As filed with the Securities and Exchange Commission on March __, 1997
File No. ________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 8-A
For Registration of Certain Classes of Securities
Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
___________________________________
TRACOR, INC.
(Exact name of registrant as specified in its charter)
Delaware 74-2618088
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
6500 Tracor Lane, 78725-2000
Austin, Texas (Zip Code)
(Address of principal
executive offices)
If this Form relates to the registration of a class of debt securities
and is effective upon filing pursuant to General Instruction A.(c)(1),
please check the following box. [ ]
If this Form relates to the registration of a class of debt securities
and is to become effective simultaneously with the effectiveness of a
concurrent registration statement under the Securities Act of 1933
pursuant to General Instruction A.(c)(2), please check the following
box. [ ]
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None Not Applicable
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Share Purchase Rights
(Title of Class)
<PAGE>
Item 1. Description of Registrant's Securities to be Registered
On February 12, 1997, the Board of Directors of Tracor, Inc. (the
"Company") declared a dividend of one preferred share purchase right
(a "Right") for each outstanding share of common stock, par value $.01
per share (the "Common Shares"), of the Company. The dividend is
payable to the stockholders of record on February 17, 1997 (the
"Record Date"). Each Right entitles the registered holder to purchase
from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the referred
Shares"), of the Company at a price of $100.00 per one one-hundredth
of a Preferred Share (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 Company and Harris
Trust and Savings Bank, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") have acquired beneficial ownership of
20% or more of the outstanding Common Shares or (ii) 10 business days
(or such later date as may be determined by action of the Board of
Directors prior to such time as any person or group of affiliated
persons becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer
the consummation of which would result in the beneficial ownership by
a person or group of 20% or more of the outstanding Common Shares (the
earlier of such dates being called the "Distribution Date"), the
Rights will be evidenced, with respect to any of the Common Share
certificates outstanding as of the Record Date, by such Common Share
certificate with a copy of a Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights),
new Common Share certificates issued after the Record Date upon
transfer or new issuance of Common Shares will contain a notation
incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights),
the surrender for transfer of any certificates for Common Shares
outstanding as of the Record Date, even without such notation or a
copy of the Summary of Rights being attached thereto, will also
constitute the transfer of the Rights associated with the Common
Shares represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the
Rights ("Right Certificates") will be mailed to holders of record of
the Common Shares as of the close of business on the Distribution Date
and such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on February 17, 2007 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case, as
described below.
The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the grant to
holders of the Preferred Shares of certain rights or warrants to
subscribe for or purchase Preferred Shares at a price, or securities
convertible into Preferred Shares with a conversion price, less than
the then-current market price of the Preferred Shares or (iii) upon
the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid
out of earnings or retained earnings or dividends payable in Preferred
Shares) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also
subject to adjustment in the event of a stock split of the Common
Shares or a stock dividend on the Common Shares payable in Common
Shares or subdivisions, consolidations or combinations of the Common
Shares occurring, in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum
preferential quarterly dividend payment of $1.00 per share but will be
entitled to an aggregate dividend of 100 times the dividend declared
per Common Share. In the event of liquidation, the holders of the
Preferred Shares will be entitled to a minimum preferential
liquidation payment of $100.00 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share.
Each Preferred Share will have 100 votes, voting together with the
Common Shares. Finally, in the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each Preferred
Share will be entitled to receive 100 times the amount received per
Common Share. These rights are protected by customary antidilution
provisions.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a
Preferred Share purchasable upon exercise of each Right should
approximate the value of one Common Share.
In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated
assets or earning power are sold after a person or group has become an
Acquiring Person, proper provision will be made so that each holder of
a Right will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that number
of shares of common stock of the acquiring company which at the time
of such transaction will have a market value of two times the exercise
price of the Right. In the event that any person or group of
affiliated or associated persons becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right, other than
Rights beneficially owned by the Acquiring Person (which will
thereafter be void), will thereafter have the right to receive upon
exercise that number of Common Shares having a market value of two
times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group
which will have become void), in whole or in part, at an exchange
ratio of one Common Share, or one one-hundredth of a Preferred Share
(or of a share of a class or series of the Company's preferred stock
having equivalent rights, preferences and privileges), per Right
(subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at
least 1% in such Purchase Price. No fractional Preferred Shares will
be issued (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the
Preferred Shares on the last trading day prior to the date of
exercise.
At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 20% or
more of the outstanding Common Shares, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price"). The redemption of the Rights
may be made effective at such time on such basis with such conditions
as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights,
including an amendment to lower certain thresholds described above to
not less than the greater of (i) the sum of .001% and the largest
percentage of the outstanding Common Shares then known to the Company
to be beneficially owned by any person or group of affiliated or
associated persons and (ii) 10%, except that from and after such time
as any person or group of affiliated or associated persons becomes an
Acquiring Person no such amendment may adversely affect the interests
of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
Item 2. Exhibits
Exhibit
Number Document
------ --------
3.1 Restated Certificate of Incorporation, as amended
(incorporated by reference to the Company's Registration
Statement Number 333-03330 filed with the Securities and
Exchange Commission on April 10, 1996).
3.2 Bylaws of the Company, as amended and restated (incorporated
by reference to the Company's Registration Statement Number
333-03330 filed with the Securities and Exchange Commission
on April 10, 1996).
4.1 Rights Agreement, dated as of February 17, 1997, between the
Company and Harris Trust and Savings Bank, as Rights Agent,
which includes: as Exhibit A thereto, the Form of
Certificate of Designations of Series A Junior Participating
Preferred Stock, par value $0.01 per share, of the Company;
as Exhibit B thereto, the Form of Right Certificate; and as
Exhibit C thereto, the Summary of Rights to Purchase
Preferred Shares.
4.2 Form of legend to be placed, pursuant to Section 3(d) of the
Rights Agreement, on all new Common Stock certificates
issued by the Company after February 17, 1997 and prior to
the Distribution Date upon transfer, exchange or new
issuance.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
TRACOR, INC.
Date: March 18, 1997 By: /s/ James B. Skaggs
-------------------
James B. Skaggs
President
RIGHTS AGREEMENT
TRACOR, INC.
and
HARRIS TRUST AND SAVINGS BANK
as
Rights Agent
Dated as of February 17, 1997
<PAGE>
TABLE OF CONTENTS
Page
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 4
Section 3. Issue of Right Certificates 4
Section 4. Form of Right Certificates 6
Section 5. Execution, Countersignature and Registration 6
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates 7
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights 8
Section 8. Cancellation and Destruction of Right Certificates 10
Section 9. Reservation and Availability of Preferred Shares 10
Section 10. Preferred Shares Record Date 11
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights 12
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares 18
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power 18
Section 14. Fractional Rights and Fractional Shares 19
Section 15. Rights of Action 20
Section 16. Agreement of Right Holders 21
Section 17. Right Certificate Holder Not Deemed a Stockholder 21
Section 18. Concerning the Rights Agent 22
Section 19. Merger or Consolidation or Change of Name of
Rights Agent 22
Section 20. Duties of Rights Agent 23
Section 21. Change of Rights Agent 25
Section 22. Issuance of New Right Certificates 25
Section 23. Redemption 26
Section 24. Exchange 26
Section 25. Notice of Certain Events 28
Section 26. Notices 28
Section 27. Supplements and Amendments 29
Section 28. Successors 29
Section 29. Benefits of this Agreement 29
Section 30. Severability 30
Section 31. Governing Law 30
Section 32. Counterparts 30
Section 33. Descriptive Headings 30
Section 34. Determinations and Actions by the Board of
Directors, etc. 30
Signatures 47
Exhibit A - Form of Certificate of Designations
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
<PAGE>
RIGHTS AGREEMENT
Rights Agreement, dated as of February 17, 1997, between Tracor, Inc.,
a Delaware corporation (the "Company"), and Harris Trust and Savings
Bank, an Illinois banking corporation (the "Rights Agent").
Recitals:
The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each
Common Share (as hereinafter defined) of the Company outstanding on
February 17, 1997 (the "Record Date"), each Right representing the
right to purchase one one-hundredth of a Preferred Share (as
hereinafter defined), upon the terms and subject to the conditions
herein set forth, and has further authorized and directed the issuance
of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date
(as such terms are hereinafter defined).
Agreements:
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all
Affiliates and Associates (as such terms are hereinafter
defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 20% or more of the
Common Shares of the Company then outstanding; provided that
an Acquiring Person shall not include (i) an Exempt Person
(as such term is hereinafter defined) or (ii) any Person,
together with all Affiliates and Associates of such Person,
who or which would be an Acquiring Person solely by reason
of (A) being the Beneficial Owner of Common Shares, the
beneficial ownership of which was acquired by such Person
pursuant to any action or transaction or series of
transactions approved by the Board of Directors before such
Person became an Acquiring Person, or (B) a reduction in the
number of Common Shares outstanding, pursuant to a
transaction or series of transactions approved by the Board
of Directors; provided, however, that if a Person does not
become an Acquiring Person by reason of subclause (A) or (B)
of this clause (ii) and shall thereafter become the
Beneficial Owner of an additional 1% or more of the Common
Shares of the Company, then such Person shall be deemed to
be an "Acquiring Person". Notwithstanding the foregoing, if
the Board of Directors of the Company determines in good
faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of
this paragraph (a), has become such inadvertently, and such
Person divests as promptly as practicable a sufficient
number of Common Shares so that such Person would no longer
be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person
shall not be deemed to be an "Acquiring Person" for any
purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 promulgated
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly,
as determined pursuant to Rule 13d-3 promulgated under
the Exchange Act;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement
or understanding (other than customary agreements with
and between underwriters and selling group members with
respect to a bona fide public offering of securities),
or upon the exercise of conversion rights, exchange
rights, rights (other than these 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
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person
or any of such Person's Affiliates or Associates has
any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide
public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent
contemplated by the proviso to Section 1(c)(ii)(B)) or
disposing of any securities of the Company.
Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase "then
outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Company,
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.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State
of Texas or in the State of Illinois are authorized or
obligated by law or executive order to close.
(e) "Certificate of Designation" shall mean the Certificate of
Designations of Series A Junior Participating Preferred
Stock setting forth the powers, preferences, rights,
qualifications, limitations, and restrictions of such series
of Preferred Stock, a copy of which is attached as
Exhibit A.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
Dallas, Texas time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M.,
Dallas, Texas time, on the next succeeding Business Day.
(g) "Common Shares" when used with reference to the Company
shall mean the shares of (i) common stock, par value $0.01
per share of the Company. "Common Shares" when used with
reference to any Person other than the Company shall mean
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.
(h) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(i) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary of the Company, or (iii) any employee benefit
plan or employee stock plan of the Company, or any trust or
other entity organized, appointed, established or holding
Common Stock for or pursuant to the terms of any such plan.
(j) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(k) "Invalidation Time" shall have the meaning set forth in
Section 7 hereof.
(l) "Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or
otherwise) of such entity.
(m) "Preferred Shares" shall mean shares of Preferred Stock, par
value $.01 per share, of the Company having the rights and
preferences set forth in the Form of Certificate of
Designations attached to this Agreement as Exhibit A.
(n) "Record Date" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement.
(o) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(p) "Right Certificate" shall mean a certificate evidencing a
Right in substantially the form attached as Exhibit "B".
(q) "Rights" shall mean the rights to purchase Preferred Shares
(or other securities) as provided in this Rights Agreement.
(r) "Shares Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such.
(s) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the
voting equity securities or equity interest is beneficially
owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof, shall
prior to the Distribution Date also be the holders of the Common
Shares) in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may from
time to time appoint such co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Right Certificates.
(a) On the Record Date, or as soon as practicable thereafter,
the Rights Agent will send a copy of a Summary of Rights to
Purchase Preferred Shares, in substantially the form of
Exhibit C hereto (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Shares
as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company.
(b) Until the Close of Business on the day which is the earlier
of (i) the tenth day after the Shares Acquisition Date, or
(ii) the tenth business day (or such later date as may be
determined by action of the Board of Directors prior to such
time as any Person becomes an Acquiring Person) after the
commencement of, or first public disclosure of an intent to
commence, a tender or exchange offer by any Person (other
than an Exempt Person) for outstanding Common Shares, if
upon consummation of such tender or exchange offer such
Person could be the Beneficial Owner of more than 20% of the
outstanding Common Shares (the Close of Business on the
earlier of such dates being the "Distribution Date"),
(x) the Rights will be evidenced by the certificates for
Common Shares registered in the names of the holders thereof
and not by separate Right Certificates, and (y) the Rights,
including the right to receive Right Certificates, will be
transferable only in connection with the transfer of Common
Shares. As soon as practicable after the Distribution Date,
the Rights Agent will send, by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the
Distribution Date, at the address of such holder shown on
the records of the Company, a Right Certificate evidencing
one whole Right for each Common Share (or for the number of
Common Shares with which one whole Right is then associated
if the number of Rights per Common Share held by such record
holder has been adjusted in accordance with the provisions
of this Rights Agreement). If the number of Rights
associated with each Common Share has been adjusted in
accordance with this Agreement, at the time of distribution
of the Right Certificates the Company may make any necessary
and appropriate rounding adjustments so that Right
Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Right
in accordance with Section 14(a). As of and after the
Distribution Date, the Rights will be evidenced solely by
such Right Certificates.
(c) With respect to any certificate for Common Shares, until the
earliest of the Distribution Date, the Redemption Date or
the Expiration Date, the Rights associated with the Common
Shares represented by any such certificate shall be
evidenced by such certificate alone, the registered holders
of the Common Shares shall also be the registered holders of
the associated Rights and the surrender for transfer of any
such certificate shall also constitute the transfer of the
Rights associated with the Common Shares represented
thereby.
(d) Certificates issued for Common Shares after the Record Date
(including without limitation, upon transfer or exchange of
outstanding Common Shares), but prior to the earliest of the
Distribution Date, the Redemption Date or the Final
Expiration Date, may have printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights
Agreement dated as of February 17, 1997, as it may be
amended from time to time (the "Rights Agreement"),
between Tracor, Inc. (the "Company") and Harris Trust
and Savings Bank, as Rights Agent (the "Rights Agent"),
the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the
principal executive offices of the Company. Under
certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Rights Agent will mail to the holder
of this certificate a copy of the Rights Agreement
without charge after receipt of a written request
therefor. Under certain circumstances, as set forth in
the Rights Agreement, Rights issued to any Person who
becomes an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as defined in the
Rights Agreement) may become null and void.
Section 4. Form of Right Certificates.
The Right Certificates (and the forms of election to purchase
Preferred Shares and of assignment to be printed on the reverse
thereof) shall be in substantially the form set forth as Exhibit B
hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any applicable
law 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 22 hereof, the Right Certificates shall entitle
the holders thereof to purchase such number of one one-hundredths of a
Preferred Share as shall be set forth therein at the price per one
one-hundredth of a Preferred Share set forth therein (the "Purchase
Price"), but the number of such one one-hundredths of a Preferred
Share and the Purchase Price shall be subject to adjustment as
provided herein.
Section 5. Execution, Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial Officer, any
Vice President, or the Treasurer, either manually or by
facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof, and shall be attested
by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such
Right Certificates, nevertheless, may be countersigned by
the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be
signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate,
shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal office, books for
registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number
of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) 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 on the reverse side
thereof duly executed, to the Rights Agent at the principal
office of the Rights Agent, together with payment of the
Purchase Price for each one one-hundredth of a Preferred
Share as to which the Rights are exercised, at or prior to
the earliest of (i) the close of business on February 17,
2007 (the "Final Expiration Date"), (ii) the time at which
the Rights are redeemed as provided in Section 23 hereof
(the "Redemption Date"), or (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a Preferred
Share purchasable pursuant to the exercise of a Right shall
initially be $100.00, and shall be subject to adjustment
from time to time as provided in Section 11 or 13 hereof and
shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the shares
to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified
check, cashier's check or money order payable to the order
of the Company, the Rights Agent shall thereupon promptly
(i) (A) requisition from any transfer agent of the Preferred
Shares certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B)
requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a
Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the
depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) 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, deliver such cash to or upon the
order of the registered holder of such Right Certificate;
provided, however, that in the case of a purchase of
securities, other than Preferred Stock, pursuant to
Section 13 hereof, the Rights Agent shall promptly take the
appropriate actions corresponding in such case to that
referred to in the foregoing clauses (i) through (v) of this
Section 7(c). Notwithstanding the foregoing provisions of
this Section 7(c), the Company may suspend the issuance of
shares of Preferred Stock upon exercise of a Right for a
reasonable period, not in excess of 90 days, during which
the Company seeks to register under the Securities Act of
1933, as amended (the "Act"), and any applicable securities
law of any other jurisdiction, the shares of Preferred Stock
to be issued pursuant to the Rights; provided, however, that
nothing contained in this Section 7(c) shall relieve the
Company of its obligations under Section 9(c) hereof.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to
the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding any provision of this Rights Agreement to
the contrary, from and after the time (the "Invalidation
Time") when any Person first becomes an Acquiring Person,
any Rights that are beneficially owned by (x) such Acquiring
Person (or any Associate or Affiliate of such Acquiring
Person), (y) a transferee of such Acquiring Person (or any
such Associate or Affiliate) who becomes a transferee after
the Invalidation Time or (z) a transferee of such Acquiring
Person (or any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Invalidation
Time pursuant to either (1) a transfer from the Acquiring
Person to holders of its equity securities or to any Person
with whom it has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (2) a
transfer which the Board has determined is part of a plan,
arrangement or understanding which has the purpose or effect
of avoiding the provisions of this Section 7(e), and
subsequent transferees of such Persons referred to in
clauses (y) and (z) above, shall be void without any further
action and any holder of such Rights shall thereafter have
no rights whatsoever with respect to such Rights under any
provision of this Rights Agreement. The Company shall use
all reasonable efforts to ensure that the provisions of this
Section 7(e) are complied with, but shall have no liability
to any holder of Right Certificates or any other Person as a
result of its failure to make any determination with respect
to an Acquiring Person or its Affiliates, Associates or
transferees hereunder. No Right Certificate shall be issued
pursuant to Section 3 hereof that represents Rights
beneficially owned by an Acquiring Person whose Rights would
be void pursuant to the provisions of this Section 7(e) or
any Associate or Affiliate thereof; no Right Certificate
shall be issued at any time upon the transfer of any Rights
to an Acquiring Person whose Rights would be void pursuant
to the provisions of this Section 7(e) or any Associate or
Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Right Certificate
delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights would be void pursuant to the provisions
of this Section 7(e) shall be cancelled.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated
to undertake any action with respect to a registered holder
upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate following the form
of election to purchase set forth on the reverse side of the
Right Certificate surrendered for such exercise and
(ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to
the Company or to any of its agents, be delivered to the Rights Agent
for cancellation or in cancelled form, or, if surrendered to the
Rights Agent, shall be cancelled by it, and no Right Certificates
shall be issued in lieu thereof except as expressly permitted by any
of the provisions of this Rights Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Shares.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and
unissued Preferred Shares or any Preferred Shares held in
its treasury, the number of Preferred Shares that will be
sufficient to permit the exercise in full of all outstanding
Rights.
(b) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred
Shares delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and
nonassessable shares.
(c) The Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares
of Preferred Stock issued or reserved for issuance in
accordance with this Rights Agreement to be listed, upon
official notice of issuance, upon the principal national
securities exchange, if any, upon which the Common Stock is
listed or, if the principal market for the Common Stock is
not on any national securities exchange, to be eligible for
quotation in the National Association of Securities Dealers'
Automated Quotation System or any successor thereto or other
comparable quotation system.
(d) The Company shall use its best efforts to (i) file, as soon
as practicable following the earliest date after the first
occurrence of an event under Section 11(a)(ii), 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 (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date
as of which the Rights are no longer exercisable for such
securities, and (B) the date of the expiration of the
Rights. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause
(i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file
such registration statement and permit it to become
effective. The Company will notify the Rights Agent of any
such suspension. Upon any such suspension, the Company
shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the
suspension is no longer in effect. In addition, if the
Company shall determine that a registration statement is
required following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights until
such time as a registration statement has been declared
effective. Notwithstanding any provision of this Agreement
to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such
jurisdiction shall not have been obtained, the exercise
thereof shall not be permitted under applicable law or a
registration statement shall not have been declared
effective.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any
Preferred Shares upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery
of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts
for the Preferred Shares 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 Preferred Shares
upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of
such Right Certificate at the time of surrender) or until it
has been established to the Company's reasonable
satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each person in whose
name any certificate for Preferred Shares is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder
of record of the Preferred Shares represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon
which the Preferred Shares transfer books of the Company are closed,
such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Shares transfer books of the
Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to
any rights of a holder of Preferred Shares for which the Rights shall
be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of Preferred Shares
covered by each Right and the number of Rights outstanding are subject
to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the
Preferred Shares payable in Preferred Shares, (B) subdivide
the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital
stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a
consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the
effective date of such subdivision, combination or
reclassification, and the number and kind of shares of
capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which,
if such Right had been exercised immediately prior to such
date and at a time when the Preferred Shares transfer books
of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in the event
any Person (other than an Exempt Person) becomes an
Acquiring Person, each holder of a Right shall
thereafter have a right to receive, upon exercise
thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-hundredths of
a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number
of Common Shares of the Company as shall equal the
result obtained by (A) multiplying the then current
Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable
and (B) dividing that product by 50% of the then
current per share market price of the Company's Common
Shares (determined pursuant to Section 11(d) hereof) on
the date of the occurrence of such event. In the event
that any Person shall become an Acquiring Person and
the Rights shall then be outstanding, the Company shall
not, except as permitted by Section 23, take any action
which would eliminate or diminish the benefits intended
to be afforded by the Rights.
(iii) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized
but unissued to permit the adjustments required
pursuant to the foregoing subparagraph (i) or the
exercise in full of the Rights in accordance with the
foregoing subparagraph (ii), the Company shall take all
such action as may be necessary to authorize such
number of additional Common Shares for issuance upon
exercise of the Rights. In the event the Company
shall, after good faith effort, be unable to take all
such action as may be necessary to authorize such
additional Common Shares, the Company shall substitute,
for each Common Share that would otherwise be issuable
upon exercise of a Right, a number of Preferred Shares
or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such
number or fraction is equal to the current per share
market price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred
Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or
purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares
("equivalent preferred shares")) or securities convertible
into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or
having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred
shares) less than the then current per share market price
(as defined in Section 11(d)) of the Preferred Shares on
such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the
number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares
and/or equivalent preferred shares so to be offered (and/or
the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current
market price and the denominator of which shall be the
number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription
or purchase (or into which the convertible securities so to
be offered are initially convertible); provided, however,
that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may
be paid in a consideration part or all of which shall be in
a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent.
Preferred Shares owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in
the event that such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of the Preferred Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred Shares) or
subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be
the then current per share market price of the Preferred
Shares on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to one
Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares;
provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the
Company to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a
record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again
be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a
"Security" for the purpose of this Section 11(d)(i)) on any
date shall be deemed to be the average of the daily closing
prices per share of such Security for the 30 consecutive
Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in
the event that the current per share market price of the
Security is determined during a period following the
announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares
of such Security or securities convertible into such shares,
or (B) any subdivision, combination or reclassification of
such Security and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such
case, the current per share market price shall be
appropriately adjusted to reflect the current market price
per share equivalent of such Security. The closing price
for each day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either
case as reported 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 Company. The term "Trading Day" shall
mean a day on which the principal national securities
exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the
Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred
Shares shall be determined in accordance with the
method set forth in Section 11(d)(i). If the Preferred
Shares are not publicly traded, the "current per share
market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market
price of the Common Shares as determined pursuant to
Section 11(d)(i) (appropriately adjusted to reflect any
stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by one
hundred. If neither the Common Shares nor the
Preferred Shares are publicly held or so listed or
traded, "current per share market price" shall mean the
fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights
Agent.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at
least 1% in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or
to the nearest one one-millionth of a Preferred Share or one
ten-thousandth of any other share or security as the case
may be. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years from the
date of the transaction which requires such adjustment or
(ii) the date of the expiration of the right to exercise any
Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock
of the Company other than Preferred Shares, thereafter the
number of such 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 Shares
contained in Section 11(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10 and 13 with respect to the
Preferred Shares shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase
Price, the number of one one-hundredths of a Preferred Share
purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the
Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase
Price, that number of one one-hundredths of a Preferred
Share (calculated to the nearest one one-millionth of a
Preferred Share) obtained by (i) multiplying (x) the number
of one one-hundredths of a share covered by a Right
immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of one
one-hundredths of a Preferred Share purchasable upon the
exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable
for the number of one one-hundredths of a Preferred Share
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 Company shall make a public
announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known
at the time, the amount of the adjustment to be made. 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 10 days
later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed
to holders of record of Right Certificates on such record
date Right Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option
of the Company, shall cause to be distributed to such
holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein
and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths of a Preferred
Share 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-hundredths of a Preferred Share which were expressed in
the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the
then par value, if any, of the Preferred Shares issuable
upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Preferred Shares
at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date of the
Preferred Shares and other capital stock or securities of
the Company, if any, issuable upon such exercise over and
above the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company
shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in
its sole discretion shall determine to be advisable in order
that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any Preferred Shares at
less than the current market price, issuance wholly for cash
of Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or
issuance of rights, options or warrants referred to
hereinabove in Section 11(b), hereafter made by the Company
to holders of its Preferred Shares shall not be taxable to
such stockholders.
(n) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on the Common Shares
payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends
in Common Shares) into a greater or lesser number of Common
Shares, then in any such case (A) the number of one
one-hundredths of a Preferred Share purchasable after such
event upon proper exercise of each Right shall be determined
by multiplying the number of one one-hundredths of a
Preferred Share so purchasable immediately prior to such
event by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and
the denominator of which is the number of Common Shares
outstanding immediately after such event, and (B) each
Common Share outstanding immediately after such event shall
have issued with respect to it that number of Rights which
each Common Share outstanding immediately prior to such
event had issued with respect to it. The adjustments
provided for in this Section 11(n) shall be made
successively whenever such a dividend is declared or paid or
such a subdivision, combination or consolidation is
effected.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or
13 hereof, the Company shall promptly (a) prepare a certificate
setting forth such adjustment, and a brief statement of the facts
accounting for such adjustment, (b) file with the Rights Agent and
with each transfer agent for the Common Shares or the Preferred Shares
a copy of such certificate and (c) mail a brief summary thereof to
each holder of a Right Certificate in accordance with Section 25
hereof. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained, and shall
not be obligated or responsible for calculating any adjustment, nor
shall it be deemed to have knowledge of such an adjustment unless and
until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. In the event, directly or indirectly, at any time
after a Person has become an Acquiring Person, (a) the Company shall
consolidate with, or merge with and into, any other Person, (b) any
Person shall consolidate with the Company, or merge with and into the
Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or
part of the Common Shares and/or the Preferred Shares shall be changed
into or exchanged for stock or other securities of any other Person
(or the Company) or cash or any other property, or (c) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more transactions, assets
or earning power aggregating 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any
other Person other than the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision shall be
made so that (i) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price multiplied
by the number of one one-hundredths of a Preferred Share for which a
Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common
Shares of such other Person (including the Company as successor
thereto or as the surviving corporation) as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the
number of one one-hundredths of a Preferred Share for which a Right is
then exercisable and dividing that product by (B) 50% of the then
current per share market price of the Common Shares of such other
Person (determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) the
issuer of such Common Shares shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such
issuer; and (iv) such issuer shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common
Shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in
relation to the Common Shares thereafter deliverable upon the exercise
of the Rights. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the
Company and such issuer shall have executed and delivered to the
Rights Agent a supplemental agreement so providing and further
providing that, as soon as practicable after the date of any such
consolidation, merger or sale of assets, the issuer will:
(x) prepare and file a registration statement under the Act with
respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use
its best efforts to cause such registration statement to
(1) become effective as soon as practicable after such
filing and (2) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the
Expiration Date; and
(y) deliver to holders of the Rights historical financial
statements for the issuer and each of its Affiliates which
comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The Company shall not enter into any transaction of the kind referred
to in this Section 13 if at the time of such transaction there are any
rights, warrants, instruments or securities outstanding or any
agreements or arrangements which, as a result of the consummation of
such transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights. The provisions of
this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right.
For the purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the
New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which the Rights are listed
or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights
on such date as determined in good faith by the Board of
Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share) upon
exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-hundredth of a
Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at
the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the
Company and a depositary selected by it; provided, that such
agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners
of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are
not integral multiples of one one-hundredth of a Preferred
Share, the Company 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 Preferred Share. For the
purposes of this Section 14(b), the current market value of
a Preferred Share shall be the closing price of a Preferred
Share (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights
or any fractional shares upon exercise of a Right (except as
provided above).
Section 15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights
Agent under Section 18 hereof, are vested in the respective registered
holders of the Right Certificates (and, prior to the Distribution
Date, the registered holders of the Common Shares); and any registered
holder of any Right Certificate (or, prior to the Distribution Date,
of the Common Shares), without the consent of the Rights Agent or of
the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and
for his own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act
in respect of, his right to exercise the Rights 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.
Section 16. Agreement of Right Holders. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the
Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent
if surrendered at the principal office of the Rights Agent,
duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate)
is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the
associated Common Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a
result of the Company's or Rights Agent's inability to
perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other
order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the
Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. 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 the
Preferred Shares or any other securities of the Company which may at
any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided
in Section 25 hereof), or to receive dividends 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.
Section 18. Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered
by it hereunder and, from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without negligence
or willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses
of defending against any claim of liability in the premises. The
indemnification provided for hereunder shall survive the expiration of
the Rights, the termination of this Agreement, and the resignation or
removal of the Rights Agent. The costs and expenses of enforcing this
right of indemnification shall also be paid by the Company.
The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon
any Right Certificate or certificate for the Preferred Shares or
Common Shares or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which
the Rights Agent or any successor Rights Agent shall be a party, or
any corporation succeeding to the stock transfer or corporate trust
powers of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any
of the parties hereto; provided, that such corporation would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either
in the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in
this Agreement.
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.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be
bound:
(a) Before the Rights Agent acts or refrains from acting, it may
consult with legal counsel (who may be legal counsel for the
Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own negligence or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of
any Right Certificate (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof)
or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Section 3,
11, 13, 23 or 24, or the ascertaining of the existence of
facts that would require any such change or adjustment
(except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be
issued pursuant to this Agreement or any Right Certificate
or as to whether any Preferred Shares will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President,
the Secretary or the Treasurer of the Company, and to apply
to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action
taken or suffered by it in good faith in accordance with
instructions of any such officer or for any delay in acting
while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to
the Company or otherwise act as fully and freely as though
it were not Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and
the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting
from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) The Rights Agent shall not be required to take notice or be
deemed to have notice of any fact, event or determination
(including, without limitation, any dates or events defined
in this Agreement or the designation of any Person as an
Acquiring Person, Affiliate or Associate) under this
Agreement unless and until the Rights Agent shall be
specifically notified in writing by the Company of such
fact, event or determination.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Agreement upon 30 days' notice in writing mailed to the
Company and to each transfer agent of the Common Shares or Preferred
Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Shares or
Preferred Shares by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If
the Company shall fail to make such appointment within a period of 30
days after giving notice of such removal or after it has been notified
in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United
States or of the State of Texas (or of any other state of the United
States so long as such corporation is authorized to do business as a
bank or trust company, in good standing, having an office or agency in
the State of Texas, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time
of its appointment as Rights Agent a combined capital and surplus of
at least $50 million. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company
shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares or Preferred Shares, and
mail a notice thereof in writing to the registered holders of the
Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent
or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such 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.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option, at
any time prior to the earlier of (i) the close of business
on the tenth Business Day following the date on which any
Person becomes an Acquiring Person (or if such date shall
have occurred prior to the Record Date, the close of
business on the tenth Business Day following the Record
Date) or (ii) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption
price of $.01 per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price").
Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the
first occurrence of an event under Section 11(a)(ii) until
such time as the Company's right of redemption hereunder as
extended (if applicable) has expired. The redemption of the
Rights by the Board of Directors may be made effective at
such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to
paragraph (a) of this Section 23, 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.
The Company shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or
any defect in, any such notice shall not affect the validity
of such redemption. Within 10 days after such action of the
Board of Directors ordering the redemption of the Rights,
the Company shall mail a notice of redemption to all the
holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares.
Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be
made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24
hereof, and other than in connection with the purchase of
Common Shares prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company 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 void
pursuant to the provisions of Section 11(a)(ii) hereof) for
Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the
date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the
Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity
holding Common Shares for or pursuant to the terms of any
such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial owner of 50% or more of
the Common Shares then outstanding
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24 and without any further
action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of
Common Shares equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such
exchange. The Company 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
will state the method by which the exchange of the Common
Shares for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued
to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all
such action as may be necessary to authorize additional
Common Shares for issuance upon exchange of the Rights. In
the event the Company shall, after good faith effort, be
unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be
issuable upon exchange of a Right, a number of Preferred
Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such
number or fraction is equal to the current per share market
price of one Common Share as of the date of issuance of such
Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence
fractional Common Shares. In lieu of such fractional Common
Shares, the Company shall pay to the registered holders of
the Right Certificates with regard to which such fractional
Common Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a
whole Common Share. For the purposes of this paragraph (d),
the current market value of a whole Common Share shall be
the closing price of a Common Share (as determined pursuant
to the second sentence of Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of exchange
pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend
payable in stock of any class to the holders of its
Preferred Shares or to make any other distribution to the
holders of its Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of
its Preferred Shares rights or warrants to subscribe for or
to purchase any additional Preferred Shares or shares of
stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving
only the subdivision of outstanding Preferred Shares), (iv)
to effect any consolidation or merger into or with, or to
effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer),
in one or more transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as
a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or
(vi) to declare or pay any dividend on the Common Shares
payable in Common Shares or to effect a subdivision,
combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends
in Common Shares), then, in each such case, the Company
shall give to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes
of such stock dividend, or distribution of rights or
warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares
and/or Preferred Shares, if any such date is to be fixed,
and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior
to the record date for determining holders of the Preferred
Shares for purposes of such action, and in the case of any
such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such
event and the consequences of such event to holders of
Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of
any Right Certificate to or on the Company shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:
Tracor, Inc.
6500 Tracor Lane
Austin, Texas 78725
Attention: Russell E. Painton, Esq.
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by
the holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Harris Trust and Savings Bank
311 West Monroe Street
Chicago, Illinois 60606
Attention: Corporate Trust Department - Keith Bradley
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate
shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. The Company may from time
to time supplement or amend this Agreement without the approval of any
holders of Right Certificates in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, or to make
any other provisions with respect to the Rights which the Company may
deem necessary or desirable, any such supplement or amendment to be
evidenced by a writing signed by the Company and the Rights Agent;
provided, however, that from and after such time as any Person becomes
an Acquiring Person, this Agreement shall not be amended in any manner
which would adversely affect the interests of the holders of Rights
(other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); and provided, further, this Agreement may not be
supplemented or amended to lengthen (i) a time period relating to when
the Rights may be redeemed at such time as the Rights are not then
redeemable or (ii) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or
amendment shall be made that changes the Redemption Price, the Final
Expiration Date, the Purchase Price or the number of one-hundredths of
Preferred Shares for which a Right is exercisable.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares)
any legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares).
Section 30. 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; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that
severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the close of business on the tenth day
following the date of such determination by the Board of Directors.
Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Texas and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such
State.
Section 32. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 33. 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.
Section 34. Determinations and Actions by the Board of Directors,
etc. The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board or to the Company,
or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to
(i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of
this Agreement (including a determination to redeem or not redeem the
Rights or to amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for the purposes of
clause (B) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith, shall (A) be final,
conclusive and binding on the Company, the Rights Agent, the holders
of the rights and all other parties, and (B) not subject the Board to
any liability to the holder of the Rights.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above
written.
TRACOR, INC.
Attest:
By: /s/ Roger W. Sadler By: /s/ James B. Skaggs
------------------- -------------------
Title: Vice President Title: President
HARRIS TRUST AND SAVINGS BANK
Attest:
By: /s/ John Yalenes By: /s/ Joseph McFadden
------------------- -------------------
Title: Vice President Title: Vice President
<PAGE>
EXHIBITS TO
RIGHTS AGREEMENT
Exhibit A -- FORM OF CERTIFICATE OF DESIGNATIONS
Exhibit B -- FORM OF RIGHT CERTIFICATE
Exhibit C -- SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
<PAGE>
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
TRACOR, INC.
(Pursuant to Section 151 of the,
Delaware General Corporation Law)
___________________________
Tracor, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was
adopted by the Board of Directors of the Corporation as required by
Section 151 of the General Corporation Law at a meeting duly called
and held on February 12, 1997:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board
of Directors" or the "Board") in accordance with the provisions of the
Certificate of Incorporation, the Board of Directors hereby creates a
series of Preferred Stock, par value $.01 per share (the "Preferred
Stock"), of the Corporation and hereby states the designation and
number of shares, and fixes the relative rights, preferences, and
limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock"
(the "Series A Preferred Stock") and the number of shares constituting
the Series A Preferred Stock shall be 500,000. Such number of shares
may be increased or decreased by resolution of the Board of Directors;
provided, that no decrease shall reduce the number of shares of Series
A Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the
conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
Section (A) Subject to the rights of the holders of any
shares of any series of Preferred Stock (or any similar stock)
ranking prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred
Stock, in preference to the holders of Common Stock, par value
$.01 per share (the "Common Stock"), of the Corporation, and of
any other junior stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on
the first day of 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 A 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 hereinafter set
forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable
in kind) of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock
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 A Preferred Stock. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the amount to which
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section (B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (A) of this Section 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 A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
Section (C) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series A Preferred Stock from
the Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of
Series A 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 A 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 A Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which record date
shall be not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
Section (A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Preferred Stock
shall entitle the holder thereof to 100 votes on all matters
submitted to a vote of the stockholders of the Corporation. In
the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying
such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such
event.
Section (B) Except as otherwise provided herein, in any
other Certificate of Designations creating a series of Preferred
Stock or any similar stock, or by law, the holders of shares of
Series A Preferred Stock and the holders of shares of Common
Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
Section (C) Except as set forth herein, or as otherwise
provided by law, holders of Series A Preferred Stock shall have
no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
Section (A) Whenever quarterly dividends or other
dividends or distributions payable on the Series A 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 A Preferred Stock
outstanding shall have been paid in full, the Corporation shall
not:
(i) 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 A Preferred Stock;
(ii) 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 A Preferred Stock, except dividends paid
ratably on the Series A 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;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up)
to the Series A Preferred Stock, provided that the
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 A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of
stock ranking on a parity with the Series A 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.
Section (B) The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise acquire
for consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A 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, or in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock
or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall
have received $100.00 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount to be distributed
per share to holders of shares of Common Stock, or (2) to the holders
of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred
Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other
property, then in any such case each share of Series A Preferred Stock
shall at the same time be similarly exchanged or changed into an
amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock)
into a greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Preferred
Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock
shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets,
junior to all series of any other class of the Corporation's Preferred
Stock.
Section 10. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially
alter or change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series A Preferred Stock, voting together as a
single class.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its Chairman of the Board and attested by
its Secretary this ______ day of February, 1997.
_____________________
Chairman of the Board
Attest:
____________________
Secretary
<PAGE>
Exhibit B
Form of Right Certificate
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER FEBRUARY 17, 2007 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT.
RIGHT CERTIFICATE
TRACOR, INC.
This certifies that Tracor, Inc., 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 February 17, 1997 (the
"Rights Agreement"), between Tracor, Inc., a Delaware corporation (the
"Company"), and Harris Trust and Savings Bank, an Illinois banking
corporation (the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 P.M., Dallas, Texas time, on
February 17, 2007 at the principal office of the Rights Agent, or at
the office of its successor as Rights Agent, one one-hundredth of a
fully paid non-assessable share of Series A Junior Participating
Preferred Stock, par value $.01 per share (the "Preferred Shares"), of
the Company, at a purchase price of $100.00 per one one-hundredth of a
Preferred Share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to
Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths of a Preferred Share
which may be purchased upon exercise hereof) set forth above, and the
Purchase Price set forth above, are the number and Purchase Price as
of February 17, 1997, based on the Preferred Shares as constituted at
such date. As provided in the Rights Agreement, the Purchase Price
and the number of one one-hundredths of a Preferred Share which may be
purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the
happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a
full description of the rights, limitations of rights, obligations,
duties and immunities hereunder of the Rights Agent, the Company and
the holders of the Right Certificates. Copies of the Rights Agreement
are on file at the principal executive offices of the Company and the
above-mentioned offices 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 Preferred Shares as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon
surrender hereof another Right Certificate or Right Certificates for
the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged in whole
or in part for Preferred Shares or shares of the Company's Common
Stock, par value $.01 per share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share, which
may, at the election of the Company, be evidenced by depositary
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 the
Preferred Shares or of any other securities of the Company which may
at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon
any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice
of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced
by this Right Certificate 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 Company
and its corporate seal. Dated as of February ___, 1997.
ATTEST: TRACOR, INC.
____________________ By: _______________________
Name: _______________________
Title: _______________________
Countersigned:
HARRIS TRUST AND SAVINGS BANK
By: _______________________
Name: _______________________
Title: _______________________
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, to transfer the within Right
Certificate on the books of the within-named Company, with full power
of substitution.
Dated: ____________________, 1997
_____________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having
an office or correspondent in the United States.
---------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights
Agreement).
_____________________________
Signature
---------------------------------------------------------------------
<PAGE>
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: TRACOR, INC.
The undersigned hereby irrevocably elects to exercise
___________________________ Rights represented by this Right
Certificate to purchase the Preferred Shares issuable upon the
exercise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
---------------------------------------------------------------------
(Please print name and address)
---------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining
of such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
---------------------------------------------------------------------
(Please print name and address)
---------------------------------------------------------------------
Dated: ____________________, 1997
_____________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having
an office or correspondent in the United States.
---------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights
Agreement).
_____________________________
Signature
---------------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon
the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is
not completed, the Company and the Rights Agent will deem the
beneficial owner of the Rights evidenced by this Right Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and such Assignment or Election to
Purchase will not be honored.
<PAGE>
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On February 12, 1997, the Board of Directors of Tracor, Inc. (the
"Company") declared a dividend of one preferred share purchase right
(a "Right") for each outstanding share of common stock, par value $.01
per share (the "Common Shares"), of the Company. The dividend is
payable on February 17, 1997 (the "Record Date") to the stockholders
of record on that date. Each Right entitles the registered holder to
purchase from the Company one one-hundredth of a share of Series A
Junior Participating Preferred Stock, par value $.01 per share (the
referred Shares"), of the Company at a price of $100.00 per one
one-hundredth of a Preferred Share (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 Company and
Harris Trust and Savings Bank, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") have acquired beneficial ownership of
20% or more of the outstanding Common Shares or (ii) 10 business days
(or such later date as may be determined by action of the Board of
Directors prior to such time as any person or group of affiliated
persons becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer
the consummation of which would result in the beneficial ownership by
a person or group of 20% or more of the outstanding Common Shares (the
earlier of such dates being called the "Distribution Date"), the
Rights will be evidenced, with respect to any of the Common Share
certificates outstanding as of the Record Date, by such Common Share
certificate with a copy of this Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights),
new Common Share certificates issued after the Record Date upon
transfer or new issuance of Common Shares will contain a notation
incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights),
the surrender for transfer of any certificates for Common Shares
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 Common
Shares represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the
Rights ("Right Certificates") will be mailed to holders of record of
the Common Shares as of the close of business on the Distribution Date
and such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on February 17, 2007 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case, as
described below.
The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the grant to
holders of the Preferred Shares of certain rights or warrants to
subscribe for or purchase Preferred Shares at a price, or securities
convertible into Preferred Shares with a conversion price, less than
the then-current market price of the Preferred Shares or (iii) upon
the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid
out of earnings or retained earnings or dividends payable in Preferred
Shares) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also
subject to adjustment in the event of a stock split of the Common
Shares or a stock dividend on the Common Shares payable in Common
Shares or subdivisions, consolidations or combinations of the Common
Shares occurring, in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum
preferential quarterly dividend payment of $1.00 per share but will be
entitled to an aggregate dividend of 100 times the dividend declared
per Common Share. In the event of liquidation, the holders of the
Preferred Shares will be entitled to a minimum preferential
liquidation payment of $100.00 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share.
Each Preferred Share will have 100 votes, voting together with the
Common Shares. Finally, in the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each Preferred
Share will be entitled to receive 100 times the amount received per
Common Share. These rights are protected by customary antidilution
provisions.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a
Preferred Share purchasable upon exercise of each Right should
approximate the value of one Common Share.
In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated
assets or earning power are sold after a person or group has become an
Acquiring Person, proper provision will be made so that each holder of
a Right will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that number
of shares of common stock of the acquiring company which at the time
of such transaction will have a market value of two times the exercise
price of the Right. In the event that any person or group of
affiliated or associated persons becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right, other than
Rights beneficially owned by the Acquiring Person (which will
thereafter be void), will thereafter have the right to receive upon
exercise that number of Common Shares having a market value of two
times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group
which will have become void), in whole or in part, at an exchange
ratio of one Common Share, or one one-hundredth of a Preferred Share
(or of a share of a class or series of the Company's preferred stock
having equivalent rights, preferences and privileges), per Right
(subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at
least 1% in such Purchase Price. No fractional Preferred Shares will
be issued (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the
Preferred Shares on the last trading day prior to the date of
exercise.
At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 20% or
more of the outstanding Common Shares, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price"). The redemption of the Rights
may be made effective at such time on such basis with such conditions
as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights,
including an amendment to lower certain thresholds described above to
not less than the greater of (i) the sum of .001% and the largest
percentage of the outstanding Common Shares then known to the Company
to be beneficially owned by any person or group of affiliated or
associated persons and (ii) 10%, except that from and after such time
as any person or group of affiliated or associated persons becomes an
Acquiring Person no such amendment may adversely affect the interests
of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.
<PAGE>
Form of Legend to be Placed on Common Stock Certificates
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement dated as of February
17, 1997, as it may be amended from time to time (the "Rights
Agreement"), between Tracor, Inc. (the "Company") and Harris Trust and
Savings Bank, as Rights Agent (the "Rights Agent"), the terms of which
are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
by this certificate. The Rights Agent will mail to the holder of this
certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain circumstances,
as set forth in the Rights Agreement, Rights issued to any Person who
becomes an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as defined in the Rights Agreement) may become null
and void.
