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
U.S. ROBOTICS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-2884848
(State of incorporation or organization) (IRS Employer
Identification No.)
8100 North McCormick Boulevard
Skokie, Illinois 60076-2999
(Address of principal executive office) (Zip Code)
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 Stock Purchase Rights
(Title of Class)
<PAGE>
Item 1. Description of Registrant's Securities to be Registered
On May 9, 1996, the Board of Directors of U.S. Robotics
Corporation (the "Company") approved the replacement of its
stockholder rights plan (the "Old Plan") with a new rights plan.
To put the new plan into effect, the Board declared a dividend
distribution of one Right for each outstanding share of common
stock, par value $.01 per share (the "Common Stock"), of the
Company to stockholders of record at the close of business on May
31, 1996. Except as described below, each Right, when
exercisable, entitles the registered holder to purchase from the
Company one one-hundredth of a share of Series B Junior
Participating Preferred Stock, par value $.01 per share (the
"Preferred Stock"), at a price of $500.00 per one one-hundredth
share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") dated as of May 9, 1996
between the Company and Harris Trust and Savings Bank, as Rights
Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no
separate Right certificates will be distributed. 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") has acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the outstanding
shares of Common Stock (the "Shares Acquisition Date") or (ii) 15
business days (or such later date as may be determined by action
of the Board of Directors of the Company (the "Board of
Directors") prior to the time that any person becomes an
Acquiring Person) following the commencement of (or a public
announcement of an intention to make) a tender or exchange offer
if, upon consummation thereof, such person or group would be the
beneficial owner of 15% or more of such outstanding shares of
Common Stock (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced by the Common
Stock certificates together with a copy of the Summary of Rights
Plan and not by separate certificates.
The Rights Agreement also provides that, until the
Distribution Date, the Rights will be transferred with and only
with the Common Stock. Until the Distribution Date (or earlier
redemption, expiration or termination of the Rights), the
transfer of any certificates for Common Stock, with or without a
copy of this Summary of Rights Plan, will also constitute the
transfer of the Rights associated with the Common Stock
represented by such certificates. 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 Stock as of the close of business on the
Distribution Date and, thereafter, such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date
and will expire at the earliest of (i) May 31, 2006 (the "Final
Expiration Date"), (ii) the redemption of the Rights by the
Company as described below and (iii) the exchange of all Rights
for Common Stock as described below.
In the event that any person (other than the Company, its
affiliates or any person receiving newly-issued shares of Common
Stock directly from the Company) becomes the beneficial owner of
15% or more of the then outstanding shares of Common Stock, each
holder of a Right will thereafter have the right to receive, upon
exercise at the then current exercise price of the Right, Common
Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the
exercise price of the Right. The Rights Agreement contains an
exemption for any issuance of Common Stock by the Company
directly to any person (for example, in a private placement or an
acquisition by the Company in which Common Stock is used as
consideration), even if that person would become the beneficial
owner of 15% or more of the Common Stock, provided that such
person does not acquire any additional shares of Common Stock.
In the event that, at any time following the Shares
Acquisition Date, the Company is acquired in a merger or other
business combination transaction or 50% or more of the Company's
assets or earning power are sold, proper provision will be made
so that each holder of a Right will thereafter have the right to
receive, upon exercise at the then current exercise price of the
Right, common stock of the acquiring or surviving company having
a value equal to two times the exercise price of the Right.
Notwithstanding the foregoing, following the occurrence of
any of the events set forth in the preceding two paragraphs (the
"Triggering Events"), any Rights that are, or (under certain
circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will immediately
become null and void.
The Purchase Price payable, and the number of shares of
Preferred Stock or other securities or property issuable, upon
exercise of the Rights, and the number of Rights associated with
a share of Common Stock, are subject to adjustment from time to
time to prevent dilution, among other circumstances, in the event
of a stock dividend on, or a subdivision, split, combination,
consolidation or reclassification of, the Preferred Stock or the
Common Stock, or a reverse split of the outstanding shares of
Preferred Stock or the Common Stock.
At any time after the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15%
or more of the outstanding Common Stock and prior to the
acquisition by such person or group of 50% or more of the
outstanding Common Stock, the Board of Directors may exchange the
Rights (other than Rights owned by such person or group, which
have become void), in whole or in part, at an exchange ratio of
one share of Common Stock 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 the Purchase Price. The Company
will not be required to issue fractional shares of Preferred
Stock or Common Stock (other than fractions in multiples of one
one-hundredths of a share of Preferred Stock) and, in lieu
thereof, an adjustment in cash may be made based on the market
price of the Preferred Stock or Common Stock on the last trading
date prior to the date of exercise.
At any time after the date of the Rights Agreement until the
time that a person becomes an Acquiring Person, the Board of
Directors may redeem the Rights in whole, but not in part, at a
price of $.001 per Right (the "Redemption Price"), which may (at
the option of the Company) be paid in cash, shares of Common
Stock or other consideration deemed appropriate by the Board of
Directors. Upon the effectiveness of any action of the Board of
Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
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.
The provisions of the Rights Agreement may be amended by the
Company, except that any amendment adopted after the time that a
person becomes an Acquiring Person may not adversely affect the
interests of holders of Rights.
As of May 11, 1996, there were 87,597,882 shares of Common
Stock outstanding and 28,173,448 shares of Common Stock reserved
for issuance under employee benefit plans. Each outstanding
share of Common Stock as of the close of business on May 31, 1996
will receive one Right. Two million five hundred thousand
(2,500,000) shares of Preferred Stock will be reserved for
issuance in the event of exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that
attempts to acquire the Company without conditioning the offer on
the Rights being redeemed or a substantial number of Rights being
acquired, and under certain circumstances the Rights beneficially
owned by such a person or group may become void. The Rights
should not interfere with any merger or other business
combination approved by the Board of Directors because, if the
Rights would become exercisable as a result of such merger or
business combination, the Board of Directors may, at its option,
at any time prior to the time that any Person becomes an
Acquiring Person, redeem all (but not less than all) of the then
outstanding Rights at the Redemption Price.
A copy of the Rights Agreement is being filed with the
Securities and Exchange Commission as an exhibit to this
Registration Statement on Form 8-A. This summary description of
the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement.
Item 2 Exhibits
1. Rights Agreement, dated as of May 9, 1996 between
U.S. Robotics Corporation and Harris Trust and Savings
Bank, as Rights Agent, which includes as Exhibit A
thereto the Form of Certificate of Designation, as
Exhibit B thereto the Form of Right Certificate, and as
Exhibit C thereto the Summary of Rights Plan. Pursuant
to the Rights Agreement, Right Certificates will not be
mailed until the occurrence of certain events described
more fully in Section 3 of the Rights Agreement.
<PAGE>
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.
U.S. ROBOTICS CORPORATION
Date: May 9, 1996 By: /s/ Casey Cowell
Name: Casey Cowell
Title: President, Chairman and
Chief Executive Officer
=================================================================
RIGHTS AGREEMENT
between
U.S. ROBOTICS CORPORATION
and
HARRIS TRUST AND SAVINGS BANK,
Rights Agent
Dated as of May 9, 1996
=================================================================
<PAGE>
TABLE OF CONTENTS
Page
Section 1. Certain Definitions....................... 1
Section 2. Appointment of Rights Agent............... 8
Section 3. Issue of Right Certificates............... 8
Section 4. Form of Right Certificates................ 12
Section 5. Countersignature and Registration......... 14
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificates............... 15
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights............... 17
Section 8. Cancellation and Destruction of
Right Certificates...................... 22
Section 9. Availability of Preferred Shares.......... 23
Section 10. Preferred Shares Record Date.............. 24
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights.............. 25
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares..................... 41
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.............. 41
Section 14. Fractional Rights and Fractional Shares... 46
Section 15. Rights of Action.......................... 48
Section 16 Agreement of Right Holders................ 49
Section 17. Right Certificate Holder Not Deemed a
Stockholder............................. 51
Section 18. Concerning the Rights Agent............... 51
Section 19. Merger or Consolidation or Change of
Name of Rights Agent.................... 52
Section 20. Duties of Rights Agent.................... 54
Section 21. Change of Rights Agent.................... 59
Section 22. Issuance of New Right Certificates........ 61
Section 23. Redemption................................ 61
Section 24. Exchange.................................. 63
Section 25. Notice of Certain Events.................. 66
Section 26. Notices................................... 68
Section 27. Supplements and Amendments................ 69
Section 28. Successors................................ 69
Section 29. Benefits of This Agreement................ 69
Section 30. Severability.............................. 70
Section 31. Governing Law............................. 70
Section 32. Counterparts.............................. 70
Section 33. Descriptive Headings...................... 70
Section 34. Determinations and Actions by the
Board of Directors...................... 70
Signatures ......................................... 72
Exhibit A - Form of Certificate of Designation, Preferences and
Rights
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights Plan
RIGHTS AGREEMENT
Rights Agreement, dated as of May 9, 1996 (the "Agreement"),
between U.S. ROBOTICS CORPORATION, a Delaware corporation (the
"Company"), and HARRIS TRUST AND SAVINGS BANK, an Illinois
banking corporation (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, 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 as of the close of business
on May 31, 1996 (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 (subject to adjustment herein)
with respect to each Common Share that shall become outstanding
between the Record Date and the Expiration Date (as such term is
hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
"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 15% or more of the Common Shares of the
Company then outstanding, but shall not include the Company, any
Subsidiary (as such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or any Subsidiary of the
Company, or any Person holding Common Shares for or pursuant to
the terms of any such plan. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of (a) an
acquisition of Common Shares by the Company which, by reducing
the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 15% or more
of the Common Shares of the Company then outstanding or (b) the
acquisition by such Person of newly issued Common Shares directly
from the Company (it being understood that a purchase from an
underwriter or other intermediary is not directly from the
Company); provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the Common Shares of the
Company then outstanding by reason of share purchases by the
Company or the receipt of newly issued Common Shares directly
from the Company and shall, after such share purchases or direct
issuance by the Company, become the Beneficial Owner of any
additional Common Shares of the Company, then such Person shall
be deemed to be an "Acquiring Person"; provided further, however,
that any transferee from such Person who becomes the Beneficial
Owner of 15% or more of the Common Shares of the Company then
outstanding shall nevertheless 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, has become such
inadvertently, and such Person divests as promptly as practicable
(and in any event within ten business days after notification by
the Company) 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, then such
Person shall not be deemed to be an "Acquiring Person" for any
purposes of this Agreement.
"Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act, as in effect on the
date of this Agreement.
A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to have "beneficial ownership" of or
"beneficially own" any securities:
(a) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;
(b) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, 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, whether written
or oral (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; (B) the sole or shared
right to vote or dispose (including any such right pursuant
to any agreement, arrangement or understanding, whether
written or oral); 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 (C) "beneficial
ownership" (as determined pursuant to Rule 13d-3 (or any
successor rule) of the General Rules and Regulations under
the Exchange Act); or
(c) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement or understanding, whether written or oral (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 clause (B) of subparagraph (b) of this
definition) 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.
"Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in
Illinois are authorized or obligated by law or executive order to
close.
"Close of business" on any given date shall mean
5:00 P.M., Chicago time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., Chicago
time, on the next succeeding Business Day.
"Common Shares" when used with reference to the Company
shall mean the shares of common stock, par value $.01 per share
(as such shares may be constituted or designated, or as such par
value may be changed, from time to time during the term of this
Agreement), 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 the equity securities or other equity
interest having power to control or direct the management of such
other Person.
"Distribution Date" shall have the meaning set forth in
Section 3 hereof.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
"Exchange Ratio" shall have the meaning set forth in
Section 24 hereof.
"Expiration Date" shall have the meaning set forth in
Section 7 hereof.
"Final Expiration Date" shall have the meaning set
forth in Section 7 hereof.
"Person" shall mean any individual, firm, corporation
or other entity, and shall include any successor (by merger or
otherwise) of such entity.
"Preferred Shares" shall mean shares of Series B Junior
Participating Preferred Stock, par value $.01 per share, of the
Company having the rights and preferences set forth in the Form
of Certificate of Designations, Preferences and Rights attached
to this Agreement as Exhibit A.
"Principal Party" shall have the meaning set forth in
Section 13 hereof.
"Purchase Price" shall have the meaning set forth in
Section 4 hereof.
"Redemption Date" shall have the meaning set forth in
Section 7 hereof.
"Right Certificate" shall have the meaning set forth in
Section 3 hereof.
"Securities Act" shall mean the Securities Act of 1933,
as amended.
"Shares Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant to
Section 13(d) promulgated under the Exchange Act) by the Company
or an Acquiring Person that an Acquiring Person has become such.
"Subsidiary" shall mean, with reference to any Person,
any corporation or other entity of which a majority of the voting
power of the voting equity securities or equity interest is
owned, directly or indirectly, by such Person.
"Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
"Triggering Event" shall mean any event described in
Section 11(a)(ii) or Section 13(a) hereof.
Any determination or interpretation required in connection
with any of the definitions contained in this Section 1 shall be
made by the Board of Directors of the Company in their good faith
judgment, which determination shall be final and binding on the
Rights Agent.
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) Until the earlier of (i) the close of business on the
tenth day after the Shares Acquisition Date or (ii) the close of
business on the fifteenth 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 date of the
commencement by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such plan) of, or of the first public
announcement of the intention of any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding
Common Shares for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer the consummation of which would
result in any Person becoming the Beneficial Owner of Common Shares
aggregating 15% or more of the then outstanding Common Shares
(including any such date which is after the date of this Agreement
and prior to the issuance of the Rights; the earlier of such dates
being herein referred to as the "Distribution Date"), (x) the Rights
will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for Common Shares registered in the names of the
holders thereof (which certificates shall also be deemed to be
certificates for Rights) and not by separate certificates, and (y)
the Rights will be transferable only in connection with the transfer
of the underlying Common Shares (including a transfer to the
Company). As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign,
and the Company will send or cause to be sent (and the Rights Agent
will, if requested, send) by first-class, insured, postage-prepaid
mail, to each record holder of Common Shares as of the close of
business on the Distribution Date, at the address of such holder
shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right for each Common Share so held (or the adjusted
number of Rights then associated with each Common Share). As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights
Plan, in substantially the form of Exhibit C hereto (the "Summary
of Rights Plan"), by first class, postage-prepaid mail, to each
record holder of Common Shares as of the close of business on the
Record Date (other than any Acquiring Person or any Associate or
Affiliate of any Acquiring Person), at the address of such holder
shown on the records of the Company. With respect to
certificates for Common Shares outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof
together with the Summary of Rights Plan, and registered holders
of Common Shares shall also be the registered holders of the
associated Rights. Until the Distribution Date (or the earlier
of the Redemption Date or the Final Expiration Date), the
transfer of any certificate for Common Shares outstanding on the
Record Date, with or without a copy of the Summary of Rights
Plan, shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby.
(c) One Right (or the adjusted number of Rights then
associated with each Common Share) shall be issued in respect of
each Common Share which is issued (whether originally issued or
delivered from the Company's treasury) after the Record Date but
prior to the earliest of the Distribution Date, the Redemption
Date or the Final Expiration Date. Certificates representing
such Common Shares shall also be deemed to be certificates for
Rights. Certificates representing both Common Shares and Rights
in accordance with this Section 3 which are executed and
delivered (whether the Common Shares represented thereby are
originally issued, delivered from the Company's treasury or are
presented for transfer) by the Company (including, without
limitation, certificates representing reacquired Common Shares
referred to in the last sentence of this paragraph (c)) after the
Record Date but prior to the earliest of the Distribution Date,
the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them
a legend substantially equivalent to the following:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in the Rights
Agreement between U.S. Robotics Corporation (the
"Company") and Harris Trust and Savings Bank dated as
of May 9, 1996 (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a
copy of which is on file at the principal offices of
the Company. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be evidenced
by separate certificates and will no longer be
evidenced by this certificate. The Company will mail
to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or an
Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently
held by or on behalf of such Person or by any sub-
sequent holder, shall become null and void.
Until the Distribution Date, the Rights associated with the
Common Shares shall be evidenced by the certificates representing
the associated Common Shares alone, and the transfer of any such
certificate shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby. In the
event that the Company purchases or acquires any Common Shares
after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed
cancelled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Shares which
are no longer outstanding.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase Preferred Shares and of assignment to be printed on the
reverse thereof) shall each be substantially in the form set
forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable
law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject
to the provisions of Section 11 and Section 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase such
number of one one-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 amount
and type of securities purchasable upon the exercise of each
Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights beneficially
owned by: (i) an Acquiring Person or any Associate or Affiliate
of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes an Acquiring Person, or (iii) a
transferee of an Acquiring Person (or such Associate or
Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or
understanding, whether written or oral, regarding the transferred
Rights or (B) a transfer which is part of a plan, arrangement or
understanding, whether written or oral, which has as a primary
purpose or effect avoidance of Section 7(e) hereof, and any Right
Certificate issued pursuant to Section 6 or Section 11 hereof
upon transfer, exchange, replacement or adjustment of any other
Right Certificate referred to in this sentence, shall contain (to
the extent feasible and otherwise reasonably identifiable as
such) the following legend:
The Rights represented by this Right Certificate are or
were beneficially owned by a Person who was or became
an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the
Rights Agreement). Accordingly, this Right Certificate
and the Rights represented hereby may become void in
the circumstances specified in Section 7(e) of such
Agreement.
The provisions of Section 7(e) shall apply whether or not any
Right Certificate actually contains the foregoing legend.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, any Vice
Chairman, its President, any of its Vice Presidents, or its
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 Agreement any such person was not such an
officer.
Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its office designated for such purpose,
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.
(a) Subject to the provisions of Sections 4(b), 7(e), 14
and 24 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on
the earlier of the Redemption Date or the Final Expiration Date,
any Right Certificate or Right Certificates may be transferred,
split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a
like number of Preferred Shares (or, following a Triggering
Event, Common Shares, other securities or property, as the case
may be) as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any
Right Certificate or Right Certificates shall make such request
in writing delivered to the Rights Agent, and shall surrender the
Right Certificate or Right Certificates to be transferred, split
up, combined or exchanged at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate
until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse
side of such Right Certificate accompanied by such documents as
the Rights Agent may deem appropriate and the Company shall have
been provided with such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Sections 4 and 7
hereof, countersign and deliver to the person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as
so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered holder in lieu of
the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Subject to Section 7(e) hereof, the registered
holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part
at any time after the 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
office of the Rights Agent designated for such purpose, together
with payment of the Purchase Price with respect to each
surrendered Right for the total number of Preferred Shares (or
other securities or property, as the case may be) as to which the
Rights are exercised, at or prior to the earliest of (i) the
close of business on May 31, 2006 (the "Final Expiration Date"),
(ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the "Redemption Date") (the earlier of (i) and
(ii) being herein referred to as the "Expiration Date") and
(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 pursuant to the exercise of a Right shall
initially be $500.00, shall be subject to adjustment from time
to time as provided in Sections 11 and 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 and the
certificate on the reverse side of the Right Certificate duly
executed, accompanied by such documents as the Rights Agent may
deem appropriate, payment of the Purchase Price for the shares
(or other securities or property, as the case may be) 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 (or make available, if
the Rights Agent is the 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) if the Company shall
have elected to deposit the Preferred Shares issuable upon
exercise of the Rights with a depositary agent, 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 will direct 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. In the
event that the Company is obligated to issue other securities
(including Common Shares) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other
securities, cash and/or property are available for distribution
by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the occurrence of a Triggering Event,
any Rights beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes an
Acquiring Person, or (iii) a transferee of an Acquiring Person
(or such Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming an
Acquiring Person and receives such Rights pursuant to either (A)
a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or
to any Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding, whether written or oral,
regarding the transferred Rights or (B) a transfer which the
Board of Directors otherwise concludes in good faith is part of a
plan, arrangement or understanding (whether written or oral)
which has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void without any further
action, and any holder of such Rights shall thereupon have no
rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise, from and after the
occurrence of a Triggering Event. The Company shall use all
reasonable efforts to ensure that the provisions of this Section
7(e) hereof are complied with, but shall have no liability to any
holder of Rights for the inability to make any determinations
with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless the certificate contained in the form of
election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise shall have been
completed and signed by the registered holder thereof and the
Company shall have been provided with 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.
(g) The Company covenants and agrees that it will cause
to be reserved and kept available out of its authorized and
unissued Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) or any
Preferred Shares (and, following the occurrence of a Triggering
Event, Common Shares and/or other securities) held in its
treasury, the number of Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other
securities) that will be sufficient to permit the exercise in
full of all outstanding Rights.
(h) Notwithstanding any statement to the contrary
contained in this Agreement or in any Right Certificate, if the
Distribution Date or the Shares Acquisition Date shall occur
prior to the Record Date, the provisions of this Agreement,
including (without limitation) Sections 3 and 11(a)(ii), shall be
applicable to the Rights upon and after their issuance to the
same extent such provisions would have been applicable if the
Record Date were the date of this Agreement.
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
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, cause
such cancelled Right Certificates to be destroyed, and in such
case cause a certificate of destruction to be delivered to the
Company.
Section 9. Availability of Preferred Shares. The Company
covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other
securities) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such Preferred Shares (and,
following the occurrence of a Triggering Event, Common Shares
and/or other securities), subject to payment of the Purchase
Price, be duly and validly authorized and issued and fully paid
and nonassessable shares.
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 (or
Common Shares and/or other securities, as the case may be) 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 (or Common Shares
and/or other securities, as the case may be) in a name other than
that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for Preferred
Shares (or Common Shares and/or other securities, as the case may
be) upon the exercise of any Rights until any such tax shall have
been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such
tax is due.
Section 10. Preferred Shares Record Date. Each person in
whose name any certificate for Preferred Shares (or Common Shares
and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have
become the holder of record of the shares or securities
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 (or Common Shares and/or other securities, as
the case may be) transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such
shares or securities on, and such certificate shall be dated, the
next succeeding Business Day on which the Preferred Shares (or
Common Shares and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Preferred
Shares (or Common Shares and/or other securities, as the case may
be) for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not
be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number 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) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock 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. If an event
occurs which would require an adjustment under both Section
11(a)(i) and Section 11(a)(ii), the adjustment provided for
in this Section 11(a)(i) shall be in addition to, and shall
be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the
event any Person becomes an Acquiring Person, each holder of
a Right, except as provided below and in Section 7(e)
hereof, 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
(x) 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 (y)
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 take any action which would eliminate or diminish
the benefits intended to be afforded by the Rights.
(iii) In lieu of issuing Common Shares of the Company
in accordance with Section 11(a)(ii) hereof, the Company
may, in the sole discretion of the Board of Directors, elect
to (and, in the event that the Board of Directors has not
exercised the exchange right contained in Section 24 hereof
and there are not sufficient issued but not outstanding and
authorized but unissued Common Shares to permit 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, issue or pay, upon the
exercise of the Rights, cash (including by way of a
reduction of the Purchase Price), property, other securities
or any combination thereof having an aggregate value equal
to the value of the Common Shares of the Company which
otherwise would have been issuable pursuant to Section
11(a)(ii), which aggregate value shall be determined by a
majority of the Board of Directors. For purposes of the
preceding sentence, the value of the Common Shares shall be
determined pursuant to Section 11(d) hereof and the value of
any equity securities which a majority of the Board of
Directors determines to be a "common stock equivalent"
(including the Preferred Shares, in such ratio as the Board
of Directors shall determine) shall be deemed to have the
same value as the Common Shares. Any such election by the
Board of Directors must be made and publicly announced
within 60 days following the date on which the event
described in Section 11(a)(ii) shall have occurred.
Following the occurrence of the event described in Section
11(a)(ii), a majority of the Board of Directors then in
office may suspend the exercisability of the Rights for a
period of up to 60 days following the date on which the
event described in Section 11(a)(ii) shall have occurred to
the extent that such directors have not determined whether
to exercise the company's right of election under this
Section 11(a)(iii). In the event of any such suspension,
the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily
suspended.
(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 of the Preferred Shares (as defined in Section
11(d)) 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 and
shall be binding on 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,
other than under Section 11(a)(iii) hereof, 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, and for the purpose of any computation under
Section 11(a)(iii) hereof, the "current per share market
price" of a Security on any date shall be deemed to be the
average of the daily closing prices per share of such
Security for thirty (30) consecutive Trading Days
immediately following 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
(other than the Rights), 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 (ex-dividend) 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 Quotation 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. If on any such date no market maker is making
a market in the Security, the fair value of such Security on
such date (as determined in good faith by the Board of
Directors of the Company) shall be used. The term "Trading
Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business
or, if the Security is not listed or admitted to trading on
any national securities exchange, a Business Day.
(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 of the
Company 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 of the Company 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) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1%
in the Purchase Price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest 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) or Section 13(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 this Section 11, and the provisions of Sections 7, 9, 10, 13
and 14 with respect to the Preferred Shares shall apply on like
terms to any such other shares.
(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 Record Date
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) into a greater
or lesser number of Common Shares, then in any such case the
number of Rights associated with each Common Share shall be
proportionately adjusted so that the number of Rights thereafter
associated with each Common Share outstanding immediately
following any such event shall equal the result obtained by
multiplying the number of Rights associated with each Common
Share immediately prior to such event by a fraction, the
numerator of which shall be the total number of Common Shares
outstanding immediately prior to such event and the denominator
of which shall be the total number of Common Shares outstanding
immediately following such event. 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.
(o) So long as the shares issuable upon the exercise of
the Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for
such issuance to be listed on such exchange upon official notice
of issuance upon such exercise.
(p) The Company shall use its best efforts to (i) file,
as soon as practicable following the first occurrence of a
Triggering Event, a registration statement under the Securities
Act with respect to the securities purchasable upon exercise of
the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such
filing and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the date of the
expiration of the Rights. The Company will also take such action
as may be appropriate under the blue sky laws of the various
states. The Company may temporarily suspend, for a period of
time not to exceed 90 days, the exercisability of the Rights in
order to prepare and file such registration statement or in order
to comply with such blue sky laws. Upon any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.
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 may assume that no adjustment
has been made unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) If after the Shares Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person, (y) 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 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 (z) 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 Person or Persons 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 validly authorized
and issued, fully paid, nonassessable and freely tradeable Common
Shares of the Principal Party (as hereinafter defined), free and
clear of all liens, rights of call or first refusal, encumbrances
or other adverse claims, 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 (or, if such Right is not then exercisable for a
number of one one-hundredths of a Preferred Share, the number of
such fractional shares for which it was exercisable immediately
prior to an event described under Section 11(a)(ii) hereof) and
dividing that product by (B) 50% of the then current per share
market price of the Common Shares of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer;
(ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or
transfer, or otherwise, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such Principal Party and
(iv) such Principal Party 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 its Common Shares thereafter
deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) In the case of any transaction described in (x) or
(y) of the first sentence of Section 13(a), the Person that
is the issuer of any securities into which Common Shares of
the Company are converted in such merger or consolidation,
and if no securities are so issued, the Person that is the
surviving entity of such merger or consolidation (including
the Company if applicable); and
(ii) in the case of any transaction described in (z)
of the first sentence in Section 13(a), the Person that is
the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions;
provided, however, that in any such case described in clauses
(b)(i) and (b)(ii): (1) if the Common Shares of such Person are
not at such time and have not been continuously over the
preceding 12-month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary
of another Person the Common Shares of which is and has been so
registered, "Principal Party" shall refer to such other Person;
(2) in case such Person is a Subsidiary, directly or indirectly,
or more than one Person, the Common Shares of two or more of
which are and have been so registered, "Principal Party" shall
refer to whichever of such Persons is the issuer of the Common
Shares having the greatest aggregate market value; and (3) in
case such Person is owned, directly or indirectly, by a joint
venture formed by two or more Persons that are not owned,
directly or indirectly, by the same Person, the rules set forth
in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such
party were a "Subsidiary" of both or all of such joint venturers
and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party shall have sufficient Common Shares authorized to permit
the full exercise of the Rights and prior thereto the Company and
such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set
forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph
(a) of this Section 13, the Principal Party will:
(i) prepare and file a registration statement under
the Securities Act, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause
such registration statement to (A) become effective as soon
as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of
the Securities Act) until the Expiration Date;
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange
Act; and
(iii) take such actions as may be necessary or
appropriate under the blue sky laws of the various states.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that one of the transactions described in Section
13(a) shall occur at any time after the occurrence of a
transaction described in Section 11(a)(ii) hereof, the Rights
which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
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 may
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 may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one one-hundredth of a Preferred Share.
For the purposes of this Section 14(b), the current market value
of one one-hundredth of a Preferred Share shall be one one-
hundredth of 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) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of Common Shares
upon exercise of the Rights or to distribute certificates which
evidence fractional Common Shares. In lieu of fractional Common
Shares, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one Common Share. For purposes of this
Section 14(c), the current market value of one Common Share shall
be the closing price of one 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 such exercise.
(d) 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 Certifi-
cate (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 bene-
fit, 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 Certifi-
cate and in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is specifi-
cally 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 office of the Rights Agent designated for
such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with appropriate forms and
certificates fully executed;
(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 any other Person as a
result of its inability to perform any of its obligations under
this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any
governmental authority prohibiting or otherwise restraining
performance of such obligation.
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 pur-
pose 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 (including any taxes other than
income taxes) incurred in the administration and execution of
this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising,
directly or indirectly, therefrom.
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 business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties
hereto; provided, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 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) The Rights Agent may consult with legal counsel
satisfactory to it (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, and the Rights
Agent shall incur no liability or responsibility to the Company
or to any holder of any Right Certificate in respect of 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 or omitting 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, suffered or omitted in good faith by it under
the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the
Company only for, and shall indemnify and hold harmless the
Company from and against, any and all losses, liabilities, costs,
damages and expenses (including attorneys' fees) arising out of
or in connection with, the Rights Agent's negligence, bad faith
or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its countersigna-
ture 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 7(e) 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 receipt of a certificate
furnished pursuant to Section 12 describing a change or
adjustment); 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 or Common Shares to be issued
pursuant to this Agreement or any Right Certificate or as to
whether any Preferred Shares or Common 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. Any application by the Rights Agent for
written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be
taken or omitted by the Rights Agent under this Agreement and the
date on and/or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be
liable for any action taken by, or omission of, the Rights Agent
in accordance with a proposal included in any such application on
or after the date specified in such application (which date shall
not be less than five Business Days after the date such
application is given, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking
any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written
instructions in response to such application specifying the
action to be taken or omitted.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or its
Subsidiaries or become pecuniarily interested in any transaction
in which the Company or its Subsidiaries may be interested, or
contract with or lend money to the Company or its Subsidiaries 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
its Subsidiaries 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) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise, transfer, split up,
combination or exchange, the certificate attached to the form of
assignment or form of election to purchase, as the case may be,
has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not
take any further action with respect to such requested exercise,
transfer, split up, combination or exchange without first
consulting with the Company.
(k) The Rights Agent shall not be under any duty or
responsibility to ensure compliance with any applicable federal
or state securities laws in connection with the issuance,
transfer or exchange of Right Certificates.
(l) The Rights Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any
other action likely to involve expense unless the Company or one
or more holders of Right Certificates shall furnish the Rights
Agent with security and indemnity to its satisfaction for any
costs and expenses which may be incurred.
(m) The Rights Agent shall not be liable for failure to
perform any duties except as specifically set forth herein, and
no implied covenants or obligations shall be read into this
Agreement against the Rights Agent whose duties and obligations
are ministerial and shall be determined solely by the express
provisions hereof.
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 or bank
organized and doing business under the laws of the United States
or of any other state of the United States, 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 $100
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 such time as any Person becomes an
Acquiring Person, redeem all but not less than all the then
outstanding Rights at a redemption price of $.001 per Right,
appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the Record Date (such
redemption price being hereinafter referred to as the "Redemption
Price"). 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. If redemption of the Rights is to be effective as of
a future date, the Rights shall continue to be exercisable,
subject to Section 7 hereof, until the effective date of the
redemption, provided that nothing contained herein shall preclude
the Board of Directors from subsequently causing the Rights to be
redeemed at a date earlier than the previously scheduled
effective date of the redemption. The Company may, at its
option, pay the Redemption Price in cash, Common Shares (based on
the current per share market price of the Common Shares at the
time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights
(or at the effective time of such redemption established by the
Board of Directors of the Company 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. Promptly after such
action of the Board of Directors ordering the redemption of the
Rights or, if later, the effectiveness of the redemption of the
Rights pursuant to paragraph (a) of this Section 23, 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. The Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press
release announcing the manner of redemption of the Rights, (ii)
depositing with a bank or trust company having a capital and
surplus of at least $100,000,000, funds necessary for such
redemption, in trust, to be applied to the redemption of the
Rights so called for redemption and (iii) arranging for the
mailing of the Redemption Price to the registered holders of the
Rights; then, and upon such action, all outstanding Rights
Certificates shall be null and void without further action by the
Company. 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, in Section 24 hereof, or 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 a Triggering Event,
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 7(e) 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 Record Date (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 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Shares (or
equivalent preferred shares, as such term is defined in Section
11(b) hereof) for Common Shares exchangeable for Rights, at the
initial rate of one one-hundredth of a Preferred Share (or
equivalent preferred share) for each Common Share, as
appropriately adjusted to reflect adjustments in the voting
rights of the Preferred Shares pursuant to the terms thereof, so
that the fraction of a Preferred Share delivered in lieu of each
Common Share shall have the same voting rights as one Common
Share.
(d) In the event that there shall not be sufficient
Common Shares or Preferred 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 or Preferred Shares for issuance upon
exchange of the Rights.
(e) 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 (e), 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 at any time after
the Distribution Date (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), 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 any of the events 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:
U.S. Robotics Corporation
8100 North McCormick Boulevard
Skokie, Illinois 60076
Attention: Corporate Secretary
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: Shareholder Services Department
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. Notices or demands sent by mail shall be deemed given
or made three Business Days after the date they are sent.
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.
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.
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 Delaware and for all purposes
shall be governed by and construed in accordance with the laws of
such State applicable to contracts to be made and performed
entirely within such State.
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. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board
or the Company or as may be necessary or advisable in the
administration of this Agreement, including, without limitation,
the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, interpretations and determinations
(including, for purpose of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in
good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Right Certificates
and all other parties, and (y) not subject the Board of Directors
to any liability to the holders of the Right Certificates.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above
written.
Attest: U.S. ROBOTICS CORPORATION
By: /s/ George A. Vinyard By: /s/ Casey Cowell
Title: Corporate Secretary Title: President, Chairman
Chief Executive Officer
Attest: HARRIS TRUST AND SAVINGS BANK
By: /s/ Todd C. Shafer By: /s/ Bruce R. Hartney
Title: Vice President Title: Vice President
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
of
U.S. ROBOTICS CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Casey Cowell, Chairman, President and Chief Executive
Officer, and George A. Vinyard, Secretary of U.S. Robotics
Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (the
"Corporation"), in accordance with the provisions of Section 103
thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation, as amended, of the
Corporation, the Board of Directors on May 9, 1996 adopted the
following resolution creating a series of 2,500,000 shares of
preferred stock designated as Series B Junior Participating
Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of the Corporation in accordance with the provisions
of its Certificate of Incorporation, as amended, a series of
preferred stock, par value $.01 per share, of the Corporation
(such preferred stock being herein referred to as "Preferred
Stock," which term shall include any additional shares of
preferred stock of the same class heretofore or hereafter
authorized to be issued by the Corporation), consisting of
2,500,000 shares is hereby created, and the voting powers,
preferences and relative, participating, optional or other
special rights, and the qualifications, limitations or
restrictions thereof, are as follows:
Section 1. Designation and Amount. There shall be a series
of Preferred Stock of the Corporation which shall be designated
as "Series B Junior Participating Preferred Stock," par value
$.01 per share (hereinafter called "Series B Preferred Stock"),
and the number of shares constituting such series shall be
2,500,000. Such number of shares may be increased or decreased
by resolution of the Board of Directors and by the filing of a
certificate pursuant to the provisions of the General Corporation
Law of the State of Delaware stating that such increase or
reduction has been so authorized; provided, however, that no
decrease shall reduce the number of shares of Series B Preferred
Stock to a number less than that of the shares then outstanding
plus the number of shares of Series B Preferred Stock issuable
upon exercise of outstanding rights, options or warrants or upon
conversion of outstanding securities issued by the Corporation.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders
of any shares of any series of Preferred Stock ranking prior and
superior to the shares of Series B Preferred Stock with respect
to dividends, the holders of shares of Series B Preferred 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 to holders of record
on the last business day of March, June, September and December
in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series B 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 (hereinafter defined) or a subdivision of the
outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, par value $.01 per
share, of the Corporation (the "Common Stock") since the
immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series B
Preferred Stock. In the event the Corporation shall at any time
following May 31, 1996 (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to
which holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying each such amount by a
fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in
paragraph (A) above at the time it declares a dividend or
distribution on the Common Stock (other than a dividend payable
in shares of Common Stock).
(C) No dividend or distribution (other than a dividend
payable in shares of Common Stock) shall be paid or payable to
the holders of shares of Common Stock unless, prior thereto, all
accrued but unpaid dividends to the date of such dividend or
distribution shall have been paid to the holders of shares of
Series B Preferred Stock.
(D) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such
shares of Series B Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders
of shares of Series B 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 B 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 B Preferred
Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series
B Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each one one-hundredth of a share of Series B Preferred
Stock shall entitle the holder thereof to one vote on all matters
submitted to a vote of the stockholders of the Corporation. In
the event the Corporation shall at any time following May 31,
1996 (i) declare any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding shares of Common
Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the number of
votes per share to which holders of shares of Series B 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.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series B 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.
(C) (i) Whenever, at any time or times, dividends payable
on any share or shares of Series B Preferred Stock shall be
in arrears in an amount equal to at least six full quarterly
dividends (whether or not declared and whether or not
consecutive), the holders of record of the outstanding
Preferred Stock shall have the exclusive right, voting
separately as a single class, to elect two directors of the
Corporation at a special meeting of stockholders of the
Corporation or at the Corporation's next annual meeting of
stockholders, and at each subsequent annual meeting of
stockholders, as provided below. At elections for such
directors, the holders of shares of Series B Preferred Stock
shall be entitled to cast one vote for each one one-
hundredth of a share of Series B Preferred Stock held.
(ii) Upon the vesting of such right of the holders of
the Preferred Stock, the maximum authorized number of
members of the Board of Directors shall automatically be
increased by two and the two vacancies so created shall be
filled by vote of the holders of the outstanding Preferred
Stock as hereinafter set forth. A special meeting of the
stockholders of the Corporation then entitled to vote shall
be called by the Chairman or the President or the Secretary
of the Corporation, if requested in writing by the holders
of record of not less than 10% of the Preferred Stock then
outstanding. At such special meeting, or, if no such
special meeting shall have been called, then at the next
annual meeting of stockholders of the Corporation, the
holders of the shares of the Preferred Stock shall elect,
voting as above provided, two directors of the Corporation
to fill the aforesaid vacancies created by the automatic
increase in the number of members of the Board of Directors.
At any and all such meetings for such election, the holders
of a majority of the outstanding shares of the Preferred
Stock shall be necessary to constitute a quorum for such
election, whether present in person or by proxy, and such
two directors shall be elected by the vote of at least a
plurality of shares held by such stockholders present or
represented at the meeting. Any director elected by holders
of shares of the Preferred Stock pursuant to this Section
may be removed at any annual or special meeting, by vote of
a majority of the stockholders voting as a class who elected
such director, with or without cause. In case any vacancy
shall occur among the directors elected by the holders of
the Preferred Stock pursuant to this Section, such vacancy
may be filled by the remaining director so elected, or his
successor then in office, and the director so elected to
fill such vacancy shall serve until the next meeting of
stockholders for the election of directors. After the
holders of the Preferred Stock shall have exercised their
right to elect Directors in any default period and during
the continuance of such period, the number of Directors
shall not be further increased or decreased except by vote
of the holders of Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking
senior to or pari passu with the Series B Preferred Stock.
(iii) The right of the holders of the Preferred Stock,
voting separately as a class, to elect two members of the
Board of Directors of the Corporation as aforesaid shall
continue until, and only until, such time as all arrears in
dividends (whether or not declared) on the Preferred Stock
shall have been paid or declared and set apart for payment,
at which time such right shall terminate, except as herein
or by law expressly provided, subject to revesting in the
event of each and every subsequent default of the character
above-mentioned. Upon any termination of the right of the
holders of the shares of the Preferred Stock as a class to
vote for directors as herein provided, the term of office of
all directors then in office elected by the holders of
Preferred Stock pursuant to this Section shall terminate
immediately. Whenever the term of office of the directors
elected by the holders of the Preferred Stock pursuant to
this Section shall terminate and the special voting powers
vested in the holders of the Preferred Stock pursuant to
this Section shall have expired, the maximum number of
members of the Board of Directors of the Corporation shall
be such number as may be provided for in the By-laws of the
Corporation irrespective of any increase made pursuant to
the provisions of this Section.
(D) Except as set forth herein, holders of Series B
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.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B 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 B Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series B Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Preferred Stock, except
dividends paid ratably on the Series B 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 on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Preferred Stock, provided that
the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series B Preferred Stock;
or
(iv) purchase or otherwise acquire for consideration
any shares of Series B 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.
(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, purchase or otherwise
acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series B
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 to be created by resolution or
resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A)
Upon any voluntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Preferred
Stock unless, prior thereto, the holders of shares of Series B
Preferred Stock shall have received $1.00 per share, plus an
amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment
(the "Series B Liquidation Preference"). Following the payment
of the full amount of the Series B Liquidation Preference, no
additional distributions shall be made to the holders of shares
of Series B Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share
(the "Common Adjustment") equal to the quotient obtained by
dividing (i) the Series B Liquidation Preference by (ii) 100 (as
appropriately adjusted as set forth in subparagraph C below to
reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number
in clause (ii), the "Adjustment Number"). Following the payment
of the full amount of the Series B Liquidation Preference and the
Common Adjustment in respect of all outstanding shares of Series
B Preferred Stock and Common Stock, respectively, holders of
Series B Preferred Stock and holders of shares of Common Stock
shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio, on a per share
basis, of the Adjustment Number to 1 with respect to such
Preferred Stock and Common Stock, on a per share basis,
respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series B
Liquidation Preference and the liquidation preferences of all
other series of Preferred Stock, if any, which rank on a parity
with the Series B Preferred Stock, then such remaining assets
shall be distributed ratably to the holders of such parity shares
in proportion to their respective liquidation preferences.
(C) In the event the Corporation shall at any time
following May 31, 1996 (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall
be adjusted by multiplying such Adjustment Number by a fraction
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
the shares of Series B Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to
the provision for adjustment hereinafter set forth) equal to 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 (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series B
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. Redemption. The shares of a Series B Preferred
Stock shall not be redeemable by the Corporation. The preceding
sentence shall not limit the ability of the Corporation to
purchase or otherwise deal in such shares of stock to the extent
permitted by law.
Section 9. Ranking. The Series B Preferred Stock shall
rank junior to all other series of the Corporation's preferred
stock (whether with or without par value) as to the payment of
dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
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 B Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a
majority or more of the outstanding shares of Series B Preferred
Stock, voting separately as a class.
Section 11. Fractional Shares. Series B Preferred Stock
may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of Series B Preferred Stock.
IN WITNESS WHEREOF, U.S. Robotics Corporation has caused its
corporate seal to be hereunto affixed and this Certificate to be
signed by Casey Cowell, its Chairman, President and Chief
Executive Officer, and the same to be attested by George A.
Vinyard, its Secretary, this 9th day of May, 1996.
U.S. ROBOTICS CORPORATION
By: _________________________
Casey Cowell
Chairman, President and
Chief Executive Officer
(SEAL)
Attest:
By: _____________________________
George A. Vinyard
Secretary
Exhibit B
[Form of Right Certificate]
Certificate No. R- _______________ Rights
NOT EXERCISABLE AFTER MAY 31, 2006 OR EARLIER IF THE RIGHTS
EXPIRE UNDER CERTAIN CIRCUMSTANCES OR ARE REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.001 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH
TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY,
THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
OF SUCH AGREEMENT.]*/ <F1>
<F1> * The portion of the legend in brackets shall be inserted
only if applicable and shall replace the preceding sentence.</F1>
Right Certificate
U.S. Robotics Corporation
This certifies that __________________________, or
registered assigns, is the registered owner of the number of
Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights
Agreement, dated as of May 9, 1996 (the "Rights Agreement"),
between U.S. Robotics Corporation, 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. (Chicago
time) on May 31, 2006, or notice of redemption or exchange at the
office of the Rights Agent (or its successors as Rights Agent)
designated for such purpose, one one-hundredth of a fully paid
non-assessable share of Series B Junior Participating Preferred
Stock, par value $.01 per share (the "Preferred Shares") of the
Company at a purchase price of $500.00 per one one-hundredth of
a share (the "Purchase Price") upon presentation and surrender of
this Right Certificate with the appropriate Form of Election to
Purchase and related Certificate duly executed. The number of
Rights evidenced by this Right Certificate (and the number of
shares which may be purchased upon exercise thereof) set forth
above, and the Purchase Price per share set forth above, are the
number and Purchase Price as of May 31, 1996, based on the
Preferred Shares as constituted at such date. Capitalized terms
not defined in this Right Certificate that are defined in the
Rights Agreement shall have the meanings ascribed to them in the
Rights Agreement.
Upon the occurrence of a Triggering Event, if the Rights
evidenced by this Right Certificate are beneficially owned by (i)
an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) under certain circumstances specified in the
Rights Agreement, a transferee of any such Acquiring Person,
Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person, such Rights shall become
null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of any such
Triggering Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of Preferred Shares or other securities,
which may be purchased upon the exercise of the Rights evidenced
by this 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, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
certain circumstances specified in such Rights Agreement. Copies
of the Rights Agreement are on file at the above-mentioned office
of the Rights Agent and are also available upon written request
to the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal corporate trust
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 may be redeemed by the
Company at its option at a redemption price of $.001 per Right at
any time prior to the earlier of the close of business on (i) the
Shares Acquisition Date and (ii) the Final Expiration Date.
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 depository receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of Preferred Shares or of any other securities
of the Company 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.
<PAGE>
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of ______________, 19__
ATTEST: (SEAL) U.S. ROBOTICS CORPORATION
__________________________ By: ________________________
Name: Name:
Title: Title:
Countersigned:
__________________________
By: _______________________
Authorized Signature
<PAGE>
[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.
Date: ___________________ , 19 __
_______________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement)
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is,
was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ____________, 19__ ______________________
Signature<PAGE>
NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this
Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Right Certificate.)
To: U.S. ROBOTICS CORPORATION
The undersigned hereby irrevocably elects to exercise _____
Rights represented by this Right Certificate to purchase the
Preferred Shares issuable upon the exercise of the Rights (or
such other securities of the Company or of any other person which
may be issuable upon the exercise of the Rights) and requests
that certificates for such shares be issued in the name of:
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 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: _______________, 19__ _______________________
Signature
Signature Guaranteed:
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Right Certificate from any Person who is, was or became
an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated: _______________, 19__ _______________________
Signature
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
<PAGE>
Exhibit C
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE
RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED
TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND
CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND
VOID AND WILL NO LONGER BE TRANSFERABLE
SUMMARY OF RIGHTS PLAN
On May 9, 1996, the Board of Directors of U.S. Robotics
Corporation (the "Company") approved the replacement of its
stockholder rights plan (the "Old Plan") with a new rights plan.
To put the new plan into effect, the Board declared a dividend
distribution of one Right for each outstanding share of common
stock, par value $.01 per share (the "Common Stock"), of the
Company to stockholders of record at the close of business on
May 31, 1996. Except as described below, each Right, when
exercisable, entitles the registered holder to purchase from the
Company one one-hundredth of a share of Series B Junior
Participating Preferred Stock, par value $.01 per share (the
"Preferred Stock"), at a price of $500.00 per one one-hundredth
share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") dated as of May 9, 1996
between the Company and Harris Trust and Savings Bank, as Rights
Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no
separate Right certificates will be distributed. 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") has acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the outstanding
shares of Common Stock (the "Shares Acquisition Date") or (ii) 15
business days (or such later date as may be determined by action
of the Board of Directors of the Company (the "Board of
Directors") prior to the time that any person becomes an
Acquiring Person) following the commencement of (or a public
announcement of an intention to make) a tender or exchange offer
if, upon consummation thereof, such person or group would be the
beneficial owner of 15% or more of such outstanding shares of
Common Stock (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced by the Common
Stock certificates together with a copy of the Summary of Rights
Plan and not by separate certificates.
The Rights Agreement also provides that, until the
Distribution Date, the Rights will be transferred with and only
with the Common Stock. Until the Distribution Date (or earlier
redemption, expiration or termination of the Rights), the
transfer of any certificates for Common Stock, with or without a
copy of this Summary of Rights Plan, will also constitute the
transfer of the Rights associated with the Common Stock
represented by such certificates. 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 Stock as of the close of business on the
Distribution Date and, thereafter, such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date
and will expire at the earliest of (i) May 31, 2006 (the "Final
Expiration Date"), (ii) the redemption of the Rights by the
Company as described below and (iii) the exchange of all Rights
for Common Stock as described below.
In the event that any person (other than the Company, its
affiliates or any person receiving newly-issued shares of Common
Stock directly from the Company) becomes the beneficial owner of
15% or more of the then outstanding shares of Common Stock, each
holder of a Right will thereafter have the right to receive, upon
exercise at the then current exercise price of the Right, Common
Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the
exercise price of the Right. The Rights Agreement contains an
exemption for any issuance of Common Stock by the Company
directly to any person (for example, in a private placement or an
acquisition by the Company in which Common Stock is used as
consideration), even if that person would become the beneficial
owner of 15% or more of the Common Stock, provided that such
person does not acquire any additional shares of Common Stock.
In the event that, at any time following the Shares
Acquisition Date, the Company is acquired in a merger or other
business combination transaction or 50% or more of the Company's
assets or earning power are sold, proper provision will be made
so that each holder of a Right will thereafter have the right to
receive, upon exercise at the then current exercise price of the
Right, common stock of the acquiring or surviving company having
a value equal to two times the exercise price of the Right.
Notwithstanding the foregoing, following the occurrence of
any of the events set forth in the preceding two paragraphs (the
"Triggering Events"), any Rights that are, or (under certain
circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will immediately
become null and void.
The Purchase Price payable, and the number of shares of
Preferred Stock or other securities or property issuable, upon
exercise of the Rights, and the number of Rights associated with
a share of Common Stock, are subject to adjustment from time to
time to prevent dilution, among other circumstances, in the event
of a stock dividend on, or a subdivision, split, combination,
consolidation or reclassification of, the Preferred Stock or the
Common Stock, or a reverse split of the outstanding shares of
Preferred Stock or the Common Stock.
At any time after the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15%
or more of the outstanding Common Stock and prior to the
acquisition by such person or group of 50% or more of the
outstanding Common Stock, the Board of Directors may exchange the
Rights (other than Rights owned by such person or group, which
have become void), in whole or in part, at an exchange ratio of
one share of Common Stock 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 the Purchase Price. The Company
will not be required to issue fractional shares of Preferred
Stock or Common Stock (other than fractions in multiples of one
one-hundredths of a share of Preferred Stock) and, in lieu
thereof, an adjustment in cash may be made based on the market
price of the Preferred Stock or Common Stock on the last trading
date prior to the date of exercise.
At any time after the date of the Rights Agreement until the
time that a person becomes an Acquiring Person, the Board of
Directors may redeem the Rights in whole, but not in part, at a
price of $.001 per Right (the "Redemption Price"), which may (at
the option of the Company) be paid in cash, shares of Common
Stock or other consideration deemed appropriate by the Board of
Directors. Upon the effectiveness of any action of the Board of
Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
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.
The provisions of the Rights Agreement may be amended by the
Company, except that any amendment adopted after the time that a
person becomes an Acquiring Person may not adversely affect the
interests of holders of Rights.
As of May 11, 1996, there were 87,597,882 shares of Common
Stock outstanding and 28,173,448 shares of Common Stock reserved for
issuance under employee benefit plans. Each outstanding share of
Common Stock as of the close of business on May 31, 1996 will
receive one Right. Two million five hundred thousand (2,500,000)
shares of Preferred Stock will be reserved for issuance in the
event of exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that
attempts to acquire the Company without conditioning the offer on
the Rights being redeemed or a substantial number of Rights being
acquired, and under certain circumstances the Rights beneficially
owned by such a person or group may become void. The Rights
should not interfere with any merger or other business
combination approved by the Board of Directors because, if the
Rights would become exercisable as a result of such merger or
business combination, the Board of Directors may, at its option,
at any time prior to the time that any Person becomes an
Acquiring Person, redeem all (but not less than all) of the then
outstanding Rights at the Redemption Price.
A copy of the Rights Agreement is being filed with the
Securities and Exchange Commission as an exhibit to a
Registration Statement on Form 8-A and a Current Report on Form
8-K. This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the
Rights Agreement.
