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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) December 11, 1998
Raychem Corporation
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(Exact Name of Registrant as Specified in Charter)
Delaware 2-15299 94-1369731
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(State or other jurisdiction of (Commission File No.) (I.R.S. Employer
incorporation) Identification No.)
300 Constitution Drive
Menlo Park, California 94025
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(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (650) 361-3333
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(Former Name or Former Address, if changed since last Report)
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Item 5. Other Events.
On December 11, 1998, Raychem Corporation (the "Corporation") issued a
press release relating to the adoption by the Board of Directors (the "Board")
of a Stockholder Rights Plan to replace the Corporation's existing Stockholder
Rights Plan. The December 11, 1998 press release of the Corporation is attached
hereto as Exhibit 99.1.
On December 11, 1998, the Board declared a dividend distribution of one
preferred share purchase right (a "Right") for each outstanding share of Common
Stock, par value $1.00 (the "Common Stock"), of the Corporation. The dividend is
payable to the stockholders of record on February 12, 1999 (the "Record Date,"
which is the last business day preceding the expiration date of the
Corporation's existing Stockholder Rights Plan) with respect to shares of Common
Stock issued thereafter until the Distribution Date (as defined below) and, in
certain circumstances, with respect to shares of Common Stock issued after the
Distribution Date. Except as set forth below, each Right, when it becomes
exercisable, entitles the registered holder to purchase from the Corporation one
one-thousandth (1/1000th) of a share of Series RP Preferred Stock of the
Corporation, $1.00 par value per share (the "Preferred Stock"), at a price of
$__ per one one-thousandth (1/1000th) of a share of Preferred Stock (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Corporation and Harris Trust and Savings Bank, as Rights Agent (the "Rights
Agent"), dated as of December 11, 1998.
Initially, the Rights will be attached to certificates representing
shares of Common Stock then outstanding, and no separate certificates
representing the Rights ("Right Certificates") will be distributed. The Rights
will separate from the Common Stock upon the earlier to occur of (i) a person or
group of affiliated or associated persons having acquired, without the prior
approval of the Board, beneficial ownership of 15% or more of the outstanding
shares of Common Stock or (ii) 10 days, or such later date as the Board may
determine, following the commencement of or announcement of an intention to
make, a tender offer or exchange offer the consummation of which would result in
a person or group of affiliated or associated persons becoming an Acquiring
Person (as hereinafter defined) except pursuant to a Permitted Offer (as
hereinafter defined) (the "Distribution Date"). A person or group whose
acquisitions of shares of Common Stock cause a Distribution Date pursuant to
clause (i) above is an "Acquiring Person," with certain exceptions as set forth
in the Rights Agreement. The date that a person or group is first publicly
announced to have become such by the Corporation or such Acquiring Person is the
"Shares Acquisition Date."
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the associated shares of Common
Stock. 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 shares of 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 shares of Common Stock outstanding as of the Record Date,
even without attaching thereto such notation or a copy of the Summary of Rights
attached to the Rights Agreement as Exhibit C, will also
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constitute the transfer of the Rights associated with the shares of Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, Right Certificates will be mailed to the holders of record of
shares of the Common Stock as of the Close of Business (as defined in the Rights
Agreement) on the Distribution Date (and to each initial record holder of
certain shares of Common Stock issued after the Distribution Date), and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on February 12, 2009, unless earlier redeemed by
the Corporation as described below.
In the event that any person becomes an Acquiring Person (except
pursuant to a tender or exchange offer which is for all outstanding shares of
Common Stock at a price and on terms which a majority of certain members of the
Board determines to be adequate and in the best interests of the Corporation,
its stockholders and other relevant constituencies, other than such Acquiring
Person, its affiliates and associates (a "Permitted Offer")), each holder of a
Right will thereafter have the right (the "Flip-In Right") to receive upon
exercise the number of shares of Common Stock (or, in certain circumstances, of
one one-thousandths (1/1000ths) of a share of Preferred Stock or other
securities of the Corporation) having a value (immediately prior to such
triggering event) equal to two times the then-applicable Purchase Price of the
Right. Notwithstanding the foregoing, following the occurrence of the event
described above, all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by any Acquiring Person or any
affiliate or associate thereof will be null and void. The Board has the option,
at any time after any person becomes an Acquiring Person, to exchange all or
part of the then-exercisable Rights (excluding those that have become void, as
described in the immediately preceding sentence) for shares of Common Stock, at
an exchange ratio determined by dividing the then-applicable Purchase Price by
the then-current market price per share of Common Stock as determined in
accordance with the Rights Agreement. However, this option generally terminates
if any person becomes the beneficial owner of 50% or more of the Common Stock.
In the event that, at any time following the Shares Acquisition Date,
(i) the Corporation is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding shares of Common
Stock immediately prior to the consummation of the transaction are not the
holders of all of the surviving corporation's voting power, or (ii) more than
50% of the Corporation's assets or earning power is sold or transferred, in
either case with or to (x) an Acquiring Person or any affiliate or associate
thereof or (y) any other person in which such Acquiring Person, affiliate or
associate has an interest or any person acting on behalf of or in concert with
such Acquiring Person, affiliate or associate, or (z) if, in such transaction,
all holders of shares of Common Stock are not treated alike, any other person,
then each holder of a Right (except Rights which previously have been voided as
set forth above) shall thereafter have the right (the "Flip-Over Right") to
receive, upon exercise, common shares of the acquiring company (or, in certain
circumstances, its parent) having a value equal to two times the exercise price
of the Right. The holder of a Right will continue to have the Flip-Over Right
whether or not such holder exercises or surrenders the Flip-In Right.
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The Purchase Price payable, and the number of shares of Preferred Stock,
shares of Common Stock or other securities 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 shares of the Preferred
Stock of certain rights or warrants to subscribe for or purchase shares of
Preferred Stock at a price, or securities convertible into Preferred Stock with
a conversion price, less than the then current market price of the Preferred
Stock or (iii) upon the distribution to holders of shares of the Preferred Stock
of evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred to
above).
The number of outstanding Rights and the number of one one-thousandths
(1/1000ths) of a share of Preferred Stock issuable upon exercise of each Right
are also subject to adjustment in the event of a stock split of the Common Stock
or a stock dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, and under certain other
circumstances, the Corporation may redeem the Rights in whole, but not in part,
at a price (payable in cash or, at the Corporation's election, in Common Stock)
of $.001 per Right (the "Redemption Price"), which redemption shall be effective
upon the action of the Board. Additionally, following the Shares Acquisition
Date, the Corporation may redeem the then outstanding Rights in whole, but not
in part, at the Redemption Price, provided that such redemption is in connection
with a merger or other business combination transaction or series of
transactions involving the Corporation in which all holders of shares of Common
Stock are treated alike but not involving an Acquiring Person or its affiliates
or associates.
Other than those provisions relating to the rights, duties and
obligations of the Rights Agent and certain principal economic terms of the
Rights, all of the provisions of the Rights Agreement may be amended by the
Board prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in order to cure
any ambiguity, defect or inconsistency, to make changes that do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or, subject to certain limitations, to shorten or lengthen
any time period under the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Corporation, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights will
not be taxable to stockholders of the Corporation, stockholders may, depending
upon the circumstances, recognize taxable income should the Rights become
exercisable or upon the occurrence of certain events thereafter.
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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
hereby incorporated herein by reference.
As of December 10, 1998, there were 78,932,074 shares of Common Stock
outstanding. Each share of Common Stock outstanding on the Record Date will
receive one Right. As long as the Rights are attached to the shares of Common
Stock, the Corporation will issue one Right with each new share of Common Stock
so that all such shares will have attached rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Corporation without conditioning the offer on the Rights being redeemed or a
substantial number of Rights being acquired. However, the Rights should not
interfere with any tender offer or merger approved by the Corporation (other
than with an Acquiring Person) because the Rights do not become exercisable in
the event of a Permitted Offer or other acquisition exempted by the Board.
Attached hereto as Exhibit 4.1 and incorporated herein by reference are
copies of the Rights Agreement and the exhibits thereto, as follows: Exhibit A
- -- Form of Certificate of Designation, Preferences and Rights of Series RP
Preferred Stock of Raychem Corporation; Exhibit B -- Form of Right Certificate;
and Exhibit C -- Summary of Rights to Purchase Series RP Preferred Stock. The
foregoing description of the Rights is qualified in its entirety by reference to
the Rights Agreement and such exhibits thereto.
Item 7. Exhibits.
<TABLE>
<CAPTION>
Exhibit Description
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<S> <C>
4.1 Rights Agreement, dated as of December 11, 1998, between
Raychem Corporation and Harris Trust and Savings Bank as Rights
Agent, which includes: as Exhibit A thereto, the Form of
Certificate of Designation, Preferences and Rights of Series
RP Preferred Stock of Raychem Corporation; as Exhibit B thereto,
the Form of Right Certificate; and, as Exhibit C thereto, the
Summary of Rights to Purchase Series RP Preferred Stock.
99.1 Press Release issued by the Corporation on December 11, 1998.
</TABLE>
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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SIGNATURE
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, thereto duly authorized.
RAYCHEM CORPORATION
By: /s/ Karen O. Cottle
--------------------------------
Karen O. Cottle,
Vice President, General Counsel
and Secretary
Date: December 11, 1998
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
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<S> <C>
4.1 Rights Agreement, dated as of December 11, 1998, between
Raychem Corporation and Harris Trust and Savings Bank as
Rights Agent, which includes: as Exhibit A thereto, the Form of
Certificate of Designation, Preferences and Rights of Series RP
Preferred Stock of Raychem Corporation; as Exhibit B
thereto, the Form of Right Certificate; and, as Exhibit C
thereto, the Summary of Rights to Purchase Series RP Preferred
Stock.
99.1 Press Release issued by the Corporation on December 11, 1998.
</TABLE>
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EXHIBIT 4.1
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RAYCHEM CORPORATION
and
HARRIS TRUST AND SAVINGS BANK, AS RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF DECEMBER 11, 1998
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
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<S> <C>
1. Certain Definitions......................................................................1
2. Appointment Of Rights Agent..............................................................6
3. Issuance Of Right Certificates...........................................................7
4. Form Of Right Certificate................................................................8
5. Countersignature And Registration........................................................9
6. Transfer, Split-Up, Combination And Exchange Of Right Certificates; Mutilated,
Destroyed, Lost Or Stolen Right Certificates............................................10
7. Exercise Of Rights; Purchase Price; Expiration Date Of Rights...........................11
8. Cancellation And Destruction Of Right Certificates......................................13
9. Reservation And Availability Of Preferred Stock.........................................14
10. Preferred Stock Record Date............................................................15
11. Adjustment Of Purchase Price, Number And Kind Of Shares Or Number Of Rights............15
12. Certificate Of Adjusted Purchase Price Or Number Of Shares.............................22
13. Consolidation, Merger Or Sale Or Transfer Of Assets Or Earning Power...................22
14. Fractional Rights And Fractional Shares................................................25
15. Rights Of Action.......................................................................27
16. Agreement Of Right Holders.............................................................27
17. Right Certificate Holder Not Deemed A Stockholder......................................28
18. Concerning The Rights Agent............................................................28
19. Merger Or Consolidation Or Change Of Name Of Rights Agent..............................29
20. Duties Of Rights Agent.................................................................30
21. Change Of Rights Agent.................................................................32
22. Issuance Of New Right Certificates.....................................................33
23. Redemption And Termination.............................................................34
24. Notice Of Certain Events...............................................................35
25. Miscellaneous..........................................................................36
26. Exchange...............................................................................39
Exhibit A - Form of Certificate of Designation, Preferences and Rights
of Series RP Preferred Stock.............................................................A-1
Exhibit B - Form of Right Certificate......................................................B-1
Exhibit C - Form of Summary of Rights......................................................C-1
</TABLE>
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RIGHTS AGREEMENT
This RIGHTS AGREEMENT (the "Agreement") is made as of this 11th day of
December, 1998 by and between Raychem Corporation, a Delaware corporation (the
"Corporation"), and Harris Trust and Savings Bank, an Illinois banking
corporation (the "Rights Agent"), with respect to the following facts and
circumstances.
A. The Board of Directors of the Corporation has authorized and declared
a dividend of one preferred share purchase right (a "Right") for each share of
Common Stock (as hereinafter defined) of the Corporation outstanding at the
Close of Business (as hereinafter defined) on February 12, 1999 (the "Record
Date"), each Right representing the right to purchase one one-thousandth
(1/1000th) of a share of Preferred Stock (as hereinafter defined), upon the
terms and subject to the conditions herein set forth.
B. The Board of Directors of the Corporation has further authorized and
directed the issuance of one Right with respect to each share of Common Stock
that shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date (as such
terms are hereinafter defined); provided, however, that Rights may be issued
with respect to shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the earlier of the Redemption Date and the Final
Expiration Date in accordance with the provisions of Section 22 of this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements herein set forth, the parties hereby agree as follows:
1. Certain Definitions.
For purposes of this Agreement, the following terms have the meanings
indicated:
1.1. "Acquiring Person" means any Person who or which, together
with all Affiliates and Associates of such Person, without the prior approval of
the Corporation's Board of Directors, shall be the Beneficial Owner of 15% or
more of the then outstanding shares of Common Stock (other than as a result of a
Permitted Offer) or was such a Beneficial Owner at any time after the date
hereof, whether or not such person continues to be the Beneficial Owner of 15%
or more of the then outstanding shares of Common Stock. Notwithstanding the
foregoing: (A) the term "Acquiring Person" shall not include (i) the
Corporation, (ii) any Subsidiary of the Corporation, (iii) any employee benefit
plan of the Corporation or of any Subsidiary of the Corporation, (iv) any Person
or entity organized, appointed or established by the Corporation or any
Subsidiary of the Corporation for or pursuant to the terms of any such plan, or
(v) any Person who or which, together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 15% or more of the then outstanding
shares of Common Stock
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as a result of the acquisition of shares of Common Stock directly from the
Corporation; and (B) no Person shall be deemed to be an "Acquiring Person"
either (i) as a result of the acquisition of Common Stock by the Corporation
which, by reducing the number of shares of Common Stock outstanding, increases
the proportional number of shares beneficially owned by such Person together
with all Affiliates and Associates of such Person; provided, however, that if
(X) a Person would become an Acquiring Person (but for the operation of this
subclause (B)(i)) as a result of the acquisition of shares of Common Stock by
the Corporation, and (Y) after such share acquisition by the Corporation, such
Person, or an Affiliate or Associate of such Person, becomes the Beneficial
Owner of any additional shares of Common Stock, then such Person shall be deemed
an Acquiring Person, or (ii) if (X) within eight (8) days after such Person
would otherwise have become an Acquiring Person (but for the operation of this
subclause (B)(ii)), such Person notifies the Board of Directors of the
Corporation that such Person did so inadvertently and (Y) within two (2)
Business Days (as defined in Section 1.8 hereof) after such notification, such
Person is the Beneficial Owner of less than 15% of the outstanding shares of
Common Stock.
1.2. "Act" means the Securities Act of 1933, as amended.
1.3. "Adjusted Number of Shares" and "Adjusted Purchase Price"
have the respective meanings set forth in Section 11.1.3 hereof.
1.4. "Adjustment Shares" has the meaning set forth in Section
11.1.2 hereof.
1.5. "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.
1.6. The term "current per share market price" shall have the
meaning set forth in Section 11.4.1 hereof when used with respect to a
"Security" (as defined in said Section 11.4.1) and shall have the meaning set
forth in Section 11.4.2 when used with respect to the Preferred Stock.
1.7. A Person is the "Beneficial Owner" of and "beneficially
owns" any securities which:
1.7.1. such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
1.7.2. such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of
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time) pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person or
any of such Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, any security if
the agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations promulgated under the Exchange Act and (2)
is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
1.7.3. 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 relating to the acquisition, holding, voting
(except to the extent contemplated by the proviso to subclause (B) of Section
1.7.2), or disposing of any securities of the Corporation.
Notwithstanding anything in this Section 1.7 to the
contrary, the phrase "then outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Corporation, 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 would be
deemed to own beneficially hereunder.
Notwithstanding anything in this Section 1.7 to the
contrary, no Person shall be deemed to beneficially own any securities solely by
reason of such Person being a party to a customary agreement pursuant to which
such Person acts or agrees to act as an underwriter with respect to a bona fide
public offering of securities.
No decision reached, or action taken, by the Board of
Directors of the Corporation or any committee thereof shall cause any Person (or
any Affiliate or Associate of such Person) who is a member of the Board of
Directors of the Corporation or such committee to be deemed, for the purposes of
this Agreement, to be a Beneficial Owner of any securities beneficially owned by
any other Person (or any Affiliate or Associate of such Person) who is a member
of the Board of Directors of the Corporation or any committee thereof solely by
reason of such membership of the Board of Directors or any committee thereof or
participation in the decisions or actions thereof on the part of either or both
of such Persons.
1.8. "Business Day" means any day other than a Saturday, a
Sunday, a day on which banking institutions in the State of Illinois or the
State of California are obligated by law or executive order to close, or a
United States federal holiday.
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1.9. "Capital Stock Equivalents" has the meaning set forth in
Section 11.1.3 hereof.
1.10. "Close of Business" on any given date means 5:00 P.M.,
Illinois time, on such date; provided, however, that if such date is not a
Business Day it means 5:00 P.M., Illinois time, on the next succeeding Business
Day.
1.11. "Common Stock" when used with reference to the Corporation
means the Common Stock of the Corporation or, in the event of a subdivision,
combination or consolidation with respect to such shares of Common Stock, the
shares of Common Stock resulting from such subdivision, combination or
consolidation. "Common Stock" when used with reference to any Person other than
the Corporation means the capital stock (or equity interest) with the greatest
voting power of such other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately control such
first-mentioned Person.
1.12. "Corporation" means Raychem Corporation, a Delaware
corporation, and also means a Principal Party to the extent provided in Section
13.1 hereof.
1.13. "Distribution Date" has the meaning set forth in Section
3.1 hereof.
1.14. "Equivalent Preferred Stock" has the meaning set forth in
Section 11.2 hereof.
1.15. "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
1.16. "Exchange Ratio" has the meaning set forth in Section 26.1
hereof.
1.17. "Final Expiration Date" has the meaning set forth in
Section 7.1 hereof.
1.18. "Interested Stockholder" means any Acquiring Person or any
Affiliate or Associate of an Acquiring Person or any other Person in which any
such Acquiring Person, Affiliate or Associate has an interest, or any other
Person acting directly or indirectly on behalf of or in concert with any such
Acquiring Person, Affiliate or Associate.
1.19. "NASDAQ" has the meaning set forth in Section 11.4.1
hereof.
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1.20. "Permitted Offer" means a tender or exchange offer which is
for all outstanding shares of Common Stock of the Corporation 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 Directors who are
not officers of the Corporation 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 pertinent including,
without limitation, prices that could reasonably be achieved if the Corporation
or its assets were sold on an orderly basis designed to realize maximum value)
and otherwise in the best interests of the Corporation, its stockholders (other
than the Person or any Affiliate or Associate thereof on whose basis the offer
is being made) and other relevant constituencies, taking into account all
factors that such directors may deem pertinent.
1.21. "Person" means any individual, firm, partnership,
corporation, limited liability company, limited liability partnership, trust,
association, joint venture or other entity, and includes any successor (by
merger or otherwise) of such entity.
1.22. "Preferred Stock" means shares of the Corporation's Series
RP Preferred Stock, par value $1.00 per share, having the relative rights,
preferences and limitations set forth in the Form of Certificate of Designation,
Preferences and Rights of Series RP Preferred Stock attached to this Agreement
as Exhibit A.
1.23. "Principal Party" has the meaning set forth in Section 13.2
hereof.
1.24. "Proration Factor" has the meaning set forth in Section
11.1.3 hereof.
1.25. "Purchase Price" has the meaning set forth in Section 4.1
hereof.
1.26. "Record Date" has the meaning set forth in Recital A
hereof.
1.27. "Redemption Date" has the meaning set forth in Section 7.1
hereof.
1.28. "Redemption Price" has the meaning set forth in Section
23.1.1 hereof.
1.29. "Right Certificate" has the meaning set forth in Section
3.1 hereof.
1.30. "Rights" has the meaning set forth in Recital A hereof.
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1.31. "Rights Agent" means Harris Trust and Savings Bank, an
Illinois banking corporation, as Rights Agent hereunder, and, from the time of
its succession, any successor Rights Agent under Section 19 or Section 21
hereof.
1.32. "Section 11.1.2 Event" has the meaning set forth in Section
11.1.2 hereof.
1.33. "Section 13 Event" means any event described in clause (x),
(y) or (z) of Section 13.1 hereof.
1.34. "Shares Acquisition Date" means the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to the Exchange Act) by the Corporation or
an Acquiring Person that an Acquiring Person has become such or that facts exist
as a result of which there exists an Acquiring Person; provided, that, if such
Person is determined by the Board of Directors of the Corporation not to have
become an Acquiring Person pursuant to subclause (B)(ii) of Section 1.1 hereof,
then no Shares Acquisition Date shall be deemed to have occurred.
1.35. "Subsidiary" of any Person means any corporation or other
Person of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
1.36. "Summary of Rights" has the meaning set forth in Section
3.2 hereof.
1.37. "Trading Day" has the meaning set forth in Section 11.4.1
hereof.
1.38. "Triggering Event" means any Section 11.1.2 Event or any
Section 13 Event.
1.39. The term "voting securities" has the meaning set forth in
Section 13.1 hereof.
2. Appointment of Rights Agent.
2.1. The Corporation hereby appoints the Rights Agent to act as
agent for the Corporation in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The Corporation may from
time to time appoint such co-Rights Agents as it may deem necessary or
desirable.
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3. Issuance of Right Certificates.
3.1. Until the earlier of (i) the Shares Acquisition Date or (ii)
the Close of Business on the tenth (10th) day (or such later date as may be
determined by action of the Corporation's Board of Directors) after the date of
the commencement by any Person (other than the Corporation, any Subsidiary of
the Corporation, any employee benefit plan of the Corporation or of any
Subsidiary of the Corporation or any Person or entity organized, appointed or
established by the Corporation or any Subsidiary of the Corporation for or
pursuant to the terms of any such plan) of, or after the date of the first
public announcement of the intention of any Person (other than the Corporation,
any Subsidiary of the Corporation, any employee benefit plan of the Corporation
or of any Subsidiary of the Corporation or any Person or entity organized,
appointed or established by the Corporation or any Subsidiary of the Corporation
for or pursuant to the terms of any such plan) to commence (which intention to
commence remains in effect for five (5) Business Days after such announcement),
a tender or exchange offer the consummation of which would result in any Person
becoming an Acquiring Person (including, in the case of both (i) and (ii), any
such date which is after the date of this Agreement and prior to the issuance of
the Rights) (the "Distribution Date"), (x) the Rights will be evidenced (subject
to the provisions of Section 3.2 hereof) by the certificates for shares of
Common Stock registered in the names of the holders thereof (which certificates
shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Corporation); provided, however, that
if a tender or exchange offer is terminated prior to the occurrence of a
Distribution Date, then no Distribution Date shall occur as a result of such
tender or exchange offer. As soon as practicable after the Distribution Date,
the Corporation will prepare and execute, the Rights Agent will countersign, and
the Corporation will send or cause to be sent by first-class, postage-prepaid
mail, to each record holder of shares of Common Stock as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Corporation, a Right Certificate, substantially in the form of
Exhibit B hereto (a "Right Certificate"), evidencing one Right for each share of
Common Stock so held. As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
3.2. As promptly as practicable following the Record Date, the
Corporation will send a copy of a Summary of Rights to Purchase Preferred Stock,
in substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of shares of Common
Stock as of the Close of Business on the Record Date, at the address of such
holder shown on the records of the Corporation. With respect to certificates for
shares of Common Stock outstanding as of the Record Date, until the Distribution
Date the Rights will be evidenced by such certificates registered in the names
of the holders thereof together with a copy of the Summary of Rights attached
thereto. Until the Distribution Date (or the earlier of the Redemption Date or
the Final Expiration Date), the surrender for transfer of any certificate for
shares of Common Stock outstanding on the Record Date, with or without a copy
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<PAGE> 10
of the Summary of Rights attached thereto, shall also constitute the transfer of
the Rights associated with such shares of Common Stock.
3.3. Certificates for shares of Common Stock that become
outstanding (including, without limitation, reacquired shares of Common Stock
referred to in the last sentence of this Section 3.3) after the Record Date but
prior to the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date, shall be deemed also to be certificates for Rights, and shall
bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Raychem
Corporation and Harris Trust and Savings Bank, an Illinois
banking corporation, as Rights Agent, dated as of December 11,
1998 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file
at the principal executive offices of Raychem Corporation. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. Raychem Corporation will
mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request
therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was
or becomes an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and certain related
persons, whether currently held by or on behalf of such Person or
by any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date the Rights associated with the shares of Common Stock
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the shares of Common Stock represented
thereby. In the event that the Corporation purchases or acquires any shares of
Common Stock after the Record Date but prior to the Distribution Date (or the
earlier of the Redemption Date or the Final Expiration Date), any Rights
associated with such shares of Common Stock shall be deemed cancelled and
retired so that the Corporation shall not be entitled to exercise any Rights
associated with the Common Stock that are no longer outstanding.
4. Form of Right Certificate.
4.1. The Right Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall be
substantially in the form set forth in Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Corporation may deem appropriate (which
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<PAGE> 11
may not affect the duties and responsibilities of the Rights Agent) 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 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 hereof, the Right Certificates shall
entitle the holders thereof to purchase such number of one one-thousandths
(1/1000ths) of a share of Preferred Stock as shall be set forth therein at the
price per one one-thousandth (1/1000th) of a share of Preferred Stock set forth
therein in accordance with Section 7.2 hereof (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.
4.2. Any Right Certificate issued pursuant to Section 3.1 or
Section 22 hereof that represents Rights that are null and void pursuant to
Section 7.6 of this Agreement and any Right Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible and upon notice by the Corporation to the Rights
Agent that this Section 4.2 has become applicable) the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly,
this Right Certificate and the Rights represented hereby are null
and void.
The provisions of Section 7.6 of this Agreement shall be operative whether or
not the foregoing legend is contained on any such Right Certificate.
5. Countersignature and Registration.
5.1. The Right Certificates shall be executed on behalf of the
Corporation by its President or any Vice President and the Secretary or an
Assistant Secretary, either manually or by facsimile signature, shall have
affixed thereto the Corporation's seal or a facsimile thereof, and shall be
attested by the Secretary or an Assistant Secretary of the Corporation, either
manually or by facsimile signature. The Right Certificates shall be
countersigned, either manually or by facsimile signature, by the Rights Agent
and shall not be valid for any purpose unless so countersigned. In case any
officer of the Corporation who shall have signed any of the Right Certificates
shall cease to be such officer of the Corporation before countersignature by the
Rights Agent and issuance and delivery by the Corporation, such Right
Certificates may nevertheless be countersigned by the Rights Agent and issued
and delivered by the Corporation with the same force and effect as though the
person who signed such Right Certificates had not ceased to be such officer of
the Corporation; and any Right Certificate may be signed on behalf of the
Corporation by any Person who, at the actual date of the execution of such Right
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<PAGE> 12
Certificate, shall be a proper officer of the Corporation to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such Person was not such an officer.
5.2. Following the Distribution Date, and receipt by the Rights
Agent of a list of record holders of Rights, the Rights Agent will keep or cause
to be kept, at its office designated pursuant to Section 25 hereof as the
appropriate place for surrender or transfer of the Right Certificates, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on the face of each of the Right
Certificates and the certificate number and the date of each of the Right
Certificates.
6. Transfer, Split-Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates.
6.1. Subject to the provisions of Section 4.2, Section 7.6 and
Section 14 hereof, at any time after the Close of Business on the Distribution
Date, and at or prior to the Close of Business on the earlier of the Redemption
Date or the Final Expiration Date, any Right Certificate or Right Certificates
may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase a
like number of one one-thousandths (1/1000ths) of a share of Preferred Stock
(or, following a Triggering Event, other securities, as the case may be) as the
Right Certificate or Right Certificates surrendered then entitled such holder
(or former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Corporation shall
be obligated to take any action whatsoever with respect to the transfer of any
such surrendered Right Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Right 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 Corporation or the Rights Agent shall
reasonably request. Thereupon the Rights Agent shall, subject to Section 4.2,
Section 7.6 and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Corporation may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates. The Rights
Agent may in its sole discretion require the Corporation or the Person entitled
to such Right Certificate to provide evidence that such payment has been made
prior to countersigning and delivering any Right Certificate pursuant to this
Section 6.1.
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<PAGE> 13
6.2. Upon receipt by the Corporation and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, at the
Corporation's request, reimbursement to the Corporation and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Corporation
will make and deliver a new Right Certificate of like tenor to the Rights Agent
for countersignature and delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
7.1. Subject to Section 7.6 hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right 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 for the total number of one
one-thousandths (1/1000ths) of a share of Preferred Stock (or other securities,
as the case may be) as to which such surrendered Rights are exercised, at or
prior to the earlier of (i) the Close of Business on February 12, 2009 (the
"Final Expiration Date"), or (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the "Redemption Date").
7.2. The Purchase Price for each one one-thousandth (1/1000th) of
a share of Preferred Stock pursuant to the exercise of a Right shall initially
be $150, shall be subject to adjustment from time to time as provided in the
next sentence and in Sections 11 and 13.1 hereof and shall be payable in
accordance with paragraph 7.3 below. Anything in this Agreement to the contrary
notwithstanding, in the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Corporation shall (i) declare or pay any
dividend on the Common Stock payable in Common Stock or (ii) effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then, in any
such case, each share of Common Stock outstanding following such subdivision,
combination or consolidation shall continue to have a Right associated therewith
and the Purchase Price following any such event shall be proportionately
adjusted to equal the result obtained by multiplying the Purchase Price
immediately prior to such event by a fraction the numerator of which shall be
the total number of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of shares of Common Stock outstanding immediately following the occurrence of
such event. The adjustment provided for in the preceding sentence shall be made
successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
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<PAGE> 14
7.3. Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate on the reverse
side thereof duly executed, accompanied by payment of the Purchase Price for the
Preferred Stock (or other securities, as the case may be) to be purchased and an
amount equal to any applicable tax or governmental charge required to be paid by
the holder of such Right Certificate in accordance with Section 6 hereof by
certified check, cashier's check or money order payable to the order of the
Corporation, the Rights Agent shall thereupon promptly (i) (A) requisition from
any transfer agent of the Preferred Stock certificates for the number of shares
of Preferred Stock to be purchased, and the Corporation hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Corporation, in its sole discretion, shall have elected to deposit the Preferred
Stock issuable upon exercise of the Rights hereunder into a depositary,
requisition from the depositary agent depositary receipts representing such
number of one one-thousandths (1/1000ths) of a share of Preferred Stock as are
to be purchased (in which case certificates for the Preferred Stock represented
by such receipts shall be deposited by the transfer agent with the depositary
agent) and the Corporation will direct the depositary agent to comply with such
requests, (ii) when appropriate, requisition from the Corporation the amount of
cash to be paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder, and (iv) when appropriate, after receipt thereof,
deliver such cash to or upon the order of the registered holder of such Right
Certificate. In the event that the Corporation is obligated to issue other
securities (including shares of Common Stock) of the Corporation pursuant to
Section 11.1 hereof, the Corporation will make all arrangements necessary so
that such other securities are available for distribution by the Rights Agent,
if and when necessary to comply with this Agreement.
7.4. In addition, in the case of an exercise of the Rights by a
holder pursuant to Section 11.1.2, the Rights Agent shall return such Right
Certificate to the registered holder thereof after imprinting, stamping or
otherwise indicating thereon that the Rights represented by such Right
Certificate no longer include the rights provided by Section 11.1.2 of the
Rights Agreement and if less than all the Rights represented by such Right
Certificate were so exercised, the Rights Agent shall indicate on the Right
Certificate the number of Rights represented thereby that continue to include
the rights provided by Section 11.1.2.
7.5. In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 6 and Section 14
hereof, or the Rights Agent shall place an appropriate notation on the Right
Certificate with respect to those Rights exercised.
7.6. Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11.1.2 Event, any Rights
beneficially owned by (i) an Acquiring
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<PAGE> 15
Person or an Affiliate or Associate of an Acquiring Person, (ii) a transferee of
an Acquiring Person (or of any Affiliate or Associate thereof) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any Affiliate or Associate thereof) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person (or from any Affiliate or Associate
thereof) to holders of equity interests in such Acquiring Person or to any
Person with whom the Acquiring Person has a continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer that the Board
of Directors of the Corporation has determined is part of a plan, arrangement or
understanding that has as a primary purpose or effect the avoidance of this
Section 7.6, 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 Corporation
shall notify the Rights Agent when this Section 7.6 applies and shall use all
reasonable efforts to insure that the provisions of this Section 7.6 and Section
4.2 hereof are complied with, but neither the Corporation nor the Rights Agent
shall have any liability to any holder of Right Certificates or other Person as
a result of the Corporation's failure to make any determinations with respect to
an Acquiring Person or its Affiliates, Associates or transferees hereunder.
7.7. Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Corporation shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) properly completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Corporation or the Rights Agent shall reasonably
request.
8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Corporation or to any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall
be cancelled by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by the provisions of this Rights Agreement. The
Corporation shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Corporation otherwise than upon the exercise
thereof. The Rights Agent shall deliver all cancelled Right Certificates to the
Corporation, or shall, at the written request of the Corporation, destroy such
cancelled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Corporation.
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9. Reservation and Availability of Preferred Stock.
9.1. The Corporation covenants and agrees that, at all times
prior to the occurrence of a Section 11.1.2 Event, it will cause to be reserved
and kept available out of its authorized and unissued Preferred Stock, or any
authorized and issued Preferred Stock held in its treasury, the number of shares
of Preferred Stock that will be sufficient to permit the exercise in full of all
outstanding Rights and, after the occurrence of a Section 11.1.2 Event, shall,
to the extent reasonably practicable, so reserve and keep available a sufficient
number of shares of Common Stock (and/or other securities) that may be required
to permit the exercise in full of the Rights pursuant to this Agreement.
9.2. So long as the shares of Preferred Stock (and, after the
occurrence of a Section 11.1.2 Event, shares of Common Stock or any other
securities) issuable upon the exercise of the Rights may be listed on any stock
exchange, the Corporation shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all shares or other securities
reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
9.3. The Corporation covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Preferred Stock (or
shares of Common Stock and/or other securities, as the case may be) 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 fully paid and non-assessable shares
or securities.
9.4. The Corporation covenants and agrees that it will pay when
due and payable any and all taxes and governmental charges that may be payable
in respect of the issuance or delivery of the Right Certificates or of any
shares of Preferred Stock (or shares of Common Stock and/or other securities, as
the case may be) upon the exercise of Rights. The Corporation shall not,
however, be required to pay any tax or governmental charge that may be payable
in respect of any transfer or delivery of Right Certificates to a person other
than, or the issuance or delivery of certificates or depositary receipts for the
shares of Preferred Stock (or shares of Common Stock and/or other securities, as
the case may be) in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise, or to issue or to
deliver any certificates or depositary receipts for shares of Preferred Stock
(or shares of Common Stock and/or other securities, as the case may be) upon the
exercise of any Rights, until any such tax or governmental charge shall have
been paid (any such tax or governmental charge being payable by the holder of
such Right Certificate at the time of surrender) or until it has been
established to the Corporation's reasonable satisfaction that no such tax or
governmental charge is due.
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9.5. The Corporation shall use its best efforts to (i) file, as
soon as practicable following the Shares Acquisition Date, a registration
statement under the Act, with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act and the rules and regulations
thereunder) until the date of the expiration of the period for exercise of the
Rights provided by Section 11.1.2. The Corporation will also take such action as
may be appropriate under the blue sky laws of the various states.
10. Preferred Stock Record Date.
Each Person in whose name any certificate for shares of Preferred Stock
(or shares of Common Stock and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the shares of Preferred Stock (or shares of
Common Stock and/or other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable taxes and governmental charges) was made;
provided, however, that, if the date of such surrender and payment is a date
upon which the shares of Preferred Stock (or shares of Common Stock and/or other
securities, as the case may be) transfer books of the Corporation are closed,
such person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding Business Day on which
the shares of Preferred Stock (or shares of Common Stock and/or other
securities, as the case may be) transfer books of the Corporation are open.
11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights.
The Purchase Price, the number and kind of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
11.1. Adjustment Events.
11.1.1. In the event the Corporation shall at any time
after the date of this Agreement (A) declare a dividend on the Preferred Stock
payable in Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C)
combine the outstanding Preferred Stock into a smaller number of Preferred Stock
or (D) issue any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Corporation is the continuing or surviving
corporation), except as otherwise provided in this Section 11.1 and Section 7.6
hereof, the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock issuable on
such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate number and
kind of shares of capital stock that, if such Right had been
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<PAGE> 18
exercised immediately prior to such date and at a time when the Preferred Stock
transfer books of the Corporation were open, such holder would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value, if any, of the shares of capital stock of the
Corporation issuable upon exercise of one Right. If an event occurs that would
require an adjustment under both Section 11.1.1 and Section 11.1.2, the
adjustment provided for in this Section 11.1.1 shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11.1.2.
11.1.2. In the event (a "Section 11.1.2 Event") that any
Person, alone or together with its Affiliates and Associates, shall become an
Acquiring Person, then proper provision shall be made so that each holder of a
Right (except as provided below and in Section 7.6 hereof) shall, for a period
of sixty (60) days (or such longer period as the Corporation's Board of
Directors may determine at any time prior to or during such period of sixty (60)
days) after the later of the occurrence of any such event or the effective date
of an appropriate registration statement under the Act pursuant to Section 9.5
hereof, have a right to receive, upon exercise thereof at a price equal to the
then current Purchase Price, in accordance with the terms of this Agreement,
such number of shares of Common Stock (or, in the discretion of the
Corporation's Board of Directors, one one-thousandths (1/1000ths) of a share of
Preferred Stock) as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the then number of one one-thousandths (1/1000ths) of
a share of Preferred Stock for which a Right was exercisable immediately prior
to the first occurrence of a Section 11.1.2 Event, and (y) dividing that product
by 50% of the then current per share market price of the Common Stock
(determined pursuant to Section 11.4 hereof) on the date of such first
occurrence (such number of shares being referred to as the "Adjustment Shares");
provided, however, that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13 hereof,
then only the provisions of Section 13 hereof shall apply and no adjustment
shall be made pursuant to this Section 11.1.2.
11.1.3. In the event that there shall not be sufficient
treasury or authorized but unissued (and unreserved) Common Stock to permit the
exercise in full of the Rights in accordance with Section 11.1.2 and the Rights
become so exercisable (and the Board of Directors of the Corporation has not
determined to make the Rights exercisable solely into fractions of a share of
Preferred Stock), notwithstanding any other provision of this Agreement, to the
extent necessary and permitted by applicable law, each Right (except as provided
below and in Section 7.6 hereof) shall thereafter represent the right to
receive, upon exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, (x) a number of (or fractions of) shares of
Common Stock calculated by dividing the maximum number of shares of Common Stock
that may permissibly be issued by the number of outstanding Rights and (y) a
number of one one-thousandths (1/1000ths) of shares of Preferred Stock or a
number of, or fractions of, other equity securities of the Corporation (or, in
the discretion of the Board of Directors of the Corporation, debt) that the
Board of Directors of the Corporation has determined to have an aggregate
current market value (determined pursuant to Section 11.1.1 and Section 11.1.2
hereof,
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to the extent applicable) equal to the difference between (1) the aggregate
current market value of the Adjustment Shares (assuming such shares of Common
Stock could be issued pursuant to Section 11.1.2 hereof) and (2) the aggregate
current market value of the shares of Common Stock issued in respect of such
Right pursuant to the preceding clause (x) (such number of, or fractions of,
shares of Preferred Stock, debt or other equity securities or debt of the
Corporation being referred to as a "Capital Stock Equivalent"); provided,
however, if sufficient shares of Common Stock and/or Capital Stock Equivalents
are unavailable, then the Corporation shall, to the extent permitted by
applicable law, take all such action as may be necessary to authorize additional
shares of Common Stock or Capital Stock Equivalents for issuance upon exercise
of the Rights, including the calling of a meeting of stockholders; and provided,
further, that if the Corporation is unable to cause sufficient shares of Common
Stock and/or Capital Stock Equivalents to be available for issuance upon
exercise in full of the Rights, then each Right shall thereafter represent the
right to receive the Adjusted Number of Shares upon exercise at the Adjusted
Purchase Price (as such terms are hereinafter defined). As used herein, the term
"Adjusted Number of Shares" shall be equal to that number of (or fractions of)
shares of Common Stock (and/or Capital Stock Equivalents) equal to the product
of (x) the number of Adjustment Shares and (y) a fraction, the numerator of
which is the number of shares of Common Stock (and/or Capital Stock Equivalents)
available for issuance upon exercise of the Rights and the denominator of which
is the aggregate number of Adjustment Shares otherwise issuable upon exercise in
full of all Rights (assuming there were a sufficient number of shares of Common
Stock available) (such fraction being referred to as the "Proration Factor").
The "Adjusted Purchase Price" shall mean the product of the Purchase Price and
the Proration Factor. The Board of Directors of the Corporation may, but shall
not be required to, establish procedures to allocate the right to receive shares
of Common Stock and Capital Stock Equivalents upon exercise of the Rights among
holders of Rights.
11.2. In case the Corporation shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all holders
of Preferred Stock entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase shares of Preferred Stock
(or shares having the same rights, privileges and preferences as the Preferred
Stock ("Equivalent Preferred Stock")) or securities convertible into Preferred
Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or
Equivalent Preferred Stock (or having a conversion price per share, if a
security convertible into shares of Preferred Stock or Equivalent Preferred
Stock) less than the then current per share market price of the Preferred Stock
(as determined pursuant to Section 11.4 hereof) on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of shares of Preferred
Stock that the aggregate offering price of the total number of shares of
Preferred Stock and/or Equivalent Preferred Stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current per share market price, and the
denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date plus the number of additional shares of
Preferred Stock and/or Equivalent Preferred Stock to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially convertible); provided, however, that in no event shall the
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consideration to be paid upon the exercise of one Right be less than the
aggregate par value, if any, of the shares of capital stock of the Corporation
issuable upon exercise of one Right. In case such subscription price may be paid
in a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be determined in good faith by the Board of
Directors of the Corporation, 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 Stock owned by or held for the account
of the Corporation shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price that would
then be in effect if such record date had not been fixed.
11.3. In case the Corporation shall fix a record date for the
making of a distribution to all holders of the Preferred Stock (including any
such distribution made in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11.2 hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the then current per share market price (as
determined pursuant to Section 11.4 hereof) of the Preferred Stock on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Corporation, 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) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Preferred Stock, and the denominator of which shall
be such current per share market price of the Preferred Stock; provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value, if any, of the shares of
capital stock of the Corporation to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price that would then be in effect if such
record date had not been fixed.
11.4. Computation of "Current Per Share Market Price."
11.4.1. For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security" for the purpose
of this Section 11.4.1) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the thirty (30) consecutive
Trading Days immediately prior to and not including such date; provided,
however, that in the event that the current per share market price of the
Security is determined during a period following the announcement by the issuer
of such Security of (A) a dividend or distribution on such Security payable in
shares of such Security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such
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Security and prior to the expiration of thirty (30) Trading Days after the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the
current per share market price shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security. The closing price
for each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to trading on
any national securities exchange, the last 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
Quotations System ("NASDAQ") or such other system then in use, or, if on any
such date the Security is not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Security selected by the Board of Directors of the
Corporation. If on any such date no such market maker is making a market in the
Security, the fair value of the Security on such date as determined in good
faith by the Board of Directors of the Corporation shall be used. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to trading
on any national securities exchange, a Business Day.
11.4.2. For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Stock shall be determined in
accordance with the method set forth in Section 11.4.1. If the shares of
Preferred Stock are not publicly traded, the "current per share market price" of
the Preferred Stock shall be conclusively deemed to be the current per share
market price of the Common Stock as determined pursuant to Section 11.4.1
(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by 1,000. If neither
the Common Stock nor the Preferred Stock are publicly held or so listed or
traded, "current per share market price" shall mean, with respect to the
Preferred Stock, the fair value per share as determined in good faith by the
Board of Directors of the Corporation, 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.
11.5. 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 that by reason of this Section 11.5 are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one one-thousandth (1/1000th) of a share of
Preferred Stock or of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11.5, any
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adjustment required by this Section 11 shall be made no later than the earlier
of (i) three (3) years from the date of the transaction that mandates such
adjustment or (ii) the Final Expiration Date.
11.6. If as a result of an adjustment made pursuant to Section
11.1.2 or Section 13.1 hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the Corporation
other than Preferred Stock, thereafter the number of other shares so receivable
upon exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Section 11.1 through 11.3,
inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 with respect to
the Preferred Stock shall apply on like terms to any such other shares.
11.7. All Rights originally issued by the Corporation subsequent
to any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of one one-thousandths
(1/1000ths) of a share of Preferred Stock purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
11.8. The Corporation 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 one one-thousandths (1/1000ths) of a share of
Preferred Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be exercisable
for the number of one one-thousandths (1/1000ths) of a share of Preferred Stock
for which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten-thousandth)
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 Corporation shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made, and shall deliver a copy of such public announcement to
the Rights Agent. This record date may be the date on which the Purchase Price
is adjusted or any day thereafter, but, if the Right Certificates have been
issued, shall be at least ten (10) days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11.8, the Corporation shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Corporation, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Corporation, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall be
issued, executed and countersigned in
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the manner provided for herein and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in the
public announcement.
11.9. Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths (1/1000ths) of a share of Preferred
Stock issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase Price and
the number of one one-thousandths (1/1000ths) of a share of Preferred Stock that
were expressed in the initial Right Certificates issued hereunder.
11.10. Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the number of
one one-thousandths (1/1000ths) of a share of Preferred Stock, share of Common
Stock or other securities issuable upon exercise of the Rights, the Corporation
shall take any corporate action that may, in the opinion of its counsel, be
necessary in order that the Corporation may validly and legally issue such
number of fully paid and non-assessable one one-thousandths (1/1000ths) of a
share of Preferred Stock, share of Common Stock or other securities at such
adjusted Purchase Price.
11.11. 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 Corporation may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the Preferred Stock, shares of Common Stock or other securities of the
Corporation, if any, issuable upon such exercise over and above the Preferred
Stock, shares of Common Stock or other securities of the Corporation, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Corporation shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment and shall deliver to the Rights Agent a notice
describing the terms of such due bill or other appropriate instrument.
11.12. Anything in this Section 11 to the contrary
notwithstanding, the Corporation 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 the Corporation in its sole discretion
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of Preferred
Stock at less than the current market price, (iii) issuance wholly for cash of
Preferred Stock or securities that by their terms are convertible into or
exchangeable for Preferred Stock, (iv) stock dividends or (v) issuance of
rights, options or warrants referred to in this Section 11, hereafter made by
the Corporation to holders of its Preferred Stock shall not be taxable to such
holders.
11.13. The Corporation covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the
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Corporation in a transaction that does not violate Section 11.14 hereof), (ii)
merge with or into any other Person (other than a Subsidiary of the Corporation
in a transaction that does not violate Section 11.14 hereof), 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 Corporation and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Corporation
and/or any of its Subsidiaries in one or more transactions each of which does
not violate Section 11.14 hereof), if (x) at the time of or immediately after
such consolidation, merger, sale or transfer, there are any charter or bylaw
provisions or any rights, warrants or other instruments or securities
outstanding or agreements in effect or other actions taken that would materially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights or (y) 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
13.1 hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates. The Corporation shall not
consummate any such consolidation, merger, sale or transfer unless prior thereto
the Corporation and such other Person shall have executed and delivered to the
Rights Agent a supplemental agreement evidencing compliance with this Section
11.13.
11.14. The Corporation covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section
25.2 hereof, take (or permit any Subsidiary to take) any action the purpose of
which is to, or if at the time such action is taken it is reasonably foreseeable
that the effect of such action is to, materially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights.
11.15. The exercise of Rights under Section 11.1.2 shall only
result in the loss of rights under Section 11.1.2 to the extent so exercised and
shall not otherwise affect the rights represented by the Rights under this
Agreement, including the rights represented by Section 13.
12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13
hereof, the Corporation shall promptly (a) prepare a certificate setting forth
such adjustment and a brief, reasonably detailed statement of the facts,
computations and methodology accounting for such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Common Stock and the Preferred
Stock a copy of such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25.1 hereof. The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall have no duty with respect to, and shall
not be deemed to have knowledge of, such adjustment unless and until it shall
have received such certificate.
13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
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13.1. In the event that, on or following the Shares Acquisition
Date, directly or indirectly, (x) the Corporation shall consolidate with, or
merge with and into, any Interested Stockholder or, if in such merger or
consolidation all holders of shares of Common Stock are not treated alike, any
other Person, (y) the Corporation shall consolidate with, or merge with, any
Interested Stockholder or, if in such merger or consolidation all holders of
shares of Common Stock are not treated alike, any other Person, and the
Corporation shall be the continuing or surviving corporation of such
consolidation or merger (other than, in a case of any transaction described in
(x) or (y), a merger or consolation that would result in all of the securities
generally entitled to vote in the election of directors of the Corporation
("voting securities") outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into securities
of the surviving entity) all of the voting securities of the Corporation or such
voting surviving entity outstanding immediately after such merger or
consolidation and the holders of such securities not having changed as a result
of such merger or consolidation), or (z) the Corporation 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 Corporation and
its Subsidiaries (taken as a whole) to any Interested Stockholder or
Stockholders or, if in such transaction all holders of Common Stock are not
treated alike, any other Person (other than the Corporation or any Subsidiary of
the Corporation in one or more transactions each of which does not violate
Section 11.14 hereof), then, and in each such case (except as provided in
Section 13.4 hereof), proper provision shall be made so that (i) each holder of
a Right, except as provided in Section 7.6 hereof, shall thereafter have the
right to receive, upon the exercise thereof at a price equal to the then current
Purchase Price, in accordance with the terms of this Agreement and in lieu of
Preferred Stock, such number of freely tradeable shares of Common Stock of the
Principal Party, not subject to any liens, encumbrances, rights of first refusal
or other adverse claims, as shall equal the result obtained by (A) multiplying
the then current Purchase Price by the number of one one-thousandths (1/1000ths)
of a share of Preferred Stock for which a Right is then exercisable (without
taking into account any adjustment previously made pursuant to Section 11.1.2)
and dividing that product by (B) 50% of the then current per share market price
of the Common Stock of such Principal Party (determined pursuant to Section 11.4
hereof) on the date of consummation of such Section 13 Event; (ii) 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 Corporation
pursuant to this Agreement; (iii) the term "Corporation" shall thereafter be
deemed to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; and (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of a
sufficient number of its shares of Common Stock) in 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 the shares of Common Stock thereafter deliverable upon the
exercise of the Rights.
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13.2. "Principal Party" shall mean:
13.2.1. in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13.1, the Person that is the
issuer of any securities into which shares of Common Stock of the Corporation
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
(including, if applicable, the Corporation if it is the surviving corporation);
and
13.2.2. in the case of any transaction described in clause
(z) of the first sentence of Section 13.1, 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 of the foregoing cases, (1) if the Common Stock
of such Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the Exchange
Act, and such Person is a direct or indirect Subsidiary of another Person the
shares of Common Stock of which are and have been so registered, "Principal
Party" shall refer to such other Person; (2) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, the shares of
Common Stock 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
Stock having the greatest aggregate market value; and (3) in case such Person is
owned, directly or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person, the rules set
forth in (1) and (2) above shall apply to each of the chains of ownership having
an interest in such joint venture as if such party were a "Subsidiary" of both
or all of such joint venturers and the Principal Parties in each such chain
shall bear the obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the total of such
interests.
13.3. The Corporation shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have a
sufficient number of its authorized shares of Common Stock that have not been
issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Corporation and
such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in Sections 13.1 and
13.2 and further providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer mentioned in Section 13.1, the Principal
Party at its own expense shall:
13.3.1. 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 (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Final Expiration Date;
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13.3.2. use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights under the blue
sky laws of such jurisdictions as may be necessary or appropriate; and
13.3.3. deliver to holders of the Rights historical
financial statements for the Principal Party that comply in all respects with
the requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. The rights
under this Section 13 shall be in addition to the rights to exercise Rights and
adjustments under Section 11.1.2 and shall survive any exercise thereof.
13.4. Notwithstanding anything in this Agreement to the contrary,
the foregoing provisions of this Section 13 shall not be applicable to a
transaction described in clauses (x) and (y) of Section 13.1 if: (i) such
transaction is consummated with a Person or Persons who acquired shares of
Common Stock pursuant to a Permitted Offer (or a wholly owned Subsidiary of any
such Person or Persons); (ii) the price per share of Common Stock offered in
such transaction is not less than the price per share of Common Stock paid to
all holders of shares of Common Stock 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 13.4, all Rights hereunder shall expire.
14. Fractional Rights and Fractional Shares.
14.1. The Corporation shall not be required to issue fractions of
Rights or to distribute Right Certificates that evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14.1,
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by
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any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights selected
by the Board of Directors of the Corporation. If on any such date no such market
maker is making a market in the Rights, the fair value of the Rights on such
date as determined in good faith by the Board of Directors of the Corporation
shall be used.
14.2. The Corporation shall not be required to issue fractions of
shares of Preferred Stock (other than fractions that are one one-thousandth
(1/1000th) or integral multiples of one one-thousandth (1/1000th) of a share of
Preferred Stock) upon exercise of the Rights or to distribute certificates that
evidence fractional shares of Preferred Stock (other than fractions that are one
one-thousandth (1/1000th) or integral multiples of one one-thousandth (1/1000th)
of a share of Preferred Stock). Fractions of shares of Preferred Stock in
integral multiples of one one-thousandth (1/1000th) of a share of Preferred
Stock may, at the election of the Corporation, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Corporation and a
depositary selected by it; provided that such agreement shall provide that the
holders of such depositary receipts shall have the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred
Stock represented by such depositary receipts. In lieu of fractional shares of
Preferred Stock that are not one one-thousandth (1/1000th) or integral multiples
of one one-thousandth (1/1000th) of a share of Preferred Stock, the Corporation
shall pay to the registered holders of Right 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 share of Preferred Stock. For the
purposes of this Section 14.2, the current market value of a share of Preferred
Stock shall be the closing price of a share of Preferred Stock (as determined
pursuant to Section 11.4.2 hereof) for the Trading Day immediately prior to the
date of such exercise.
14.3. Following the occurrence of one of the transactions or
events specified in Section 11 giving rise to the right to receive shares of
Common Stock, Capital Stock Equivalents (other than Preferred Stock) or other
securities upon the exercise of a Right, the Corporation shall not be required
to issue fractions of shares or units of such shares of Common Stock, Capital
Stock Equivalents or other securities upon exercise of the Rights or to
distribute certificates that evidence fractions of such shares of Common Stock,
Capital Stock Equivalents or other securities. In lieu of fractional shares or
units of such shares of Common Stock, Capital Stock Equivalents or other
securities, the Corporation may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of a share or
unit of such shares of Common Stock, Capital Stock Equivalents or other
securities. For purposes of this Section 14.3, the current market value shall be
determined in the manner set forth in Section 11.4 hereof for the Trading Day
immediately prior to the date of such exercise and, if such Capital Stock
Equivalent is not traded, each such Capital Stock Equivalent shall have the
value of one one-thousandth (1/1000th) of a share of Preferred Stock.
14.4. The holder of a Right by the acceptance of the Right
expressly waives such holder's right to receive any fractional Rights or any
fractional share upon exercise of a
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Right (except as provided above). The Rights Agent shall not be deemed to have
knowledge of, and shall have no duty in respect of, the issuance of fractional
Rights or fractional shares unless and until it shall have received instructions
from the Corporation concerning the issuance of such fractional Rights or
fractional shares.
15. Rights of Action.
All rights of action in respect of this Agreement, excepting the rights
of action given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of shares of the Common Stock); and
any registered holder of any Right Certificate (or, prior to the Distribution
Date, of shares of the Common Stock), without the consent of the Rights Agent or
of the holder of any other Right Certificate (or, prior to the Distribution
Date, of shares of the Common Stock), may, in such registered holder's own
behalf and for such registered holder's own benefit, enforce, and may institute
and maintain any suit, action or proceeding against the Corporation to enforce,
or otherwise act in respect of, such registered holder's right to exercise the
Rights evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement. Nothing in this
Section 15 is intended to modify or limit the authority of the Board of
Directors under Section 25.3.
16. Agreement of Right Holders.
Every holder of a Right, by accepting the same, consents and agrees with
the Corporation and the Rights Agent and with every other holder of a Right
that:
16.1. prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the associated shares of
Common Stock;
16.2. after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate form
fully executed;
16.3. subject to Section 6 and Section 7.7 hereof, the
Corporation and the Rights Agent may deem and treat the Person in whose name the
Right Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificate or the associated Common Stock certificate made by anyone
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other than the Corporation or the Rights Agent) for all purposes whatsoever, and
neither the Corporation nor the Rights Agent, subject to the last sentence of
Section 7.6 hereof, shall be required to be affected by any notice to the
contrary; and
16.4. Notwithstanding anything in this Agreement to the contrary,
neither the Corporation nor the Rights Agent shall have any liability to any
holder of a Right or a beneficial interest in 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,
judgment or ruling (whether interlocutory or final) 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, that the Corporation must use
its best efforts to have any such order, decree, judgment or ruling lifted or
otherwise overturned as soon as practicable.
17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of shares of the
Preferred Stock or any other securities of the Corporation that may at any time
be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a
stockholder of the Corporation 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
24 hereof), or to receive dividends or other distributions or to exercise any
preemptive or subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance with
the provisions hereof.
18. Concerning the Rights Agent.
18.1. The Corporation agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and other disbursements incurred in the administration, preparation, delivery,
amendment and execution of this Agreement and the exercise and performance of
its duties hereunder. The Corporation also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, damage, judgment,
fine, penalty, claim, demand, settlement, cost or expense incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
any action taken, suffered or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including without limitation
the costs and expenses of defending against any claim of liability in the
premises. The costs and expenses of enforcing this right of indemnification
shall also be paid
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by the Corporation. The indemnity provided for herein shall survive the
expiration of the Rights and the termination of this Agreement.
18.2. The Rights Agent may conclusively rely upon and shall be
authorized and protected and shall incur no liability for, or in respect of, any
action taken, suffered or omitted by it in connection with the acceptance and
administration of this Agreement in reliance upon any Right Certificate or
certificate for shares of Common Stock or for other securities of the
Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons. The Rights Agent shall not be deemed to have knowledge of,
and shall have no duty in respect of, any fact contained in such Right
Certificate or certificate for shares of Common Stock or for other securities of
the Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document unless and until it shall have received the
same.
18.3. Anything in this Agreement to the contrary notwithstanding,
in no event shall the Rights Agent be liable for special, indirect, incidental
or consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage and regardless of the form of the action.
19. Merger or Consolidation or Change of Name of Rights Agent.
19.1. 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 stock
transfer or all or substantially all of the shareholder services business of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such Person
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof.
19.2. In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
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20. Duties of Rights Agent.
20.1. The Rights Agent undertakes those duties and obligations,
and only the duties and obligations, expressly imposed by this Agreement (and no
implied duties or obligations) upon the following terms and conditions, and no
implied duties or obligations shall be read into this Agreement against the
Rights Agent, by all of which the Corporation and the holders of Right
Certificates, by their acceptance thereof, shall be bound.
20.2. Before the Rights Agent acts or refrains from acting, the
Rights Agent may consult with legal counsel (who may be legal counsel for the
Corporation), and the advice or opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent, and the Rights Agent
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in good faith and in accordance with such advice or opinion.
20.3. 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 an Acquiring Person and
the determination of the current market price of any security) be proved or
established by the Corporation prior to taking, suffering or omitting any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Treasurer or the
Secretary of the Corporation and delivered to the Rights Agent; and such
certificate shall be full authorization and protection to the Rights Agent and
the Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted in good faith by it under the provisions of this Agreement
in reliance upon such certificate.
20.4. The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
20.5. The Rights Agent shall not be liable for, or by reason of,
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature on such Right Certificates) or
be required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Corporation only.
20.6. The Rights Agent shall not be under any liability or
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Corporation of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming null and void
pursuant to Section 7.6 hereof) or any adjustment
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required under the provisions of Section 11, Section 13 or Section 26 hereof or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after receipt of the certificate described in Section 12 hereof); nor shall it
by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock or shares of
Common Stock to be issued pursuant to this Agreement or any Right Certificate or
as to whether any Preferred Stock or shares of Common Stock will, when issued,
be validly authorized and issued, fully paid and non-assessable.
20.7. The Corporation 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.
20.8. The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President or the Secretary of the Corporation, and to apply
to such officers for advice or instructions in connection with its duties, and
such instructions shall be full authorization and protection of the Rights Agent
and the Rights Agent shall incur no liability for or in respect of any action
taken, suffered or omitted by it in good faith or lack of action in accordance
with instructions of any such officer or for any delay in acting while waiting
for those instructions. The Rights Agent shall incur no liability for or in
respect of its reliance upon the most recent instructions received by any such
officer. Any application by the Rights Agent for written instructions from the
Corporation may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this Agreement
and the date on or after which such action shall be taken or such omission shall
be effective. The Rights Agent shall not be liable for any action taken or
suffered by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five (5) Business Days after the
date any officer of the Corporation actually receives such application, unless
any such officer shall have consented in writing to an earlier date) unless,
prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instruction in response
to such application specifying the action to be taken, suffered or omitted.
20.9. The Rights Agent and any stockholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Corporation or become pecuniarily interested
in any transaction in which the Corporation may be interested, or contract with
or lend money to the Corporation or otherwise act as fully and freely as though
it were not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Corporation or for any
other Person or legal entity.
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20.10. The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, negligence or misconduct of any
such attorneys or agents or for any loss to the Corporation or any other Person
resulting from any such act, default, negligence or misconduct, absent gross
negligence, bad faith or willful misconduct in the selection and continued
employment thereof.
20.11. 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 it believes that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
20.12. 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 not been
completed, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without first consulting with the
Corporation.
20.13. The Rights Agent shall not be required to take notice or
be deemed to have notice of any fact, event or determination (including, without
limitation, any dates or events defined in this Agreement or the designee of any
Person as an Acquiring Person, Affiliate or Associate), under this Agreement
unless and until the Rights Agent shall be specifically notified in writing by
the Corporation of such fact, event or determination.
21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon thirty (30) days' notice in
writing mailed to the Corporation and to each transfer agent of the Common Stock
or Preferred Stock by registered or certified mail, and, at the expense of the
Corporation, to the holders of the Right Certificates by first-class mail. The
Corporation may remove the Rights Agent or any successor Rights Agent upon sixty
(60) days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock or
Preferred Stock by registered or certified mail, and to holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Corporation shall appoint a
successor to the Rights Agent. If the Corporation shall fail to make such
appointment within a period of sixty (60) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Corporation), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Corporation or by such a court, shall be a Person
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organized and doing business under the laws of the United States or of any of
the States of Illinois, New York, New Jersey or California (or of any other
state of the United States so long as such Person is authorized to do business
in any of the States of Illinois, New York, New Jersey or California), in good
standing, having an office in any of such States, which is subject to
supervision or examination by federal or state authority and which (or the
parent corporation of which) has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50,000,000. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement. Not later than the effective date of any such appointment, the
Corporation shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Stock or Preferred Stock, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
22. Issuance of New Right Certificates.
22.1. Notwithstanding any of the provisions of this Agreement or
of the Rights to the contrary, the Corporation may, at its option, issue new
Right Certificates evidencing Rights in such form as may be approved by its
Board of Directors to reflect any adjustment or change in the Purchase Price and
the number or kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance with the provisions
of this Agreement.
22.2. In connection with the issuance or sale of Common Stock
following the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Corporation (a) shall with respect to shares
of Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Corporation, and (b)
may in any other case, if deemed necessary or appropriate by the Board of
Directors of the Corporation, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) the Corporation shall not be obligated to issue any such Right
Certificates if, and to the extent that, the Corporation shall be
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advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Corporation or the Person to whom such
Right Certificate would be issued, and (ii) no Right Certificate shall be issued
if, and to the extent that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
23. Redemption and Termination.
23.1. Redemption
23.1.1. The Board of Directors of the Corporation may, at
its option, redeem all but not less than all of the then outstanding Rights at a
redemption price of $.001 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"), at any time prior to the earlier of the
occurrence of a Section 11.1.2 Event or the Final Expiration Date. The
Corporation may, at its option, pay the Redemption Price either in shares of
Common Stock (based on the current per share market price of the Common Stock at
the time of redemption) or cash; provided that if the Corporation elects to pay
the Redemption Price in shares of Common Stock, the Corporation shall not be
required to issue any fractional shares of Common Stock and the number of shares
of Common Stock issuable to each holder of Rights shall be rounded down to the
next whole share.
23.1.2. In addition, the Board of Directors of the
Corporation may, at its option, at any time following the occurrence of a
Section 11.1.2 Event and the expiration of any period during which the holder of
Rights may exercise the Rights under Section 11.1.2 but prior to any Section 13
Event redeem all but not less than all of the then outstanding Rights at the
Redemption Price (x) in connection with any merger, consolidation or sale or
other transfer (in one transaction or in a series of related transactions) of
assets or earning power aggregating 50% or more of the earning power of the
Corporation and its Subsidiaries (taken as a whole) in which all holders of
shares of Common Stock are treated alike and not involving (other than as a
holder of shares of Common Stock being treated like all other such holders) an
Interested Stockholder or (y) (i) if and for so long as the Acquiring Person is
not thereafter the Beneficial Owner of 15% or more of the Common Stock, and (ii)
at the time of redemption no other Persons are Acquiring Persons.
23.2. In the case of a redemption permitted under Section 23.1.1,
immediately upon the date for redemption set forth in (or determined in the
manner specified in) a resolution of the Board of Directors of the Corporation
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. In the case of a redemption permitted only under
Section 23.1.2, the right to exercise the Rights will terminate and represent
only the right to receive the Redemption Price
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upon the later of ten (10) Business Days following the giving of such notice or
the expiration of any period during which the Rights may be exercised under
Section 11.1.2. The Corporation shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or any defect in, any
such notice shall not affect the validity of such redemption. Within ten (10)
days after such date for redemption set forth in a resolution of the Board of
Directors of the Corporation ordering the redemption of the Rights, the
Corporation shall mail a notice of redemption to the Rights Agent and all the
holders of the then outstanding Rights at (in the case of notice to holders)
their addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Stock. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Corporation nor any of its Affiliates or Associates
may redeem, acquire or purchase for value any Rights at any time in any manner
other than as specifically set forth in this Section 23 and other than in
connection with the purchase of shares of Common Stock prior to the Distribution
Date.
23.3. The Corporation may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release announcing
the manner of redemption of the Rights in accordance with this Agreement and
(ii) mailing payment of the Redemption Price to the registered holders of the
Rights at their addresses as they appear on the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the Transfer
Agent of the Common Stock, and upon such action, all outstanding Rights and
Right Certificates shall be null and void without any further action by the
Corporation.
24. Notice of Certain Events.
24.1. In case the Corporation shall propose (i) to pay any
dividend payable in stock of any class to the holders of its Preferred Stock or
to make any other distribution to the holders of its Preferred Stock (other than
a regular quarterly cash dividend), (ii) to offer to the holders of its
Preferred Stock rights or warrants to subscribe for or to purchase any
additional Preferred Stock or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only the subdivision of
outstanding Preferred Stock), (iv) to effect any consolidation or merger into or
with any other Person (other than a Subsidiary of the Corporation in a
transaction which does not violate Section 11.14 hereof), or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer) in one or more transactions, of 50% or more of the
assets or earning power of the Corporation and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Corporation and/or any of
its Subsidiaries in one or more transactions each of which does not violate
Section 11.14 hereof), or (v) to effect the liquidation, dissolution or winding
up of the Corporation, then, in each such case, the Corporation shall give the
Rights Agent and to each holder of a Right Certificate, in accordance with
Section 25 hereof, a notice of such proposed action which shall specify the
record date for the purposes of such stock dividend or distribution of rights or
warrants, or the date on which such reclassification,
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consolidation, merger, sale, transfer, liquidation, dissolution or winding up is
to take place and the date of participation therein by the holders of the
Preferred Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least
twenty (20) days prior to the record date for determining holders of the
Preferred Stock for purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Preferred Stock, whichever shall be the earlier.
24.2. In case of a Section 11.1.2 Event, then (i) the Corporation
shall as soon as practicable thereafter give to each holder of a Right
Certificate, in accordance with Section 25.1.3 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11.1.2 hereof, and
(ii) all references in the preceding Section 24.1 to Preferred Stock shall be
deemed thereafter to refer also to shares of Common Stock and/or, if
appropriate, other securities of the Corporation.
25. Miscellaneous.
25.1. Notices.
25.1.1. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Corporation shall be sufficiently given or made if sent by
registered or certified mail and shall be deemed given upon receipt, addressed
(until another address is filed in writing with the Rights Agent) as follows:
Raychem Corporation
300 Constitution Drive
Menlo Park, California 94025
Attention: General Counsel/Corporate Secretary
25.1.2. Subject to the provisions of Section 21 hereof,
any notice or demand authorized by this Agreement to be given or made by the
Corporation or by the holder of any Right Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by registered or certified mail and
shall be deemed given upon receipt, addressed (until another address is filed in
writing with the Corporation) as follows:
Harris Trust and Savings Bank
311 W. Monroe Street
Chicago, Illinois 60606
Attention: Susan A. Knaack
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25.1.3. Notices or demands authorized by this Agreement to
be given or made by the Corporation or the Rights Agent to the holder of any
Right Certificate or, if prior to the Distribution Date, to the holder of
certificates representing shares of Common Stock shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the Corporation.
25.2. Supplements and Amendments. The Corporation may from time
to time supplement or amend any provision of this Agreement without the approval
of any holders of Rights in order to cure any ambiguity, to correct, supplement
or amend any provision herein, or to make any other provision with respect to
the Rights which the Corporation may deem necessary or desirable, any such
supplement or amendment to be evidenced by a writing signed by the Corporation
and the Rights Agent; provided, however, that from and after any Shares
Acquisition Date this Agreement shall not be amended in any manner which will
adversely affect the interests of the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Corporation which states that the
proposed supplement or amendment is in compliance with the terms of this Section
25.2, and, if requested by the Rights Agent, an opinion of counsel, the Rights
Agent shall execute such supplement or amendment, provided that such supplement
or amendment does not adversely affect the rights or obligations of the Rights
Agent under Section 18 or Section 20 of this Agreement. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of shares of Common Stock. This
Agreement shall not be amended, without the prior written consent of the Rights
Agent, in any manner that changes or increases the duties or obligations of the
Rights Agent.
25.3. Determination and Actions by the Board of Directors, etc.
The Board of Directors of the Corporation shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board, or the Corporation, or as may be necessary or
advisable in the administration of this Agreement, including without limitation,
the right and power to (i) interpret the provisions of this Agreement, and (ii)
make all determinations deemed necessary or advisable for the administration of
this Agreement (including, without limitation, a determination to redeem or not
redeem the Rights or to amend the Agreement and whether any proposed amendment
adversely affects the interests of the holders of Right Certificates). For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock or other securities outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock or any other securities of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i)
of the General Rules and Regulations under the Exchange Act as in effect on the
date of this Agreement. All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith,
shall (x) be final, conclusive and binding on the Corporation, the Rights Agent,
the holders of the
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Right Certificates and all other Persons, and (y) not subject the Board to any
liability to the holders of the Right Certificates. The Rights Agent shall be
fully protected and shall incur no liability for or in respect of its reliance
on the good faith of the Corporation's Board of Directors with respect to
actions done or made in connection with such calculation. Nothing in Section 15
hereof is intended to modify or limit this Section 25.3.
25.4. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Corporation or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
25.5. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person or corporation other than the Corporation,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the shares of Common Stock) any legal or
equitable right, remedy or claim under this Agreement. This Agreement shall be
for the sole and exclusive benefit of the Corporation, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the shares of Common Stock).
25.6. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
25.7. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
25.8. 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.
25.9. Descriptive Headings. Descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
38
<PAGE> 41
26. Exchange.
26.1. Notwithstanding any other provision hereof, the Board of
Directors of the Corporation may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null and
void pursuant to the provisions of Section 7.6 hereof) for shares of Common
Stock of the Corporation at an exchange ratio determined by dividing the
then-applicable exercise price of the Rights determined under Section 7.2 by the
"current per share market price" as defined in Section 11.4.1 (such exchange
ratio being hereinafter referred to as the "Exchange Ratio"). Notwithstanding
the foregoing, the Corporation's Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than the Corporation,
any Subsidiary of the Corporation, any employee benefit plan of the Corporation
or any such Subsidiary, or any Person organized, appointed or established by the
Corporation for or pursuant to the terms of any such plan or any trustee,
administrator or fiduciary of such a plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Stock then outstanding.
26.2. Immediately upon the action of the Board of Directors of
the Corporation ordering the exchange of any Rights pursuant to Section 26.1 and
without any further action and without any notice, the right to exercise such
rights shall terminate and the only right thereafter of the holder of such
Rights (other than a holder of Rights that have become null and void pursuant to
the provisions of Section 7.6 hereof) shall be to receive that number of shares
of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Corporation shall promptly give public
notice, and shall promptly give notice to the Rights Agent, 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 Corporation 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 books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
shall state the method by which the exchange of the Common Stock for Rights will
be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void pursuant to
the provisions of Section 7.6) held by each holder of Rights.
39
<PAGE> 42
26.3. In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 26, the
Corporation shall take all such action as may be necessary to issue additional
shares of Common Stock, Preferred Stock and/or Capital Stock Equivalents with an
aggregate current market value (as determined by the Board of Directors of the
Corporation) equal to the aggregate current market value of a number of shares
of Common Stock equal to the Exchange Ratio.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
40
<PAGE> 43
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and attested, all as of the date and year first above
written.
RAYCHEM CORPORATION
Attest:
By: /s/ RAYMOND J. SIMS
---------------------------------
Raymond J. Sims
Senior Vice President and
Chief Financial Officer
HARRIS TRUST AND SAVINGS BANK, as Rights Agent
By: /s/ SUSAN A. KNAACK
--------------------------------
Name: Susan A. Knaack
Title: Officer
<PAGE> 44
EXHIBIT A
Certificate of Designation, Preferences and
Rights of Series RP Preferred Stock
of
Raychem Corporation
(Pursuant to Section 151 of the Delaware General Corporation Law)
I, Karen O. Cottle, Secretary of Raychem Corporation (the
"Corporation"), a corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance with the provisions of
Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors of
the Corporation by the Amended and Restated Certificate of Incorporation of the
Corporation, the said Board of Directors on December 11, 1998, adopted the
following resolutions creating a series of 150,000 shares of Preferred Stock
designated as Series RP Preferred Stock.
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of the Corporation in accordance with the provisions of the
Amended and Restated Certificate of Incorporation of the Corporation, the Board
of Directors hereby creates a series of Series RP Preferred Stock, with a par
value of $1.00 per share, of the Corporation and hereby states the designation
and number of shares, and fixes the relative rights, preferences and limitations
thereof as follows (the following provisions being intended to operate in
addition to any other provisions of said Amended and Restated Certificate of
Incorporation applicable to any series of Preferred Stock):
Series RP Preferred Stock
Section 1. Designation, Par Value and Amount. The shares of such series
shall be designated as "Series RP Preferred Stock" (hereinafter referred to as
"Series RP Preferred Stock"), the shares of such series shall be with par value
of $1.00 per share, and the number of shares constituting such series shall be
150,000; provided, however, that, if more than a total of 150,000 shares of
Series RP Preferred Stock shall be issuable upon the exercise of Rights (the
"Rights") issued pursuant to the Rights Agreement, dated as of December 11,
1998, between the Corporation and Harris Trust and Savings Bank, as Rights Agent
(as amended from time to time, the "Rights Agreement"), the Board of Directors
of the Corporation shall direct by resolution or resolutions that a certificate
be properly executed, acknowledged and filed providing for the total number of
shares of Series RP Preferred Stock authorized to be issued to be increased (to
the extent that the Amended and Restated Certificate of Incorporation then
permits) to the largest number of whole shares (rounded up to the nearest whole
number) issuable upon exercise of the Rights.
<PAGE> 45
Section 2. Dividends and Distributions.
2.1 Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series RP Preferred Stock with respect to dividends, the holders of
shares of Series RP Preferred Stock shall be entitled to receive, when, as and
if declared by the Board of Directors out of assets legally available for the
purpose, quarterly dividends payable in cash on the first business day of March,
June, September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or fraction
of a share of Series RP Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision
for adjustment set forth in Section 6.1, 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, par value $1.00 per share, of the
Corporation (the "Common Stock") or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series RP Preferred Stock.
2.2 The Corporation shall declare a dividend or distribution on
the Series RP Preferred Stock as provided in Section 2.1 above immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series RP
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
2.3 Dividends shall begin to accrue and be cumulative on
outstanding shares of Series RP Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series RP
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series RP
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series RP Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series RP Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not more
than 30 days prior to the date fixed for the payment thereof.
2
<PAGE> 46
Section 3. Voting Rights. The holders of shares of Series RP Preferred
Stock shall have the following voting rights:
3.1 Except as provided in Section 3.3 and subject to the
provision for adjustment hereinafter set forth, each share of Series RP
Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters
submitted to a vote of the stockholders of the Corporation.
3.2 Except as otherwise provided herein or by law, the holders of
shares of Series RP Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
3.3 The following additional provisions shall apply with respect
to the voting of shares of Series RP Preferred Stock:
3.3.1 If, on the date used to determine stockholders of
record for any meeting of stockholders for the election of directors, a default
in preference dividends (as defined in Section 3.3.5 below) on the Series RP
Preferred Stock shall exist, the holders of the Series RP Preferred Stock shall
have the right, voting as a class as described in Section 3.3.2 below, to elect
two directors (in addition to the directors elected by holders of Common Stock
of the Corporation). Such right may be exercised (a) at any meeting of
stockholders for the election of directors or (b) at a meeting of the holders of
shares of Voting Preferred Stock (as hereinafter defined), called for the
purpose in accordance with the Bylaws of the Corporation, until all such
cumulative dividends (referred to above) shall have been paid in full or until
non-cumulative dividends have been paid regularly for at least one year.
3.3.2 The right of the holders of Series RP Preferred
Stock to elect two directors, as described above, shall be exercised as a class
concurrently with the rights of holders of any other series of Preferred Stock
upon which voting rights to elect such directors have been conferred and are
then exercisable. The Series RP Preferred Stock and any additional series of
Preferred Stock that the Corporation may issue and that may provide for the
right to vote with the foregoing series of Preferred Stock are collectively
referred to herein as "Voting Preferred Stock."
3.3.3 Each director elected by the holders of shares of
Voting Preferred Stock shall be referred to herein as a "Preferred Director." A
Preferred Director shall continue to serve as such for a term of one year,
except that upon any termination of the right of all holders of Voting Preferred
Stock to vote as a class for Preferred Directors, the term of office of
Preferred Directors then serving shall terminate. Any Preferred Director may be
removed by, and shall not be removed except by, the vote of the holders of
record of a majority of the outstanding shares of Voting Preferred Stock then
entitled to vote for the election of directors, present (in person or by proxy)
and voting together as a single class (a) at a meeting of the stockholders, or
(b) at a meeting of the holders of shares of such Voting Preferred Stock, called
for the purpose in accordance with the Bylaws of the Corporation.
3.3.4 So long as a default in any preference dividends of
the Series RP Preferred Stock shall exist or the holders of any other series of
Voting Preferred Stock shall be
3
<PAGE> 47
entitled to elect Preferred Directors, (a) any vacancy in the office of a
Preferred Director may be filled (except as provided in the following clause
(b)) by an instrument in writing signed by the remaining Preferred Director and
filed with the Corporation and (b) in the case of the removal of any Preferred
Director, the vacancy may be filled by the vote or written consent of the
holders of a majority of the outstanding shares of Voting Preferred Stock then
entitled to vote for the election of directors, present (in person or by proxy)
and voting together as a single class, at such time as the removal shall be
effected. Each director appointed as aforesaid by the remaining Preferred
Director shall be deemed, for all purposes hereof, to be a Preferred Director.
Whenever (x) no default in preference dividends on the Series RP Preferred Stock
shall exist and (y) the holders of other series of Voting Preferred Stock shall
no longer be entitled to elect such Preferred Directors, then the number of
directors constituting the Board of Directors of the Corporation shall be
reduced by two.
3.3.5 For purposes hereof, a "default in preference
dividends" on the Series RP Preferred Stock shall be deemed to have occurred
whenever the amount of cumulative and unpaid dividends on the Series RP
Preferred Stock shall be equivalent to six full quarterly dividends or more
(whether or not consecutive), and, having so occurred, such default shall be
deemed to exist thereafter until, but only until, all cumulative dividends on
all shares of the Series RP Preferred Stock then outstanding shall have been
paid through the last Quarterly Dividend Payment Date or until, but only until,
non-cumulative dividends have been paid regularly for at least one year.
3.4 Except as set forth herein (or as otherwise required by
applicable law), holders of Series RP Preferred Stock shall have no general or
special voting rights and their consent shall not be required for taking any
corporate action.
Section 4. Certain Restrictions.
4.1 Whenever quarterly dividends or other dividends or
distributions payable on the Series RP Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series RP Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
4.1.1 declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series RP Preferred Stock;
4.1.2 declare or pay dividends, 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 RP
Preferred Stock, except dividends paid ratably on the Series RP Preferred Stock
and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then
entitled;
4.1.3 redeem or purchase or otherwise acquire for
consideration (except as provided in Section 4.1.4 below) shares of any stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series RP Preferred Stock, provided that the
4
<PAGE> 48
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such junior 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 RP Preferred Stock;
4.1.4 redeem or purchase or otherwise acquire for
consideration any shares of Series RP Preferred Stock, or any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series RP Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among the
respective series or classes.
4.2 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 Section 4.1,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series RP Preferred Stock
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 shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, in any other Certificate of Amendment creating a
series of Preferred Stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up.
6.1 Subject to the prior and superior rights of holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series RP Preferred Stock with respect to rights upon liquidation,
dissolution or winding up (voluntary or otherwise), no distribution shall be
made to the holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series RP Preferred Stock
unless, prior thereto, the holders of shares of Series RP Preferred Stock shall
have received per share an amount equal to the greater of 1,000 times $150 or
1,000 times the payment made per share of Common Stock, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series RP Liquidation Preference"). Following
the payment of the full amount of the Series RP Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series RP
Preferred Stock unless, prior thereto, the holders of shares of Common Stock
shall have received an amount per share (the "Capital Adjustment") equal to the
quotient obtained by dividing (i) the Series RP Liquidation Preference by (ii)
1,000 (as appropriately adjusted as set forth in Section 6.3 to reflect such
events as stock splits, stock dividends and recapitalizations with respect to
the Common Stock) (such number in clause (ii) being hereafter referred to as the
"Adjustment Number"). Following the payment of the full amount of the Series RP
Liquidation Preference
5
<PAGE> 49
and the Capital Adjustment in respect of all outstanding shares of Series RP
Preferred Stock and Common Stock, respectively, holders of Series RP Preferred
Stock and holders of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Preferred Stock and Common Stock, on a per
share basis, respectively.
6.2 In the event, however, that there are not sufficient assets
available to permit payment in full of the Series RP Liquidation Preference and
the liquidation preferences of all other series of preferred stock, if any,
which rank on a parity with the Series RP Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of Series RP Preferred Stock
and the holders of such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are not sufficient
assets available to permit payment in full of the Capital Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
6.3 In the event the Corporation shall (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 Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such Adjustment
Number by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 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 shares of
Series RP Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share equal to the Adjustment Number (as appropriately
adjusted as set forth in Section 6.3 to reflect such events as stock splits,
stock dividends and recapitalizations with respect to the Common Stock) 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.
Section 8. No Redemption. The shares of Series RP Preferred Stock shall
not be redeemable.
Section 9. Ranking. The Series RP 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 other
series shall provide otherwise.
Section 10. Amendment. The Amended and Restated Certificate of
Incorporation of the Corporation shall not be further amended in any manner that
would materially alter or change the powers, preferences or special rights of
the Series RP Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding shares
of Series RP Preferred Stock, voting separately as a class.
6
<PAGE> 50
Section 11. Fractional Shares. Series RP Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of Series RP Preferred Stock.
RESOLVED, that the proper officers of the Corporation be, and each of
them hereby is, authorized to execute a Certificate of Designation with respect
to the Series RP Preferred Stock pursuant to Section 151 of the General
Corporation Law of the State of Delaware and to take all appropriate action to
cause such Certificate to become effective, including, but not limited to, the
filing and recording of such Certificate with and/or by the Secretary of State
of the State of Delaware.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
7
<PAGE> 51
IN WITNESS WHEREOF, I have executed and subscribed to this Certificate
and do affirm the foregoing as true under penalty of perjury this 11th day of
December, 1998.
---------------------------------
Karen O. Cottle
Secretary
8
<PAGE> 52
EXHIBIT B
Form of Right Certificate
Certificate No. RP- _____ Rights
NOT EXERCISABLE AFTER FEBRUARY 12, 2009 OR EARLIER IF REDEEMED BY
THE CORPORATION. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001
PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
RAYCHEM CORPORATION
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 December 11, 1998 (the "Rights Agreement"), between
Raychem Corporation, a Delaware corporation (the "Corporation"), and Harris
Trust and Savings Bank, an Illinois banking corporation, (the "Rights Agent") to
purchase from the Corporation at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M., California
time, on February 12, 2009, unless the Rights evidenced hereby shall have been
previously redeemed by the Corporation, at the principal office or offices of
the Rights Agent designated for such purpose, or at the office of its successor
as Rights Agent, one one-thousandth (1/1000th) of a fully paid non-assessable
share of Series RP Preferred Stock (the "Preferred Stock") of the Corporation,
at a purchase price of $150 per one one-thousandth (1/1000th) of a share of
Preferred Stock (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of one
one-thousandths (1/1000ths) of a share of Preferred Stock that may be purchased
upon exercise hereof) set forth above, and the Purchase Price set forth above,
are the number and Purchase Price as of February 12, 1999, based on the
Preferred Stock as constituted at such date.
Upon the occurrence of a Section 11.1.2 Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any Affiliate
or Associate thereof) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of an Affiliate
or Associate thereof) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person (or from
any Affiliate or Associate thereof) to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person has a
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer that the Board of Directors of the Corporation has
determined is part of a plan,
<PAGE> 53
arrangement or understanding that has as a primary purpose or effect the
avoidance of Section 7.6 of the Rights Agreement, shall become null and void
without any further action and no holder hereof shall have any rights whatsoever
with respect to such Rights, whether under any provision of the Rights Agreement
or otherwise.
As provided in the Rights Agreement, the Purchase Price and the number
of one one-thousandths (1/1000ths) of a share of Preferred Stock or other
securities that may be purchased upon the exercise of the Rights evidenced by
this Right Certificate are subject to modification and adjustment upon the
happening of certain events, including Triggering Events (as such term is
defined in the Rights Agreement).
This Right Certificate is subject to all of the terms, covenants and
restrictions of the Rights Agreement, which terms, covenants and restrictions
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 Corporation and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal executive offices of
the Corporation and the office of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
shares of Preferred Stock or other securities as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Corporation at a redemption price of
$.001 per Right (subject to adjustment as provided in the Rights Agreement)
payable in cash.
No fractional shares of Preferred Stock will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions that are one
one-thousandth (1/1000th) or integral multiples of one one-thousandth (1/1000th)
of a share of Preferred Stock, which may, at the election of the Corporation, be
evidenced by depository receipts), but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of the Preferred
Stock or of any other securities of the Corporation that 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 Corporation 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
2
<PAGE> 54
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 other distributions or to exercise any
preemptive or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided in the
Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal. Dated as of __________, _____.
[SEAL]
ATTEST: RAYCHEM CORPORATION
By By
- ----------------------------- -------------------------------
Name Name
- ----------------------------- -------------------------------
Title Title
- ----------------------------- -------------------------------
Countersigned:
[ ]
By
- -----------------------------
Name
- -----------------------------
Title
- -----------------------------
3
<PAGE> 55
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the Right Certificate.)
FOR VALUE RECEIVED______________________________________________________
hereby sells, assigns and transfers unto________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________ Attorney-in-Fact,
to transfer the within Right Certificate on the books of the within-named
Corporation, with full power of substitution.
Dated:__________, _____ --------------------------------------------
Signature
Signature Guaranteed:
- ------------------------------
Signatures must be guaranteed by an "Eligible Guarantor Institution" as
defined in Rule 17Ad-15 (or any successor rule or regulation) promulgated
pursuant to the Securities Exchange Act of 1934, as amended (this term means, in
general, banks, stock brokers, savings and loan associations, and credit unions,
in each case with membership in an approved signature guarantee medallion
program).
The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate are not being sold, assigned or transferred by or on behalf of
a Person who is or was an Acquiring Person or an Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement), (2) this Right Certificate
is not being sold, assigned or transferred to or on behalf of any such Acquiring
Person, Affiliate or Associate, and (3) after due inquiry and to the best
knowledge of the undersigned, the undersigned did not acquire the Rights
evidenced by this Right Certificate from any Person who is or was an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement).
--------------------------------------------
Signature
<PAGE> 56
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires
to exercise Rights represented by the Right Certificate)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the shares of Preferred
Stock, shares of Common Stock or other securities issuable upon the exercise of
such Rights and requests that certificates for such shares of Preferred Stock,
shares of Common Stock or other securities be issued in the name of:
Please insert social security number
or other identifying number_____________________________________________________
________________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security number
or other identifying number_____________________________________________________
________________________________________________________________________________
(Please print name and address)
Dated: __________, _____
--------------------------------------------
Signature
Signature Guaranteed:
- ------------------------------
Signatures must be guaranteed by an "Eligible Guarantor Institution" as
defined in Rule 17Ad-15 (or any successor rule or regulation) promulgated
pursuant to the Securities Exchange Act of 1934, as amended (this term means, in
general, banks, stock brokers, savings and loan associations, and credit unions,
in each case with membership in an approved signature guarantee medallion
program).
<PAGE> 57
Form of Reverse Side of Right Certificate -- continued
The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate are not being exercised by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), (2) this Right Certificate is not being sold,
assigned or transferred by or on behalf of any such Acquiring Person, Affiliate
or Associate, and (3) after due inquiry and to the best knowledge of the
undersigned, the undersigned did not acquire the Rights evidenced by this Right
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement).
--------------------------------------------
Signature
Notice
The signature on the foregoing Forms of Assignment and Election and
certificates must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Corporation 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 such terms are defined in the Right
Agreement) and such Assignment or Election to Purchase will not be honored.
<PAGE> 58
EXHIBIT C
RAYCHEM CORPORATION
300 Constitution Drive
Menlo Park, California 94025
SUMMARY OF RIGHTS TO PURCHASE
SERIES RP PREFERRED SHARES
On December 11, 1998, the Board of Directors (the "Board") of
Raychem Corporation (the "Corporation") declared a dividend distribution of one
preferred share purchase right (a "Right") for each outstanding share of Common
Stock (the "Common Stock") of the Corporation. The dividend is payable to the
stockholders of record on February 12, 1999 (the "Record Date"), and with
respect to shares of Common Stock issued thereafter until the Distribution Date
(as defined below) and, in certain circumstances, with respect to shares of
Common Stock issued after the Distribution Date. Except as set forth below, each
Right, when it becomes exercisable, entitles the registered holder to purchase
from the Corporation one one-thousandth (1/1000th) of a share of Series RP
Preferred Stock, $1.00 par value per share (the "Preferred Stock"), of the
Corporation at a price of $150 per one one-thousandth (1/1000th) of a share of
Preferred Stock (the "Purchase Price"), subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Corporation and Harris Trust and Savings Bank, as Rights
Agent (the "Rights Agent"), dated as of December 11, 1998.
Initially, the Rights will be attached to all certificates
representing shares of Common Stock then outstanding, and no separate
certificates representing the Rights ("Right Certificates") will be distributed.
The Rights will separate from the Common Stock upon the earliest to occur of (i)
a person or group of affiliated or associated persons having acquired, without
the prior approval of the Corporation's Board of Directors, beneficial ownership
of 15% or more of the outstanding shares of Common Stock (except pursuant to a
Permitted Offer, as hereinafter defined) or (ii) 10 days (or such later date as
the Board may determine) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of which
would result in a person or group of affiliated or associated persons becoming
an Acquiring Person (as hereinafter defined) (the "Distribution Date"). A person
or group whose acquisitions of shares of Common Stock cause a Distribution Date
pursuant to clause (i) above is an "Acquiring Person," with certain exceptions
as set forth in the Rights Agreement. The date that a person or group is first
publicly announced to have become such by the Corporation or such Acquiring
Person is the "Shares Acquisition Date."
The Rights Agreement provides that, until the Distribution Date,
the Rights will be transferred with and only with the associated shares of
Common Stock. 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 shares of 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 shares of
<PAGE> 59
Common Stock outstanding as of the Record Date, even without such notation or a
copy of this Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the shares of Common Stock represented by
such certificate. As soon as practicable following the Distribution Date, Right
Certificates will be mailed to the holders of record of the shares of Common
Stock as of the Close of Business (as defined in the Rights Agreement) on the
Distribution Date (and to each initial record holder of certain shares of Common
Stock issued after the Distribution Date), and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on February 12, 2009, unless earlier
redeemed by the Corporation as described below.
In the event that any person becomes an Acquiring Person (except
pursuant to a tender or exchange offer which is for all outstanding shares of
Common Stock at a price and on terms which a majority of certain members of the
Board determines to be adequate and in the best interests of the Corporation,
its stockholders and other relevant constituencies, other than such Acquiring
Person, its affiliates and associates (a "Permitted Offer")), each holder of a
Right will thereafter have the right (the "Flip-In Right") to receive, upon
exercise, the number of shares of Common Stock (or, in certain circumstances, of
one one-thousandths (1/1000ths) of a share of Preferred Stock or other
securities of the Corporation) having a value (immediately prior to such
triggering event) equal to two times the exercise price of the Right.
Notwithstanding the foregoing, following the occurrence of the event described
above, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person or any
affiliate or associate thereof will be null and void. The Board has the option,
at any time after any person becomes an Acquiring Person, to exchange all or
part of the then-exercisable Rights (excluding those that have become void, as
described in the immediately preceding sentence) for shares of Common Stock, at
an exchange ratio determined by dividing the then-applicable Purchase Price by
the then-current market price per share of Common Stock as determined in
accordance with the Rights Agreement. However, this option generally terminates
if any person becomes the beneficial owner of 50% or more of the Common Stock.
In the event that, at any time following the Shares Acquisition
Date, (i) the Corporation is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding shares of Common
Stock immediately prior to the consummation of the transaction are not the
holders of all of the surviving corporation's voting power, or (ii) more than
50% of the Corporation's assets or earning power is sold or transferred, in
either case with or to (x) an Acquiring Person or any affiliate or associate
thereof or (y) any other person in which such Acquiring Person, affiliate or
associate has an interest or any person acting on behalf of or in concert with
such Acquiring Person, affiliate or associate, or (z) any other person if, in
such transaction, all holders of shares of Common Stock are not treated alike,
then each holder of a Right (except Rights which previously have been voided as
set forth above) shall thereafter have the right (the "Flip-Over Right") to
receive, upon exercise, common shares of the acquiring company (or, in certain
circumstances, its parent), having a value equal to two
2
<PAGE> 60
times the exercise price of the Right. The holder of a Right will continue to
have the Flip-Over Right whether or not such holder exercises or surrenders the
Flip-In Right.
The Purchase Price payable, and the number of shares of Preferred
Stock, shares of Common Stock or other securities 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
shares of the Preferred Stock of certain rights or warrants to subscribe for or
purchase Preferred Stock at a price, or securities convertible into Preferred
Stock with a conversion price, less than the then current market price of the
Preferred Stock or (iii) upon the distribution to holders of shares of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
The number of outstanding Rights and the number of one
one-thousandths (1/1000ths) of a share of Preferred Stock issuable upon exercise
of each Right are also subject to adjustment in the event of a stock split of
the Common Stock or a stock dividend on the Common Stock payable in Common Stock
or subdivisions, consolidations or combinations of the Common Stock occurring,
in any such case, prior to the Distribution Date.
Preferred Stock purchasable upon exercise of the Rights will not
be redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment of $1.00 per share but, if greater, will
be entitled to an aggregate dividend per share of 1,000 times the dividend
declared per share of Common Stock. In the event of liquidation, the holders of
shares of the Preferred Stock will be entitled to a minimum preferential
liquidation payment per share in an amount equal to the greater of $150 or
1,000 times the payment made per share of Common Stock plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series RP Liquidation Preference");
thereafter, and after the holders of shares of the Common Stock receive a
liquidation payment of an amount equal to the quotient obtained by dividing the
Series RP Liquidation Preference by 1,000 (subject to certain adjustments for
stock splits, stock dividends and recapitalizations with respect to the Common
Stock), the holders of shares of the Preferred Stock and the holders of the
Common Stock will share the remaining assets in the ratio of 1,000 to 1 (as
adjusted) for each share of Preferred Stock and Common Stock so held,
respectively. Finally, in the event of any merger, consolidation or other
transaction in which shares of Common Stock are exchanged, each share of
Preferred Stock will be entitled to receive 1,000 times the amount received per
share of Common Stock. These rights are protected by customary antidilution
provisions. In the event that the amount of accrued and unpaid dividends on the
Preferred Stock is equivalent to six full quarterly dividends or more, the
holders of shares of the Preferred Stock shall have the right, voting as a
class, to elect two directors in addition to the directors elected by the
holders of shares of the Common Stock until all cumulative dividends on the
Preferred Stock have been paid or set apart for payment through the last
quarterly dividend payment date. No fractional shares of Preferred Stock will be
issued (other than fractions which are one one-thousandth (1/1000th) or integral
multiples of one one-thousandth (1/1000th) of a share of Preferred Stock, which
may, at the election of the Corporation, be evidenced by
3
<PAGE> 61
depositary receipts) and in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Stock on the last trading day prior
to the date of exercise.
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price.
At any time prior to the earlier to occur of (i) a person
becoming an Acquiring Person or (ii) the expiration of the Rights, and under
certain other circumstances, the Corporation may redeem the Rights in whole, but
not in part, at a price (payable in cash or, at the Corporation's election, in
Common Stock) of $0.001 per Right (the "Redemption Price"), which redemption
shall be effective upon the action of the Board. Additionally, following the
Shares Acquisition Date, the Corporation may redeem the then outstanding Rights
in whole, but not in part, at the Redemption Price, provided that such
redemption is in connection with a merger or other business combination
transaction or series of transactions involving the Corporation in which all
holders of shares of Common Stock are treated alike but not involving an
Acquiring Person or its affiliates or associates.
Other than those provisions relating to the rights, duties and
obligations of the Rights Agent and certain principal economic terms of the
Rights, all of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Corporation prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board of Directors of the Corporation in order to cure any ambiguity, defect or
inconsistency, to make changes that do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or, subject
to certain limitations, to shorten or lengthen any time period under the Rights
Agreement.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Corporation, including, without
limitation, the right to vote or to receive dividends. While the distribution of
the Rights will not be taxable to stockholders of the Corporation, stockholders
may, depending upon the circumstances, recognize taxable income should the
Rights become exercisable or upon the occurrence of certain events thereafter.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Corporation.
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 hereby
incorporated herein by reference.
4
<PAGE> 1
EXHIBIT 99.1
<TABLE>
<S> <C>
FOR RELEASE RAYCHEM CORPORATION ADOPTS NEW STOCKHOLDER RIGHTS PLAN TO REPLACE
- ----------------------------- EXPIRING PLAN
December 11, 1998
Menlo Park, CA
Raychem Corporation's board of directors today adopted a new
CONTACT stockholder rights plan designed to protect stockholders in the event
- ----------------------------- of an unfriendly takeover by encouraging potential acquirors to
negotiate with the board. The plan is designed to assist Raychem
Spencer Sias stockholders in realizing fair value and equal treatment in the event
Manager of Public Relations of any attempted takeover. It will replace Raychem's existing
(650) 361-7840 stockholder rights plan which expires on February 13, 1999.
[email protected]
Under the new plan, stock purchase rights will be
distributed as a dividend at the rate of one
right for each share of common stock held at the
close of business on February 12, 1999. No
separate certificates evidencing the new rights
will be issued unless and until they become
exercisable.
In the event a person or group acquires 15
percent or more of Raychem's outstanding common
stock without prior approval of Raychem's board
of directors, the new stockholder rights plan
allows Raychem stockholders (other than the
unapproved acquiror and its affiliates) to
acquire, by payment of the then applicable
exercise price, Raychem common stock with a
market value equal to two times the exercise
price. The initial exercise price for the new
rights is $150, subject to adjustment in
accordance with the terms of the new stockholder
rights plan.
- MORE -
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
PAGE 2 RAYCHEM CORPORATION ADOPTS NEW STOCKHOLDER RIGHTS
- ---------------------------- PLAN TO REPLACE EXPIRING PLAN
Raychem's board of directors may redeem the new
rights for a nominal amount at any time prior to
an event that causes the new rights to become
exercisable. The new rights will expire on
February 12, 2009. The full details of the new
Raychem stockholder rights plan will be available
in an SEC filing on Form 8-K.
# # #
RAYCHEM CORPORATION RAYCHEM CORPORATION OF MENLO PARK, CALIFORNIA, IS
AN INTERNATIONAL COMPANY WITH APPROXIMATELY 9,000
EMPLOYEES MORE THAN 45 COUNTRIES AND REVENUES OF
$1.8 BILLION IN FISCAL 1998. THE COMPANY UTILIZES
EXPERTISE IN MATERIALS SCIENCE, ELECTRONICS, AND
PROCESS ENGINEERING TO DEVELOP, MANUFACTURE, AND
MARKET HIGH-PERFORMANCE PRODUCTS FOR ELECTRONICS
OEM BUSINESSES, AND TELECOMMUNICATIONS, ENERGY
AND INDUSTRIAL APPLICATIONS. INFORMATION ON
RAYCHEM IS AVAILABLE ON THE INTERNET AT
WWW.RAYCHEM.COM.
</TABLE>
