ADC TELECOMMUNICATIONS, INC.
and
NORWEST BANK MINNESOTA, N.A.
as Rights Agent
SECOND AMENDED AND RESTATED
RIGHTS AGREEMENT
Amended and Restated as of November 28, 1995
(Amending and Restating the Rights Agreement dated as of
September 23, 1986, as amended and restated as of August 16, 1989)
Table of Contents
Section 1. Certain Definitions 2
Section 2. Appointment of Rights Agent 5
Section 3. Issue of Right Certificates 5
Section 4. Form of Right Certificates 7
Section 5. Countersignature and Registration 8
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Lost, Stolen, Destroyed or Mutilated Right
Certificates 8
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 9
Section 8. Cancellation and Destruction of Right Certificates 11
Section 9. Reservation and Availability of Shares of
Common Stock 11
Section 10. Common Stock Record Date 12
Section 11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights 13
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares 20
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power 21
Section 14. Fractional Rights and Fractional Shares 24
Section 15. Rights of Action 25
Section 16. Agreement of Right Holders 25
Section 17. Right Certificate Holder Not Deemed a Shareholder 26
Section 18. Concerning the Rights Agent 26
Section 19. Merger, Consolidation or Change of Name
of Rights Agent 26
Section 20. Duties of Rights Agent 27
Section 21. Change of Rights Agent 29
Section 22. Issuance of New Right Certificates 30
Section 23. Redemption 31
Section 24. Exchange 31
Section 25. Notice of Certain Events 33
Section 26. Notices 33
Section 27. Supplements and Amendments 34
Section 28. Successors 35
Section 29. Benefits of this Agreement 35
Section 30. Administration and Interpretation by Directors 35
Section 31. Severability 35
Section 32. Governing Law 36
Section 33. Counterparts 36
Section 34. Descriptive Headings 36
Signature 37
SECOND AMENDED AND RESTATED
RIGHTS AGREEMENT
Second Amended and Restated Rights Agreement, dated as of November
28, 1995, between ADC Telecommunications, Inc., a Minnesota corporation (the
"Company"), and Norwest Bank Minnesota, N.A., a national banking association,
as Rights Agent (the "Rights Agent"), amending and restating the Rights
Agreement, dated as of September 23, 1986 (the "Rights Agreement"), between the
Company and the Rights Agent, as such Rights Agreement was amended and restated
by the Amended and Restated Rights Agreement, dated as of August 16, 1989 (the
"First Amended and Restated Rights Agreement").
W I T N E S S E T H
WHEREAS, on September 23, 1986 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company (as the composition of such Board
of Directors may change from time to time, the "Board of Directors") authorized
and declared a dividend of one Right (as hereinafter defined) for each share of
Common Stock, par value $.20 per share, of the Company outstanding at the Close
of Business (as hereinafter defined) on October 6, 1986 (the "Record Date") and
authorized the issuance of one Right with respect to each share of Common Stock
(as such number may hereafter be adjusted pursuant to the provisions of Section
11) issued (whether originally issued or delivered from the Company's treasury)
between the Record Date and the earlier of the Distribution Date and the
Expiration Date (as such terms are defined in Sections 3 and 7), each Right
(individually a "Right" and collectively the "Rights") initially representing
the right to purchase one-half of one share of Common Stock upon the terms and
subject to the conditions set forth in the Rights Agreement; and
WHEREAS, on September 23, 1986 the Company and the Rights Agent
entered into the Rights Agreement; and
WHEREAS, on August 16, 1989, the Company and the Rights Agent entered
into the First Amended and Restated Rights Agreement, amending and restating
the Rights Agreement; and
WHEREAS, on November 28, 1995, the Board of Directors determined to
further amend and restate the Amended and Restated Rights Agreement as
permitted by Section 26(iii) thereof and directed the Rights Agent to enter
into this Second Amended and Restated Agreement.
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 (as hereinafter
defined) who or which, alone or together with all Affiliates and
Associates (in each case, as hereinafter defined) of such Person, shall be
the Beneficial Owner (as hereinafter defined) of 15% or more of the shares
of Common Stock then outstanding, but shall not include the Company, any
Subsidiary (as hereinafter defined) of the Company or any employee benefit
plan of the Company or of any Subsidiary of the Company or any entity
holding shares of Common Stock organized, appointed or established 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 shares of Common Stock by the Company which, by reducing
the number of shares of Common Stock outstanding, increases the
proportionate number of shares of Common Stock Beneficially Owned by such
Person to 15% or more of the shares of Common Stock then outstanding;
provided, however, that if a Person shall become the Beneficial Owner of
15% or more of the shares of Common Stock 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 shares of
Common Stock, then such Person shall be deemed to be an "Acquiring
Person." For 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 which any Person Beneficially Owns, shall be made
in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Securities Exchange Act of 1934, as
amended, as in effect on the Rights Dividend Declaration Date (the
"Exchange Act").
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "Beneficially Own", any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has
(A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding
whether or not in writing (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights
(other than
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the Rights at any time prior to the occurrence of a Section
11(a)(ii) Event (as hereinafter defined) but thereafter
including Rights acquired by such Person from and after the
Distribution Date other than Rights acquired by such Person
directly from the Company pursuant to Section 3(a) or Rights
acquired by such Person upon adjustments under Section 11 or 22
to Rights that would not be deemed hereunder to be Beneficially
Owned by such Person), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to Beneficially Own, any securities
tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange; or
(B) (1) the right to vote or dispose of or (2) the
"Beneficial Ownership" (as determined pursuant to Rule 13d-3 of
the General Rules and Regulations under the Exchange Act) of
(including without limitation pursuant to any agreement,
arrangement or understanding whether or not in writing),
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to Beneficially Own, any securities if
the agreement, arrangement or understanding to vote such
securities (x) arises solely from a revocable proxy or consent
given to such Person or any of such Person's Affiliates or
Associates in response to a public proxy solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act and (y) is not also then
reportable by such Person on Schedule 13D under the Exchange Act
(or any comparable or successor report) as being Beneficially
Owned by such Person; or
(ii) which are Beneficially Owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates or Associates) has
any agreement, arrangement or understanding whether or not in writing
(other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities) for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy that does not, as a result of the
proviso to clause (i)(B) of this Section l(d), cause the holder
thereof to be deemed to be the Beneficial Owner of such securities
under clause (i)(B) of this Section 1(c)) 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
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number of such securities not then actually issued and outstanding which
such Person would be deemed to Beneficially Own hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of New York or
Minnesota are authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
Minneapolis, Minnesota time, on such date; provided, however, that if such
date is not a Business Day, it shall mean 5:00 P.M., Minneapolis,
Minnesota time, on the next succeeding Business Day.
(f) "Common Stock", unless used with reference to a Person other
than the Company, shall mean the shares of Common Stock, par value $.20
per share (as such par value may be changed from time to time), of the
Company. "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 or, if
such Person is a Subsidiary of another Person, the Person or Persons that
ultimately control such first-mentioned Person.
(g) "Continuing Director" shall mean any Person who is a member of
the Board of Directors of the Company, while such Person is a member of
the Board of Directors, 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 who was a member of the
Board of Directors on the Rights Dividend Declaration Date. A "Continuing
Director" shall also mean any Person who subsequently becomes a member of
the Board of Directors, while such Person is a member of the Board of
Directors, 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 initial nomination for
election or initial election to the Board of Directors is recommended or
approved by a majority of the Continuing Directors.
(h) "Distribution Date" shall have the meaning set forth in
Section 3.
(i) "Expiration Date" shall have the meaning set forth in Section 7.
(j) "Final Expiration Date" shall have the meaning set forth in
Section 7.
(k) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
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(l) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii).
(m) "Section 13 Event" shall mean any event described in clauses
(x), (y) or (z) of Section 13(a).
(n) "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) of the
Exchange Act) by the Company or any Person that such Person has become an
Acquiring Person.
(o) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which a majority of the voting power of the
voting equity securities or other equity interest entitled to vote in the
election of directors (or Persons with comparable responsibilities if the
entity has no directors) is Beneficially Owned, directly or indirectly, by
such Person.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3, 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 RIGHT 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 following such 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 day after the date that
a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company or any employee benefit plan of the Company
or of any Subsidiary of the Company or any entity holding shares of
Common Stock organized, appointed or established for, or pursuant to
the terms of, any such plan) is first commenced (within the meaning
of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act), if, upon the consummation thereof, such Person would
be the Beneficial Owner of 15% or more of the then outstanding shares
of Common Stock, including any such date which is after the Rights
Dividend Declaration Date and prior to the issuance of the Rights
(or, if the tenth day after the date of commencement of any such
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tender or exchange offer occurs before the Record Date, the Close of
Business on the Record Date),
(the earlier of such dates described in clauses (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 Common Stock registered in the names of the holders thereof
(which certificates for Common Stock shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of the underlying shares of Common Stock (including a transfer to the
Company). Subject to Section 7(e), as promptly as practicable following the
Distribution Date, the Rights Agent will send, by first-class, postage prepaid
mail, to each record holder of Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, one or more Right Certificates, in substantially the form of Exhibit A
hereto (as amended and restated), evidencing one Right for each share of Common
Stock so held. In the event that an adjustment in the number of Rights per
share of Common Stock has been made pursuant to Section 11, at the time Right
Certificates are distributed, the Company may, to the extent provided in
Section 14(a), make the necessary and appropriate rounding adjustments (as set
forth in Section 14(a)) so that Right Certificates are distributed representing
only whole numbers of Rights and cash is paid in lieu of fractional Rights
pursuant to Section 14(a). As of and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) With respect to certificates for Common Stock outstanding as of
the Record Date, until the Distribution Date, the Rights will be evidenced by
such certificates for Common Stock and the registered holders of the Common
Stock shall also be the registered holders of the associated Rights. Until the
Distribution Date, the transfer of any certificate for Common Stock (including
without limitation the transfer of any certificate for Common Stock outstanding
on the Record Date and/or as of the date of this Second Amended and Restated
Rights Agreement, with or without a copy of any "Summary of Rights" or "Amended
and Restated Summary of Rights," as defined in the Rights Agreement and the
First Restated Rights Agreement, respectively, attached thereto) shall also
constitute the transfer of the Rights associated with the Common Stock
represented thereby.
(c) Rights shall be issued in respect of all shares of Common Stock
which are issued after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates for Common Stock issued
after the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date shall bear substantially the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Second Amended and Restated Rights
Agreement dated as of November 28, 1995 between ADC
Telecommunications, Inc. (the "Company") and Norwest Bank Minnesota,
N.A. (the "Rights Agent") (the "Rights Agreement"),
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the terms of which (including restrictions on the transfer of such
Rights) are hereby incorporated herein by reference and a copy of
which is on file at the principal executive office 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 after receipt of a
written request therefor from such holder. 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 Associate thereof (as such terms are defined in the
Rights Agreement) and any subsequent holder of such Rights, whether
currently held by or on behalf of such Person or any subsequent
holder, may become null and void.
With respect to such certificates containing the foregoing legend (or the
similar legend in effect after the Rights Dividend Declaration Date and prior
to the date of this Second Amended and Restated Rights Agreement), until the
earlier of the Distribution Date or the Expiration Date, the Rights associated
with the Common Stock represented by such certificates shall be evidenced by
such certificates alone, the registered holders of Common Stock shall also be
the registered holders of the associated Rights, and the transfer of any such
certificate shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates
(and the forms of election to exercise and of assignment to be printed on the
reverse thereof) shall be in substantially the form of Exhibit A hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to conform to usage. Subject to the
provisions of Sections 11, 14 and 22, the Right Certificates, whenever
distributed, shall be dated as of the Record Date, and on their face shall
entitle the holders thereof to purchase such number of shares of Common Stock
as shall be set forth therein at the price per one-half share set forth therein
(the "Purchase Price"), but the number of such shares and the Purchase Price
thereof shall be subject to adjustment as provided herein.
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Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the
Company, unless otherwise determined by the Board of Directors, by its chief
executive officer, chief financial officer or any other officer of the Company,
either manually or by facsimile signature. The Right Certificates shall be
manually countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed or whose facsimile signature shall appear on any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as
though the person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf of
the Company by any person who, at the actual date of the signing of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement
such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its offices in Minneapolis, Minnesota, books for
registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; LOST, STOLEN, DESTROYED OR MUTILATED RIGHT CERTIFICATES.
(a) Subject to the provisions of Section 7(e) and Section 14, at any
time after the Close of Business on the Distribution Date, and at or prior to
the Close of Business on the Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, evidencing a like number of Rights and
entitling the registered holder to purchase a like number of shares of Common
Stock (or following a Section 11(a)(ii) Event, other securities, cash or
assets, as the case may be) as the Right Certificate or Right Certificates
surrendered then evidenced and entitled such holder (or former holder in the
case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the office or offices of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company shall be obligated
to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall have duly
completed and executed the form of assignment on the reverse side of such Right
Certificate and shall have provided such additional evidence of the identity of
the Beneficial Owner (or
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former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to Section
7(e), countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's or
the Rights Agent's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company will
make and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(e), the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in Sections 9(c), 11(a)(iv) and 23(a)), in whole or in
part, at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to exercise on the reverse side thereof
duly completed and executed, to the Rights Agent at the office or offices of
the Rights Agent designated for such purpose, together with payment of the
Purchase Price for each one-half share of Common Stock (or other securities or
property, as the case may be) as to which the Rights evidenced by such Right
Certificate are exercised, at or prior to the earlier of (i) the Close of
Business on November 28, 2005 (the "Final Expiration Date"), or (ii) the time
at which the Rights are redeemed as provided in Section 23 (such earlier of the
times provided in clauses (i) and (ii) being herein referred to as the
"Expiration Date").
(b) The Purchase Price for each one-half share of Common Stock
acquired pursuant to the exercise of a Right shall be $125.00, as of the date
of this Second Amended and Restated Rights Agreement, shall be subject to
adjustment from time to time thereafter as provided in Sections 11 and 13 and
shall be payable in lawful money of the United States of America in accordance
with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to exercise duly completed and executed,
accompanied by payment, with respect to each Right so exercised, of the
Purchase
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Price for each one-half share of Common Stock (or other securities or property,
as the case may be) to be purchased and an amount equal to any applicable
transfer tax in cash, or by certified check or bank draft payable to the order
of the Company, the Rights Agent shall, subject to Section 20(k), thereupon
promptly (i) requisition from any transfer agent of the shares of Common Stock
(or make available, if the Rights Agent is the transfer agent for such shares)
certificates for the number of shares of Common Stock to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, (ii) requisition from the Company the amount of cash to be paid
in lieu of issuance of fractional shares in accordance with Section 14, (iii)
promptly after receipt of such certificates, cause the same to be delivered to
or upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder, and (iv)
promptly after receipt thereof, deliver such cash for fractional shares to or
upon the order of the registered holder of such Right Certificate. If the
Company determines to issue other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11(a)(iv), the Company will make
all arrangements necessary so that such other securities, cash and/or property
are available for distribution by the Rights Agent, if and when appropriate.
(d) Subject to the provisions of Section 14, if the registered
holder of any Right Certificate shall exercise less than all the Rights
evidenced thereby, a new Right Certificate evidencing Rights equivalent to the
Rights remaining unexercised shall be issued by the Rights Agent and delivered
to the registered holder of such Right Certificate or to such holder's duly
authorized assigns.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights that
are or were Beneficially Owned by (i) an Acquiring Person, or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person, or
an Associate or Affiliate of an Acquiring Person, who becomes a transferee
after such Acquiring Person becomes such, and (iii) a transferee of an
Acquiring Person, or an Associate or Affiliate of an Acquiring Person, who
becomes a transferee prior to or concurrently with such Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from such Acquiring Person, or Associate or
Affiliate, to or on behalf of holders of equity interests in such Acquiring
Person, or Associate or Affiliate, or to any Person with whom such Acquiring
Person, or Associate or Affiliate has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which a
majority of the Continuing Directors (or, if there are no Continuing Directors,
the Board of Directors) concludes in good faith (whether before or after such
transfer) is a part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of this Section 7(e), shall become null and
void without any further action and any holder of such Rights shall have no
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(e) are complied with, but shall
have no liability to any holder of Rights as a result of its failure to make
any determinations with
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respect to an Acquiring Person, or its Affiliates or Associates, or the
transferees thereof hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall
have (i) duly completed and executed the form of election to purchase set forth
on the reverse side of the Right Certificate surrendered for such exercise and
(ii) provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Right Certificates to the Company.
Section 9. RESERVATION AND AVAILABILITY OF SHARES OF COMMON
STOCK.
(a) The Company covenants and agrees that it will use its best
efforts to cause to be reserved and keep available, out of its authorized and
unissued shares of Common Stock, the number of shares of Common Stock that,
except as provided in Section 11(a)(iv), will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the shares of Common Stock issuable upon the exercise
of Rights may be listed on any national securities exchange, the Company
covenants and agrees that it will 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.
(c) The Company covenants and agrees that it will use its best
efforts to (i) file, as soon as practicable following the earliest date after
the occurrence of a Section 11(a)(ii) Event as of which the consideration to be
delivered by the Company upon exercise of the Rights has been determined
pursuant to this Agreement, including in accordance with Section 11(a)(iv), or
as soon as is required by law following the Distribution Date, as the case may
be, a registration statement under the Securities Act of 1933, as amended (the
"Act"), with respect to the Rights and 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
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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, or (B) the Expiration Date. The Company will also take such
action as may be appropriate under the blue sky or securities laws of the
various states. The Company may temporarily suspend, for a period of time not
to exceed 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 any required registration statement. 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 qualification in such
jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock 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 which
may be payable in respect of the issuance or delivery of the Right Certificates
and of any certificates for shares of Common Stock or other securities, as the
case may be, upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates for shares of Common Stock or other
securities, as the case may be, in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for exercise or
to issue or deliver any certificates for shares of Common Stock or other
securities, as the case may be, upon the exercise of any Rights until any such
tax shall have been paid (any such tax being payable by the holder of such
Right Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
Section 10. COMMON STOCK RECORD DATE. Each person in whose name
any certificate for shares of Common Stock (or other securities, as the case
may be) is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of the shares of Common Stock (or other
securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the applicable Purchase Price (and
any applicable transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Common Stock (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 on, and
such certificate shall be dated, the next
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succeeding Business Day on which such transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a shareholder of the Company
with respect to shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company, except as provided
herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER 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 outstanding
Common Stock payable in shares of Common Stock, (B) subdivide the
outstanding Common Stock, (C) combine the outstanding Common Stock
into a smaller number of shares or (D) issue any shares of its
capital stock in a reclassification of the outstanding Common 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 in Section 7(e), the Purchase Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind
of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive the aggregate number and
kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the
Common Stock transfer books of the Company were open, such holder
would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and under Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall
be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24, in the event 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 an
acquisition of shares of Common Stock pursuant to 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 of the Company who are not officers of the
Company and who are not representatives, nominees, Affiliates or
Associates of an Acquiring Person, after receiving advice from one
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or more investment or financial advisers, to be (x) fair to
shareholders (taking into account all factors which the Board of
Directors deems 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 (y)
otherwise in the best interests of the Company, its shareholders,
employees, customers, suppliers and creditors, and the communities in
which the Company does business, then, promptly following the first
occurrence of a Section 11(a)(ii) Event, proper provision shall be
made so that each holder of a Right (except as otherwise 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 the number of
one-half shares of Common Stock for which such Right was exercisable
immediately prior to the occurrence of such Section 11(a)(ii) Event,
such number of one-half shares of Common Stock as shall be equal to
the result obtained by (x) multiplying the then-current Purchase
Price by the number of one-half shares of Common Stock for which such
Right was exercisable immediately prior to the occurrence of such
Section 11(a)(ii) Event and (y) dividing that product by 50% of the
current market price per one-half share of Common Stock on the date
of occurrence of such Section 11(a)(ii) Event (determined pursuant to
Section 11(d) hereof).
(iii) In the event that there shall not be sufficient
authorized but unissued shares of Common Stock of the Company to
permit the exercise in full of the Right in accordance with Section
11(a)(ii), the Company shall, except to the extent an election is
made under Section 11(a)(iv), use its best efforts to have the
shareholders of the Company take all such action as may be necessary
to authorize additional shares of Common Stock of the Company for
issuance upon exercise of the Rights.
(iv) In lieu of issuing shares of Common Stock upon the exercise
of the Rights in accordance with Section 11(a)(ii), the Company may,
if a majority of the Continuing Directors (or, if there are no
Continuing Directors, the Board of Directors) determine that such
action is necessary or appropriate and not contrary to the interests
of holders of Rights, elect to issue or pay uniformly, subject to
Section 7(e), with respect to all outstanding Rights, upon the
exercise of the Rights, cash (including an offset against the
Purchase Price), property, other securities or any combination
thereof having an aggregate value per Right, as of the date
immediately preceding the public announcement of such election, equal
to the current market price as of such date of the one-half shares of
Common Stock (determined pursuant to Section 11(d)) that otherwise
would have been issuable pursuant to Section 11(a)(ii), which value
shall be determined by a nationally recognized investment banking
firm selected by a majority
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of the Continuing Directors (or the Board of Directors). For
purposes of the preceding sentence, the value of any preferred stock
which a majority of the Continuing Directors (or the Board of
Directors) determines to be equivalent to the Common Stock shall be
deemed to have the same value as the Common Stock without the
necessity of a determination of value by an investment banking firm.
Any such election by the Continuing Directors (or the Board of
Directors) must be made and publicly announced within 90 days after
the date on which the Section 11(a)(ii) Event occurs. Following the
occurrence of a Section 11(a)(ii) Event, a majority of the Continuing
Directors (or the Board of Directors) may suspend the exercisability
of the Rights for a period of up to 90 days following the occurrence
of such Section 11(a)(ii) Event to the extent that the Continuing
Directors (or the Board of Directors) have not determined whether to
exercise the Company's right of election under this Section
11(a)(iv). In the event of any such suspension, the Company shall
issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
(b) In the case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common
Stock entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Common Stock (or
securities convertible into Common Stock) at a price per share of
Common Stock (or having a conversion price per share of Common Stock,
if a security convertible into Common Stock) less than twice the
current market price of one-half of one share of Common Stock on such
record date (as determined pursuant to Section 11(d)), 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 Common Stock outstanding on such record date, plus the
number of shares of Common Stock which the aggregate offering price
of the total number of shares of Common Stock so to be offered
(and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase, at twice such current
market price of one-half of one share of Common Stock, and the
denominator of which shall be the number of shares of Common Stock
outstanding on such record date, plus the number of additional shares
of Common 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 shall be in a form
other than cash, the value of such consideration shall be as
determined in good faith by a majority of the Continuing Directors
(or, if there are no Continuing Directors, the Board of Directors),
whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent. Shares of
Common Stock owned by or held for the account of the Company shall
not
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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 or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation) of
evidences of indebtedness or cash or non-cash assets (other than (i)
a regular periodic cash dividend or (ii) a dividend payable in Common
Stock, but including any dividend payable in stock other than Common
Stock) or subscription rights or warrants (excluding those referred
to in Section 11(b)), 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 of one-half of
one share of the Common Stock on such record date (as determined
pursuant to Section 11(d)), less the fair market value (as determined
in good faith by a majority of the Continuing Directors or, if there
are no Continuing Directors, the Board of Directors, whose
determination shall be described in a statement filed with the Rights
Agent) of the portion of the evidences of indebtedness or cash or
non-cash assets so to be distributed on, or of such subscription
rights or warrants applicable to, one-half of one share of the
Common Stock, and the denominator of which shall be such current
market price of one-half of one share of the Common Stock. Such
adjustments shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current
market price" of one-half of one share of the Common Stock on any
date shall be deemed to be one-half of the average of the daily
closing prices per whole share of such Common Stock for the 30
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in the event
that the current market price of one-half of one share of the Common
Stock is determined during a period following the announcement by the
issuer of such Common Stock of (i) 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 (ii) any subdivision, combination or reclassification of such
Common Stock, and prior to the expiration of 30 Trading Days after
the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then, and
in each such case, the "current market price" per one-half of one
share of such Common Stock shall be appropriately adjusted to take
into account ex-dividend trading. The closing price for any day
shall be the last sale price, regular way, or, in case no
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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 sale price or,
if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or
such other system then in use or, if on any such day 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 a
majority of the Continuing Directors (or, if there are no Continuing
Directors, the Board of Directors). If on any such day no market
maker is making a market in the Common Stock, the fair value of such
shares on such day as determined in good faith by a majority of the
Continuing Directors (or, if there are no Continuing Directors, the
Board of Directors) shall be used in lieu of the closing price for
such day. 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 Common Stock is 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, the
"current market price" of one-half of one share of such Common Stock
shall be deemed to be one-half of the fair value per whole share of
such Common Stock as determined in good faith by a majority of the
Continuing Directors (or, if there are no Continuing Directors, the
Board of Directors), whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.
(e) Anything herein to the contrary notwithstanding, except the
last sentence of this Section 11(e), no adjustment in the Purchase
Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in such 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-thousandth of
a share of Common Stock, as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment which would be
required by this Section 11, but for the first sentence of this
Section 11(e), shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment
or (ii) the Expiration Date.
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(f) If as a result of an adjustment made pursuant to Section
11(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other
than Common 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 one-half shares of Common 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 with respect to the Common
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
shares of Common Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price
as a result of the calculations made in Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of shares (calculated to the nearest ten-
thousandth) of Common Stock obtained by (i) multiplying (x) the
number of shares covered by a Right immediately prior to such
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 shares of Common Stock
issuable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment in the number of Rights shall be
exercisable for the number of shares of Common 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 ten-
thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase Price.
The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment
to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. If Right Certificates have
been issued, upon each adjustment
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of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders
of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14, the additional Rights
to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement
for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company,
new Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right Certificates
so to be distributed shall be issued, executed and countersigned in
the manner provided for herein (and may bear, at the option of the
Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Right Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one-
half share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one-half of the then par value, if
any, of the shares of Common Stock issuable upon exercise of the
Rights, the Company shall take all corporate action, if any, which
may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon exercise of the Rights.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer until the
occurrence of such event the issuing to the holder of any Right
exercised after such record date of the number of shares of Common
Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of shares of
Common 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 ββββ or other appropriate
instrument evidencing such holder's right to receive such additional
shares or securities (fractional or otherwise) 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 sole discretion a majority of the Continuing Directors
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(or, if there are no Continuing Directors, the Board of Directors)
shall determine to be advisable in order that any (i) combination or
subdivision of the Common Stock, (ii) issuance wholly for cash of any
shares of Common Stock at less than twice the current market price of
one-half of one share of the Common Stock (determined pursuant to
Section 11(d)), (iii) issuance wholly for cash of securities which by
their terms are convertible into or exchangeable for shares of Common
Stock, (iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the
Company to holders of its Common Stock shall not be taxable to such
shareholders.
(n) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
27, 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 unless such action is approved
by a majority of the Continuing Directors.
(o) Anything in this Agreement or the Rights to the contrary
notwithstanding, in the event that the Company shall at any time
after the date hereof and prior to the Distribution Date (i) declare
a dividend on the outstanding Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, (iii)
combine the outstanding Common Stock into a smaller number of shares,
or (iv) issue any shares of its capital stock in a reclassification
of the outstanding Common Stock, the number of Rights associated with
each share of Common Stock then outstanding, or that become
outstanding thereafter but prior to the Distribution Date, shall be
proportionately adjusted 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 total number
of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the
total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Sections 11 and 13, 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 Common Stock a
copy of such certificate and (c) mail a brief summary thereof to each holder of
record of a Right Certificate (or, if prior to the Distribution Date, to each
holder of record of a certificate representing shares of Common Stock) in
accordance with Section 26. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained.
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Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly,
(x) the Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company), 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) shall
consolidate with the Company, or merge with and 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 held by
existing shareholders of the Company shall be changed into or
exchanged for stock or other securities of any other Person (or the
Company) or cash or any other property, or
(z) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one
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 its Subsidiaries),
then, and in each such case (except as may be contemplated by Section 13(f)),
proper provision shall be made so that: (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive, upon the
exercise thereof at the then-current Purchase Price in accordance with the
terms of this Agreement, in lieu of the number of one-half shares of Common
Stock of the Company for which such Right was exercisable immediately prior to
the occurrence of such Section 13 Event, such number of validly authorized and
issued, fully paid, nonassessable and freely tradeable shares of Common Stock
of the Principal Party (as hereinafter defined), not subject to any rights of
first refusal, as shall be equal to the result obtained by (1) multiplying the
then-current Purchase Price by the number of one-half shares of Common Stock
for which such Right was exercisable immediately prior to the occurrence of
such Section 13 Event and (2) dividing that product by 50% of the current
market price per whole share of the Common Stock of such Principal Party on the
date of consummation of such Section 13 Event (determined in accordance with
Section 11(d)); (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11 shall
-21-
apply to such Principal Party; and (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock in accordance with Section 9) 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.
(b) "Principal Party" shall mean
(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, or 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 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, and (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.
(c) The Company shall not consummate any transaction constituting a
Section 13 Event 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
consummation of any transaction constituting a Section 13 Event, 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, and use its best
efforts to cause such registration statement to (A) become effective
as soon as
-22-
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until
the earlier of (1) the date as of which the Rights are no longer
exercisable for such securities or (2) the Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
(d) The Company covenants and agrees that it shall not, at any time
after the Distribution Date and prior to the Expiration Date, (i) consolidate
with, (ii) merge with or into, 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
Person or Persons (other than the Company or its Subsidiaries), whether in a
transaction constituting a Section 13 Event or otherwise, if at the time of or
immediately after such consolidation, merger, sale, transfer or other
transaction, there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(e) The provisions of this Section 13 shall similarly apply to
successive mergers, consolidations, 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).
(f) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in clause (x) or
(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 tender offer or exchange offer
for all outstanding shares of Common Stock which complies with the provisions
of Section 11(a)(ii), (ii) the price per share of Common Stock offered in such
transaction is not less than the price per share of Common Stock paid to all
holders of shares of Common Stock whose shares were purchased pursuant to such
tender offer or exchange offer and (iii) the form of consideration being
offered to the remaining holders of shares of Common Stock pursuant to such
transaction is the same as the form of consideration paid pursuant to such
tender offer or exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(f), all Rights hereunder shall expire.
-23-
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(o), or to
distribute Right Certificates which evidence fractional Rights. The Company
may, in lieu of such fractional Rights, pay to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or,
if the Rights are not listed or admitted to trading on any national securities
exchange, the last sale 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 day 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 a majority of the Continuing Directors (or, if there are no Continuing
Directors, the Board of Directors). If on any such day no market maker is
making a market in the Rights, the fair value of the Rights on such day as
determined in good faith by a majority of the Continuing Directors (or the
Board of Directors) shall be used in lieu of the closing price for such day.
(b) The Company shall not be required to issue fractions of shares
of Common Stock or other capital stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares. The Company may, in
lieu of such fractional shares, pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value per whole share
of such Common Stock or capital stock. For purposes of this Section 14(b), the
current market value per whole share of Common Stock or other capital stock
shall be the closing price of a share of such Common Stock or other capital
stock (as determined in accordance with Section 11(d)) for the Trading Day
immediately prior to the date of such exercise.
(c) Every holder of Rights by accepting the Rights expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, if cash payments are made to such holder as permitted by
this Section 14.
-24-
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, of the associated Common
Stock certificates); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of any associated Common Stock certificate),
without the consent of the Rights Agent or of any holder of a Right Certificate
(or, prior to the Distribution Date, of an associated Common Stock
certificate), may, in such holder's own behalf and for such holder's own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, such holder's
right to exercise the Rights evidenced by such Right Certificate (or, prior to
the Distribution Date, the associated Common Stock certificate) in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations hereunder and injunctive relief against actual
or threatened violations of the obligations of any Person subject to this
Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of Rights by
accepting the Rights consents and agrees with the Company and the Rights Agent
and with every other holder of Rights that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Stock;
(b) on or after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the office or offices of the Rights Agent designated for such purposes,
duly endorsed or accompanied by a proper instrument of transfer; and
(c) subject to Sections 6(a) and 7(f), the Company and the Rights
Agent may deem and treat the person in whose name the Right Certificate
(or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing
on the Right 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 shall be affected
by any notice to the contrary.
Notwithstanding anything in this Agreement or the Rights to the contrary, the
Company, the Rights Agent, the Board of Directors and the Continuing Directors
shall not have any liability to any holder of a Right or other Person as a
result of the inability of the Company or the Rights Agent 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,
-25-
rule, regulation or executive order promulgated or enacted by any governmental
authority prohibiting or otherwise restraining performance of such obligation.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of Common 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 Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(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
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability 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 Right
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.
Section 19. MERGER, 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
-26-
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided, however, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21. In
case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
Certificates (or, prior to the Distribution Date, the associated Common Stock
certificates), by their acceptance of the Rights, 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 the "current per share 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 any one of
the Chairman of the Board, the Chief Executive Officer, the President, any
Vice President, the Secretary or the Treasurer of the Company and
delivered to the Rights Agent; and such certificate shall be full and
complete authorization and protection to the
-27-
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
Right Certificates or be required to verify the same (except as to its
countersignature thereof), but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall it be responsible for any adjustment
required under the provisions of Section 11 or 13 or responsible for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after
actual notice of any such adjustment); 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 of the Company or any other
Person to be issued pursuant to this Agreement or any Right Certificate or
as to whether any shares of Common Stock of the Company or any other
Person 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
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action
taken or suffered in good faith by it in accordance with instructions of
any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
-28-
transaction in which the Company or its Subsidiaries may be interested, or
contract with or lend money to the Company or its Subsidiaries or
otherwise act as fully and freely as though it were not Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or its Subsidiaries or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct; provided, 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 or powers 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 Right Certificate surrendered to the
Rights Agent for exercise of transfer, the form of assignment or form of
election to purchase, as the case may be, has either not been duly
completed and executed or indicates an affirmative response to enumerated
clause 1 and/or 2 of such Right Certificate, the Rights Agent shall not
take any further action with respect to such requested exercise of
transfer without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock by registered or certified mail, and to the
registered holders of the Right Certificates (or, prior to the Distribution
Date, the associated Common Stock certificates) by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock by registered or
certified mail, and to the registered holders of the Right Certificates (or,
prior to the Distribution Date, the associated Common Stock certificates) by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the registered holder of a Right Certificate
(or, prior to the Distribution Date, the associated Common Stock
-29-
certificate) who shall, with such notice, submit such holder's Right
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) for inspection by the Company, then the registered holder may
apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or
by such a court, shall be a corporation organized and doing business under the
laws of the United States or of the State of Minnesota or New York (or of any
other state of the United States so long as such corporation is authorized to
do business as a banking institution in the State of Minnesota or New York), in
good standing, having an office in the State of Minnesota or New York which is
authorized under such laws to exercise corporate trust 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 $5 million. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent and 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 mail a notice thereof in writing to the
registered holders of the Right Certificates (or, prior to the Distribution
Date, the associated Common Stock certificates). Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, but
subject to Section 7(e), the Company may: (a) at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Agreement; and (b) if deemed necessary or appropriate by the Board of
Directors, issue Right Certificates representing the appropriate number of
Rights in connection with the sale or issuance (including upon exercise of any
stock option or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company) of
shares of Common Stock following the Distribution Date and prior to the
Expiration Date; 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.
-30-
Section 23. REDEMPTION.
(a) At least a majority of the Continuing Directors (or, if there
are no Continuing Directors, the Board of Directors) may, at their option, at
any time prior to the earlier of (i) the occurrence of a Section 11(a)(ii)
Event or (ii) the Final Expiration Date, redeem all but not less than all the
then outstanding Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). The Company may, at its option, pay
the Redemption Price in cash, Common Stock or other securities (based upon the
current market value of such Common Stock or other securities at the time of
redemption) or any other form of consideration deemed appropriate by the
Continuing Directors (or the Board of Directors). Any redemption of the Rights
pursuant to this Section 23(a) may be made effective at such time, on such
basis and with such conditions as such Continuing Directors (or the Board of
Directors) may, in their sole discretion, establish. The Continuing Directors,
the Board of Directors and the Company shall not have any liability to any
Person as a result of the redemption of Rights pursuant to the terms hereof.
(b) Immediately upon any action of the Continuing Directors (or the
Board of Directors) redeeming the Rights pursuant to Section 23(a), 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 such action of the
Continuing Directors (or the Board of Directors) redeeming the Rights pursuant
to Section 23(a), the Company shall give notice of such redemption to the
Rights Agent and the registered holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Company maintained by the Company, the Rights
Agent or the transfer agent for the Common Stock, as the case may be. 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.
Section 24. EXCHANGE.
(a) The Board of Directors of the Company (at a time when a majority
of the members of the Board of Directors then serving are Continuing Directors)
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 shall not include
Rights that have become void pursuant to the provisions of Section 7(e)) for
Common Stock, with each Right to be exchanged for such number of shares of
Common Stock as shall equal the result obtained by dividing (x) the Purchase
Price by (y) the current market price of one-half of one share of the Common
Stock (determined pursuant to Section 11(d) (such number of shares being
hereinafter referred to as the "Exchange Ratio")). The Exchange Ratio shall be
appropriately
-31-
adjusted to reflect any stock split, stock dividend or similar transaction
affecting the Common Stock that occurs after a Section 11(a)(ii) Event.
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after an Acquiring Person becomes the
Beneficial Owner of 50% or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of 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 will state the method by which the exchange 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 outstanding and exercisable Rights (other than
Rights which have become void pursuant to the provisions of Section 7(e)) held
by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute a series of preferred stock of the Company with rights,
privileges and other terms substantially the same as the Common Stock
("Equivalent Preferred Stock") for Common Stock exchangeable for Rights.
(d) In the event that there shall not be sufficient Common Stock or
Equivalent Preferred Stock issued but not outstanding or authorized but
unissued and unreserved to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such action as may
be necessary to authorize additional Common Stock or Equivalent 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 Common
Stock. In lieu of such fractional shares of Common Stock, the Company shall
pay 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 shares
of Common Stock. For the purposes of this paragraph (e), the current market
value of a whole share of Common Stock shall be the closing price of a share of
Common Stock (as determined pursuant to the second sentence of Section 11(d))
for the Trading Day immediately prior to the date of exchange pursuant to this
Section 24. The Board of
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Directors of the Company shall not have any liability to any Person as a result
of the exchange of Rights pursuant to the terms of this Section.
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 (other
than Common Stock) to the holders of Common Stock or to make any other
distribution to the holders of Common Stock (other than a regular periodic cash
dividend or (ii) to offer to the holders of Common Stock rights or warrants to
subscribe for or to purchase any additional Common Stock or shares of stock of
any class or any other securities, rights or options, or (iii) to effect any
reclassification of its Common Stock (other than a reclassification involving
only the subdivision of outstanding shares of Common Stock), or (iv) to effect
any consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or 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 a merger in which the
Company is the surviving corporation and no vote of shareholders of the Company
is required to consummate the merger, or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each registered holder of a Right Certificate, to the extent
feasible and in accordance with Section 26, 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 shares
of the Common 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
20 days prior to the record date for determining holders of the shares of
Common Stock for purposes of such action, and in the case of any such other
action, at least 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
Common Stock, whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any
such case, the Company shall as soon as practicable thereafter give to each
registered holder of a Right Certificate, to the extent feasible and in
accordance with Section 26, 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).
Section 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
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ADC TELECOMMUNICATIONS, INC.
ββββ β. ββββ ββββββ
βββββββββ, ββ βββββ
Attention: General Counsel
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 Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
NORWEST BANK MINNESOTA, N.A.
βββ βββββ βββββββ ββββββββ
βββββ ββ. ββββ, ββ βββββ
Attention: Stock Transfer Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, prior
to the Distribution Date, the associated Common Stock certificate) shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company maintained by the Company, the Rights Agent or the
transfer agent for the Common Stock, as the case may be.
Section 27. SUPPLEMENTS AND AMENDMENTS. If approved by at least a
majority of the Continuing Directors (or, if there are no Continuing Directors,
the Board of Directors), the Company and the Rights Agent may from time to time
supplement or amend this Agreement without the approval of any holders of Right
Certificates (or, prior to the Distribution Date, the associated Common Stock
certificates) in order (i) to cure any ambiguity herein, (ii) to correct or
supplement any provision herein which may be defective or inconsistent with any
other provision herein, or (iii) to otherwise change or supplement any
provision herein in any manner or make any other provision with respect to the
Rights which may be necessary or desirable to effectuate the purposes of this
Agreement; provided, however, that, from and after the occurrence of any
Section 11(a)(ii) Event, this Agreement may not be supplemented or amended in
any manner which would adversely affect the interests of the holders of Rights.
Without limiting the foregoing, if so approved by the Continuing Directors (or
the Board of Directors), this Agreement may be amended at any time prior to the
occurrence of a Section 11(a)(ii) Event to lower the thresholds set forth in
Sections 1(a) and 3(a)(ii) to not less than the greater of (i) any percentage
greater than the largest percentage of the outstanding shares of Common Stock
then known by the Company to be Beneficially Owned by any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity holding Common Shares
for or pursuant to the terms of any such plan) and (ii) 10%. Upon the delivery
of a certificate from an appropriate officer of the Company which states that
the proposed supplement or amendment is
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in compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment unless the Rights Agent shall have determined in
good faith that such supplement or amendment would adversely affect its
interests under this Agreement.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the associated Common Stock certificates) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the associated Common Stock certificates).
Section 30. ADMINISTRATION AND INTERPRETATION BY DIRECTORS. The
Board of Directors (and/or, as provided for herein, the Continuing Directors)
shall have the exclusive power and authority to administer this Agreement and
to exercise all rights and powers specifically granted to the Board of
Directors or the Company (and/or, as provided herein, the Continuing Directors)
or necessary or advisable in the administration of this Agreement, including
without limitation the right and power to interpret this Agreement and to make
all determinations deemed necessary or advisable for the administration of this
Agreement. All such acts, interpretations and determinations done or made by
the Board of Directors and/or the Continuing Directors in good faith shall be
final, conclusive and binding on the Company, the Rights Agent and the holders
of the Rights. Accordingly, the Board of Directors and the Continuing
Directors, as the case may be, shall not be liable to the holders of the Rights
or any other party for any determination made, action taken or action omitted
to be taken pursuant to the terms of this Agreement, if such determination,
action or omitted action was made or taken or omitted in good faith.
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;
provided, however, that notwithstanding anything in this Agreement or the
Rights to the contrary, if any such term, provision, covenant or restriction is
held by such court or authority to be invalid, void or unenforceable and a
majority of the Continuing Directors (or, if there are no Continuing Directors,
the Board of Directors) determines in their good faith judgment that severing
the invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 shall
be reinstated and shall not expire until
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the Close of Business on the fifteenth day following the date of such
determination.
Section 32. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Minnesota and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amended and
Restated Rights Agreement to be duly executed as of the day and year above
written.
ADC TELECOMMUNICATIONS, INC.
By /s/ βββββ β. ββββββ
Its Vice President, General Counsel and
Secretary
NORWEST BANK MINNESOTA, N.A.
By /s/ βββββββ β. βββββββ
Its Assistant Vice President
Exhibit A
[Amended and Restated Form of Right Certificate]
Certificate No. R-
_____________ Rights
NOT EXERCISABLE AFTER NOVEMBER 28, 2005 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
ISSUED TO OR HELD BY ANY ACQUIRING PERSON OR THEIR AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR
THEIR TRANSFEREES BECOME VOID.
Right Certificate
ADC TELECOMMUNICATIONS, INC.
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 September 23, 1986 between ADC
Telecommunications, Inc., a Minnesota corporation (the "Company"), and Norwest
Bank Minnesota, N.A. (the "Rights Agent"), as amended and restated as of
November 28, 1995 (the "Rights Agreement"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M. (Minneapolis, Minnesota time) on November
28, 2005, at the office or offices of the Rights Agent designated for such
purpose, or its successors as Rights Agent, one-half of one fully paid,
nonassessable share of the Common Stock (the "Common Stock") of the Company, at
a purchase price of $___________ (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Exercise duly
completed and executed. The number of Rights evidenced by this Right
Certificate (and the number of one-half shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per one-half share
set forth above, are, except for adjustments required pursuant to the Rights
Agreement, the number and Purchase Price as of __________, ____, based on the
Common Stock as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the
number of shares of Common Stock which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events. In certain circumstances and
as
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described in the Rights Agreement, cash, property or other securities may be
issued by the Company upon the exercise hereof in lieu of shares of Common
Stock.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal office of the Rights Agent
and are also available upon written request to the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a
like aggregate number of shares of Common Stock as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate (i) may be redeemed by the Company at its
option at a redemption price of $___________ (the "Redemption Price") per Right
(subject to adjustment in certain circumstances) or (ii) may be exchanged in
whole or in part for shares of Common Stock or shares of a series of preferred
stock of the Company with rights, privileges and other terms substantially the
same as the Common Stock.
No fractional shares of Common Stock will be issued upon the exercise
of any Right or Rights evidenced hereby, if in lieu thereof a cash payment is
made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares of
the Common 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 shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting shareholders (except
as provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
A-2
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the manual or facsimile signature of the proper officer of
the Company.
Dated:
ATTEST: ADC TELECOMMUNICATIONS, INC.
By ______________________________ By _______________________________
Title ___________________________ Title ____________________________
Countersigned:
NORWEST BANK MINNESOTA, N.A.
By ____________________________________
Authorized Signature
A-3
[Amended and Restated Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _____________ hereby sells, assigns and transfers unto
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Right Certificate, together will all right, title and interest therein,
and does hereby irrevocably constitute and appoint Attorney, to transfer the
within Right Certificate on the books of the within-named Company, with full
power of substitution.
Dated: _________________, ____
__________________________________
Signature
Signature Guaranteed: (Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not Beneficially Owned by and were not acquired from an
Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement).
__________________________________
Signature
A-4
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate)
To ADC TELECOMMUNICATIONS, INC.:
The undersigned hereby irrevocably elects to exercise __________
Rights represented by this Right Certificate to purchase the shares of Common
Stock issuable upon the exercise of such Rights (or such other securities of
the Company or of any other person which may be issuable upon exercise of the
Rights) and requests that certificates for such shares be issued in the name
of:
Please insert social security
or other identifying number
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not Beneficially Owned by and were not acquired from an
Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement).
__________________________________
Signature
Dated: ______________, _____
__________________________________
Signature
Signature Guaranteed: (Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate.)
A-5