SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
LeCROY CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-2507777
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 Chestnut Ridge Road
Chestnut Ridge, NY 10977
(Address of principal executive offices) (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 None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Share Purchase Rights
(Title of class)
<PAGE>
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. Description of Registrant's Securities to be Registered
On November 2, 1998, the Board of Directors of LeCroy Corporation
(the "Company") declared a dividend distribution of one common share
purchase right (a "Right") for each outstanding share of common stock, par
value $0.01 per share (the "Common Shares"), of the Company. The
dividend is payable on November 18, 1998 (the "Record Date") to the
stockholders of record on that date. Except as described below, each Right,
when exercisable, entitles the registered holder to purchase from the
Company one Common Share of the Company at a price of $126 per
Common Share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and BankBoston, N.A., as Rights
Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Rights certificates will
be distributed. Until the earlier to occur of (i) 10 business days following a
public announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") have acquired beneficial ownership of 15%
or more of the outstanding Common Shares (the date of such an
announcement being a "Shares Acquisition Date"), or (ii) 10 business days
(or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) following
the commencement of, or announcement of an intention to make, a tender
offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of such
outstanding Common Shares, the Rights will be evidenced, with respect to
any of the Common Share certificates outstanding as of the Record Date, by
such Common Share certificates together with a copy of this Summary of
Rights.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or
new issuance of Common Shares will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the Record Date, even
without such notation or a copy of this Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights
("Rights Certificates") will be mailed to holders of record of the Common
Shares as of the close of business on the Distribution Date, and the
separate Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on November 2, 2008 (the "Final Expiration Date"), unless
the Rights are earlier redeemed by the Company, as described below.
The Purchase Price payable, and the number of Common Shares or
other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event
of a stock dividend on, or a subdivision, combination or reclassification of,
the Common Shares, (ii) upon the grant to holders of the Common Shares of
certain rights or warrants to subscribe for or purchase Common Shares at a
price, or securities convertible into Common Shares with a conversion price,
less than the then current market price of the Common Shares or (iii) upon
the distribution to holders of the Common Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out
of earnings or retained earnings or dividends payable in Common Shares) or
of subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of Common
Shares issuable upon exercise of each Right are also subject to adjustment
in the event of a stock split of the Common Shares or a stock dividend on
the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any
such case, prior to the Distribution Date.
Common Shares purchasable upon exercise of the Rights will not be
redeemable.
In the event that, after the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become
such, the Company is involved in a merger or other business combination
transaction in which the Common Shares are exchanged or changed, or
50% or more of the Company's consolidated assets or earning power are
sold (in one transaction or a series of transactions), proper provision will be
made so that each holder of a Right (other than an Acquiring Person) will
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock
of the acquiring company (or, in the event there is more than one acquiring
company, the acquiring company receiving the greatest portion of the assets
or earning power transferred) which at the time of such transaction would
have a market value of two times the exercise price of the Right.
In the event that (i) any person becomes an Acquiring Person, (ii) an
Acquiring Person engages in one or more "self-dealing" transactions as set
forth in the Rights Agreement, or (iii) during such time as there is an
Acquiring Person, there shall be a reclassification of securities or a
recapitalization or reorganization of the Company or other transaction or
series of transactions involving the Company which has the effect of
increasing by more than 1% the proportionate share of the outstanding
shares of any class of equity securities of the Company or any of its
subsidiaries beneficially owned by the Acquiring Person, each holder of a
Right will thereafter have the right to receive upon exercise that number of
Common Shares having a market value of two times the exercise price of the
Right. Upon occurrence of any of the events described in the immediately
preceding sentence, any Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person shall immediately become null and void.
At any time after the occurrence of any such event and prior to the
acquisition by such person or group of 50% or more of the outstanding
Common Shares, 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 Common Share per Right
(subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1%
in such Purchase Price. No fractional Common Shares will be issued and in
lieu thereof, an adjustment in cash will be made based on the market price
of the Common Shares on the last trading day prior to the date of exercise.
At any time prior to the earlier of (i) the tenth day after a Shares
Acquisition Date, or (ii) the expiration of the Rights, the Board of Directors
may redeem the Rights in whole, but not in part, at a price of $.001 per
Right (the "Redemption Price"). The redemption of the Rights 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. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.
Other than those provisions relating to the principal economic terms
of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights Agreement
may be amended by the Board in order to cure any ambiguity, to make
changes that do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or to shorten or lengthen
any time period under the Rights Agreement; provided, however, that no
amendment to adjust the time period governing redemption shall be made
at such time as the Rights are not redeemable.
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 Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Company's Board of Directors. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors since the Rights may be redeemed by
the Company at $.001 per Right prior to the time that a person or group has
acquired beneficial ownership of 15% or more of the Common Shares.
The form of Rights Agreement between the Company and the Rights
Agent specifying the terms of the Rights, which includes as Exhibit A the
form of Rights Certificate, is attached hereto as an exhibit and incorporated
herein by reference. The foregoing 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 November 2, 1998, between the
Company and BankBoston, N.A., Rights Agent.
2. Form of Rights Certificate, included as Exhibit A to Item 1 above.
3. Summary of Rights to Purchase Common Shares, included as
Exhibit B to Item 1 above.
4. Press Release, dated November 3, 1998 (incorporated herein by
reference to Exhibit 4 to the Company's Report on Form 8-K filed on
November 12, 1998 (File No. 0-26634)).
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.
LeCROY CORPORATION
By: \s\ John C. Maag
John C. Maag,
Vice President-Finance,
Chief Financial Officer,
Secretary and Treasurer
DATED: November 10, 1998
Exhibit 1
RIGHTS AGREEMENT
This Rights Agreement (this "Agreement"), dated as of November 2,
1998, is by and between LeCroy Corporation (the "Company"), a Delaware
corporation, and BankBoston, N.A. (the "Rights Agent"), a national banking
association.
The Company's Board of Directors has declared a dividend of one
right (a "Right") in respect of each share of the Company's Common Stock
outstanding of record as of the close of business, New York time, on
November 18, 1998 (the "Record Date"). Each Right has the terms and is
subject to the conditions set forth in this Agreement.
The parties hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement:
(a) "Acquiring Person" means any Person who, together with all
Affiliates and Associates of such Person, is the Beneficial Owner of 15% or
more of the Common Shares of the Company then outstanding or who was
such a Beneficial Owner at any time after the date hereof, whether or not
such Person continues to be the Beneficial Owner of 15% or more of the
Common Shares then outstanding, but will not include the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or
any Subsidiary of the Company, or any entity holding securities of the
Company organized, appointed, or established by the Company or any
Subsidiary for or pursuant to the terms of any such plan. Notwithstanding
the foregoing, (i) Kopp Investment Advisers, Inc. ("Kopp") will not be deemed
to be an Acquiring Person so long as Kopp does not own in excess of 25.8%
of the issued and outstanding Common Shares in the aggregate, and (ii) no
Person will become an "Acquiring Person" solely as the result of an
acquisition of Common Shares by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to 15% or more of the Common
Shares of the Company then outstanding; provided, however, that if a
Person becomes the Beneficial Owner of 15% or more of the Common
Shares of the Company then outstanding by reason of share purchases by
the Company, and after such share purchases by the Company, becomes
the Beneficial Owner of any additional Common Shares of the Company,
then such Person will be deemed to be an "Acquiring Person."
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of Common Shares so that such
Person would no longer be an "Acquiring Person," as defined pursuant to
the foregoing provisions of this paragraph (a), then such Person shall not be
deemed to be an "Acquiring Person" for any purposes of this Rights
Agreement.
(b) "Affiliate" and "Associate" have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement.
(c) A Person will be deemed the "Beneficial Owner" of and will be
deemed to "beneficially own" any securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement, or understanding
(whether or not in writing) or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise; provided,
however, that a Person will not be deemed the "Beneficial Owner" of,
or to "beneficially own," (A) securities tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
payment, purchase, or exchange, or (B) at any time prior to the
occurrence of a Triggering Event, securities issuable upon exercise of
Rights, or (C) from and after the occurrence of a Triggering Event,
securities issuable upon exercise of Rights, which Rights were
acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a)
or Section 23 hereof (the "Original Rights") or pursuant to Section
11(i) hereof in connection with an adjustment made with respect to
any Original Rights;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3
of the General Rules and Regulations under the Exchange Act),
including without limitation pursuant to any agreement,
arrangement, or understanding, whether or not in writing; provided,
however, that a Person will not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (ii) as a
result of an oral or written agreement, arrangement, or
understanding to vote such security if such agreement, arrangement,
or understanding: (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable provisions of the General
Rules and Regulations under the Exchange Act, and (B) is not also
then reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
(iii) that are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii) of
this paragraph (d)) or disposing of any voting securities of the
Company.
provided, however, that nothing in this paragraph (d) will cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities acquired through such
Person's participation in good faith in a firm commitment underwriting until
the expiration of forty days after the date of such acquisition.
(d) "Business Day" means any day other than a Saturday, a
Sunday, or a day on which banking institutions in The Commonwealth of
Massachusetts are authorized or obligated by law or executive order to
close.
(e) "Close of business" on any given date means 5:00 P.M., New
York City time, on such date; provided, however, that if such date is not a
Business Day it means 5:00 P.M., New York City time, on the next
succeeding Business Day.
(f) "Common Shares" when used with reference to the Company
means the shares of common stock, par value $0.01 per share, of the
Company. "Common Shares" when used with reference to any Person other
than the Company means the capital stock with the greatest voting power,
or the equity securities or other equity interest having power to control or
direct the management, of such other Person, or if such other Person is a
Subsidiary of another Person, of the Person or Persons that ultimately
control such first-mentioned Person and which have issued and
outstanding such capital stock, equity securities, or equity interests.
(g) "Distribution Date" has the meaning set forth in Section 3
hereof.
(h) "Expiration Date" has the meaning set forth in Section 7
hereof.
(i) "Final Expiration Date" has the meaning set forth in Section 7
hereof.
(j) "Person" means any individual, firm, corporation, partnership,
limited liability company, trust, or other entity, and includes any successor
(by merger or otherwise) of such entity.
(k) "Redemption Date" has the meaning set forth in Section 7
hereof.
(l) "Section 7(e) Person" has the meaning set forth in Section 7
hereof.
(m) "Section 11(a)(ii) Event" means any event described in Section
11(a)(ii) hereof.
(n) "Section 13 Event" means any event described in clauses (x),
(y), or (z) of Section 13(a) hereof.
(o) "Shares Acquisition Date" means the first date of public
announcement (which, for purposes of this definition, includes without
limitation a report filed pursuant to Section 13(d) under the Exchange Act)
by the Company or an Acquiring Person that an Acquiring Person has
become such.
(p) "Subsidiary" of any Person means any other Person of which a
majority of the voting power of the voting equity securities or equity interest
is owned, directly or indirectly, by such first-mentioned Person, or which is
otherwise controlled by such first-mentioned Person.
(q) "Triggering Event" means any Section 11(a)(ii) Event or any
Section 13 Event.
(r) "Voting Stock" means (i) the Common Shares of the Company,
and (ii) any other shares of capital stock of the Company entitled to vote
generally in the election of directors or entitled to vote together with the
Common Shares in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution, or
winding-up. Whenever any provision of this Agreement requires a
determination of whether a number of shares of Voting Stock constituting a
specified percentage of such Voting Stock has been voted, tendered,
acquired, sold or otherwise disposed of, or a determination of whether a
Person has offered or proposed to acquire a number of shares of Voting
Stock constituting such specified percentage, the number of shares of
Voting Stock constituting such specified percentage of Voting Stock will in
every such case be deemed to be the number of shares of Voting Stock
constituting the specified percentage of the Company's entire voting power
then entitled to vote generally inthe election of directors or then entitled to
vote together with the Common Shares in respect of any merger,
consolidation, sale of all or substantially all of the Company's assets,
liquidation, dissolution, or winding-up.
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 until the Distribution Date, will also be the holders of the
Common Shares in accordance with Section 3 hereof) 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, upon ten (10) days' prior
written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and shall in no event be liable for, the acts or omissions of any
such co-Rights Agent. In the event the Company appoints one or more Co-
Rights Agents, the respective duties of the Rights Agents and any Co-Rights
Agents will be as the Company may determine.
Section 3. Issue of Rights Certificates.
(a) Until the earliest of:
(i) the close of business on the tenth Business Day after the
Shares Acquisition Date; or
(ii) the tenth Business Day (or such later date as may be
determined by action of the Board of Directors prior to such time as
any Person becomes an Acquiring Person) after the 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 earliest of such dates being herein
referred to as the "Distribution Date"):
(x) no right may be exercised;
(y) 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 will also be
deemed to be certificates for Rights) and not by separate certificates;
and
(z) the Rights (and the right to receive certificates therefor)
will be transferable only in connection with the transfer of the
underlying Common Shares.
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 if requested, the Rights Agent will send)
by first-class, postage-prepaid mail or other appropriate means, 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 certificate for Rights, in substantially the form of the
attached Exhibit A (collectively, "Rights Certificates"), evidencing one Right
for each Common Share so held. As of and after the Distribution Date, the
Rights will be evidenced solely by Rights Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Common
Shares, in substantially the form of the attached Exhibit B (the "Summary
of Rights"), by first-class, postage-prepaid mail, or other appropriate means,
to each record holder of Common Shares as of the close of business on the
Record Date, at the address of such holder shown on the records of the
Company or its transfer agent.
With respect to certificates for Common Shares outstanding as of the
Record Date, until the Distribution Date (or earlier redemption, expiration
or termination of the Rights), the Rights will be evidenced by such
certificates registered in the names of the holders thereof together with a
copy of the Summary of Rights attached thereto, and the registered holders
of the Common Shares will also be the registered holders of the associated
Rights. With respect to uncertificated Common Shares outstanding as of
the Record Date, until the Distribution Date, the Rights will be evidenced by
the registration of the Common Shares in the Company's share register in
the names of the holders thereof.
Until the Distribution Date (or earlier redemption, expiration or
termination of the Rights), the surrender for transfer of any certificate for
Common Shares outstanding on the Record Date, even without a copy of
the Summary of Rights attached thereto, will also constitute the transfer of
the Rights associated with the Common Shares represented by such
certificate.
(c) Certificates issued for Common Shares (including without
limitation certificates issued upon transfer or exchange of Common Shares)
after the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date will be deemed also to be certificates for Rights and will
have impressed, printed, or written thereon, or otherwise affixed thereto,
the following legend:
"This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between
LeCroy Corporation and BankBoston, N.A., dated as of
November 2, 1998 (the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of LeCroy
Corporation. Under certain circumstances, as set forth in the
Rights Agreement, such Rights may be redeemed, may expire,
or may be evidenced by separate certificates and no longer be
evidenced by this certificate. LeCroy Corporation will mail to
the registered holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request
therefor. As described in the Rights Agreement, under certain
circumstances, Rights held by Acquiring Persons (as defined in
the Rights Agreement), or certain related Persons, and any
subsequent holder of such Rights, may become null and void."
and, in the case of the initial transaction or subsequent periodic
statements with respect to uncertificated Common Shares, the
following legend:
"The registration in the share register of LeCroy Corporation of
the shares of common stock to which this initial transaction or
subsequent periodic statement relates also evidences and
entitles the registered holder of such shares to certain rights as
set forth in a Rights Agreement between LeCroy Corporation
and BankBoston, N.A., dated as of November 2, 1998 (the
"Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file
at the principal executive offices of LeCroy Corporation. Under
certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will
no longer be evidenced by separate certificates and will no
longer be evidenced by such registration. LeCroy Corporation
will mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request
therefor. Under certain circumstances, as set forth in the
Rights Agreement, Rights issued to any Person who becomes
an Acquiring Person (as defined in the Rights Agreement) may
become null and void."
Until the Distribution Date, the Rights associated with Common
Shares will be evidenced only by the certificates representing such Common
Shares, and the surrender for transfer of any such certificate will also
constitute the transfer of the Rights associated with the Common Shares
represented thereby. However, with respect to such initial transaction or
subsequent periodic statements containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares with
respect to which such statements are issued shall be evidenced solely by
the registration of ownership of such Common Shares in the share register
of the Company, and the registration of transfer of ownership in such share
register shall also constitute the transfer of the Rights associated with the
Common Shares whose ownership is so transferred. 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 will be deemed cancelled and retired so that the Company
will not be entitled to exercise any Rights associated with the Common
Shares that are no longer outstanding.
Notwithstanding anything to the contrary stated herein, no Rights
Certificate shall be issued pursuant to this Section 3 that represents Rights
"beneficially owned" by an Acquiring Person whose Rights would be void
pursuant to Section 7(e) or any Associate or Affiliate of any such Acquiring
Person; no Rights Certificate shall be issued at any time upon the transfer
of any Rights to an Acquiring Person whose Rights would be void pursuant
to Section 7(e) or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate; any Rights Certificate
delivered to the Rights Agent for transfer to an Acquiring Person whose
Rights would be void pursuant to Section 7(e) shall be canceled.
Section 4. Form of Rights Certificates.
The Rights Certificates (and the forms of election to purchase shares
and of assignment to be printed on the reverse thereof) will be substantially
in the form of the attached Exhibit A, and may have such marks of
identification or designation and such legends, summaries, or indorsements
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 or
securities quotation system on or by which the Rights may from time to
time be listed or quoted, or to conform to usage. Subject to the provisions
of Section 11 and Section 23 hereof, the Rights Certificates initially will
entitle the holders thereof to purchase such number of Common Shares as
may be set forth therein at the price per Common Share set forth therein
(the "Purchase Price"), but the number of such Common Shares and the
Purchase Price will be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Rights
Certificates will be executed on behalf of the Company by such officer or
officers who would be entitled to sign certificates representing Common
Shares, either manually or by facsimile signature, may (but need not) have
affixed thereto the Company's seal or a facsimile thereof, and may (but need
not) be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Rights Certificates will be
countersigned by the Rights Agent and will not be valid for any purpose
unless so countersigned. If any officer of the Company who signed any of
Rights Certificate ceases to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Rights Certificate, nevertheless, may be countersigned by
the Rights Agent and issued and delivered by the Company with the same
force and effect as though the Person who signed such Rights Certificate
had not ceased to be such officer of the Company; and any Rights
Certificate may be signed on behalf of the Company by any
Person who, at the actual date of the execution of such Rights Certificate,
will be a proper officer of the Company to sign such Rights Certificate,
although at the date of the execution of this Rights Agreement any such
Person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept books for registration and transfer of the Rights Certificates,
showing the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the
Rights Certificates, and the date of each Rights Certificate.
Section 6. Transfer, Split-Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates. Subject to the provisions of Sections 3(c), 4, 7(e), and 15
hereof, at any time after the close of business on the Distribution Date, and
before the close of business on the Expiration Date, any Rights Certificate(s)
may be transferred, split up, combined, or exchanged for one or more new
Rights Certificates entitling the registered holder to purchase the same
number of Common Shares as the Rights Certificate(s) surrendered then
entitled such holder to purchase.
Any registered holder desiring to transfer, split up, combine, or
exchange any Rights Certificate(s) will make such request in writing
delivered to the Rights Agent, and will surrender the Rights Certificate or
Rights 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, split up, combination or exchange
of any such surrendered Rights Certificate until the registered holder shall
have completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent will countersign and
deliver to the Person entitled thereto one or more Rights Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer, split-up, combination, or
exchange of Rights Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction, or mutilation
of a Rights Certificate, and in case of loss, theft, or destruction, of
indemnity and/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 Rights Certificate if mutilated, the
Company will execute and deliver a new Rights Certificate of like tenor to
the Rights Agent for delivery to the registered holder in lieu of the Rights
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
Rights 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 Rights 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 for the Common Shares (or other
securities) as to which the Rights are being exercised, at or prior to the
earliest of:
(i) the close of business on the tenth anniversary of the
date hereof (the "Final Expiration Date");
(ii) the time at which the Rights are redeemed as provided in
Section 24 hereof (the "Redemption Date"); or
(iii) the time at which such Rights are exchanged as provided
in Section 25 hereof (such earliest time being herein referred to as
the "Expiration Date").
(b) The Purchase Price for each Common Share upon the exercise
of a Right will initially be $126, will be subject to adjustment from time to
time as provided in Sections 11 and 13 hereof, and will be payable in lawful
money of the United States of America in accordance with Section 7(c)
hereof.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the appropriate form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the shares to be
purchased and an amount equal to any applicable transfer tax required to
be paid by the holder of such Rights Certificate in accordance with Section
9 hereof, in cash or by certified check, cashier's check, money order, or
bank draft paid or payable to the order of the Company, the Rights Agent
will thereupon promptly:
(i) (A) requisition from any transfer agent of the Common
Shares (or make available, if the Rights Agent is the transfer agent)
certificates for the number of Common Shares to be purchased (and
the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests), or (B) if the Company, in its sole
discretion, elects to deposit the Common Shares issuable upon
conversion of the Rights hereunder into a depository, requisition from
the depository agent depository receipts representing such number of
Common Shares as are to be purchased (in which case certificates for
the Common Shares represented by such receipts will be deposited
by the transfer agent with the depository agent) and the Company will
direct the depository agent to comply with such request;
(ii) when appropriate, requisition from the Company the
amount of cash, if any, to be paid in lieu of issuance of fractional
shares in accordance with Section 15 hereof;
(iii) promptly after receipt of such certificates or depository
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name
or names as may be designated by such holder; and
(iv) when appropriate, after receipt, promptly deliver such
cash to or upon the order of the registered holder of such Rights
Certificate. In the event that the Company is obligated to issue other
securities of the Company pursuant to Section 11(a), the Company
will make all arrangements necessary so that such other securities
are available for distribution by the Rights Agent, if, as, and when
appropriate.
(d) Subject to the provisions of Section 15 hereof, if the registered
holder of any Rights Certificate exercises less than all of the Rights
evidenced thereby, a new Rights Certificate evidencing Rights equivalent to
the Rights remaining unexercised will be issued by the Rights Agent to the
registered holder of such Rights Certificate.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by any:
(i) Acquiring Person or Associate or Affiliate of an Acquiring
Person;
(ii) transferee of an Acquiring Person (or of any Associate or
Affiliate of an Acquiring Person) who becomes such a transferee after
the Acquiring Person becomes such; or
(iii) transferee of an Acquiring Person (or of any Associate or
Affiliate of an Acquiring Person) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and who
receives such Rights pursuant to either (A) a transfer (regardless of
whether for consideration) from such Acquiring Person, Associate, or
Affiliate to holders of equity interests in such Acquiring Person,
Associate, or Affiliate, or to any Person with whom such Acquiring
Person, Associate, or Affiliate has any continuing oral or written plan,
agreement, arrangement, or understanding regarding the transferred
Rights, or (B) a transfer that the Board of Directors of the Company
has determined is part of an oral or written plan, agreement,
arrangement, or understanding that has as a primary purpose or
effect avoidance of this Section 7(e);
(each Person described in the preceding clauses (i) through (iii) of this
Section 7(e), a "Section 7(e) Person") will become null and void without any
further action, and no holder of such Rights will have any rights whatsoever
with respect to such Rights, whether under this Agreement or otherwise.
The Company will use reasonable efforts to insure that the provisions
of this Section 7(e) and Sections 3(c) and 4 hereof are complied with, but
will have no liability to any holder of Rights Certificates or any other Person
as a result of its failure to make or erroneous making of any determination
with respect to an Acquiring Person, Affiliate or Associate of an Acquiring
Person, or transferee of any such Person.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company will 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 Rights Certificate surrendered for such exercise will have been properly
completed and duly executed by the registered holder thereof and the
Company will 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 will reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination, or exchange will, 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, will be cancelled by it;
and no Rights Certificates will be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company
will deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent will so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent will deliver all cancelled Rights Certificates to the
Company, or at the written request of the Company, will destroy such
cancelled Rights Certificates and certify such destruction to the Company.
Section 9. Reservation and Availability of Common Shares.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Common
Shares or any Common Shares held in its treasury, a number of Common
Shares (or other securities) sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7 of this Agreement.
(b) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Common Shares or other
securities delivered upon due exercise of Rights and payment of the
purchase price therefor will be duly and validly authorized and issued, fully
paid, and nonassessable at the time of delivery of the certificates for such
Common Shares or other securities.
(c) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and
charges payable in respect of the issuance or delivery of the Rights
Certificates or of any Common Shares or other securities upon the exercise
of Rights. The Company will not, however, be required to pay any transfer
tax payable in respect of any transfer or delivery of Rights Certificates to a
Person other than, or the issuance or delivery of certificates or depository
receipts for the Common Shares or other securities in a name other than
that of, the registered holder of the Rights Certificate evidencing Rights
surrendered for exercise; or to issue or to deliver any certificates or
depository receipts for Common Shares or other securities upon the
exercise of any Rights until any such tax has been paid (any such tax being
payable by the holder of such Rights Certificate at the time of surrender) or
until it has been established to the Company's reasonable satisfaction that
no such tax is due.
(d) The Company may temporarily suspend the exercisability of
the Rights in order to prepare and file any registration statement as may be
required to be filed pursuant to applicable law with respect to securities
purchasable upon exercise of the Rights. Upon any such suspension, the
Company will issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended. The Company will thereafter
issue a public announcement at such time as the suspension is no longer in
effect.
Section 10. Common Shares Record Date. Each Person in whose
name any certificate for Common Shares (or other securities) is issued upon
the exercise of Rights will for all purposes be deemed to have become the
holder of record of the Common Shares represented thereby on, and such
certificate will be dated, the date upon which the Rights 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
Common Shares (or other securities) transfer books of the Company are
closed, such Person will be deemed to have become the record holder of
such shares on, and such certificate will be dated, the next succeeding
Business Day on which the Common Shares (or other securities) transfer
books of the Company are open.
Until a Rights Certificate has been duly exercised, the holder thereof
will not be entitled to any rights of a stockholder of the Company with
respect to shares for which the Rights may be exercisable ( including
without limitation the rights to vote and to receive dividends and other
distributions) and will not be entitled to receive any notice of any
proceedings of the Company, except as specifically provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of
shares 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) Except as otherwise provided in this Section 11(a)
and in Section 7(e), if the Company at any time after the date of this
Agreement (A) declares a dividend on the Common Shares payable in
Common Shares, (B) subdivides the outstanding Common Shares,
(C) combines the outstanding Common Shares into a smaller number
of shares, or (D) issues any shares of its capital stock in a
reclassification of the Common Shares (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), then 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, as the case may be, and the number and kind of
shares of capital stock issuable on such date, each will be
proportionately adjusted so that the holder of any Right duly
exercised after such applicable time will be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number
and kind of shares of capital stock that, if such Right had been
exercised immediately prior to such applicable time and at a time
when the Common Shares transfer books of the Company were open,
such holder would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination, or
reclassification; provided, however, that in no event will 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 that would
require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) will be in
addition to, and will be made prior to, any adjustment required
pursuant to Section 11(a)(ii).
(ii) Subject to Section 25 of this Agreement, if any Person
becomes an Acquiring Person then, and in each such case, proper
provision will be made promptly so that, following the Distribution
Date, each holder of a Right, except as provided in Section 7(e)
hereof, will have a right to receive, upon exercise thereof at a price
equal to the then current Purchase Price in accordance with the
terms of this Agreement, such number of Common Shares of the
Company as is equal to the result obtained by (x) multiplying the
then current Purchase Price by the then number of Common Shares
for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
(which following such first occurrence will thereafter be referred to as
the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the then current per share market price of the
Company's Common Shares (determined pursuant to Section 11(d)
hereof) on the date of such first occurrence (such number of shares,
the "Adjustment Shares"); provided, however, that if the transaction
that would otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof will apply and no adjustment will be
made pursuant to this Section 11(a)(ii). 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 the event that the number of Common Shares that are
authorized by the Company's certificate of incorporation (as amended
and in effect as of the relevant time) but not outstanding or reserved
for issuance for purposes other than upon exercise of the Rights, are
not sufficient to permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii) of this Section 11(a), the
Company will: (A) determine the excess of the value of the
Adjustment Shares issuable upon the exercise of a Right (the
"Current Value") over the Purchase Price (such excess, the "Spread"),
and (B) with respect to each Right, make adequate provision to
substitute for the Adjustment Shares, upon payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Common Shares of the same or a different class or other equity
securities of the Company (including without limitation preferred
shares or units of preferred shares that the Company's Board of
Directors in good faith deems (based on, among other things, the
dividend and liquidation rights of such preferred shares) to have
substantially the same economic value as Common Shares (such
preferred shares, hereinafter referred to as "common share
equivalents")), (4) debt securities of the Company, (5) other assets, or
(6) any combination of the foregoing, having an aggregate value equal
to the Current Value, where such aggregate value has been
determined by the Board of Directors after considering the advice of a
competent investment banking firm selected by the Board of Directors
of the Company; provided, however, that if the Company has not
made adequate provision to deliver value pursuant to clause (B)
above within thirty (30) days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 24(b) expires (the
later of (x) and (y) being referred to herein as the "Section 11(a)(ii)
Trigger Date"), then the Company will be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment
of the Purchase Price, Common Shares (to the extent available) and
then, if necessary, cash, which shares and/or cash have an aggregate
value equal to the Spread. If the Board of Directors of the Company
determines in good faith that it is likely that sufficient additional
Common Shares could be authorized for issuance upon exercise in
full of the Rights, the 30-day period set forth above may be extended
to the extent necessary, but not more than 90 days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution Period"). To
the extent that the Company determines that action need be taken
pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company will provide, subject to Section 7(e) hereof,
that such action will apply uniformly to all outstanding Rights, and
may suspend the exercisability of the Rights until the expiration of
the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to
determine the value thereof. The Company will make a public
announcement when the exercisability of the Rights has been
temporarily suspended, and again when such suspension is no longer
in effect. For purposes of this Section 11(a)(iii), the value of the
Common Shares will be the current market price (as determined
pursuant to Section 11(d) hereof) per Common Share on the Section
11(a)(ii) Trigger Date and the value of any "common share equivalent"
will be deemed to have the same value as the Common Shares on
such date.
(b) If the Company fixes a record date for the issuance of rights,
options, or warrants to all holders of Common Shares entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe
for or purchase Common Shares (or shares having the same or more
favorable rights, privileges, and preferences as the Common Shares
("equivalent common shares")) or securities convertible into Common
Shares or equivalent common shares at a price per Common Share or
equivalent common share (or having a conversion price per share, if a
security convertible into Common Shares or equivalent common shares) less
than the then current per share market price of the Common Shares (as
defined in Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date will be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which will be the number of Common Shares outstanding on
such record date plus the number of Common Shares that the aggregate
offering price of the total number of Common Shares and/or equivalent
common shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such
current market price and the denominator of which will be the number of
Common Shares outstanding on such record date plus the number of
additional Common Shares and/or equivalent common 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 will
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 will be in a form other than cash, the
value of such consideration will be as determined in good faith by the Board
of Directors of the Company, whose determination will be described in a
statement filed with the Rights Agent. Common Shares owned by or held
for the account of the Company will not be deemed outstanding for the
purpose of any such computation. Such
adjustment will 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 will be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) If the Company fixes a record date for the making of a
distribution to all holders of the Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of cash, evidences of
indebtedness, or other assets (other than a dividend payable in Common
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 will be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
will be the then current per share market price of the Common 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 will be
described in a statement filed with the Rights Agent) of the portion of the
cash, evidences of indebtedness, or other assets so to be distributed or of
such subscription rights or warrants applicable to one Common Share and
the denominator of which will be such current per share market price of the
Common Shares; provided, however, that in no event will 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 will be made successively
whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price will again be adjusted to be
the Purchase Price that would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder
other than computations made pursuant to Section 11(a)(iii) hereof,
the "current per share market price" of any Security (a "Security" for
the purpose of this Section 11(d)(i)) on any date will be deemed to be
the average of the daily closing prices per share of such Security for
the 30 consecutive Trading Days (as hereinafter defined) immediately
prior to such date; provided, however, that in the event that the
current per share market price of the Security is determined during a
period following the announcement by the issuer of such Security of
(A) a dividend or distribution on such Security payable in shares of
such Security or securities convertible into such shares, or (B) any
subdivision, combination, or reclassification of such Security and
prior to the expiration of 30 Trading Days after the ex-dividend date
for such dividend or distribution, or the record date for such
subdivision, combination, or reclassification, then, and in each such
case, the current per share market price will be appropriately
adjusted to reflect the current market price per share equivalent of
such Security. The closing price for each day will 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 National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or such other system then
in use, or if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Security selected by the Board of Directors of the Company. The term
"Trading Day" means 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 Common Shares will be
determined in accordance with the method set forth in Section
11(d)(i). If the Common Shares are not publicly held or so listed or
traded, "current per share market price" means the fair value per
share as determined in good faith by the Board of Directors of the
Company, whose determination will be described in a statement filed
with the Rights Agent.
(e) Subject to the final sentence of this Section 11(e), no
adjustment in the Purchase Price will be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price;
provided, however, that any adjustments that by reason of this Section 11(e)
are not required to be made will be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section 11 will
be made to the nearest cent or to the nearest one ten-thousandth of any
Common Share or 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 will be made no later than the earlier of (i) three
years from the date of the transaction that requires such adjustment or
(ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised will become entitled to
receive any shares of capital stock of the Company other than Common
Shares, thereafter the number of such other shares so receivable upon
exercise of any Right will be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Common Shares contained in Section 11(a) through (c),
(e), (h) through (k), and (m), and the provisions of Sections 7, 9, 10, 13, 14,
and 15 with respect to the Common Shares will 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 will evidence the right to
purchase, at the adjusted Purchase Price, the number of Common Shares
purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company has 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 will thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of
Common Shares (calculated to the nearest one ten thousandth of a
Common Share) obtained by (i) multiplying (x) the number of Common
Shares 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 Common Shares purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment
of the number of Rights will be exercisable for the number of Common
Shares 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 will 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 will 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 Rights Certificates have been issued, will be at least 10
days later than the date of the public announcement. If Rights Certificates
have been issued, upon each adjustment of the number of Rights pursuant
to this Section 11(i), the Company as promptly as practicable will cause to
be distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 15 hereof, the additional
Rights to which such holders will be entitled as a result of such adjustment,
or at the Company's option, will cause to be distributed to such holders of
record in substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the Rights
to which such holders are entitled after such adjustment. Rights
Certificates so to be distributed will be issued, executed, and countersigned
in the manner provided for herein (and may bear, at the option of the
Company, the adjusted Purchase Price) and will be registered in the names
of the holders of record of Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of Common Share issuable upon the exercise of the Rights,
the Rights Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of Common Shares that were
expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the
Common Shares issuable upon exercise of the Rights, the Company will
take any corporate action that may be necessary, in the opinion of its
counsel, in order that the Company may validly and legally issue fully paid
and nonassessable Common Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 requires that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may defer until the occurrence of such event
the issuing to the holder of any Right exercised after such record date of the
Common Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Common 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 will deliver to such
holder an 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 will 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 determines to be
advisable in order that any consolidation or subdivision of the Common
Shares, issuance wholly for cash of any Common Shares at less than the
current market price, issuance wholly for cash of Common Shares or
securities that by their terms are convertible into or exchangeable for
Common Shares, stock dividends, or issuance of rights, options, or
warrants referred to hereinabove in this Section 11, hereafter made by the
Company to holders of its Common Shares will not be taxable to such
stockholders.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made pursuant to Section 11 or 13
hereof, the Company will 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 a copy of such certificate, and (c) mail a brief summary
thereof to each holder of a Rights Certificate (or if prior to the Distribution
Date, to each holder of a certificate representing Common Shares) in
accordance with Section 27 hereof. The Rights Agent may rely on such
certificate without further inquiry and may assume that no such
adjustment has been made unless and until it will have received such
certificate.
Section 13. Consolidation, Merger, or Sale or Transfer of Assets
or Earning Power of the Company.
(a) In the event that, following the Shares Acquisition Date,
directly or indirectly:
(x) the Company consolidates with, or merges with and into,
any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 14(b) hereof), and the
Company is not the continuing or surviving corporation of such
consolidation or merger;
(y) any Person (other than a Subsidiary of the Company in a
transaction that complies with Section 14(b) hereof) consolidates with
the Company, or merges with and into the Company and the
Company is the continuing or surviving corporation of such merger,
and in connection with such merger, all or part of the Common
Shares will be changed into or exchanged for stock or other securities
of any other Person (or the Company) or cash or any other property;
(z) the Company sells or otherwise transfers (or one or more
of its Subsidiaries sells or otherwise transfers), 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 (other than to the Company or one or more
of its Subsidiaries, in one or more transactions that complies with
Section 14(b) hereof);
then, and in each such case, proper provision will be made so that (i)
following the Distribution Date, and subject to Section 7(e) hereof, each
holder of a Right will have the right to receive, upon the exercise thereof at
the then current Purchase Price in accordance with the terms of this
Agreement, such number of freely tradable Common Shares of the Principal
Party(as hereinafter defined), free and clear of liens, rights of call or first
refusal, encumbrances, and other adverse claims, as is equal to the result
obtained by (1) multiplying the then current Purchase Price by the number
of Common Shares for which a Right is exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
number of such shares for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event, by the Purchase Price in
effect immediately prior to such first occurrence), and (2) dividing that
product (which following the first occurrence of a Section 13 Event, will be
referred to as the "Purchase Price" for each Right and for all purposes of
this Agreement) by 50% of the 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 Section 13 Event;
(ii) such Principal Party will thereafter be liable for, and will assume, by
virtue of such consolidation, merger, sale, or transfer, all the obligations
and duties of the Company pursuant to this Agreement; (iii) the term
"Company" will thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11 hereof will
apply to such Principal Party; and (iv) such Principal Party will take such
steps (including without limitation 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 will thereafter be applicable, as nearly as reasonably may be, in
relation to the Common Shares thereafter deliverable upon the exercise of
the Rights.
(b) "Principal Party" means
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of subsection (a) of this Section 13, the Person
that is the issuer of any securities into which Common Shares of the
Company are converted in such merger of consolidation, and if no
securities are so issued, the Person that is the other party to the
merger or consolidation (including, if applicable, the Company, if it is
the surviving corporation); and
(ii) in the case of any transaction described in clause (z) of
the first sentence of paragraph (a) of this Section 13, 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 (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 Securities
Exchange Act of l934, as amended (the "Exchange Act"), and such Person is
a direct or indirect subsidiary or Affiliate of another Person, then "Principal
Party" will refer to such other Person; (2) in case such Person is a
subsidiary, directly or indirectly, or Affiliate of more than one Person, the
Common Shares of two or more of which are and have been so registered,
"Principal Party" will 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 the preceding clauses (1) and (2) will 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 ventures and
the Principal Parties in each such chain will 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 will not consummate any such consolidation,
merger, sale or transfer unless the Principal Party has a sufficient number
of authorized Common Shares that have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and each Principal Party
and each other Person who may become a Principal Party as a result of
such consolidation, merger, sale, or transfer first execute and deliver 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 Section 13 Event, the Principal Party at
its own expense will:
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities
purchasable upon the exercise of the Rights, will use its best efforts
to cause such registration statement to become effective as soon as
practicable after such filing and will use its best efforts to cause such
registration statement to remain effective (with a prospectus meeting
the requirements of the Securities Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under the blue
sky laws of such jurisdictions as may be necessary;
(iii) use its best efforts to list (or continue the listing of) the
Rights and the securities purchasable upon exercise of the Rights on
a national securities exchange or to meet the eligibility requirements
for quotation on NASDAQ; and
(iv) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates, which
financial statements comply in all material respects with the
requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 will similarly apply to successive mergers
or consolidations or sales or other transfers. If a Section 13 Event occurs at
any time after the occurrence of a Section 11(a)(ii) Event, the Rights that
have not theretofore been exercised will thereafter become exercisable solely
in the manner described in paragraph (a) of this Section 13.
Section 14. Additional Covenants.
(a) The Company covenants and agrees that it will not at any time
after the Distribution Date (i) consolidate with, (ii) merge with or into, or
(iii) sell or transfer, in one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company
and its subsidiaries taken as a whole, to any other Person, if at the time of
or after such consolidation, merger, or sale there are any charter or by-law
provisions or any rights, warrants, or other instruments outstanding or any
other action taken or circumstances extant that would diminish or
otherwise eliminate the benefits intended to be afforded by the Rights. The
Company will not consummate any such consolidation, merger, or sale
unless the Company and such other Person first execute and deliver to the
Rights Agent a supplemental agreement evidencing compliance with this
subsection.
(b) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 24 or Section 28 hereof,
take any action if at the time such action is taken it is reasonably
foreseeable that such action will substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
Section 15. Fractional Rights and Fractional Shares.
(a) The Company will not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(i), or to
distribute Rights Certificates that evidence fractional Rights. In lieu of such
fractional Rights, there will be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purposes of this Section 15(a), the
current market value of a whole Right will 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
will 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
will be used.
(b) The Company will not be required to issue fractions of Common
Shares upon exercise of the Rights or to distribute certificates that evidence
fractional Common Shares. In lieu of fractional Common Shares, the
Company will pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one Common Share. For
the purposes of this Section 15(b), the current market value of a Common
Share will be the closing price of a Common Share (as determined pursuant
to Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date
of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right.
Section 16. Rights of Action. Excepting the rights of action given to
the Rights Agent under Section 19 hereof, all rights of action in respect of
this Agreement are vested in the respective registered holders of the Rights
Certificates (and prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Rights Certificate (or
prior to the Distribution Date, of the Common Shares), without the consent
of the Rights Agent or of the holder of any other Rights Certificate (or, prior
to the Distribution Date, of the Common Shares), may, in his own behalf
and for his own benefit, enforce, and may institute and maintain any suit,
action, or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement. Holders of Rights will be entitled to
recover the reasonable costs and expenses, including attorneys' fees,
incurred by them in any action to enforce the provisions of this Agreement.
Section 17. Agreement of Rights Holders. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(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 Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly indorsed or accompanied by a
proper instrument of transfer;
(c) subject to Section 6 and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the Person in whose name the Rights
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 Rights 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 will 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 will have any liability to any
holder of a Right or a beneficial interest in a Right or other Person as a
result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order,
decree, or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory, or administrative agency or commission, or any
statute, rule, regulation, or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, the Company must use its best efforts
to have any such order, decree or ruling lifted or otherwise overturned as
soon as possible.
Section 18. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate will be entitled to vote, receive
dividends or be deemed for any purpose to be the holder of the Common
Shares or any other securities of the Company that may at any time be
issuable on the exercise of the Rights represented thereby, nor will anything
contained herein or in any Rights Certificate be construed to confer upon
the holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in
Section 26 hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Rights Certificate
have been exercised in accordance with the provisions hereof.
Section 19. Concerning the Rights Agent. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered
by it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without gross 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 therefrom.
The Rights Agent will be protected and will incur no liability for or in
respect of any action taken, suffered, or omitted by it in connection with its
administration of this Agreement in reliance upon any Rights Certificate or
certificate for Common Shares or 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 if necessary, verified or acknowledged, by the proper Person or Persons.
Section 20. 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 may be a party, or any corporation
succeeding to the stock transfer or corporate trust business of the Rights
Agent or any successor Rights Agent, will 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 22 hereof. In case at the time such
successor Rights Agent succeeds to the agency created by this Agreement,
any of the Rights Certificates will have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature
of the predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates have
been countersigned, any successor Rights Agent may countersign such
Rights 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 Rights
Certificates will have the full force provided in the Rights Certificates
and in this Agreement.
In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates have not been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or
in its changed name; and in all such cases such Rights Certificates will
have the full force provided in the Rights Certificates and in this Agreement.
Section 21. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, will be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel will be full
and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any fact or
matter (including without limitation the identity of any Acquiring Person) be
proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect
thereof is specifically prescribed herein) may be deemed to be conclusively
proved and established by a certificate signed by the Chief Executive
Officer, President, any Vice President, the Treasurer, or the Secretary of the
Company and delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent will be liable hereunder to the Company and
any other Person only for its own gross negligence, bad faith, or willful
misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have
been made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
will it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor will
it be responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof or for the manner, method, or amount of
any adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of a certificate furnished
pursuant to Section 12 describing any such adjustment); nor will it be
responsible for any determination by the Board of Directors of the Company
of the current market value of the Rights or Common Shares; nor will it by
any act hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any Common Shares or other securities
to be issued pursuant to this Agreement or any Rights Certificate or as to
whether any Common Shares or other securities 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
the Chief Executive Officer, President, any Vice President, the Treasurer, or
the Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it will 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 Rights Agreement and the date on and/or after which such
action will be taken or such omission will be effective. The Rights Agent will
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 will not be less than ten
Business Days after the date the Chief Executive Officer, President, any
Vice President, the Treasurer, or the Secretary of the Company actually
receives such application, unless any such officer of the Company consents
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 receives 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 become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein will preclude
the Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent will 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 the act, default, neglect, or misconduct of any such attorney or agent,
provided reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement will require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there will be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certification 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 l
and/or 2 thereof, the Rights Agent will not take any further action with
respect to such requested exercise of transfer without first consulting with
the Company.
Section 22. 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' prior notice in writing to the Company and to
each transfer agent of the Common Shares in accordance with Section 27
hereof, and to the holders of the Rights Certificates by first-class mail at
the expense of the Company.
The Company may remove the Rights Agent or any successor Rights
Agent upon 30 days' prior notice in writing sent to the Rights Agent or
successor Rights Agent, as the case may be, and each transfer agent of the
Common Shares in accordance with Section 27 hereof, and to the holders of
the Rights Certificates by first-class mail.
If the Rights Agent resigns or is removed or otherwise becomes
incapable of acting, the Company will appoint a successor to the Rights
Agent. If the Company fails to make such appointment within a period of
30 days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who will, with such
notice, submit his Rights Certificate for inspection by the Company), then
the registered holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or
by a court, will be an entity organized and doing business under the laws of
the United States or any state of the United States (so long as such entity is
in good standing), and 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 will 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 will 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 will file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Shares, and mail a notice
thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 22, however, or any
defect therein, will 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 23. Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company at its option may issue new Rights Certificates 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 Rights Certificates made
in accordance with the provisions of this Agreement.
Section 24. Redemption.
(a) The Rights may be redeemed by action of the Board of
Directors pursuant to paragraph (b) of this Section 24, and will not be
redeemed in any other manner.
(b) The Board of Directors of the Company may, at its option, at
any time prior to the earliest of (x) the close of business on the tenth day
following a Shares Acquisition Date, or (y) 5:00 p.m., E.S.T., on the Final
Expiration Date, redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.001 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof. 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.
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (b)
of this Section 24, 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 will be to receive the Redemption Price. The
Company will promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice will not
affect the validity of such redemption. Within 10 days after such action
ordering the redemption of the Rights pursuant to paragraph (b) or (c), as
the case may be, the Company will 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 mailed in the manner herein provided will be
deemed duly 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, pay
the Redemption Price in cash, Common Shares (based on the current per
share market price of the Common Shares as of the time of redemption) or
any other form of consideration deemed appropriate by the Board of
Directors. Notwithstanding anything contained in this Agreement to the
contrary, the Rights will not be exercisable after the first occurrence of a
Section 11(a)(ii) Event until such time as the Company's right of redemption
under Section 24(b) has expired.
Section 25. Exchange.
(a) The Company's Board of Directors, at its option, at any time
after the occurrence of a Section 11(a)(ii) Event may exchange all or part of
the then outstanding and exercisable Rights (which will 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 date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Company's Board of Directors may not 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 Company's Board of
Directors ordering the exchange of any Rights pursuant to subsection (a) of
this Section 25, and without any further action and without any notice, the
right to exercise such Rights will terminate and the only right thereafter of a
holder of such Rights will 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 will promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice will not affect the validity of such exchange. The Company promptly
will 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 will 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 that will be exchanged. Any partial
exchange will be effected pro rata based on the number of Rights (other than
Rights that have become void pursuant to the provisions of Section 7(e)
hereof) held by each holder of Rights.
(c) In the event that there are not sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated
in accordance with this Section 25, the Company will take all such action
as may be necessary to authorize additional Common Shares for issuance
upon exchange of the Rights.
(d) The Company will not be required to issue fractions of Common
Shares or to distribute certificates that evidence fractional Common Shares.
In lieu of such fractional Common Shares, the Company will pay to the
registered holders of the Rights Certificates with regard to which such
fractional Common Shares would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole Common
Share. For the purposes of this paragraph (e), the current market value of a
whole Common Share will be the closing price of a Common Share (as
determined pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 25.
Section 26. Notice of Certain Events.
(a) In case the Company proposes, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of its Common Shares or to make any other distribution to the
holders of its Common Shares, (ii) to offer to the holders of its Common
Shares rights or warrants to subscribe for or to purchase any additional
Common Shares or shares of stock of any class or any other securities,
rights, or options, (iii) to effect any reclassification of its Common Shares
(other than a reclassification involving only the subdivision of outstanding
Common Shares), (iv) to effect any consolidation or merger into or with, or
to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution, or winding-up of the Company, or (vi) to declare or
pay any dividend on the Common Shares payable in Common Shares or to
effect a subdivision, combination or consolidation of the Common Shares
(by reclassification or otherwise than by payment of dividends in Common
Shares), then, in each such case, the Company will give to each holder of a
Rights Certificate, in accordance with Section 27 hereof, a notice of such
proposed action, which will 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, if any such date is to be
fixed, and such notice will 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 Common 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, whichever will be the earlier.
(b) In case any of Section 11(a)(ii) Event will occur, (i) the
Company will as soon as practicable thereafter give to each holder of a
Rights Certificate, in accordance with Section 27 hereof, a notice of the
occurrence of such event, which notice will describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii)
hereof, and (ii) all references in the preceding paragraph to Common Shares
will be deemed thereafter to refer to Common Shares or, if appropriate,
other securities.
Section 27. Notices. Any notice or demand authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to or on the Company will be sufficiently given or made if
sent by reputable overnight courier or by registered, certified, or first-class
mail, postage or delivery charges prepaid and addressed (until another
address is filed in writing with the Rights Agent) as follows:
LeCroy Corporation
700 Chestnut Ridge Road
Chestnut Ridge, New York 10977
Attention: Chief Executive Officer
Any notice or demand authorized by this Agreement to be given or
made by the Company or by the holder of any Rights Certificate to or on the
Rights Agent will be sufficiently given or made if sent by reputable overnight
courier or by registered, certified, or first-class mail, postage or delivery
charges prepaid and addressed (until another address is filed in writing
with the Company) as follows:
BankBoston, N.A.
c/o Boston Equiserve Limited Partnership
150 Royall Street
Canton, Massachusetts 02021
Attn: Client Administration
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate or
certificate representing Common Shares will be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Company.
Section 28. Supplements and Amendments. Prior to the
Distribution Date, if the Company so directs, the Company and the Rights
Agent will supplement or amend any provision of this Agreement without
the approval of any holders of certificates representing Common Shares.
From and after the Distribution Date, if the Company so directs, the
Company and the Rights Agent will supplement or amend this Agreement
without the approval of any holders of Rights Certificates in order (i) to cure
any ambiguity, (ii) to correct or supplement any provision contained herein
that may be defective or inconsistent with any other provisions herein, (iii)
to shorten or lengthen any time period hereunder, or (iv) to change or
supplement the provisions hereunder in any manner that the Company may
deem necessary or desirable and that will not adversely affect the interests
of the holders of Rights Certificates (other than an Acquiring Person or any
Affiliate or Associate of an Acquiring Person).
Section 29. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent will
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 30. Benefits of this Agreement. Nothing in this Agreement
will be construed to give to any Person or corporation other than the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and prior to the Distribution Date, of the Common Shares) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement will be for the sole and exclusive benefit of the Company, the
Rights Agent, and the registered holders of the Rights Certificates (and,
prior to the Distribution Date, of the Common Shares).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement will remain
in full force and effect and will in no way be affected, impaired or
invalidated.
Section 32. Governing Law. This Agreement and each Rights
Certificate issued hereunder will be deemed to be a contract made under
the laws of the State of Delaware and for all purposes will 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 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts will for all purposes
be deemed to be an original, and all such counterparts will together
constitute but one and the same agreement.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
will not control or affect the meaning or construction of any of the
provisions hereof.
[ Remainder of Page Intentionally Left Blank ]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, as an agreement under seal, as
of the date first above written.
LECROY CORPORATION
By \s\ John C. Maag
Name: John C. Maag
Title: Vice President Finance
and Secretary
BANKBOSTON, N.A.,
as Rights Agent
By \s\ Tyler Haynes
Name: Tyler Haynes
Title: Administration
Manager
EXHIBIT A
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER NOVEMBER 2, 2008, OR EARLIER
IF NOTICE OF REDEMPTION OR EXCHANGE OCCURS. THE
RIGHTS ARE SUBJECT, AT THE OPTION OF THE COMPANY, TO
REDEMPTION AT $0.001 PER RIGHT AND TO EXCHANGE 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.
RIGHTS CERTIFICATE
LECROY 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 November 2, 1998 (the "Rights Agreement"), by and
between LeCroy Corporation (the "Company"), a Delaware corporation, and
BankBoston, N.A. (the "Rights Agent"), to purchase from the Company at
any time after the Distribution Date (as defined in the Rights Agreement)
and prior to 5:00 P.M., New York City time, on November 2, 2008, at the
office of the Rights Agent designated for such purpose, or at the office of its
successor as Rights Agent designated for such purpose, one share of
Common Stock, par value $0.01 per share (the "Common Shares"), of the
Company, at a purchase price of $126 per Common Share (the "Purchase
Price"), upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of Common Shares
that may be purchased upon exercise hereof) set forth above, and the
Purchase Price set forth above, are the number of Rights and Purchase Price
as of November 2, 1998, based on the Common Shares as constituted at
such date. As provided in the Rights Agreement, the Purchase Price and the
number of Common Shares that may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events.
This Rights Certificate is subject to all of the terms, provisions, and
conditions of the Rights Agreement, which terms, provisions, and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties, and immunities of the
Rights Agent, the Company and the holders of the Rights Certificates.
Copies of the Rights Agreement are on file at the principal executive offices
of the Company and the above-mentioned office of the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, may
be surrendered at the principal office of the Rights Agent in exchange for
another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase the same aggregate
number of Common Shares as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered entitled such holder to purchase. If this
Rights Certificate is exercised in part, the holder will be entitled to receive
upon surrender hereof another Rights Certificate or Rights Certificates for
the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at its
option at a redemption price of $0.001 per Right, or (ii) may be exchanged in
whole or in part by the Company, at its option, for Common Shares.
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, will be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Common
Shares or of any other securities of the Company that may at any time be
issuable on the exercise hereof, nor will anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate have been exercised as provided in the Rights Agreement.
This Rights Certificate will not be valid or obligatory for any purpose
until it is countersigned by the Rights Agent.
Dated as of ____________, ____.
LECROY CORPORATION
By
Name:
Title:
Countersigned:
By
Name:
Title:
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns, and transfers to
(Please print name and address of transferee)
this Rights Certificate, together with all right, title, and interest therein
and does hereby irrevocably constitute and appoint ___________ as attorney,
to transfer the within Rights Certificate on the books of LeCroy Corporation,
with full power of substitution.
Dated: _____________, _____
(Signature)
Medallion Signature Guaranty:
Assignment Certification
The undersigned hereby certifies by checking the appropriate boxes
that:
(l) The Rights evidenced by this Rights Certificate [ ] are [ ] are 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 term is defined pursuant to the Rate Agreement);
(2) After due inquiry and to the best knowledge of the undersigned,
he, she,or it [ ] did [ ]did not acquire the Rights evidenced by this Rights
Certificate from any person who is or was an Acquiring Person or an Affiliate
or Associate of an Acquiring Person.
Dated: _____________, _____
(Signature)
Notice
The signatures to the foregoing Assignment and Certification must
correspond exactly to the name of the registered owner hereof, as written
upon the face of this Rights Certificate, without any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate.)
To LECROY CORPORATION:
The undersigned hereby irrevocably elects to exercise
_____________________ Rights represented by this Rights Certificate to
purchase the Common Shares (or such other securities of the Company or
of any other person) issuable upon the exercise of such 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 the above number of Rights is not all of the Rights evidenced by
this Rights Certificate, then a new Rights Certificate for the balance
remaining of such Rights will be registered and returned to the
undersigned.)
Dated: _____________, _____
(Signature)
Medallion Signature Guaranty:
Election Certification
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) The Rights evidenced by this Rights Certificate [ ] are [ ] are 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 Acquiring Person
(as such terms are defined pursuant to the Rate Agreement).
(2) After due inquiry and to the best knowledge of the undersigned,
he, she,or it [ ] did [ ]did not acquire the Rights evidenced by this Rights
Certificate from any person who is or was an Acquiring Person or an Affiliate
or Associate of any Acquiring Person.
Dated: _____________, _____
(Signature)
NOTICE
The signatures in the foregoing Election to Purchase and Certification
must correspond exactly to the name of the registered owner hereof, as
written upon the face of this Rights Certificate, without any change
whatsoever.
In the event the certification set forth above in the Assignment or the
Election to Purchase, as the case may be, is not completed, the Company
and the Rights Agent will deem the beneficial owner of the Rights evidenced
by this Rights Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such Assignment
or Election to Purchase will not be honored.
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
On November 2, 1998, the Board of Directors of LeCroy
Corporation (the "Company") declared a dividend distribution of one
common share purchase right (a "Right") for each outstanding share of
common stock, par value $0.01 per share (the "Common Shares"), of the
Company. The dividend is payable on November 18, 1998 (the "Record
Date") to the stockholders of record on that date. Except as described
below, each Right, when exercisable, entitles the registered holder to
purchase from the Company one Common Share of the Company at a
price of $126 per Common Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the Company and
BankBoston, N.A., as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Rights certificates
will be distributed. Until the earlier to occur of (i) 10 business days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") have acquired beneficial
ownership of 15% or more of the outstanding Common Shares (the date
of such an announcement being a "Shares Acquisition Date"), or (ii) 10
business days (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an
Acquiring Person) following the commencement of, or announcement of
an intention to make, a tender offer or exchange offer the consummation
of which would result in the beneficial ownership by a person or group of
15% or more of such outstanding Common Shares, the Rights will be
evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificates
together with a copy of this Summary of Rights.
The Rights Agreement provides that, until the Distribution Date,
the Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Share certificates issued after the Record Date
upon transfer or new issuance of Common Shares will contain a
notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares
outstanding as of the Record Date, even without such notation or a copy
of this Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Shares
as of the close of business on the Distribution Date, and the separate
Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on November 2, 2008 (the "Final Expiration Date"),
unless the Rights are earlier redeemed by the Company, as described
below.
The Purchase Price payable, and the number of Common Shares or
other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Shares, (ii) upon the grant to holders of
the Common Shares of certain rights or warrants to subscribe for or
purchase Common Shares at a price, or securities convertible into
Common Shares with a conversion price, less than the then current
market price of the Common Shares or (iii) upon the distribution to
holders of the Common Shares of evidences of indebtedness or assets
(excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Common Shares) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of Common
Shares issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or
subdivisions, consolidations or combinations of the Common Shares
occurring, in any such case, prior to the Distribution Date.
Common Shares purchasable upon exercise of the Rights will not
be redeemable.
In the event that, after the first date of public announcement by
the Company or an Acquiring Person that an Acquiring Person has
become such, the Company is involved in a merger or other business
combination transaction in which the Common Shares are exchanged or
changed, or 50% or more of the Company's consolidated assets or
earning power are sold (in one transaction or a series of transactions),
proper provision will be made so that each holder of a Right (other than
an Acquiring Person) will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company (or, in the
event there is more than one acquiring company, the acquiring company
receiving the greatest portion of the assets or earning power transferred)
which at the time of such transaction would have a market value of two
times the exercise price of the Right.
In the event that (i) any person becomes an Acquiring Person, (ii)
an Acquiring Person engages in one or more "self-dealing" transactions
as set forth in the Rights Agreement, or (iii) during such time as there is
an Acquiring Person, there shall be a reclassification of securities or a
recapitalization or reorganization of the Company or other transaction or
series of transactions involving the Company which has the effect of
increasing by more than 1% the proportionate share of the outstanding
shares of any class of equity securities of the Company or any of its
subsidiaries beneficially owned by the Acquiring Person, each holder of a
Right will thereafter have the right to receive upon exercise that number
of Common Shares having a market value of two times the exercise price
of the Right. Upon occurrence of any of the events described in the
immediately preceding sentence, any Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person shall immediately become null and void.
At any time after the occurrence of any such event and prior to the
acquisition by such person or group of 50% or more of the outstanding
Common Shares, 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 Common Share per Right
(subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at
least 1% in such Purchase Price. No fractional Common Shares will be
issued and in lieu thereof, an adjustment in cash will be made based on
the market price of the Common Shares on the last trading day prior to
the date of exercise.
At any time prior to the earlier of (i) the tenth day after a Shares
Acquisition Date, or (ii) the expiration of the Rights, the Board of
Directors may redeem the Rights in whole, but not in part, at a price of
$.001 per Right (the "Redemption Price"). The redemption of the Rights
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.
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may
be amended by the Board of Directors of the Company prior to the
Distribution Date. After the Distribution Date, the provisions of the
Rights Agreement may be amended by the Board in order to cure any
ambiguity, to make changes that do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement;
provided, however, that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not
redeemable.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.
