SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Thermo Electron Corporation
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(Exact name of registrant as specified in its charter)
Delaware 04-2209186
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(State of incorporation (IRS Employer
or organization) Identification No.)
81 Wyman Street, Waltham, MA 02254
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Preferred Stock Purchase Rights
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(Title of Class)
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of each class to be so registered)
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Item 1. Description of Registrant's Securities to be Registered
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On January 19, 1996, the Board of Directors of Thermo
Electron Corporation (the "Company") declared a dividend
distribution of one Right for each outstanding share of the
Company's Common Stock to stockholders of record at the close of
business on January 29, 1996. Each Right entitles the registered
holder to purchase from the Company a unit consisting of one
ten-thousandth of a share (a "Unit") of Series B Junior
Participating Preferred Stock, $100 par value (the "Preferred
Stock") at a Purchase Price of $250.00 in cash per Unit, subject
to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the
Company and The First National Bank of Boston as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no
separate Rights Certificates will be distributed. The Rights
will separate from the Common Stock and a Distribution Date will
occur upon the earlier of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of 15% or more of the
outstanding shares of Common Stock (the "Stock Acquisition
Date"), or (ii) 10 business days following the commencement of a
tender offer or exchange offer that would result in a person or
group beneficially owning 15% or more of such outstanding shares
of Common Stock. Until the Distribution Date, (i) the Rights
will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates,
(ii) new Common Stock certificates issued after January 29, 1996
will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution Date
and will expire at the close of business on January 29, 2006,
unless earlier redeemed or exchanged by the Company as described
below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent
the Rights. Except as otherwise determined by the Board of
Directors and except in connection with shares of Common Stock
issued upon the exercise of employee stock options, issuances
under other employee stock benefit plans or the conversion of
convertible securities issued hereafter, only shares of Common
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Stock issued prior to the Distribution Date will be issued with
Rights.
In the event that a Person becomes the beneficial owner of
15% or more of the then outstanding shares of Common Stock,
except pursuant to an offer for all outstanding shares of Common
Stock which the independent directors determine to be fair to,
and otherwise in the best interests of, stockholders, each holder
of a Right will thereafter have the right to receive, upon
exercise, that number of shares of Common Stock (or, in certain
circumstances, cash, property or other securities of the Company)
which equals the exercise price of the Right divided by one-half
of the current market price (as defined in the Rights Agreement)
of the Common Stock at the date of the occurrence of the event.
However, Rights are not exercisable following the event set forth
above until such time as the Rights are no longer redeemable by
the Company as set forth below. Notwithstanding any of the
foregoing, following the occurrence of such event, all Rights
that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will
be null and void. The event set forth in this paragraph are
referred to as "Section 11(a)(ii) Event."
For example, at an exercise price of $250.00 per Right, each
Right not owned by an Acquiring Person (or by certain related
parties) following an event set forth in the preceding paragraph
would entitle its holder to purchase for $250.00 such number of
shares of Common Stock (or other consideration, as noted above)
as equals $250.00 divided by one-half of the current market price
(as defined in the Rights Agreement) of the Common Stock.
Assuming that the Common Stock had a per share value of $50.00 at
such time, the holder of each valid Right would be entitled to
purchase ten shares of Common Stock for $250.00.
In the event that, at any time after any person has become
an Acquiring Person, (i) the Company is acquired in a merger or
other business combination transaction in which the Company is
not the surviving corporation or its Common Stock is changed or
exchanged (other than a merger which follows an offer determined
by the independent directors to be fair as described in the first
sentence of the second preceding paragraph), or (ii) 50% or more
of the Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have the right to
receive, upon exercise, that number of shares of common stock of
the acquiring company which equals the exercise price of the
Right divided by one-half of the current market price of such
common stock at the date of the occurrence of the event.
For example, at an exercise price of $250.00 per Right, each
Right following an event set forth in the preceding paragraph
would entitle its holder to purchase for $250.00 such number of
shares of common stock of the acquiring company as equals $250.00
divided by one-half of the current market price (as defined in
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the Rights Agreement) of such common stock. Assuming that such
common stock had a per share value of $100.00 at such time, the
holder of each valid Right would be entitled to purchase five
shares of common stock of the acquiring company for $250.00.
At any time after the occurrence of a Section 11(a)(ii)
Event, and subject to the concurrence of a majority of the
Continuing Directors (as defined in the Rights Agreement), the
Board of Directors of the Company may exchange the Rights (other
than Rights owned by such Acquiring Person which have become
void), in whole or in part, at an exchange ratio of one share of
Common Stock, or one ten-thousandth of a share of Preferred Stock
(or of a share of a class or series of the Company's preferred
stock having equivalent rights, preferences and privileges), per
Right (subject to adjustment).
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are
granted certain rights or warrants to subscribe for Preferred
Stock or convertible securities at less than the current market
price of the Preferred Stock, or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to
above).
The number of Rights associated with each share of Common
Stock is also subject to adjustment in the event of a stock split
of the Common Stock or a stock dividend on the Common
Stock payable in Common Stock or subdivisions, consolidations or
combinations of Common Stock occurring, in any such case, prior
to the Distribution Date.
Preferred Stock purchasable upon exercise of the Rights will
not be redeemable. Each share of Preferred Stock will be
entitled to a minimum preferential quarterly dividend payment of
$100 per share and will be entitled to an aggregate dividend of
10,000 times the dividend declared per share of Common Stock. In
the event of liquidation, the holders of the Preferred Stock will
be entitled to a minimum preferential liquidating payment of $100
per share and will be entitled to an aggregate payment of 10,000
times the payment made per share of Common Stock. Each share of
Preferred Stock will have 10,000 votes, voting together with the
Common Stock. Finally, in the event of any merger, consolidation
or other transaction in which Common Stock is changed or
exchanged, each share of Preferred Stock will be entitled to
receive 10,000 times the amount received per share of Common
Stock. These rights are protected by customary antidilution
provisions.
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Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of one ten-thousandth of
a share of Preferred Stock purchasable upon exercise of each
Right should approximate the value of one share of Common Stock.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least
1% of the Purchase Price. No fractional Units will be issued
and, in lieu thereof, an adjustment in cash will be made based on
the market price of the Preferred Stock on the last trading date
prior to the date of exercise.
At any time until ten days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (payable in cash or stock).
Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the $.01
redemption price. The Rights may also be redeemable following
certain other circumstances specified in the Rights Agreement.
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.
While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the
acquiring company as set forth above.
Prior to the Distribution Date, the terms of the Rights are
subject to amendment by the Board of Directors without the
consent of the holders of the Rights, except that the redemption
price of the Rights is not subject to amendment. After the
Distribution Date, only limited terms of the Rights are subject
to amendment by the Board.
As of December 31, 1995, there were 85,851,741 shares of
Common Stock outstanding, and there were 35,941,622 shares of
Common Stock reserved for issuance upon exercise of outstanding
options issued pursuant to various employee benefit plans and
upon the conversion or exchange of outstanding convertible or
exchangeable securities. Each outstanding share of Common Stock
on January 29, 1996 will receive one Right. As long as the
Rights are attached to the Common Stock, one additional Right (as
such number may be adjusted pursuant to the provisions of the
Rights Agreement) shall be deemed to be delivered for each share
of Common Stock issued or delivered by the Company in the future.
In addition, following the Distribution Date and prior to the
expiration or redemption of the Rights, the Company shall issue
stock upon the exercise, conversion or exchange of securities
issued on or before the Distribution Date that are exercisable or
exchangeable for, or convertible into, Common Stock, and may
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otherwise issue Rights when it issues Common Stock only if the
Board of Directors deems it to be necessary or appropriate for
tax purposes. Forty Thousand shares of Preferred Stock are
initially reserved for issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that
attempts to acquire the Company without conditioning the offer on
a substantial number of Rights being acquired. The Rights,
however, should not affect any prospective offeror willing to
make an offer at a fair price and otherwise in the best interests
of the Company and its stockholders, as determined by a majority
of unaffiliated Directors, or willing to negotiate with the Board
of Directors. The Rights should not interfere with any merger or
other business combination approved by the Board of Directors of
the Company since the Board of Directors may, at its option, at
any time prior to the close of business on the earlier of (i) the
tenth day following the Stock Acquisition Date or (ii) January
29, 1996, and in certain other circumstances, redeem all but not
less than all of the then outstanding Rights at the Redemption
Price. It should be noted, however, that the Company's
Certificate of Incorporation, as amended, contains certain
provisions, including a classified board of directors and the
prohibition of written actions of stockholders, which may also
have certain anti-takeover effects.
In conjunction with the declaration of this dividend, the
Board of Directors of the Company redeemed the rights issued
pursuant to the Company's May 4, 1988 Rights Agreement effective
as of January 29, 1996. The redemption price for these
previously issued rights was $.02 per right and, prior to the
redemption, certificates representing each share of the Company's
Common Stock also represented 4/9ths of a previously issued
right.
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 Certificate of Designations, as
Exhibit B the Form of Rights Certificate, and as Exhibit C the
Summary of Rights to Purchase Preferred Stock, is filed as
Exhibit 1 hereto and is 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 such
Exhibits.
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Item 2. Exhibits.
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1 Rights Agreement, dated as of January 19, 1996 between
Thermo Electron Corporation and The First National Bank of
Boston, as Rights Agent, which includes as Exhibit A the Form of
Certificate of Designations, as Exhibit B the Form of Rights
Certificate, and as Exhibit C the Summary of Rights to Purchase
Preferred Stock. Pursuant to the Rights Agreement, Rights
Certificates will not be mailed until after the Distribution Date
(as that term is defined in the Rights Agreement).
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SIGNATURES
Pursuant to the requirements of the 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, thereunto duly authorized.
Date: January 25, 1996 Thermo Electron Corporation
/s/ George N. Hatsopoulos
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By: George N. Hatsopoulos
Title: Chairman and President
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EXHIBIT INDEX
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Exhibit No. Description Page
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1 Rights Agreement, dated as
of January 19, 1996 between
Thermo Electron Corporation
and The First National Bank
of Boston, as Rights Agent,
which includes as Exhibit A
the Form of Certificate of
Designations, as Exhibit B
the Form of Rights Certificate,
and as Exhibit C the Summary
of Rights to Purchase Preferred
EXHIBIT 1
THERMO ELECTRON CORPORATION
and
THE FIRST NATIONAL BANK OF BOSTON
Rights Agent
__________________
Rights Agreement
Dated as of January 19, 1996
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Table of Contents
Section Page
1 Certain Definitions 1
2 Appointment of Rights Agent 6
3 Issue of Rights Certificates 6
4 Form of Rights Certificates 9
5 Countersignature and Registration 10
6 Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates 10
7 Exercise of Rights; Purchase Price;
Expiration Date of Rights 11
8 Cancellation and Destruction of
Rights Certificates 14
9 Reservation and Availability of Capital Stock 14
10 Preferred Stock Record Date 16
11 Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights 16
12 Certificate of Adjusted Purchase Price or
Number of Shares 26
13 Consolidation, Merger or Sale or Transfer
of Assets or Earning Power 27
14 Fractional Rights and Fractional Shares 30
15 Rights of Action 31
16 Agreement of Rights Holders 32
17 Rights Certificate Holder Not Deemed
a Stockholder 32
18 Concerning the Rights Agent 33
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19 Merger or Consolidation or Change of
Name of Rights Agent 33
20 Duties of Rights Agent 34
21 Change of Rights Agent 37
22 Issuance of New Rights Certificates 38
23 Redemption and Termination 38
24 Exchange 40
25 Notice of Certain Events 42
26 Notices 43
27 Supplements and Amendments 43
28 Successors 44
29 Determinations and Actions by the
Board of Directors, etc. 44
30 Benefits of this Agreement 45
31 Severability 45
32 Governing Law 45
33 Counterparts 45
34 Descriptive Headings 45
Exhibit A -- Certificate of Designations
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of January 19, 1996 (the
"Agreement"), between THERMO ELECTRON CORPORATION, a Delaware
corporation (the "Company"), and THE FIRST NATIONAL BANK OF
BOSTON, a national banking association, as Rights Agent (the
"Rights Agent").
W I T N E S S E T H
WHEREAS, on January 19, 1996, the Board of Directors of the
Company (the "Board") authorized and declared a dividend of one
right (a "Right") for each share of Common Stock (as hereinafter
defined) of the Company outstanding at the close of business on
January 29, 1996 (the "Record Date"), and authorized the issuance
of one Right (as such number may hereinafter be adjusted pursuant
to the provisions of Section 11(p) hereof) for each share of
Common Stock of the Company issued between the Record Date
(whether originally issued or delivered from the Company's
treasury) and the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date, each Right
initially representing the right to purchase one ten-thousandth
of a share of Series B Junior Participating Preferred Stock of
the Company having the rights, powers and preferences set forth
in the form of Certificate of Designations attached hereto as
Exhibit A, upon the terms and subject to the conditions
hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall
be the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, but shall not include (i) the Company,
(ii) any Subsidiary of the Company, (iii) any employee benefit
plan of the Company or of any Subsidiary of the Company, or (iv)
any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common
Stock 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
Stock of the Company then outstanding; provided, however, that if
a Person shall become the Beneficial Owner of 15% or more of the
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Common Stock of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by
the Company, become the Beneficial Owner of any additional Common
Stock of the Company, then such Person shall be deemed to be an
"Acquiring Person." Notwithstanding the foregoing, if the Board
of Directors of the Company determines in good faith that a
Person who would otherwise be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this paragraph (a), has
become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares of Common Stock so that
such Person would no longer be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this paragraph (a), then
such Person shall not be deemed to be an "Acquiring Person" for
any purposes of this Agreement.
(b) "Act" shall mean the Securities Act of 1933.
(c) "Affiliate" and "Associate" shall 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 and in effect on the date of this Agreement (the
"Exchange Act").
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, beneficially owns, directly or
indirectly, or which such person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement
or understanding (other than customary agreements with and
between underwriters and selling group members with respect to a
bona fide public offering of securities), whether or not in
writing, or upon the exercise of conversion rights, exchange
rights, other rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (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 purchase or exchange,
or (B) securities issuable upon exercise of Rights at any time
prior to the occurrence of a Triggering Event, or (C) securities
issuable upon exercise of Rights from and after the occurrence of
a Triggering Event which Rights were acquired by such Person or
any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22
hereof (the "Original Rights") or pursuant to Section 11(i)
hereof in connection with an adjustment made with respect to any
Original Rights;
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(ii) which 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, or any comparable or
successor rule), including pursuant to any agreement, arrangement
or understanding (other than customary agreements with and
between underwriters and selling group members with respect to a
bona fide public offering of securities), whether or not in
writing; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security
under this subparagraph (ii) as a result of an 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) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona
fide public offering of securities), 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.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when
used with reference to a Person's Beneficial Ownership of
securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which
such Person would be deemed to own beneficially hereunder.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the
Commonwealth of Massachusetts are authorized or obligated by law
or executive order to close.
(f) "Close of business" on any given date shall mean 5:00
P.M., Boston time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., Boston time,
on the next succeeding Business Day.
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(g) "Common Stock" shall mean the common stock, $1.00 par
value, of the Company, except that "Common Stock" when used with
reference to any Person other than the Company shall mean the
capital stock of such Person with the greatest voting power, or
the equity securities or other equity interest having power to
control or direct the management, of such Person.
(h) "Common stock equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(i) "Continuing Director" shall mean (i) any member of the
Board, while such Person is a member of the Board, who is not
an Acquiring Person, or an Affiliate or Associate of an Acquiring
Person, or a representative of an Acquiring Person or of any such
Affiliate or Associate, and was a member of the Board prior to
the date of this Agreement, or (ii) any Person who subsequently
becomes a member of the Board, while such Person is a member of
the Board, who is not an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, if such
Person's nomination for election or election to the Board is
recommended or approved by a majority of the Continuing
Directors.
(j) "Current market price" shall have the meaning set forth
in Section 11(d)(i) hereof.
(k) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(l) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(m) "Exchange Act" shall have the meaning set forth in
Section 1(c) hereof.
(n) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(o) "Final Expiration Date" shall mean the close of
business on January 29, 2006.
(p) "Permitted Offer" shall mean a tender offer or an
exchange offer for all outstanding shares of Common Stock at a
price and on terms determined by at least a majority of the
members of the Board of Directors who are not officers of the
Company and who are not representatives, nominees, Affiliates or
Associates of an Acquiring Person, after receiving advice from a
nationally recognized investment banking firm selected by the
Board of Directors of the Company, to be (a) at a price that is
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fair to stockholders (taking into account all factors which such
members of the board deem relevant including, without limitation,
prices which could reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to realize maximum
value) and (b) otherwise in the best interests of the Company and
its stockholders.
(q) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(r) "Preferred Stock" shall mean shares of Series B Junior
Participating Preferred Stock, $100 par value, of the Company
having the rights and preferences set forth in the form of
Certificate of Designations attached to this Agreement as
Exhibit A and, to the extent that there is not a sufficient
number of shares of Series B Junior Participating Preferred Stock
authorized to permit the full exercise of the Rights, any other
series of Junior Series Preferred Stock, $100 par value, of the
Company designated for such purpose containing terms
substantially similar to the terms of the Series B Junior
Participating Preferred Stock.
(s) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(t) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(u) "Record Date" shall have the meaning set forth in the
WHEREAS clause at the beginning of the Agreement.
(v) "Redemption Date" shall have the meaning set forth in
Section 7(a) hereof.
(w) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(x) "Rights" shall have the meaning set forth in the
WHEREAS clause at the beginning of the Agreement.
(y) "Rights Certificates" shall have the meaning set forth
in Section 3(a) hereof.
(z) "Section 11(a)(ii) Event" shall mean an acquisition of
Common Stock described in the first sentence of Section 11(a)(ii)
hereof.
(aa) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
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(bb) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(cc) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(dd) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant to
Section 13(d) under the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
(ee) "Subsidiary" shall mean, with reference to any Person,
any corporation of which an amount of voting securities
sufficient to elect at least a majority of the directors of such
corporation is beneficially owned, directly or indirectly, by
such Person, or otherwise controlled by such Person.
(ff) "Substitution Period" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(gg) "Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
(hh) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the
Common Stock) in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it
may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of business on the
tenth day after the Stock Acquisition Date (or, if the tenth day
after the Stock Acquisition Date occurs before the Record Date,
the close of business on the Record Date), or (ii) the close of
business on 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
that a tender or exchange offer 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 Person
or entity organized, appointed or established by the Company for
or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General
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Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would be the Beneficial Owner
of 15% or more of the shares of Common Stock then outstanding
(the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject
to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the
holders of the Common Stock (which certificates for Common Stock
shall be deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights will be transferable
only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will
send by first-class, insured, postage prepaid mail, to each
record holder of the Common Stock as of the close of business on
the Distribution Date, at the address of such holder shown on the
records of the Company, one or more rights certificates, in
substantially the form of Exhibit B hereto (the "Rights
Certificates"), evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p) hereof, at
the time of distribution of the Right Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by
such Rights Certificates.
(b) As promptly as practicable following the Record Date,
the Company will send a copy of a Summary of Rights to Purchase
Preferred Stock, in substantially the form attached hereto as
Exhibit C, by first-class, postage prepaid mail, to each record
holder of the Common Stock as of the close of business on the
Record Date, at the address of such holder shown on the records
of the Company. With respect to certificates for the Common
Stock outstanding as of the close of business on the Record Date,
until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of
the Common Stock shall also be the registered holders of the
associated Rights.
(c) Rights shall be issued (i) in respect of all shares of
Common Stock that are issued (either as an original issuance or
from the Company's treasury) after the Record Date but prior to
the earlier of the Distribution Date or the Expiration Date and
(ii) in connection with the issuance or sale of Common Stock
following the Distribution Date and prior to the Expiration Date
upon the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of
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securities issued by the Company prior to the Distribution Date.
Certificates representing such shares of Common Stock (including,
without limitation, certificates issued upon transfer or exchange
of Common Stock) shall also be deemed to be certificates for
Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement
between Thermo Electron Corporation (the "Company") and The First
National Bank of Boston (the "Rights Agent") dated as of
January 19, 1996 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on
file at the principal offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after
receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued
to, or held by, any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associates thereof (as such terms are
defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become
null and void.
With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or (ii)
the Expiration Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Stock shall
also be the registered holders of the associated Rights.
(d) Until the earlier of the Distribution Date or the
Expiration Date (as such term is defined in Section 7 hereof),
the transfer of any certificates representing shares of Common
Stock in respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with such shares
of Common Stock. In the event that the Company purchases or
acquires any shares of Common Stock after the Record Date but
prior to the Distribution Date, any Rights associated with such
shares of Common Stock shall be deemed cancelled and retired so
that the Company shall not be entitled to exercise any Rights
associated with the shares of Common Stock which are no longer
outstanding.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase, certification and assignment to be printed on the
reverse thereof) shall each be substantially in the form set
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forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable
law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange or over-the-counter
market on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever distributed,
shall entitle the holders thereof to purchase such number of one
ten-thousandths of a share of Preferred Stock as shall be set
forth therein at the price set forth therein (such exercise price
per one ten-thousandth of a share, the "Purchase Price"), but the
amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3 or
Section 22 hereof that represents Rights beneficially owned by
persons known to be: (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any continuing agreement, arrangement
or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding that
has as a primary purpose or effect avoidance of Section 7(e)
hereof, and any Rights Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the following
legend:
The Rights represented by this Rights Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the Rights Agreement).
Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances
specified in Section 7(e) of such Agreement.
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Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, its President or any
Vice President, either manually or by facsimile signature, and
shall have affixed thereto the Company's seal or a facsimile
thereof, which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the person who
signed such Rights Certificates had not ceased to be such officer
of the Company; and any Rights Certificates may be signed on
behalf of the Company by any person who, at the actual date of
the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although
at the date of the execution of this Rights Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent shall
keep or cause to be kept, at its office designated as the
appropriate place for surrender of Rights Certificates upon
exercise or transfer, books for registration and transfer of the
Rights Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each
of the Rights Certificates, the Certificate number and the date
of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the close of business on
the Distribution Date, and at or prior to the close of business
on the earlier of the Redemption Date or the Expiration Date, any
Rights Certificate or Certificates (other than Rights
Certificates representing Rights that have become void pursuant
to Section 7(e) hereof or that have been exchanged pursuant to
Section 24 hereof) may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of one
ten-thousandths of a share of Preferred Stock (or, following a
Triggering Event, Common Stock, other securities, cash or other
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assets, as the case may be) as the Rights Certificate or
Certificates surrendered then entitled such holder (or former
holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up,
combined or exchanged, with the form of assignment and
certificate appropriately executed, at the office of the Rights
Agent designated for such purpose. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and
signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided
such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof
as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e) and Section 14
hereof, countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as
so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case
of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation
of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner
in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date 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 including, without
limitation, the restrictions on exercisability set forth in
Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in
whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the office of the Rights Agent
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designated for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number of one
ten-thousandths of a share (or other securities, cash or other
assets, as the case may be) as to which such surrendered Rights
are then exercisable, at or prior to the earliest of (i) the
Final Expiration Date, (ii) the time at which the Rights expire
as provided in Section 13(d) hereof, (iii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date"), or (iv) the time at which such Rights are
exchanged as provided in Section 24 hereof (the earliest of (i),
(ii), (iii) and (iv) being herein referred to as the "Expiration
Date").
(b) The Purchase Price for each one ten-thousandth of a
share of Preferred Stock pursuant to the exercise of a Right
shall initially be $250.00, and shall be subject to adjustment
from time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in, accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect
to each Right so exercised, of the Purchase Price per one
ten-thousandth of a share of Preferred Stock (or other shares,
securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to
Section 20(k) hereof, thereupon promptly (i) (A) requisition from
any transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of one ten-thousandths
of a share of Preferred Stock to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) if the Company shall have elected to
deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts
representing such number of one ten-thousandths of a share of
Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary
agent to comply with such requests, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the
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Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) may be made in cash or by certified
bank check or money order payable to the order of the Company.
In the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay cash
and/or distribute other property pursuant to Section 11(a)
hereof, the Company shall make all arrangements necessary so that
such other securities, cash and/or other property are available
for distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)
(ii) Event, any Rights beneficially owned by (i) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (ii)
a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with
whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or
(B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding that
has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Company shall use
all reasonable efforts to ensure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with, but shall
have no liability to any holder of Rights Certificates or other
Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported transfer or exercise
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as set forth in this Section 7 unless such registered holder
shall have (i) completed and signed the certificate following the
form of assignment or election to purchase set forth on the
reverse side of the Rights Certificate surrendered for such
assignment or exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled
by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to the
Company, or shall, at the written request of the Company, destroy
such cancelled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued
shares of Preferred Stock (and, following the occurrence of a
Triggering Event, out of its authorized and unissued shares of
Common Stock and/or other securities or out of its authorized and
issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) that, as provided in
this Agreement including Section 11(a) (iii) hereof, will be
sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock
and/or other securities) issuable and deliverable upon the
exercise of the Rights are eligible for listing on any national
securities exchange, the Company shall use its best efforts to
cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed
on such exchange upon official notice of issuance upon such
exercise.
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(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(a)(iii)
hereof, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement
under the Act, with respect to the securities purchasable upon
exercise of the Rights on an appropriate form; (ii) cause such
registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities,
and (B) the Expiration Date. The Company will also take such
action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. The Company
may temporarily suspend, for a period of time not to exceed
ninety (90) days after the date set forth in clause (i) of the
first sentence of this Section 9(c), the exercisability of the
Rights in order to prepare and file such registration statement
and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is
no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in
any jurisdiction unless the requisite registration or
qualification in such jurisdiction shall have been effected or
obtained.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one
ten-thousandths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer
taxes and charges that may be payable in respect of the issuance
or delivery of the Rights Certificates and of any certificates
for a number of one ten-thousandths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, however, be
required (i) to pay any transfer tax that may be payable in
respect of any transfer or delivery of Rights Certificates to a
Person other than, or the issuance or delivery of a number of one
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ten-thousandths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise or (ii) to
issue or deliver any certificates for a number of one
ten-thousandths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name other than
that of the registered holder upon the exercise of any Rights
until such tax shall have 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
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in
whose name any certificate for a number of one ten-thousandths of
a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder
of record of such fractional shares of Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable
transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred
Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are closed, such Person shall
be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred
Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights
Certificate, as such, shall not be entitled to any rights of a
stockholder of the Company with respect to securities for which
the Rights shall be exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions or
to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights. The Purchase Price, the number
and kind of shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a)(i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the
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outstanding Preferred Stock into a smaller number of shares, or
(D) issue any shares of its capital stock in a reclassification
of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is
the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as the case may be,
issuable on such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be
entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of Preferred
Stock or capital stock, as the case may be, which, if such Right
had been exercised immediately prior to such date and at a time
when the Preferred Stock transfer books of the Company were open,
he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs that would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in the
event that any Person shall become an Acquiring Person, unless
the event causing the 15% threshold to be crossed is a
transaction set forth in Section 13(a) hereof, or is a Permitted
Offer, then, promptly following the first occurrence of such
event, proper provision shall be made so that each holder of a
Right (except as provided below and in Section 7(e) hereof) shall
thereafter have the right to receive, upon exercise thereof at
the then current Purchase Price in accordance with the terms of
this Agreement, in lieu of a number of one ten-thousandths of a
share of Preferred Stock, such number of shares of Common Stock
of the Company that equals the result obtained by (x) multiplying
the then current Purchase Price by the then number of one
ten-thousandths of a share of Preferred Stock 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, shall thereafter be referred to
as the "Purchase Price" for each Right and for all purposes of
this Agreement) by 50% of the current market price (determined
pursuant to Section 11(d) hereof) per share of Common Stock on
the date of such first occurrence (such number of shares, the
"Adjustment Shares").
(iii) In the event that the number of shares of Common
Stock that are authorized by the Company's certificate of
incorporation but not outstanding or reserved for issuance for
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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 shall: (A) determine the excess of (l)
the value of the Adjustment Shares issuable upon the exercise of
a Right (the "Current Value") over (2) the Purchase Price (such
excess, the "Spread"), and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price, (l) cash, (2) a
reduction in the Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without limitation, shares,
or units of shares, of preferred stock which the Board of
Directors of the Company has deemed to have the same value as
shares of Common Stock (such shares of preferred stock, "common
stock 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 of the
Company based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of the
Company; provided, however, if the Company shall not have 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 23(a)
expires (the later of (x) and (y) being referred to herein as the
"Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, shares of
Common Stock (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 shall
determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty (30) day
period set forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Section 11(a)(ii)
Trigger Date, in order that the Company may seek shareholder
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 some action need
be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to
all outstanding Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant
to such first sentence and to determine the value thereof. In
the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights
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has been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the Common
Stock shall be the current market price (as determined pursuant
to Section 11(d) hereof) per share of the Common Stock on the
Section 11(a)(ii) Trigger Date and the value of any "common stock
equivalent" shall be deemed to have the same value as the Common
Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within forty-five (45) calendar days after such
record date) Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred Stock
("equivalent preferred stock")) or securities convertible into
Preferred Stock or equivalent preferred stock at a price per
share of Preferred Stock or per share of equivalent preferred
stock (or having a conversion price per share, if a security
convertible into Preferred Stock or equivalent preferred stock)
less than the current market price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on such record
date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares
of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock and/or equivalent
preferred stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered)
would purchase at such current market price, and the denominator
of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional
shares of Preferred Stock and/or equivalent preferred stock to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by
delivery of consideration part or all of which may be in a form
other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all
purposes. Shares of Preferred Stock owned by or held for the
account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed, and in the
event that such rights, options or warrants are not so issued,
the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been
fixed.
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(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any
such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Preferred
Stock, but including any dividend payable in stock other than
Preferred Stock) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be
the current market price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record date, less
the fair market value (as determined in good faith by the Board
of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes) of the portion of the cash, assets
or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of
Preferred Stock and the denominator of which shall be such
current market price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record date. Such
adjustments shall be made successively whenever such a record
date is fixed, and in the event that such distribution is not so
made, the Purchase Price shall be adjusted to be the Purchase
Price which would have been in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii)
hereof, the "current market price" per share of Common Stock on
any date shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for purposes of computations
made pursuant to Section 11(a)(iii) hereof, the "current market
price" per share of Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of such
Common Stock for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that in the
event that the current market price per share of the Common Stock
is determined during a period following the announcement by the
issuer of such Common Stock of (A) a dividend or distribution on
such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other
than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the
expiration of the requisite thirty (30) Trading Day or ten (10)
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Trading Day period, as set forth above, 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 market price" shall be properly
adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the shares of Common Stock
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 shares of
Common Stock are listed or admitted to trading or, if the shares
of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the Nasdaq National
Market ("Nasdaq") or such other system then in use, or, if on any
such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Common Stock selected by the Board of Directors of the Company.
If on any such date no market maker is making a market in the
Common Stock, the fair value of such shares on such date as
determined in good faith by the Board of Directors of the Company
shall be used. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities
exchange, a Business Day. If the Common Stock is not publicly
held or not so listed or traded, "current market price" per
share shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(d) (other than the last
sentence thereof). If the current market price per share of
Preferred Stock cannot be determined in the manner provided above
or if the Preferred Stock is not publicly held or listed or
traded in a manner described in clause (i) of this Section 11(d),
the "current market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 10,000 (as such
number may be appropriately adjusted for such events as stock
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splits, stock dividends and recapitalizations with respect to the
Common Stock occurring after the date of this Agreement)
multiplied by the current market price per share of the Common
Stock. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, "current market price" per
share of the Preferred Stock shall mean the fair value per share
as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the "current
market price" of one ten-thousandth of a share of Preferred Stock
shall be equal to the "current market price" of one share of
Preferred Stock divided by 10,000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent (l%) in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest ten-millionth of a share of Preferred Stock, or
one-hundred-thousandth of a share of Common Stock or other share,
as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three (3) years from the
date of the transaction which mandates such adjustment, or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive any
shares of capital stock other than Preferred Stock, thereafter
the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Sections 11(a), (b), (c), (e), (g),
(h), (i), (j), (k) and (m), and the provisions of Sections 7, 9,
10, 13 and 14 hereof with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price,
the number of one ten-thousandths of a share of Preferred Stock
purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
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(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase,
at the adjusted Purchase Price, that number of one
ten-thousandths of a share of Preferred Stock (calculated to the
nearest ten-millionth) obtained by (i) multiplying (x) the number
of one ten-thousandths of a share covered by a Right immediately
prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and
(ii) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights,
in lieu of any adjustment in the number of one ten-thousandths of
a share of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of one
ten-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest
one-hundred-thousandth) obtained by dividing the Purchase Price
in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement
of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be
the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued,
shall be at least ten (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 shall, as promptly as practicable,
cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at
the option of the Company, shall cause to be distributed to such
holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment.
Rights Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and
may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of
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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 one ten-thousandths of a share of
Preferred Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one ten-thousandth of
a share and the number of one ten-thousandths of a share which
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 stated value, if any,
of the number of one ten-thousandths of a share of Preferred
Stock issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable such number of one
ten-thousandths of a share of Preferred Stock at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of
any Right exercised after such record date the number of one
ten-thousandths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one ten-thousandths of a
share of Preferred Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill
or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or
securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that in their good faith judgment the Board of Directors
of the Company shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at less
than the current market price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock,
(iv) stock dividends or (v) issuance of rights, options or
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warrants referred to in this Section 11, hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to
such stockholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or
other instruments or securities outstanding or agreements in
effect that would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior
to, simultaneously with or immediately after such consolidation,
merger or sale, the shareholders of the Person who constitutes,
or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the
Company and such other Person shall have executed and delivered
to the Rights Agent a supplemental agreement evidencing
compliance with this Section 11(n).
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by
Section 23, Section 24 or Section 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Record Date and prior to the Distribution Date (i)
declare or pay any dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of
shares, the number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted
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so that the number of Rights thereafter associated with each
share of Common Stock following any such event shall equal the
result obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such event
by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to the
occurrence of such event and the denominator of which shall be
the number of shares of Common Stock outstanding immediately
following the occurrence of such event.
(q) The exercise of Rights under Section 11(a)(ii) shall
only result in the loss of rights under Section 11(a)(ii) to the
extent so exercised and shall not otherwise affect the rights
represented by the Rights under this Rights Agreement, including
the rights represented by Section 13.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 or Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b)
promptly file with the Rights Agent, and with each transfer agent
for the Preferred Stock and the Common Stock, 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 shares of Common
Stock) in accordance with Section 26 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and
on any adjustment therein contained and shall not be deemed to
have knowledge of any adjustment unless and until it shall have
received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, at any time after a Person has
become an Acquiring Person, directly or indirectly, (x) the
Company shall consolidate with, or merge with and into, any other
Person (other than a Subsidiary of the Company in a transaction
that complies with Section 11(o) hereof), and the Company shall
not be 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 11(o)
hereof) shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection
with such consolidation or merger, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any
other property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or
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otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof),
then, and in each such case and except as contemplated by
Section 13(d) hereof, proper provision shall be made so that: (i)
each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and freely
tradeable shares of Common Stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (l) multiplying the then
current Purchase Price by the number of one ten-thousandths of a
share of Preferred Stock for which a Right is exercisable
immediately prior to the 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
one ten-thousandths of a share for which a Right was exercisable
immediately prior to the occurrence of a Section 11(a)(ii) Event
by the Purchase Price in effect immediately prior to such
occurrence), and dividing that product (which, following the
occurrence of a Section 13 Event, shall be referred to as the
"Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the current market price (determined
pursuant to Section 11(d)(i) hereof) per share of the Common
Stock of such Principal Party on the date of consummation of such
Section 13 Event; (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended
that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) hereof shall
be of no effect following the first occurrence of any Section 13
Event.
(b) "Principal Party" shall mean
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(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), the
Person that is the issuer of any securities into which shares of
Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person
that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions;
provided, however, that in any such case, (1) if the Common Stock
of such Person is not at such time and has not been continuously
over the preceding twelve (12) month period registered under
Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which
is and has been so registered, "Principal Party" shall refer to
such other Person; (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common
Stocks of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market
value; and (3) in case such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that
are not owned, directly or indirectly, by the same Person, the
rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture as
if such party were a "Subsidiary" of both or all of such joint
ventures and the Principal Parties in each such chain shall bear
the obligations set forth in this Section 13 in the same ratio
as their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party shall have a sufficient number of authorized shares of its
Common Stock which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph
(a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement under
the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form,
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and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the 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
or appropriate; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that a Section 13 Event shall occur at any time
after the occurrence of a Section 11(a)(ii) Event, the Rights
which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if (i)
such transaction is consummated with a Person or Persons (or a
wholly-owned subsidiary of any such Person or Persons) who
acquired shares of Common Stock pursuant to a Permitted Offer,
(ii) the price per share of Common Stock paid in such transaction
is not less than the price per share of Common Stock paid to all
holders of shares of Common Stock whose shares were purchased
pursuant to such Permitted Offer, and (iii) the form of
consideration paid in such transaction is the same as the form of
consideration paid pursuant to such Permitted Offer. Upon
consummation of any such transaction contemplated by this
Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in
Section 11(i) or (p) hereof, or to distribute Rights Certificates
that evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For
purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
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fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed 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 such quoted price or, if not so quoted, the
average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other
system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors
of the Company. If on any such date no such market maker is
making a market in the Rights the fair value of the Rights on
such date as determined in good faith by the Board of Directors
of the Company shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are
integral multiples of one ten-thousandth of a share of Preferred
Stock) upon exercise of the Rights or to distribute certificates
that evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one ten-thousandth of a
share of Preferred Stock). In lieu of fractional shares of
Preferred Stock (other than fractions which are integral
multiples of one ten-thousandth of a share of Preferred Stock),
the Company shall 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 ten-thousandth of a share of
Preferred Stock. For purposes of this Section 14(b), the current
market value of one ten-thousandth of a share of Preferred Stock
shall be one ten-thousandth of the closing price of a share of
Preferred Stock (as determined pursuant to Section 11(d)(ii)
hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock.
In lieu of fractional shares of Common Stock, the Company shall
pay to the registered holders of Rights Certificates at the time
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such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market price of one (1)
share of Common Stock (as determined pursuant to Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of such
exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as
permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, except the rights of action expressly
given to the Rights Agent in Section 18 hereof, are vested in the
respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common
Stock), 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 Stock), 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 shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to
this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right by accepting the same consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common
Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent
if surrendered at the office of the Rights Agent designated for
such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and
certificates duly completed and fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in
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whose name a Rights Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7(e) hereof, shall
be required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of
its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the number of one ten-thousandths of a
share of Preferred Stock or any other securities of the Company
which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in
any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties
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here- under. The Company also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, liability
or expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the
premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate
for Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20
hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties
hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent
may adopt the counter- signature of a predecessor Rights Agent
and deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have
been countersigned, any successor Rights Agent may countersign
such Rights Certificates either in the name of the predecessor or
in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Rights Certificates shall
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have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the
identity of any Acquiring Person and the determination of
"current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by the Chairman of the
Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates or be required to verify
the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Rights
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Certificate (except its countersignature thereof); nor shall it
be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any adjustment
required under the provisions of Section 11, Section 13 or
Section 24 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after
receipt of a certificate describing any such adjustment,
delivered pursuant to Section 12); nor shall it by any act
hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Common Stock or
Preferred Stock to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any shares of Common Stock or
Preferred Stock will, when so 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 Chairman of the Board, the President, any Vice
President, the Secretary, any Assistant Secretary, the Treasurer
or any Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer. 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 with respect
to its duties or obligations under this Rights Agreement and the
date on and/or after which such action shall be taken or omitted
and the Rights Agent shall not be liable for any action taken or
omitted in accordance with a proposal included in any such
application on or after the date specified therein (which date
shall not be less than five Business Days after the date any such
officer actually receives such application, unless any such
officer shall have consented in writing to an earlier date)
unless, prior to taking or omitting any such action, the Rights
Agent has received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of
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the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct; provided, however,
reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to
purchase, as the case may be, has not been completed, the Company
and the Rights Agent will deem the beneficial owner of the rights
evidenced by such Rights Certificate to be an Acquiring Person or
an Affiliate or Associate thereof and such assignment or election
to purchase will not be honored.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty (30) days' notice in
writing mailed to the Company, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified
mail, and to the holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Stock and
Preferred Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment
within a period of thirty (30) days after giving notice of such
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removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by
the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall
be (a) a corporation organized and doing business under the laws
of the United States (or of any state of the United States) in
good standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) an
affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property
at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Common Stock and the Preferred Stock, 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 21,
however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be
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. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date
and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under
any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities issued by the Company prior
to the Distribution Date, and (b) may, in any other case, if
deemed necessary or appropriate by the Board of Directors of the
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Company, issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be
issued if, and to the extent that, the Company shall be advised
by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to
whom such Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close of
business on the tenth day following the Stock Acquisition Date
(or, if the Stock Acquisition Date shall have occurred prior to
the Record Date, the close of business on the tenth day following
the Record Date), or (ii) the Final Expiration Date, redeem all
but not less than all the then outstanding Rights at a redemption
price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price")
and the Company may, at its option, pay the Redemption Price
either in shares of Common Stock (based on the "current market
price," as defined in Section 11(d)(i) hereof, of the shares of
Common Stock at the time of redemption) or cash; provided,
however, that notwithstanding the foregoing if, following the
occurrence of a Stock Acquisition Date and following the
expiration of the right of redemption set forth above in this
Section 23(a), either (i)(A) a Person who is an Acquiring Person
shall have transferred or otherwise disposed of a number of
shares of Common Stock in one transaction or series of
transactions, not directly or indirectly involving the Company or
any of its Subsidiaries, such that such Person is thereafter a
Beneficial Owner of 10% or less of the outstanding shares of
Common Stock, and (B) there are no other Persons, immediately
following the occurrence of the event described in clause (A),
who are Acquiring Persons, and (C) there are at least two
Continuing Directors then in office and a majority of the
Continuing Directors approve the reinstatement of the right of
redemption pursuant to this Section 23, or (ii)(A) the Board
approves the consolidation, merger or other combination of the
Company with or into, or the sale or other transfer (either by
the Company or one or more of its Subsidiaries), in one
transaction or a series of related transactions, of more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole), to a Person other than the
Acquiring Person (or any Associate or Affiliate of such Acquiring
Person) who caused the occurrence of such Stock Acquisition Date,
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and (B) the Board of Directors of the Company, as part of the
approval of such an event described in the preceding
clause (ii)(A), approves the reinstatement of the right of
redemption pursuant to this Section 23, and (C) there are at
least two Continuing Directors then in office and a majority of
the Continuing Directors so approve such reinstatement, then, in
either such case, the right of redemption shall be reinstated and
thereafter be subject to the provisions of this Section 23.
Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired (such right
of redemption hereunder being deemed to have expired
notwithstanding the existence of the possibility of the
reinstatement thereof as provided above in this Section 23(a)).
Subject to the foregoing, the redemption of the Rights by the
Board may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion
may establish.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights, evidence of
which shall have been filed with the Rights Agent and without any
further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the Company
shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to
all such holders at each holder's last address as it appears upon
the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent
for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be
made.
(c) The Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press
release announcing the manner of redemption of the Rights in
accordance with this Agreement and (ii) mailing payment of the
Redemption Price to the registered holders of the Rights at their
last addresses as they appear on the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books
of the Transfer Agent of the Common Shares, and upon such action,
all outstanding Rights and Right Certificates shall be null and
void without any further action by the Company.
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Section 24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time after a Section 11(a)(ii) Event, exchange all
or part of the then outstanding and exercisable Rights (which (i)
shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof, and (ii) shall include,
without limitation, any Rights issued after the Distribution Date
in connection with the exercise of options pursuant to the
Company's employee benefit plans, where such option is exercised
for securities of the Company or surrendered for cash) for shares
of Common Stock at an exchange ratio of one share of Common Stock
per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors may effect such an exchange only if there are at least
two Continuing Directors then in office and a majority of such
Continuing Directors concur with such exchange.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to
subsection (a) of this Section 24, evidence of which shall have
been filed with the Rights Agent, and without any further action
and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure
to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights
at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange shall state
the method by which the exchange of shares of Common Stock for
Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void pursuant to
the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Stock (or
equivalent preferred stock, as such term is defined in
Section 11(b) hereof) for shares of Common Stock exchangeable for
Rights, at the initial rate of one ten-thousandth of a share of
Preferred Stock (or equivalent preferred stock) for each share of
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Common Stock, as appropriately adjusted to reflect adjustments in
the voting rights of the Preferred Stock pursuant to Section 3(A)
of the Certificate of Designations attached hereto as Exhibit A,
so that the fraction of a share of Preferred Stock (or equivalent
preferred stock) delivered in lieu of each share of Common Stock
shall have the same voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient shares
of Common Stock or Preferred Stock issued but not outstanding or
authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company
shall take all such action as may be necessary to authorize
additional shares of Common Stock or Preferred Stock for issuance
upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of such
fractional shares of Common Stock, there shall be paid to the
registered holders of the Right Certificates with regard to which
such fractional shares of Common Stock would otherwise be
issuable, an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock. For the
purposes of this subsection (e), the current market value of a
whole share of Common Stock shall be the closing price per share
of Common Stock (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after
the Distribution Date, (i) to pay any dividend payable in stock
of any class to the holders of Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than
a regular quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of
stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than
a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related
transactions, of more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its
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Subsidiaries in one or more transactions each of which complies
with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
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 shares of
Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i)
or (ii) above at least twenty (20) days prior to the record date
for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking
of such proposed action or the date of participation therein by
the holders of the shares of Preferred Stock whichever shall be
the earlier.
(b) In case a Section 11(a) (ii) Event shall occur, then,
in any such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 26 hereof, a
notice of the occurrence of such event, which shall specify the
event and the consequences of the event to holders of Rights
under Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed thereafter
to refer also to Common Stock and/or, if appropriate, other
securities.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the
holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Thermo Electron Corporation
81 Wyman Street
Waltham, Massachusetts 02254
Attention: Corporate Secretary
Subject to the provisions of Section 21, 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 shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
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The First National Bank of Boston
c/o Boston EquiServe Limited Partnership
P.O. Box 1865
Boston, Massachusetts 02105
Attention: 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, if prior to the Distribution Date, to the
holder of certificates representing shares of Common Stock) shall
be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the Stock
Acquisition Date and subject to the penultimate sentence of this
Section 27, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the Stock
Acquisition Date and subject to the penultimate sentence of this
Section 27, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order (i)
to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent
with any other provisions herein, or (iii) to change or
supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). Upon the delivery of a
certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained
in this Agreement to the contrary, no supplement or amendment
shall be made (i) which changes the Redemption Price or (ii) at
any time prior to such time as any Person first becomes an
Acquiring Person lowers the thresholds set forth in Sections 1(a)
and/or 3(a) hereof from 15% to less than, in either case, the
greater of (x) the sum of .001% and the largest percentage of the
outstanding shares of Common Stock then known by the Company to
be beneficially owned by any Person or (y) 10%. Prior to the
Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common
Stock.
Section 28. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the
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Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding
at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board
of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights
and powers specifically granted to the Board or to the Company,
or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to
(i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to
redeem or not redeem the Rights or to amend this Agreement). All
such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in
good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board to any liability to
the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock).
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 shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with
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the laws of such State applicable to contracts made and to be
performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section 34. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
Attest: THERMO ELECTRON CORPORATION
By:_________________________ By:_________________________
Name: Name: George N. Hatsopoulos
Title: Title: Chairman and President
Attest: THE FIRST NATIONAL BANK OF
BOSTON
By:___________________________ By:_________________________
Name: Name:
Title: Title:
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EXHIBIT A
CERTIFICATE OF DESIGNATIONS
of
THERMO ELECTRON CORPORATION
(Pursuant to Section 151 of the
Delaware General Corporation Law)
______________________________
Thermo Electron Corporation, a corporation organized and
existing under the General Corporation Law of the State of
Delaware (hereinafter called the "Corporation"), hereby certifies
that the following resolution was adopted by the Board of
Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on
January 19, 1996:
RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors of this Corporation (hereinafter
called the "Board of Directors" or the "Board") in accordance
with the provisions of the Certificate of Incorporation, the
Board of Directors hereby creates a series of Preferred Stock,
$100 par value (the "Preferred Stock"), of the Corporation and
hereby states the designation and number of shares, and fixes the
relative rights, preferences and limitations thereof as follows:
Series B Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series B Junior Participating
Preferred Stock" (the "Series B Preferred Stock") and the number
of shares constituting the Series B Preferred Stock shall be
40,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series B Preferred Stock to
a number less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible
into Series B Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any
shares of any series of Preferred Stock (or any similar stock)
ranking prior and superior to the Series B Preferred Stock with
respect to dividends, the holders of shares of Series B Preferred
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Stock, in preference to the holders of Common Stock, par value
$1.00 per share (the "Common Stock"), of the Corporation, and of
any other junior stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds of the
Corporation legally available for the payment of dividends,
quarterly dividends payable in cash on March 31, June 30,
September 30 and December 31 in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series B
Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $100 or (b) subject to the
provision for adjustment hereinafter set forth, 10,000 times the
aggregate per share amount of all cash dividends, and 10,000
times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately
preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series B Preferred Stock.
In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock,
or effect a subdivision, combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares of
Series B Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding
immediately prior to such event. In the event the Corporation
shall at any time declare or pay any dividend on the Series B
Preferred Stock payable in shares of Series B Preferred
Stock, or effect a subdivision, combination or consolidation of
the outstanding shares of Series B Preferred Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Series B Preferred Stock) into a greater or lesser
number of shares of Series B Preferred Stock, then in each such
case the amount to which holders of shares of Series B Preferred
Stock were entitled immediately prior to such event under clause
(b) of the first sentence of this Section 2(A) shall be adjusted
by multiplying such amount by a fraction, the numerator of which
is the number of shares of Series B Preferred Stock that were
outstanding immediately prior to such event and the denominator
of which is the number of shares of Series B Preferred Stock
outstanding immediately after such event.
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(B) The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in
paragraph (A) of this Section immediately after it declares a
dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock) and the Corporation
shall pay such dividend or distribution on the Series B Preferred
Stock before the dividend or distribution declared on the Common
Stock is paid or set apart; provided that, in the event no
dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $100 per share on the Series B Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(C) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series B Preferred Stock from
the Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of
Series B Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series B Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series B Preferred
Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60
days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series
B Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series B Preferred Stock
shall entitle the holder thereof to 10,000 votes on all matters
submitted to a vote of the stockholders of the Corporation. In
the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock,
or effect a subdivision, combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
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otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the number of votes per share to which
holders of shares of Series B Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying
such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such
event. In the event the Corporation shall at any time declare or
pay any dividend on the Series B Preferred Stock payable in
shares of Series B Preferred Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Series
B Preferred Stock (by reclassification or otherwise than by
payment of a dividend in shares of Series B Preferred Stock) into
a greater or lesser number of shares of Series B Preferred Stock,
then in each such case the number of votes per share to which
holders of shares of Series B Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number
of shares of Series B Preferred Stock that were outstanding
immediately prior to such event and the denominator of
which is the number of shares of Series B Preferred Stock
outstanding immediately after such event.
(B) Except as otherwise provided herein, in the
Certificate of Incorporation or by law, the holders of shares of
Series B Preferred Stock and the holders of shares of Common
Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(C)(i) If at any time dividends on any Series B
Preferred Stock shall be in arrears in an amount equal to six
quarterly dividends thereon, the holders of the Series B
Preferred Stock, voting as a separate series from all other
series of Preferred Stock and classes of capital stock, shall be
entitled to elect two members of the Board of Directors in
addition to any Directors elected by any other series, class or
classes of securities and the authorized number of Directors will
automatically be increased by two. Promptly thereafter, the
Board of Directors of this Corporation shall, as soon as may be
practicable, call a special meeting of holders of Series B
Preferred Stock for the purpose of electing such members of the
Board of Directors. Said special meeting shall in any event be
held within 45 days of the occurrence of such arrearage.
(ii) During any period when the holders of
Series B Preferred Stock, voting as a separate series, shall be
entitled and shall have exercised their right to elect two
Directors, then and during such time as such right continues
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(a) the then authorized number of Directors shall be increased by
two, and the holders of Series B Preferred Stock, voting as a
separate series, shall be entitled to elect the additional
Directors so provided for, and (b) each such additional Director
shall not be a member of any existing class of the Board of
Directors, but shall serve until the next annual meeting of
stockholders for the election of Directors, or until his
successor shall be elected and shall qualify, or until his right
to hold such office terminates pursuant to the provisions of this
Section 3(C).
(iii) A Director elected pursuant to the terms
hereof may be removed with or without cause by the holders of
Series B Preferred Stock entitled to vote in an election of such
Director.
(iv) If, during any interval between annual
meetings of stockholders for the election of Directors and while
the holders of Series B Preferred Stock shall be entitled to
elect two Directors, there is no such Director in office by
reason of resignation, death or removal, then, promptly
thereafter, the Board of Directors shall call a special meeting
of the holders of Series B Preferred Stock for the purpose of
filling such vacancy and such vacancy shall be filled at such
special meeting. Such special meeting shall in any event be held
within 45 days of the occurrence of such vacancy.
(v) At such time as the arrearage is fully cured, and
all dividends accumulated and unpaid on any shares of Series B
Preferred Stock outstanding are paid, and, in addition thereto,
at least one regular dividend has been paid subsequent to curing
such arrearage, the term of office of any Director elected
pursuant to this Section 3(C), or his successor, shall
automatically terminate, and the authorized number of Directors
shall automatically decrease by two, the rights of the holders of
the shares of the Series B Preferred Stock to vote as provided in
this Section 3(C) shall cease, subject to renewal from time to
time upon the same terms and conditions, and the holders of
shares of the Series B Preferred Stock shall have only the
limited voting rights elsewhere herein set forth.
(D) Except as set forth herein, or as otherwise
provided by law, holders of Series B Preferred Stock shall have
no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
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(A) Whenever quarterly dividends or other
dividends or distributions payable on the Series B Preferred
Stock as provided in Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series B Preferred Stock
outstanding shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends, or make any
other distributions, on any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series B Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series B Preferred Stock, except dividends paid ratably
on the Series B Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series B Preferred Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series B Preferred
Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series B Preferred Stock, or any
shares of stock ranking on a parity with the Series B Preferred
Stock, except in accordance with a purchase offer made in writing
or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise acquire
for consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
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Section 5. Reacquired Shares. Any shares of Series B
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Certificate of
Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation, dissolution or winding
up of the Corporation, no distribution shall be made (1) to the
holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series B
Preferred Stock unless, prior thereto, the holders of shares of
Series B Preferred Stock shall have received $100 per share, plus
an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series B Preferred Stock
shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth,
equal to 10,000 times the aggregate amount to be distributed per
share to holders of shares of Common Stock, or (2) to the holders
of shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series B
Preferred Stock, except distributions made ratably on the Series
B Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up.
(B) Neither the consolidation, merger or other
business combination of the Corporation with or into any other
corporation nor the sale, lease, exchange or conveyance of all or
any part of the property, assets or business of the Corporation
shall be deemed to be a liquidation, dissolution or winding up of
the Corporation for purposes of this Section 6.
(C) In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the aggregate amount to
which holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1)
of paragraph (A) of this Section 6 shall be adjusted by
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multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event. In the event the Corporation shall at any time
declare or pay any dividend on the Series B Preferred Stock
payable in shares of Series B Preferred Stock, or effect a
subdivision, combination or consolidation of the outstanding
shares of Series B Preferred Stock (by reclassification or
otherwise than by payment of a dividend in shares of Series B
Preferred Stock) into a greater or lesser number of shares of
Series B Preferred Stock, then in each such case the aggregate
amount to which holders of shares of Series B Preferred Stock
were entitled immediately prior to such event under the proviso
in clause (1) of paragraph (A) of this Section 4 shall be
adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Series B Preferred Stock that
were outstanding immediately prior to such event and the
denominator of which is the number of shares of Series B
Preferred Stock outstanding immediately after such event.
Section 7. Consolidation, Merger, etc. Notwithstanding
anything to the contrary contained herein, in case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
each share of Series B Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share, subject
to the provision for adjustment hereinafter set forth, equal to
10,000 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be,
into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of
shares of Series B Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event. In the event the Corporation shall at any time
declare or pay any dividend on the Series B Preferred Stock
payable in shares of Series B Preferred Stock, or effect a
subdivision, combination or consolidation of the outstanding
shares of Series B Preferred Stock (by reclassification or
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otherwise than by payment of a dividend in shares of Series B
Preferred Stock) into a greater or lesser number of shares of
Series B Preferred Stock, then in each such case the amount set
forth in the first sentence of this Section 7 with respect to the
exchange or change of shares of Series B Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Series B Preferred Stock that
were outstanding immediately prior to such event and the
denominator of which is the number of shares of Series B
Preferred Stock outstanding immediately after such event.
Section 8. No Redemption. The shares of Series B Preferred
Stock shall not be redeemable.
Section 9. Rank. The Series B Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of
assets, junior to all series of any other class of the Preferred
Stock issued either before or after the issuance of the Series B
Preferred Stock, unless the terms of any such series shall
provide otherwise.
Section 10. Amendment. The Certificate of Incorporation of
the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special
rights of the Series B Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series B Preferred Stock,
voting together as a single class.
Section 11. Fractional Shares. Series B Preferred Stock
may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in
distributions and have the benefit of all other rights of holders
of Series B Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Corporation by its Chairman of the
Board and President and attested by its Secretary this ___ day of
January, 1996.
THERMO ELECTRON CORPORATION
________________________________
George N. Hatsopoulos
Chairman of the Board and President
Attest:
________________________________
, Secretary
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EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER JANUARY, 29, 2006 OR EARLIER IF REDEEMED OR
EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION
AT $.01 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. [THE RIGHTS REPRESENTED BY
THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]
Rights Certificate
THERMO ELECTRON 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 January 19, 1996 (the "Rights Agreement"), between
Thermo Electron Corporation, a Delaware corporation (the
"Company"), and The First National Bank of Boston, a national
banking association (the "Rights Agent"), to purchase from the
Company after the Distribution Date (as such term is defined on
the Rights Agreement) and at any time prior to 5:00 P.M. (Boston
time) on January 29, 2006 at the office of the Rights Agent
designated for such purpose, or its successors as Rights Agent,
one ten-thousandth of a fully paid, non-assessable share of
Series B Junior Participating Preferred Stock (the "Preferred
Stock") of the Company, $.01 par value per share, at a purchase
price of
$250.00 in cash per one ten-thousandth of a share (the "Purchase
Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related
* The portion of the legend in brackets shall be inserted only
if applicable and shall replace the preceding sentence.
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Certificate duly executed. The number of Rights evidenced by
this Rights Certificate (and the number of one ten-thousandths of
a share of Preferred Stock which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above,
are the number and Purchase Price as of the close of business on
January 29, 1996, based on the Preferred Stock as constituted at
such date. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in
the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the
Rights evidenced by this Rights Certificate are beneficially
owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring
Person, Associate or Affiliate who becomes a transferee after the
Acquiring Person becomes an Acquiring Person, or (iii) under
certain circumstances specified in the Rights Agreement, a
transferee of a person who, concurrently with or after such
transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null
and void and no holder hereof shall have any right with respect
to such Rights from and after the occurrence of such
Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other
securities which may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification
and adjustment upon the happening of certain events, including
Section 11(a)(ii) Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal
offices of the Company and are available upon written request to
the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent
designated for such purpose, with the Form of Election and
Certificate set forth on the reverse side duly executed, may be
exchanged for another Rights Certificate or Rights Certificates
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of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one ten-thousandths of a
share of Preferred Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have
entitled such holder to purchase. If this Rights Certificate
shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the
Company at its option at a redemption price of $.01 per Right at
any time prior to the earlier of the close of business on (i) the
tenth day following the Stock Acquisition Date (as such time
period may be extended pursuant to the Rights Agreement), and
(ii) the Final Expiration Date.
Subject to the provisions of the Rights Agreement, the
Company may, at its option, at any time after a Section 11(a)(ii)
Event, subject to the approval of a majority of the Continuing
Directors, exchange all or part of the Rights evidenced by this
Certificate for shares of the Company's Common Stock or for
Preferred Stock (or shares of a class or series of the Company's
preferred stock having the same rights, privileges and
preferences as the Preferred Stock).
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one ten-thousandth of a
share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Preferred Stock or of any other
securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Rights Certificate shall have
been exercised as provided in the Rights Agreement.
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This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of _______________, 199_
ATTEST: THERMO ELECTRON CORPORATION
________________________ By:_________________________
Secretary
Title:______________________
COUNTERSIGNED:
The First National Bank of Boston
as Rights Agent
By:___________________________
Authorized Signature
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<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
To: The First National Bank of Boston
The undersigned hereby irrevocably elects to exercise
________ Rights represented by this Rights Certificate to
purchase the shares of Preferred Stock issuable upon the exercise
of the Rights (or such other securities of the Company or of any
other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
Please insert social security
or other identifying number _____________________________________
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name of
and delivered to:
Please insert social security
or other identifying number______________________________________
_________________________________________________________________
(Please print name and address)
________________________________________________________________
Dated:____________, 19__
_______________________
Signature
Signature Guaranteed:
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<PAGE>
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ }
are [ ] are not being exercised by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was
or became an Acquiring Person or an Affiliate or Associate
thereof.
Dated: ______________, 19__
___________________________
Signature
Signature Guaranteed:
NOTICE
------
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
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<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED_______________________________________________
hereby sells, assigns and transfers unto_________________________
_________________________________________________________________
(Please print name and address of transferee)
_________________________________________________________________
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _________________ Attorney, to transfer the within Rights
Certificate on the books of the within-named Company, with full
power of substitution.
Dated: __________________, 199_
___________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies that the Rights evidenced
by this Rights Certificate are not beneficially owned by an
Acquiring Person or an Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement).
Dated: ___________, 199_
____________________________
Signature
Signature Guaranteed:
PAGE
<PAGE>
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On January 19, 1996, the Board of Directors of Thermo
Electron Corporation (the "Company") declared a dividend
distribution of one Right for each outstanding share of the
Company's Common Stock to stockholders of record at the close of
business on January 29, 1996. Each Right entitles the registered
holder to purchase from the Company a unit consisting of one
ten-thousandth of a share (a "Unit") of Series B Junior
Participating Preferred Stock, $100 par value (the "Preferred
Stock") at a Purchase Price of $250.00 in cash per Unit, subject
to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the
Company and The First National Bank of Boston, as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no
separate Rights Certificates will be distributed. The Rights
will separate from the Common Stock and a Distribution Date will
occur upon the earlier of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of 15% or more of the
outstanding shares of Common Stock (the "Stock Acquisition
Date"), or (ii) 10 business days following the commencement of a
tender offer or exchange offer that would result in a person or
group beneficially owning 15% or more of such outstanding shares
of Common Stock. Until the Distribution Date, (i) the Rights
will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates,
(ii) new Common Stock certificates issued after January 29, 1996
will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution Date
and will expire at the close of business on January 29, 2006,
unless earlier redeemed or exchanged by the Company as described
below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent
the Rights. Except as otherwise determined by the Board of
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Directors, and except for shares of Common Stock issued upon
exercise, conversion or exchange of then outstanding options,
convertible or exchangeable securities or other contingent
obligations to issue shares, only shares of Common Stock issued
prior to the Distribution Date will be issued with Rights.
In the event that a Person becomes the beneficial owner of
15% or more of the then outstanding shares of Common Stock,
except pursuant to an offer for all outstanding shares of Common
Stock which the independent directors determine to be fair to,
and otherwise in the best interests of, stockholders, each holder
of a Right will thereafter have the right to receive, upon
exercise, that number of shares of Common Stock (or, in certain
circumstances, cash, property or other securities of the Company)
which equals the exercise price of the Right divided by one-half
of the current market price (as defined in the Rights Agreement)
of the Common Stock at the date of the occurrence of the event.
However, Rights are not exercisable following the event set forth
above until such time as the Rights are no longer redeemable by
the Company as set forth below. Notwithstanding any of the
foregoing, following the occurrence of such event, all Rights
that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will
be null and void. The event set forth in this paragraph is
referred to as a "Section 11(a)(ii) Event."
For example, at an exercise price of $250.00 per Right, each
Right not owned by an Acquiring Person (or by certain related
parties) following an event set forth in the preceding paragraph
would entitle its holder to purchase for $250.00 such number of
shares of Common Stock (or other consideration, as noted above)
as equals $250.00 divided by one-half of the current market price
(as defined in the Rights Agreement) of the Common Stock.
Assuming that the Common Stock had a per share value of $50.00 at
such time, the holder of each valid Right would be entitled to
purchase ten shares of Common Stock for $250.00.
In the event that, at any time after any person has become
an Acquiring Person, (i) the Company is acquired in a merger or
other business combination transaction in which the Company is
not the surviving corporation or its Common Stock is changed or
exchanged (other than a merger which follows an offer determined
by the independent directors to be fair as described in the first
sentence of the second preceding paragraph), or (ii) 50% or more
of the Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have the right to
receive, upon exercise, that number of shares of common stock of
the acquiring company which equals the exercise price of the
Right divided by one-half of the current market price of such
common stock at the date of the occurrence of the event.
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For example, at an exercise price of $250.00 per Right, each
Right following an event set forth in the preceding paragraph
would entitle its holder to purchase for $250.00 such number of
shares of common stock of the acquiring company as equals $250.00
divided by one-half of the current market price (as defined in
the Rights Agreement) of such common stock. Assuming that such
common stock had a per share value of $100.00 at such time, the
holder of each valid Right would be entitled to purchase five
shares of common stock of the acquiring company for $250.00.
At any time after the occurrence of a Section 11(a)(ii)
Event, and subject to the concurrence of a majority of the
Continuing Directors (as defined in the Rights Agreement), the
Board of Directors of the Company may exchange the Rights (other
than Rights owned by such Acquiring Person which have become
void), in whole or in part, at an exchange ratio of one share of
Common Stock, or one ten-thousandth of a share of Preferred Stock
(or of a share of a class or series of the Company's preferred
stock having equivalent rights, preferences and privileges), per
Right (subject to adjustment).
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are
granted certain rights or warrants to subscribe for Preferred
Stock or convertible securities at less than the current market
price of the Preferred Stock, or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to
above).
The number of Rights associated with each share of Common
Stock is also subject to adjustment in the event of a stock split
of the Common Stock or a stock dividend on the Common
Stock payable in Common Stock or subdivisions, consolidations or
combinations of Common Stock occurring, in any such case, prior
to the Distribution Date.
Preferred Stock purchasable upon exercise of the Rights will
not be redeemable. Each share of Preferred Stock will be
entitled to a minimum preferential quarterly dividend payment of
$100 per share and will be entitled to an aggregate dividend of
10,000 times the dividend declared per share of Common Stock. In
the event of liquidation, the holders of the Preferred Stock will
be entitled to a minimum preferential liquidating payment of $100
per share and will be entitled to an aggregate payment of 10,000
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times the payment made per share of Common Stock. Each share of
Preferred Stock will have 10,000 votes, voting together with the
Common Stock. Finally, in the event of any merger, consolidation
or other transaction in which Common Stock is changed or
exchanged, each share of Preferred Stock will be entitled to
receive 10,000 times the amount received per share of Common
Stock. These rights are protected by customary antidilution
provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of one ten-thousandth of
a share of Preferred Stock purchasable upon exercise of each
Right should approximate the value of one share of Common Stock.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least
1% of the Purchase Price. No fractional Units will be issued
and, in lieu thereof, an adjustment in cash will be made based on
the market price of the Preferred Stock on the last trading date
prior to the date of exercise.
At any time until ten days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (payable in cash or stock).
Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the $.01
redemption price. The Rights may also be redeemable following
certain other circumstances specified in the Rights Agreement.
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.
While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the
acquiring company as set forth above.
Prior to the Distribution Date, the terms of the Rights are
subject to amendment by the Board of Directors without the
consent of the holders of the Rights, except that the redemption
price of the Rights is not subject to amendment. After the
Distribution Date, only limited terms of the Rights are subject
to amendment by the Board.
In conjunction with the declaration of this dividend, the
Board of Directors of the Company redeemed the rights issued
pursuant to the Company's May 4, 1988 Rights Agreement effective
as of January 29, 1996. The redemption price for these
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previously issued rights was $.02 per right and, prior to the
redemption, certificates representing each share of the Company's
Common Stock also represented 4/9ths of a previously issued
right.
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 dated January , 1996. 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
