a time or with the
concurrence of a group of directors consisting of less than the entire Board) is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable, such determination shall then be made by the Board in
accordance with applicable law and the Company's Certificate of Incorporation
and Bylaws.
Section 32. GOVERNING LAW. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Minnesota and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 33. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the Sections
of this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: ANGEION CORPORATION
By: /s/ David L. Christofferson By: /s/ Whitney A. McFarlin
------------------------------ -----------------------------
Name: David L. Christofferson Name: Whitney A. McFarlin
Title: Vice President, Chief Title: Chairman of the Board,
Financial Officer and President and
Secretary Chief Executive Officer
Attest: NORWEST BANK MINNESOTA, N.A.
By: /s/ Barbara M. Novak By: /s/ Karri L. VanDell
------------------------------ -----------------------------
Name: Barbara M. Novak Name: Karri L. VanDell
Title: Assistant Vice President Title: Account Manager
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<PAGE>
EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
of
SERIES B JUNIOR PREFERRED STOCK
of
ANGEION CORPORATION
Pursuant to Section 302A.401 of the
Minnesota Business Corporations Act
of the State of Minnesota
-------------------
We, Whitney A. McFarlin, Chief Executive Officer, and David L.
Christofferson, Chief Financial Officer, of Angeion Corporation, a corporation
organized and existing under the Business Corporations Act of the State of
Minnesota (the "Corporation"), in accordance with the provisions thereof, DO
HEREBY CERTIFY:
That pursuant to the authority vested in the Board of Directors by the
Articles of Incorporation of the Corporation, the said Board of Directors on
April 8, 1996, adopted the following resolution creating a series of three
hundred thousand (300,000) shares of Preferred Stock designated as Series B
Junior Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of this Corporation in accordance with the provisions of its Articles of
Incorporation, a series of Preferred Stock of the Corporation be and it hereby
is created, and that the designation and amount thereof and the voting powers,
preferences and relative, participation, optional and other special rights of
the shares of such series, and the qualifications, limitation or restrictions
thereof are as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as Series B Junior Preferred Stock, par value $.01 per share (the
"Series B Junior Preferred Shares"), and the number of shares constituting such
series shall be three hundred thousand (300,000).
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to the prior and superior rights of the holders of any shares
of any series of Preferred Stock ranking prior and superior to Series B Junior
Preferred Shares with respect to dividends, the holders of Series B Junior
Preferred Shares shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of January, March, July and October
in each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date," commencing on the
<PAGE>
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a Series B Junior Preferred Share, in an amount per share (rounded
to the nearest cent) equal to (subject to the provision for adjustment
hereinafter set forth), 1,000 times the aggregate per share amount of all cash
dividends, and 1,000 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock, par
value $.01 per share, of the Corporation (the "Common Stock") since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a Series B Junior Preferred Share. In the event the Corporation
shall at any time after April 8, 1996 (the "Rights Declaration Date") (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount to
which holders of Series B Junior Preferred Shares were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on the Series
B Junior Preferred Shares as provided in paragraph (a) above immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock).
(c) Dividends shall begin to accrue and be cumulative on outstanding
Series B Junior Preferred Shares from the Quarterly Dividend Payment Date next
preceding the date of issue of such Series B Junior Preferred Shares, unless the
date of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of Series B Junior Preferred Shares entitled to receive
a quarterly dividend and before such Quarterly Dividend Payment Date, in either
of which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the Series B Junior Preferred Shares in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date
for the determination of holders of Series B Junior Preferred Shares entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be no more than 30 days prior to the date fixed for the payment
thereof.
Section 3. VOTING RIGHTS. In addition to any other voting rights required
by law, the holders of Series B Junior Preferred Shares shall have the following
voting rights:
(a) Subject to the provision for adjustment hereinafter set forth, each
Series B Junior Preferred Share shall entitle the holder thereof to 1,000 votes
on all matters submitted to a vote of the stockholders of the Corporation. In
the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, then in each
such case the number of votes per share to which holders of Series B Junior
Preferred Shares were entitled immediately
2
<PAGE>
prior to such event shall be adjusted by multiplying such number by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(b) If, on the date used to determine stockholders of record for any
meeting of stockholders for the election of directors, a default in dividends on
the Series B Junior Preferred Shares shall exist, the number of directors
constituting the Board of Directors of the Corporation shall be increased by
two, and the holders of the Series B Junior Preferred Shares shall have the
right at such meeting, voting together as a single class, to elect two directors
of the Corporation to fill such newly created directorships. Each director
elected by the holders of Series B Junior Preferred Shares (herein called a
"Series B Preferred Director") shall continue to serve as such director for the
full term for which he shall have been elected, notwithstanding that prior to
the end of such term a default in dividends shall cease to exist. Any Series B
Preferred Director may be removed by, and shall not be removed except by, the
vote of the holders of record of the outstanding Series B Junior Preferred
Shares, voting together as a single class, at a meeting of the stockholders, or
of the holders of Series B Junior Preferred Shares called for such purpose.
Thereafter, so long as a default in dividends on the Series B Preferred Shares
shall exist (i) any vacancy in the office of a Series B Preferred Director may
be filled (except as provided in the following clause (ii)) by an instrument in
writing signed by the remaining Series B Preferred Director and filed with the
Corporation and (ii) in the case of the removal of any Series B Preferred
Director, the vacancy may be filled by the vote of the holders of the
outstanding Series B Junior Preferred Shares, voting together as a class, at the
same meeting at which such removal shall be voted. Each director appointed as
aforesaid by the remaining Series B Preferred Director shall be deemed, for all
purposes hereof, to be a Series B Preferred Director. Whenever the term of
office of the Series B Preferred Directors shall end and no default in dividends
on the Series B Junior Preferred Shares shall exist, the number of directors
constituting the Board of Directors of the Corporation shall be reduced by two.
For the purposes of this Section 3(b), a "default in dividends" on the Series B
Junior Preferred Shares shall be deemed to have occurred whenever there shall be
an arrearage in the payment of any dividends to which the holders of the Series
B Junior Preferred Shares are entitled to receive, whether or not any such
dividends have been declared by the Board of Directors, for six consecutive
quarters, and, having so occurred, such default shall be deemed to exist
thereafter until, but only until, all accrued dividends on all shares of Series
B Junior Preferred Shares then outstanding shall have been paid through the last
Quarterly Dividend Payment Date.
At any time when such right to elect directors separately as a class
shall have so vested, the Corporation may, and upon the written request of the
holders of record of not less than 20% of the then outstanding total number of
the Series B Junior Preferred Shares shall, call a special meeting of holders of
such Series B Junior Preferred Shares for the election of directors. In the
case of such a written request, such special meeting shall be held within 90
days after the delivery of such request, and, in either case, at the place and
upon the notice provided by law and in the Bylaws of the Corporation; provided
that the Corporation shall not be required to call such a special meeting if
such request is received less than 120 days before the date fixed for the next
ensuing annual or special meeting of stockholders of the Corporation. After the
number of directors of the Corporation shall have been increased by two as
hereinabove provided, the number as so increased may thereafter be further
increased or decreased in such manner as may be permitted by the Articles of
Incorporation or By-laws, provided that no such action shall impair the
3
<PAGE>
right of the holders of Series B Junior Preferred Shares to elect and to be
represented by two directors as herein provided.
(c) Except as otherwise provided herein, in the Articles of Incorporation
of the Corporation or by law, the holders of Series B Junior Preferred Shares
and the holders of Common Stock (and the holders of shares of any other series
or class entitled to vote thereon) shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
Section 4. CERTAIN RESTRICTIONS.
(a) Whenever any dividends or other distributions payable on the Series B
Junior Preferred shares as provided in Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, on Series B Junior Preferred Shares outstanding shall have been paid
in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any share ranking
junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series B Junior Preferred Shares;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Junior Preferred
Shares, except dividends paid ratably on the Series B Junior Preferred
Shares and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Junior Preferred
Shares, provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares of
any stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series B Junior Preferred
Shares; or
(iv) purchase or otherwise acquire for consideration any Series B
Junior Preferred Shares, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
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<PAGE>
Section 5. REACQUIRED SHARES. Any Series B Junior Preferred Shares
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued Preferred
Stock and may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors.
Section LIQUIDATION, DISSOLUTION OR WINDING UP. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of Series B Junior Preferred Shares shall be entitled
to receive the greater of (a) $1,000.00 per share, plus accrued dividends to the
date of distribution, whether or not earned or declared, or (b) an amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1,000 times the aggregate amount to be distributed per share to holders of
Common Stock. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller number of shares,
then in each such case the amount to which holders of Series B Junior Preferred
Shares were entitled immediately prior to such event pursuant to clause (b) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the Series B
Junior Preferred Shares shall at the same time be similarly exchanged or changed
in an amount per share (subject to the provision for adjustment hereinafter set
forth) equal to 1,000 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, then in each such case the amount
set forth in the preceding sentence with respect to the exchange or change of
Series B Junior Preferred Shares shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 8. NO REDEMPTION. The Series B Junior Preferred Shares shall not
be redeemable.
Section 9. RANKING. The Series B Junior Preferred Stock shall rank junior
to all other series of the Corporation's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.
Section 10. FRACTIONAL SHARES. Series B Junior Preferred Shares may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series B Junior Preferred Shares.
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<PAGE>
Section 11. AMENDMENT. The Articles of Incorporation of the Corporation
shall not be further amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series B Junior
Preferred Shares so as to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding Series B Junior Preferred
Shares, voting separately as a class.
IN WITNESS WHEREOF, the undersigned have executed and subscribed this
Certificate and do affirm the foregoing as true under penalties of perjury this
day of April, 1996.
/s/ Whitney A. McFarlin
--------------------------------------
Whitney A. McFarlin
Chief Executive Officer
ATTEST:
/s/ David L. Christofferson
- -------------------------------------
David L. Christofferson
Chief Financial Officer
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<PAGE>
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- Rights
-----
NOT EXERCISABLE AFTER APRIL 7, 2006 OR EARLIER IF REDEEMED OR EXCHANGED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.005 PER RIGHT, AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR
AN ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN [ACQUIRING] [ADVERSE] PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN [ACQUIRING] [ADVERSE] PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.]*
__________
*The portion of the legend in brackets shall be inserted only if applicable,
shall be modified to apply to an Acquiring Person or an Adverse Person, as
applicable, and shall replace the preceding sentence.
<PAGE>
ANGEION CORPORATION
RIGHTS CERTIFICATE
This certifies that _______________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of April 8, 1996 (the "Rights Agreement"), between Angeion
Corporation, a Minnesota corporation (the "Company"), and [Norwest Bank
Minnesota, N.A.], a national banking association (the "Rights Agent"), to
purchase from the Company at any time prior to 5:00 p.m. (Minneapolis time) on
April 7, 2006 at the office of the Rights Agent designated for such purpose, or
its successors as Rights Agent, one one-thousandth of a fully paid, non-
assessable Series B Junior Preferred Share, par value $.01 per share, (the
"Preferred Shares"), of the Company, at a purchase price (the "Purchase Price")
of $70.00 per one one-thousandth of a Preferred Share (such fraction, a
"Preferred Share Fraction"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related Certificate duly
executed. The Purchase Price may be paid by cash, certified bank check or money
order payable to the order of the Company. The number of Rights evidenced by
this Rights Certificate (and the number of Preferred Share Fractions which may
be purchased upon exercise thereof) set forth above, and the Purchase Price per
Preferred Share Fraction set forth above, are the number and Purchase Price as
of the close of business on ___________, ____, based on the Preferred Shares as
constituted at such date. Pursuant to the Rights Agreement, the Company
reserves the right to require prior to the occurrence of a Triggering Event
that, upon any exercise of Rights, a number of Rights be exercised so that only
whole Preferred Shares will be issued.
Capitalized terms used herein without definition shall have the meaning
given to them in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights evidenced
by this Rights Certificate are beneficially owned by (i) an Acquiring Person, an
Adverse Person or an Affiliate or Associate of any such Person, (ii) a
transferee of any such Acquiring Person, Adverse 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, an
Adverse Person or an Affiliate or Associate of any such 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 Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of Preferred Shares or other securities which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events, including
Triggering Events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal offices of the
<PAGE>
Company and the above-mentioned office of the Rights Agent and are also
available upon written request to the Company.
Subject to the provisions of the Rights Agreement, this Rights Certificate,
with or without other Rights Certificates, upon surrender at the office or
offices of the Rights Agent designated for such purpose, with the Form of
Election and Certificate set forth on the reverse side duly executed, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of Preferred Share Fractions as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled such holder
to purchase. If this Rights Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed, subject to the approval of at least a majority
of the Continuing Directors, at a redemption price of $.005 per Right at any
time prior to the earlier of the close of business on (i) the tenth Business Day
following the Stock Acquisition Date (as such time period may be extended
pursuant to the Rights Agreement), (ii) the tenth Business Day after a
determination that a Person is an Adverse Person, or (iii) the Final Expiration
Date.
Subject to the provisions of the Rights Agreement, the Company may, at its
option, at any time after a Section 11(a)(ii) Event, subject to the approval of
at least a majority of the Continuing Directors, exchange all or part of the
Rights evidenced by this Certificate for Preferred Share Fractions, or, upon an
appropriate Section 24(a) Election, Common Shares.
No Fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of a Preferred Share Fraction), but in lieu thereof a cash payment
will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred Shares or
of any other securities of the Company (including Common Shares) which may at
any time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
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<PAGE>
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of _________,_____.
ATTEST: ANGEION CORPORATION
__________________________________ By:___________________________
Title:________________________
Countersigned:
[__________________________]
By:________________________________
Authorized Officer
3
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _____________________ hereby sells, assigns and
transfers unto _________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________________
Attorney, to transfer the within Rights Certificate on the books of the within-
named Company, with full power of substitution.
Dated: ___________________________ ________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange or a commercial bank or trust company having an office or
correspondent in the United States.
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<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person, an
Adverse Person or an Affiliate or Associate of any such Person (as such terms
are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person, an Adverse Person or an Affiliate or Associate of any such Person.
Date: _______________ ______________________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
5
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: ANGEION CORPORATION
The undersigned irrevocably hereby elects to exercise ______ Rights
represented by this Rights Certificate to purchase the Preferred Shares issuable
upon the exercise of the Rights (or Common Shares or such other securities of
the Company or of any other person which may be issuable upon the exercise of
the Rights) and requests that certificates for such shares be issued in the name
of and delivered to:
Please insert social security
or other identifying number ___________________________
_______________________________________________________
(Please print name and address)
_______________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number ___________________________
_______________________________________________________
(Please print name and address)
_______________________________________________________
Dated: __________, ____. __________________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange or a commercial bank or trust company having an office or
correspondent in the United States.
6
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person,
an Adverse Person or an Affiliate or Associate of any such Person (as such terms
are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person, an
Adverse Person or an Affiliate or Associate of any such Person.
Date: ______________ __________________________________________________
Signature
Signature Guaranteed:
NOTICES
The signature to the foregoing Election or Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
7
<PAGE>
EXHIBIT C
ANGEION CORPORATION
SUMMARY OF RIGHTS AGREEMENT
On April 8, 1996, the Board of Directors of Angeion Corporation (the
"Company") declared a dividend distribution of: (a) one preferred share purchase
right (the "Rights") for each outstanding share of the Company's Common Stock,
par value $.01 per share (the "Common Shares"), payable to shareholders of
record at the close of business on April 30, 1996, and (b) one Right for each
Common Share into which Series A Preferred Shares (as hereinafter defined)
outstanding on the Record Date are convertible; PROVIDED THAT immediately upon
conversion of such Series A Preferred Shares into Common Shares, the Rights
previously attached to the Series A Preferred shall automatically and without
any further action become attached to the Common Shares, so that following
conversion the holders of Series A Preferred Shares hold the same number of
Rights as were held before conversion. Each Right entitles the registered
holder to purchase from the Company a unit consisting of one one-thousandth of a
share (a "Preferred Share Fraction") of the Company's Series B Junior Preferred
Stock, par value $.01 per share (the "Preferred Shares"), or a combination of
securities and assets of equivalent value, at a purchase price of $70.00 per
Preferred Share Fraction (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") dated as of April 8, 1996 between the Company and Norwest
Bank Minnesota, N.A. as Rights Agent.
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Rights Certificates will be
distributed. The Rights will separate from the Common Shares and will be
distributed to the holders thereof upon the first to occur of (i) ten business
days following 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 outstanding Common Shares
(other than as a result of a Permitted Offer, as defined) (the "Stock
Acquisition Date"), (ii) ten business days (or such later date as the Board of
Directors, acting by a majority of the Continuing Directors, may determine)
following the commencement of a tender offer or exchange offer that would result
in a person or group beneficially owning 15% or more of the outstanding Common
Shares (other than as a result of a Permitted Offer, as defined), or (iii) ten
business days after a determination by at least a majority of the Continuing
Directors that a Person is an Adverse Person, and that such Person, alone or
together with its affiliates and associates, has become the beneficial owner of
a substantial amount of Common Shares (which amount shall in no event be less
than 10% of the Common Shares then outstanding) and (a) such beneficial
ownership by such Person is intended to cause the Company to repurchase the
Common Shares beneficially owned by such Person or to cause pressure on the
Company to take action or enter into a transaction or series of transactions
intended to provide such Person with short-term financial gain under
circumstances where at least a majority of the Continuing Directors determines
that the best long-term interests of the Company and its shareholders would not
be served by taking such action or entering into such transaction or series of
transactions at that time or (b) such beneficial ownership is causing or
reasonably likely to cause a material adverse impact (including, but not limited
to, impairment of relationships with customers or impairment of the Company's
ability to maintain its competitive position)(the earlier of (i), (ii) and (iii)
being called the "Distribution Date").
A "Permitted Offer" shall mean a tender or exchange offer which is for all
outstanding Common Shares at a price and on terms determined, prior to the
purchase of shares under such
<PAGE>
tender or exchange offer, by at least a majority of the members of the Board of
Continuing Directors who are not officers of the Company and who are not
Acquiring Persons or Affiliates, Associates, nominees or representatives of an
Acquiring Person, to be adequate (taking into account all factors that such
Directors deem relevant including, without limitation, prices that could
reasonably be achieved if the Company or its assets were sold on an orderly
basis designed to realize maximum value) and otherwise in the best interests of
the Company and its shareholders (other than the Person or any Affiliate or
Associate thereof on whose basis the offer is being made) taking into account
all factors that such directors may deem relevant.
A "Continuing Director" is (i) any member of the Board of Directors prior
to April 8, 1996, while such person is a member of the Board of Directors, who
is not an Acquiring Person or an Adverse Person, or an affiliate or associate of
either of the foregoing, or a representative or designee of an Acquiring Person
or an Adverse Person or any such affiliate or associate, or (ii) any person who
subsequently becomes a member of the Board of Directors who is not an Acquiring
Person or an Adverse Person, or an affiliate or associate of either of the
foregoing, or a representative or designee of an Acquiring Person, an Adverse
Person or any such affiliate or associate, and whose nomination or election to
the Board of Directors is recommended or approved by a majority of the
Continuing Directors.
Until the Distribution Date, (i) the Rights will be evidenced by
certificates representing Common Shares and/or Series A Preferred Shares, as the
case may be, and will be transferred with and only with such Common Share
certificates, (ii) new Common Share certificates issued after April 8, 1996,
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificate for Common Shares
outstanding will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on April 7, 2006, unless earlier redeemed or exchanged
by the Company as described below (the earliest of all such dates, the
"Expiration Date").
As soon as practical after the Distribution Date, Rights Certificates will
be mailed to holders of record of the Common Shares as of the close of business
on the Distribution Date and, thereafter, the separate Rights Certificates alone
will represent the Rights. All Common Shares issued prior to the earlier of the
Distribution Date and the Expiration Date will be issued with Rights. Common
Shares issued after the Distribution Date upon the exercise of employee stock
options, issuances under other employee stock benefit plans or the conversion of
convertible securities issued prior to the Distribution Date will be issued with
Rights.
In the event (i) that a person or group, with certain exceptions, becomes
the beneficial owner of more than 15% of the then outstanding Common Shares or
(ii) at least a majority of the Continuing Directors determines that a person is
an Adverse Person, then each holder of a Right will thereafter have the right to
receive, upon exercise, that number of Preferred Share Fractions (or in certain
circumstances, that number of Common Shares, cash, property or other securities
of the Company) having a value equal to two times the exercise price of the
Right. The Rights, however, are not exercisable following the occurrence of
either of the events set forth above until such time as the Rights are no longer
redeemable by the Company as set forth below. Notwithstanding any of the
foregoing, following the occurrence of either of the events set forth above, all
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person or Adverse Person
(or certain related persons and
2
<PAGE>
transferees) will be null and void. The events set forth in this paragraph are
referred to as "Section 11(a)(ii) Events."
For example, at an exercise price of $70 per Right, each Right not owned by
an Acquiring Person or an Adverse Person (or by certain related parties)
following a Section 11(a)(ii) Event would entitle its holder to purchase $140
worth of Preferred Share Fractions (or Common Shares or other consideration as
noted above) for $70. Assuming that Preferred Shares had a per share value of
$17,500 at such time, and that Preferred Share Fractions had a value of one one-
thousandth of $17,500, or $17.50, per Preferred Share Fraction at such time, the
holder of each valid Right would be entitled to purchase 8 Preferred Share
Fractions for $70 (or $140 worth of Preferred Share Fractions).
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction in
which the Company is not the surviving corporation or the Common Shares are
changed or exchanged or (ii) 50% or more of the Company's assets or earning
power is sold or transferred, each holder of a Right (except Rights which
previously have been voided as set forth above) shall thereafter have the right
to receive, upon exercise, that number of shares of common stock of the
acquiring company which equals the exercise price of the Right divided by one-
half of the current market price of such common stock at the date of the
occurrence of the event. The events set forth in this paragraph are referred to
as "Section 13 Events," and the Section 11(a)(ii) Events and the Section 13
Events are collectively referred to as the "Triggering Events."
At any time after the occurrence of a Section 11(a)(ii) Event, at the
election of a majority of the Continuing Directors, the Company may exchange the
Rights (other than Rights which have become void), in whole or in part, at an
exchange ratio of one Preferred Share Fraction Per Right (subject to
adjustment).
The Purchase Price payable, and the number of Preferred Share Fractions or
other securities or property issuable upon exercise of the Rights, are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, split, combination, consolidation or
reclassification of, the Preferred Shares, (ii) if holders of any security of
the Company are granted rights, options or warrants to subscribe for or purchase
Preferred Shares or convertible securities at less than the current market price
of the Preferred Shares, or (iii) upon the distribution to holders of Preferred
Shares of evidences of indebtedness or assets (excluding quarterly cash
dividends ) or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustments in the initial Purchase Price will
be required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company will not be required to issue fractional Preferred Shares,
other than fractions which are integral multiples of Preferred Share Fractions
(or, in the event of an appropriate election, Common Shares) and, in lieu of
such fractional Preferred Shares (or Common Shares, if appropriate), an
adjustment in cash will be made based on the market price of the Preferred
Shares (or Common Shares, as the case may be) on the last trading date prior to
the date of exercise.
In general, at any time prior to the first to occur of (i) ten days
following the Stock Acquisition Date, (ii) ten days after a person is determined
to be an Adverse Person, or (iii) the Final Expiration Date, the Company, acting
by a majority of the Continuing Directors, may redeem the Rights in whole, but
not in part, at a price of $.005 per Right (payable in cash, stock or other
3
<PAGE>
consideration deemed appropriate by the Board of Directors). Immediately upon
redemption of the Rights, the Rights will terminate and the only right of the
holders of the Rights will be to receive the $.005 redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or receive dividends. The creation of the Rights should not be taxable
to shareholders. Shareholders may, however, depending upon the circumstances,
recognize taxable income in the event that the rights become exercisable for
Preferred Shares (or other consideration) of the Company or for common stock of
an acquiring company as set forth above.
Any of the provisions of the Rights Agreement, including the definition of
Acquiring Person or the Purchase Price, may be amended by at least a majority of
the Continuing Directors prior to the Distribution Date. After the Distribution
Date, the provisions of the Rights Agreement may be amended by at least a
majority of the Continuing Directors in order to cure any ambiguity, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person or Adverse Person), or to
shorten or lengthen certain time periods under the Rights Agreement. However,
no amendment to adjust the time period governing redemption can be made at such
time as the Rights are not redeemable.
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
4
<PAGE>
FOR IMMEDIATE RELEASE Contact: David Christofferson,
investors or Brenda Roth, media
612/550-9388
ANGEION ADOPTS SHAREHOLDERS' RIGHTS PLAN;
DECLARES DIVIDEND DISTRIBUTION OF PREFERRED SHARE PURCHASE RIGHTS
MINNEAPOLIS (April 9, 1996) -- Angeion Corporation (Nasdaq: ANGN) announced
today that its Board of Directors has adopted a Shareholders' Rights Plan to
protect the Company and its shareholders from unsolicited attempts or
inequitable offers to acquire the Company. The Rights Plan has no immediate
dilutive effect and does not diminish the ability of the Company or its
shareholders to engage in a fair offer.
To implement this Shareholders' Rights Plan, the Company has declared a
dividend distribution of one Preferred Share Purchase Right on each outstanding
share of Angeion Corporation Common Stock, outstanding on April 30, 1996.
Each Right will entitle shareholders to buy one one-thousandth of a share
of the Company's Series B Junior Preferred Stock at an exercise price of $70.00.
The Rights will become exercisable following the tenth business day after: (a)
a person or group announces acquisition of 15% or more of the Company's Common
Stock, or the Company becomes aware of such an acquisition, (b) a person or
group announces commencement of a tender offer the consummation of which would
result in ownership by the person or group of 15% or more the Company's Common
Stock, or (c) the Company's Board of Directors determines that a person or group
is an "Adverse Person or Group," as defined in the Rights Plan.
The Company will be entitled to redeem the Rights at $.005 per Right at
certain times as provided in the Rights Plan.
"This Rights Plan is intended to protect our shareholders should Angeion
become the target of hostile or unfriendly takeover tactics," said Whitney A.
McFarlin, Angeion's Chairman, President and CEO. "It is designed to assure that
all shareholders of the Company receive a fair price for their Company shares in
the event of an acquisition of the Company. It is also designed to make certain
that all Angeion shareholders receive fair and equal treatment in the event of
an attempted takeover.
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<PAGE>
Angeion Shareholders Rights Plan
Page 2
"We are not aware of any such effort to acquire control of the Company,"
McFarlin added, "nor was the Rights Plan adopted in response to any specific
effort."
The dividend distribution was made on April 8, 1996 to shareholders of
record on April 30, 1996. The Rights will expire in ten years on April 7, 2006.
Minneapolis-based Angeion is developing sophisticated medical devices for
treatment of life-threatening cardiac arrhythmias (irregular heartbeats). In
addition to its Sentinel-TM- Implantable Cardioverter Defibrillator (ICD)
system, Angeion is also developing RF and laser catheter ablation systems.
-End-
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