EXHIBIT 1
RIGHTS AGREEMENT
dated as of
June 18, 1998
between
TEXAS INSTRUMENTS INCORPORATED
and
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Rights Agent
TABLE OF CONTENTS
-----------------
Page
----
Section 1. Definitions.............................................. 1
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........................ 7
Section 6. Transfer and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right
Certificates.......................................... 8
Section 7. Exercise of Rights; Expiration Date of Rights............ 9
Section 8. Cancellation and Destruction of Right Certificates....... 10
Section 9. Reservation and Availability of Capital Stock............ 11
Section 10. Preferred Stock Record Date.............................. 12
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of
Rights................................................ 12
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares................................................ 21
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power...................................... 22
Section 14. Fractional Rights and Fractional Shares.................. 24
Section 15. Rights of Action......................................... 26
Section 16. Agreement of Right Holders............................... 26
Section 17. Right Certificate Holder Not Deemed a Stockholder........ 27
Section 18. Concerning the Rights Agent.............................. 27
Section 19. Merger or Consolidation or Change of Name of Rights
Agents.............................................. 28
Section 20. Duties of Rights Agent................................... 28
Section 21. Change of Rights Agent................................... 31
Section 22. Issuance of New Right Certificates....................... 32
Section 23. Redemption............................................... 32
Section 24. Exchange................................................. 33
Section 25. Notice of Proposed Actions............................... 34
Section 26. Notices.................................................. 35
Section 27. Supplements and Amendments............................... 35
Section 28. Successors............................................... 36
Section 29. Determinations and Actions by the Board of Directors,
Etc................................................. 36
Section 30. Benefits of this Agreement............................... 36
Section 31. Severability............................................. 36
Section 32. Governing Law............................................ 37
Section 33. Counterparts............................................. 37
Section 34. Descriptive Headings..................................... 37
Exhibit A -- Form of Certificate of Designation of Preferred Stock
Exhibit B -- Form of Right Certificate
Exhibit C -- Summary Description of the Stockholder Rights Plan
RIGHTS AGREEMENT
AGREEMENT dated as of June 18, 1998, between Texas Instruments
Incorporated, a Delaware corporation (the "Company), and ▇▇▇▇▇▇ Trust and
Savings Bank, as Rights Agent (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on June 18, 1998 the Board of Directors of the Company
authorized and declared a dividend of one preferred stock purchase right (a
"Right") for each share of Common Stock (as hereinafter defined) outstanding
at the close of business on June 30, 1998 (the "Record Date") and has
authorized the issuance, upon the terms and subject to the conditions
hereinafter set forth, of one Right (subject to adjustment) in respect of each
share of Common Stock issued after the Record Date, each Right representing
the right to purchase, upon the terms and subject to the conditions hereinafter
set forth, one one-thousandth (subject to adjustment) of a share of Preferred
Stock (as hereinafter defined);
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definitions. The following terms, as used herein,
have the following meanings:
"Acquiring Person" means any Person who, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 20%
or more of the shares of Common Stock then outstanding, but shall not include
an Exempt Person; provided, however, that (a) if, subsequent to the close of
business on June 17, 1998 and prior to the first public announcement of the
adoption of this Agreement, any Person became or becomes the Beneficial Owner
of 20% or more of the shares of Common Stock outstanding, such Person shall
not be deemed to be or to become an "Acquiring Person" unless and until such
time as such Person shall, after the first public announcement of the adoption
of this Agreement, become the Beneficial Owner of additional shares of Common
Stock (other than pursuant to a dividend or distribution paid or made by the
Company on the outstanding Common Stock or pursuant to a split or subdivision
of the outstanding Common Stock), unless, upon becoming the Beneficial Owner
of such additional shares of Common Stock, such Person is not then the
Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding; and (b) 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 outstanding, increases the proportionate number
of shares of Common Stock beneficially owned by such Person to 20% or more of
the shares of Common Stock then outstanding, provided, however, that if a
Person shall become the Beneficial Owner of 20% or more of the shares of
Common Stock then outstanding by reason of such share acquisition by the
Company and shall thereafter become the Beneficial Owner of any additional
shares of Common Stock (other than pursuant to a dividend or distribution paid
or made by the Company on the outstanding Common Stock or pursuant to a split
or subdivision of the outstanding Common Stock), then such Person shall be
deemed to be an "Acquiring Person" unless upon becoming the Beneficial Owner
of such additional shares of Common Stock such Person does not beneficially own
20% or more of the shares of Common Stock then outstanding.
"Affiliate" and "Associate" have the respective meanings
ascribed to such terms in Rule 12b-2 under the Exchange Act as in effect on
the date hereof.
A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to have "Beneficial Ownership" of and to "beneficially own", any
securities:
(a) which such Person or any of its Affiliates
or Associates, directly or indirectly, beneficially owns (as
determined pursuant to Rule 13d-3 under the Exchange Act as in
effect on the date hereof);
(b) which such Person or any of its Affiliates
or Associates, directly or indirectly, has
(i) the right to acquire (whether such right is
exercisable immediately or only upon the occurrence of
certain events or the passage of time or both) pursuant to
any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own,
(A) securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered
securities are accepted for purchase, (B) securities which
such Person has a right to acquire upon the exercise of
Rights at any time prior to the time that any Person
becomes an Acquiring Person or (C) securities issuable upon
the exercise of Rights from and after the time that any
Person becomes an Acquiring Person if such Rights were
acquired by such Person or any of such Person's Affiliates
or Associates prior to the Distribution Date or pursuant to
Section 3(a) or Section 22 hereof ("Original Rights") or
pursuant to Section 11(i) or Section 11(p) with respect to
an adjustment to Original Rights;
(ii) the right to vote (whether such right is
exercisable immediately or only upon the occurrence of
certain events or the passage of time or both) pursuant to
any agreement, arrangement or understanding (whether or not
in writing) or otherwise; provided that a Person shall not
be deemed the "Beneficial Owner" of or to "beneficially
own" any security under this clause (ii) as a result of an
agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding
(A) arises solely from a revocable proxy or consent given
in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules
and regulations under the Exchange Act and (B) is not also
then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(c) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) and
with respect to which such Person or any of its Affiliates or
Associates has any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering
of securities) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in
subparagraph (b)(ii) immediately above) or disposing of any such
securities;
provided, however, that no Person who is an officer, director or employee of an
Exempt Person shall be deemed, solely by reason of such Person's status or
authority as such, to be the "Beneficial Owner" of, to have "Beneficial
Ownership" of or to "beneficially own" any securities that are "beneficially
owned", including without limitation, in a fiduciary capacity, by an Exempt
Person or by any other such officer, director or employee of an Exempt Person.
"Business Day" means any day other than a Saturday, Sunday or a
day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Close of business" on any given date means 5:00 P.M., New York
City time, on such date; provided that if such date is not a Business Day
"close of business" means 5:00 P.M., New York City time, on the next
succeeding Business Day.
"Common Stock" means the Common Stock, par value $1.00 per
share, of the Company, except that, when used with reference to any Person
other than the Company, "Common Stock" means 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.
"Continuing Director" means any member of the Board of Directors
of the Company, while such Person is a member of the Board, who is not an
Acquiring Person or an Affiliate or Associate of an Acquiring Person or a
representative or nominee of an Acquiring Person or of any such Affiliate or
Associate and either (a) was a member of the Board immediately prior to the
time any Person becomes an Acquiring Person or (b) subsequently becomes a
member of the Board, if such Person's nomination for election or election to
the Board is recommended or approved by a majority of the Continuing Directors.
"Distribution Date" means the earlier of (a) the close of
business on the tenth day (or such later day as may be designated by action of
a majority of the Continuing Directors) after the Stock Acquisition Date and
(b) the close of business on the tenth Business Day (or such later day as may
be designated by action of a majority of the Continuing Directors) after the
date of the commencement of a tender or exchange offer by any Person if, upon
consummation thereof, such Person would be an Acquiring Person.
"Exempt Person" shall mean the Company or any Subsidiary of the
Company, in each case including, without limitation, in its fiduciary capacity,
or any employee benefit plan of the Company or of any Subsidiary of the
Company, or any entity or trustee holding Common Stock for or pursuant to the
terms of any such plan or for the purpose of funding any such plan or funding
other employee benefits for employees of the Company or of any Subsidiary of
the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expiration Date" means the earlier of (a) the Final Expiration
Date and (b) the time at which all Rights are redeemed as provided in Section
23 or exchanged as provided in Section 24.
"Final Expiration Date" means the close of business on June 18,
2008.
"Person" means an individual, corporation, limited liability
company, partnership, association, trust or any other entity or organization.
"Preferred Stock" means the Series B Participating Cumulative
Preferred Stock, par value $25.00 per share, of the Company, having the terms
set forth in the form of certificate of designation attached hereto as Exhibit
A.
"Purchase Price" means the price (subject to adjustment as
provided herein) at which a holder of a Right may purchase one one-thousandth
of a share of Preferred Stock (subject to adjustment as provided herein) upon
exercise of a Right, which price shall initially be $200.
"Section 11(a)(ii) Event" means any event described in the
first clause of Section 11(a)(ii).
"Section 13 Event" means any event described in clauses (x),
(y) or (z) of Section 13(a).
"Securities Act" means the Securities Act of 1933, as amended.
"Stock Acquisition Date" means the date of the first public
announcement (including the filing of a report on Schedule 13D under the
Exchange Act (or any comparable or successor report)) by the Company or an
Acquiring Person indicating that an Acquiring Person has become such.
"Subsidiary" of any Person means any other Person of which
securities or other ownership interests having ordinary voting power, in the
absence of contingencies, to elect a majority of the board of directors or
other Persons performing similar functions are at the time directly or
indirectly owned by such first Person.
"Trading Day" means a day on which the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading is open for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, a Business Day.
"Triggering Event" means any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights 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. If the
Company appoints one or more Co-Rights Agents, the respective duties of the
Rights Agent and any Co-Rights Agents shall be as the Company shall determine.
Section 3. Issue of Right Certificates. (a) Prior to the
Distribution Date, (i) the Rights will be evidenced (subject to the
penultimate sentence of this Section 3(a)) by the certificates for the Common
Stock and not by separate Right Certificates (as hereinafter defined) and the
registered holders of the Common Stock shall be deemed to be the registered
holders of the associated Rights, and (ii) the Rights will be transferable
only in connection with the transfer of the underlying shares of Common Stock.
As soon as practicable after the Record Date, the Company will send a copy of
the Summary of Rights substantially in the form of Exhibit C hereto, by
first-class, postage prepaid mail, to each record holder of the Common Stock
as of the close of business on the Record Date at the address of such holder
shown on the records of the Company. With respect to certificates for Common
Stock outstanding as of the Record Date, prior to the Distribution Date, the
Rights will be evidenced by such certificates registered in the names of the
holders thereof together with a copy of the Summary of Rights. Prior to the
Distribution Date (or, if earlier, the Expiration Date), the surrender for
transfer of any certificate for Common Stock outstanding on the Record Date,
with or without a copy of the Summary of Rights, shall also constitute the
transfer of the Rights associated with the Common Stock represented thereby.
(b) As soon as practicable after the Company has notified the
Rights Agent of the occurrence of the Distribution Date, the Rights Agent will
send, by first-class, insured, postage prepaid mail, to each record holder of
the Common Stock as of the close of business on the Distribution Date (other
than any Acquiring Person or any Affiliate or Associate thereof), at the
address of such holder shown on the records of the Company, one or more Right
Certificates evidencing one Right (subject to adjustment as provided herein)
for each share of Common Stock so held. If an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11, the
Company shall, at the time of distribution of the Right Certificates, make the
necessary and appropriate rounding adjustments (in accordance with Section
14(a)) so that Right Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. From and after
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(c) Rights shall be issued in respect of all shares of Common Stock
outstanding as of the Record Date or issued (on original issuance or out of
treasury) after the Record Date but prior to the earlier of the Distribution
Date and the Expiration Date. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date and prior to the
Expiration Date, the Company (i) shall, with respect to shares of Common Stock
so issued or sold (x) pursuant to the exercise of stock options or under any
employee plan or arrangement or (y) upon the exercise, conversion or exchange
of other securities issued by the Company prior to the Distribution Date and
(ii) may, in any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided that no such Right Certificate shall be issued if, and to the extent
that, (i) 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 Right Certificate would be issued or (ii)
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
(d) Certificates issued for Common Stock after the Record Date but
prior to the earlier of the Distribution Date and the Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences certain Rights as set forth in a
Rights Agreement dated as of June 18, 1998 and as amended from
time to time (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of the Company. The
Company will mail to the holder of this certificate a copy of the
Rights Agreement without charge promptly after receipt of a
written request therefor. Under certain circumstances, as set
forth in the Rights Agreement, such Rights may be evidenced by
separate certificates and no longer be evidenced by this
certificate, may be redeemed or exchanged or may expire. As set
forth in the Rights Agreement, Rights issued or transferred to,
or held by, any Person who is, was or becomes an Acquiring Person
or an Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement), whether currently held by or on behalf of
such Person or by any subsequent holder, may be null and void.
Section 4. Form of Right Certificates. The certificates
evidencing the Rights (and the forms of assignment, election to purchase and
certificates to be printed on the reverse thereof) (the "Right Certificates")
shall be substantially in the form of Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law, rule or regulation 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. The Right Certificates, whenever distributed,
shall be dated as of the Record Date.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The 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 whose manual or facsimile signature is affixed to 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 may, nevertheless, be countersigned by the Rights
Agent and issued and delivered 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. Any Right Certificate may be signed on behalf of the Company by
any Person who, at the actual date of the execution of such Right Certificate,
shall be a proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Rights Agreement any such Person
was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as the place
for surrender of Right Certificates upon exercise, transfer or exchange, books
for registration and transfer of the Right Certificates. Such books shall
show with respect to each Right Certificate the name and address of the
registered holder thereof, the number of Rights indicated on the certificate
and the certificate number.
Section 6. Transfer and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates. (a) At any time
after the Distribution Date and prior to the Expiration Date, any Right
Certificate or Certificates may, upon the terms and subject to the conditions
set forth below in this Agreement, be transferred or exchanged for another
Right Certificate or Certificates evidencing a like number of Rights as the
Right Certificate or Certificates surrendered. Any registered holder desiring
to transfer or exchange any Right Certificate or Certificates shall surrender
such Right Certificate or Certificates (with, in the case of a transfer, the
form of assignment and certificate on the reverse side thereof duly executed)
to the Rights Agent at the principal 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 or Certificates until the registered holder
of the Rights has complied with the requirements of Section 7(e). Upon
satisfaction of the foregoing requirements, the Rights Agent shall, subject to
Sections 7(d), 14 and 24, countersign and deliver to the Person entitled
thereto a Right Certificate or Certificates as so requested. The Company may
require payment of a sum sufficient to cover any transfer tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of any Right Certificate or Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will issue 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; Expiration Date of Rights. (a)
The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein, including Sections
7(d) and 7(e), 9(c), 11(a), 23 and 24) in whole or in part at any time after
the Distribution Date and prior to the Expiration Date upon surrender of the
Right Certificate, with the form of election to purchase and the certificate
on the reverse side thereof duly executed, to the Rights Agent at the
principal office or offices of the Rights Agent designated for such purpose,
together with payment (in lawful money of the United States of America by
certified check or bank draft payable to the order of the Company) of the
aggregate Purchase Price with respect to the Rights then to be exercised and
an amount equal to any applicable transfer tax or other governmental charge.
(b) Upon satisfaction of the requirements of Section 7(a) and
subject to Section 20(k), the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Stock (or make available,
if the Rights Agent is the transfer agent therefor) certificates for the total
number of one one-thousandths of a share of Preferred Stock to be purchased
(and the Company hereby irrevocably authorizes its transfer agent to comply
with all such requests) or (B) if the Company shall have elected to deposit
the shares of Preferred Stock issuable upon exercise of the Rights with a
depositary agent, requisition from the depositary agent depositary receipts
representing interests in such number of one one-thousandths of a share of
Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited by
the transfer agent with the depositary agent) and the Company will direct the
depositary agent to comply with such request, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of issuance of
fractional shares in accordance with Section 14 and (iii) after receipt of
such certificates or depositary receipts and cash, if any, cause the same to
be delivered to or upon the order of the registered holder of such Right
Certificate (with such certificates or receipts registered in such name or
names as may be designated by such holder). If the Company is obligated to
deliver Common Stock, other securities or assets pursuant to this Agreement,
the Company will make all arrangements necessary so that such other securities
and assets are available for delivery by the Rights Agent, if and when
appropriate.
(c) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing the number of Rights remaining unexercised shall be issued by the
Rights Agent and 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, subject to the provisions of Section 14.
(d) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person
(or any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or in any such Associate or Affiliate) or to any Person with
whom the Acquiring Person (or any such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Continuing Directors have determined is
part of a plan, arrangement or understanding which has as a primary purpose
or effect the avoidance of this Section 7(d) shall become null and void without
any further action, and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(d) are complied with, but shall
have no liability to any holder of Right Certificates or other Person as a
result of its failure to make any determinations with respect to an Acquiring
Person or its Affiliates and Associates or any transferee of any of them
hereunder.
(e) 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 of Rights upon the occurrence of any
purported transfer pursuant to Section 6 or exercise pursuant to this Section 7
unless such registered holder (i) shall have completed and signed the
certificate contained in the form of assignment or election to purchase, as
the case may be, set forth on the reverse side of the Right Certificate
surrendered for such transfer or exercise, as the case may be, (ii) shall not
have indicated an affirmative response to clause 1 or 2 thereof and (iii)
shall have provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for exercise, transfer 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 cancelled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by this Agreement. The
Company shall deliver to the Rights Agent for cancellation, and the Rights
Agent shall cancel, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock. (a)
The Company covenants and agrees that it will cause to be reserved and kept
available a number of shares of Preferred Stock which are authorized but not
outstanding or otherwise reserved for issuance sufficient to permit the
exercise in full of all outstanding Rights as provided in this Agreement.
(b) So long as the Preferred Stock issuable upon the exercise of
Rights may be listed on any national securities exchange, the Company shall
use its best efforts to cause, from and after such time as the Rights become
exercisable, all securities reserved for such issuance to be listed on any such
exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) to 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 in accordance with Section
11(a)(iii), or as soon as is required by law following the Distribution Date,
as the case may be, a registration statement under the Securities Act with
respect to the securities issuable upon exercise of the Rights, (ii) to cause
such registration statement to become effective as soon as practicable after
such filing and (iii) to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The Company will
also take such action as may be appropriate under, or to ensure compliance
with, the securities or blue sky laws of the various states in connection with
the exercisability of the Rights. The Company may temporarily suspend, for a
period of time not to exceed 90 days after the date set forth in clause
9(c)(i), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
Notwithstanding any such provision of this Agreement to the contrary, the
Rights shall not be exercisable for securities in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained,
such exercise therefor shall not be permitted under applicable law or a
registration statement in respect of such securities shall not have been
declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all one one-thousandths of a share of
Preferred Stock issuable upon exercise of Rights shall, at the time of delivery
of the certificates for such securities (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 other
governmental charges which may be payable in respect of the issuance or
delivery of the Right Certificates and of any certificates for Preferred Stock
upon the exercise of Rights. The Company shall not, however, be required to
pay any transfer tax or other governmental charge which may be payable in
respect of any transfer involved in the issuance or delivery of any Right
Certificates or of any certificates for Preferred Stock to a Person other than
the registered holder of the applicable Right Certificate, and prior to any
such transfer, issuance or delivery any such tax or other governmental charge
shall have been paid by the holder of such Right Certificate or it shall have
been established to the Company's satisfaction that no such tax or other
governmental charge is due.
Section 10. Preferred Stock Record Date. Each Person (other
than the Company) in whose name any certificate for Preferred Stock is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such Preferred Stock represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any transfer taxes or other governmental charges) was made; provided that
if the date of such surrender and payment is a date upon which the transfer
books of the Company relating to the Preferred Stock are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
applicable 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 stockholder of the Company with respect to shares
for which the Rights shall be exercisable, including 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. (a) (i) If the Company shall at any time after
the date of this Agreement (A) pay a dividend on the Preferred Stock payable
in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock
into a greater number of shares, (C) combine the outstanding Preferred Stock
into a smaller number of shares or (D) issue any shares of its capital stock
in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger involving the
Company), the Purchase Price in effect immediately prior to the record date
for such dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock or
other capital stock issuable on such date shall be proportionately adjusted so
that each holder of a Right shall (except as otherwise provided herein,
including Section 7(d)) thereafter be entitled to receive, upon exercise
thereof at the Purchase Price in effect immediately prior to such date, the
aggregate number and kind of shares of Preferred Stock or other capital stock,
as the case may be, which, if such Right had been exercised immediately prior
to such date and at a time when the applicable transfer books of the Company
were open, such holder would have been entitled to receive upon such exercise
and by virtue of such dividend, subdivision, combination or reclassification.
If an event occurs which requires an adjustment under both this Section
11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) If any Person, alone or together with its Affiliates
and Associates, shall, at any time after the date of this
Agreement, become an Acquiring Person, then each holder of a
Right shall (except as otherwise provided herein, including
Section 7(d)) thereafter be entitled to receive, upon exercise
thereof at the Purchase Price in effect immediately prior to the
first occurrence of a Section 11(a)(ii) Event, in lieu of
Preferred Stock, such number of duly authorized, validly issued,
fully paid and nonassessable shares of Common Stock of the
Company (such shares being referred to herein as the "Adjustment
Shares") as shall be equal to the result obtained by dividing
(x) the product obtained by multiplying the Purchase
Price in effect immediately prior to the first occurrence
of a Section 11(a)(ii) Event by the number of one
one-thousandths of a share of Preferred Stock for which a
Right was exercisable immediately prior to such first
occurrence (such product being thereafter referred to as
the "Purchase Price" for each Right) by
(y) 50% of the current market price (determined
pursuant to Section 11(d)(i)) per share of Common Stock on
the date of such first occurrence;
provided, however, that the Purchase Price (as so adjusted pursuant to the
foregoing clause (ii)(x)) and the number of Adjustment Shares so receivable upon
exercise of a Right shall, following the occurrence of such Section 11(a)(ii)
Event, be subject to further adjustment as appropriate in accordance with
Section 11(f). From and after the occurrence of a Section 13 Event, any Rights
that theretofore have not been exercised pursuant to this Section 11(a)(ii)
shall thereafter be exercisable only in accordance with Section 13 and not
pursuant to this Section 11(a)(ii).
(iii) If the number of shares of Common Stock which are
authorized by the Company's certificate of incorporation but not
outstanding or reserved for issuance other than upon exercise of
the Rights is not sufficient to permit the exercise in full of
the Rights in accordance with Section 11(a)(ii), the Company
shall, with respect to each Right, make adequate provision to
substitute for the Adjustment Shares, upon payment of the
Purchase Price then in effect, (A) (to the extent available)
Common Stock and then, (B) (to the extent available) other equity
securities of the Company which a majority of the Continuing
Directors has determined to be essentially equivalent to shares
of Common Stock in respect to dividend, liquidation and voting
rights (such securities being referred to herein as "common stock
equivalents") and then, if necessary, (C) other equity or debt
securities of the Company, cash or other assets, a reduction in
the Purchase Price or any combination of the foregoing, having an
aggregate value (as determined by the Continuing Directors based
upon the advice of a nationally recognized investment banking
firm selected by the Continuing Directors) equal to the value of
the Adjustment Shares; provided that (x) the Company may, and (y)
if the Company shall not have made adequate provision as required
above to deliver value within 30 days following the later of the
first occurrence of a Section 11(a)(ii) Event and the first date
that the right to redeem the Rights pursuant to Section 23 shall
expire, then the Company shall be obligated to, deliver, upon the
surrender for exercise of a Right and without requiring payment
of the Purchase Price, (1) (to the extent available) Common Stock
and then (2) (to the extent available) common stock equivalents
and then, if necessary, (3) other equity or debt securities of
the Company, cash or other assets or any combination of the
foregoing, having an aggregate value (as determined by the
Continuing Directors based upon the advice of a nationally
recognized investment banking firm selected by the Continuing
Directors) equal to the excess of the value of the Adjustment
Shares over the Purchase Price. If the Continuing Directors of
the Company shall determine in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized
for issuance upon exercise in full of the Rights, the 30 day
period set forth above (such period, as it may be extended, being
referred to herein as the "Substitution Period") may be extended
to the extent necessary, but not more than 90 days following the
first occurrence of a Section 11(a)(ii) Event, in order that the
Company may seek stockholder approval for the authorization of
such additional shares. To the extent that the Company
determines that some action is to be taken pursuant to the first
and/or second sentence of this Section 11(a)(iii), the Company
(X) shall provide, subject to Section 7(d), that such action
shall apply uniformly to all outstanding Rights and (Y) may
suspend the exercisability of the Rights until the expiration of
the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form and value
of any consideration to be delivered as referred to in such first
and/or second sentence. If any such suspension occurs, 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. For purposes of this Section 11(a)(iii), the
value of the Common Stock shall be the current market price per
share of Common Stock (as determined pursuant to Section 11(d))
on the later of the date of the first occurrence of a Section
11(a)(ii) Event and the first date that the right to redeem the
Rights pursuant to Section 23 shall expire; any common stock
equivalent shall be deemed to have the same value as the Common
Stock on such date; and the value of other securities or assets
shall be determined pursuant to Section 11(d)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within 45 calendar days after
such record date) Preferred Stock (or securities having the same rights,
privileges and preferences as the shares of Preferred Stock ("equivalent
preferred stock")) or securities convertible into or exercisable for Preferred
Stock (or equivalent preferred stock) at a price per share of Preferred Stock
(or equivalent preferred stock) (in each case, taking account of any conversion
or exercise price) less than the current market price (as determined pursuant
to Section 11(d)) per share of Preferred Stock on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such date by a
fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares of Preferred
Stock which the aggregate price (taking account of any conversion or exercise
price) of the total number of shares of Preferred Stock (and/or equivalent
preferred stock) so to be offered would purchase at such current market price
and the denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date plus the number of additional shares of
Preferred Stock (and/or equivalent preferred stock) so to be offered. 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 the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes. Shares of Preferred Stock owned by
or held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and if such rights, options or warrants
are not so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger involving the Company) of
evidences of indebtedness, equity securities other than Preferred Stock, assets
(other than a regular periodic cash dividend out of the earnings or retained
earnings of the Company) or rights, options 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 (as determined pursuant to Section 11(d)) per
share of Preferred Stock on such record date, less the value (as determined
pursuant to Section 11(d)(iii)) of such evidences of indebtedness, equity
securities, assets, rights, options or warrants so to be distributed with
respect to one share of Preferred Stock and the denominator of which shall be
such current market price per share of Preferred Stock. Such adjustment shall
be made successively whenever such a record date is fixed, and if such
distribution is not so made, 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.
(d) (i) For the purpose of any computation hereunder other than
computations made pursuant to Section 11(a)(iii) or 14, the "current market
price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days immediately prior to such date; for purposes of
computations made pursuant to Section 11(a)(iii), the "current market price"
per share of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for the 10 consecutive
Trading Days immediately following such date; and for purposes of computations
made pursuant to Section 14, the "current market price" per share of Common
Stock for any Trading Day shall be deemed to be the closing price per share of
Common Stock for such Trading Day; provided that if the current market price
per share of the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or
securities exercisable for or convertible into shares of such Common Stock
(other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of the
requisite 30 Trading Day or 10 Trading Day period, as set forth above, after
the ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification, then, and in each such
case, the "current market price" shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, on the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
or, if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use or, if on any
such date the shares of Common Stock are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock selected by the Board of
Directors of the Company, or, if at the time of such selection there is an
Acquiring Person, by a majority of the Continuing Directors. If on any such
date no market maker is making a market in the Common Stock, the fair value
of such shares on such date as determined in good faith by the Board of
Directors of the Company (or, if at the time of such determination there is an
Acquiring Person, by a majority of the Continuing Directors) shall be used. If
the Common Stock is not publicly held or not so listed or traded, the "current
market price" per share means the fair value per share as determined in good
faith by the Board of Directors of the Company, or, if at the time of such
determination there is an Acquiring Person, by a majority of the Continuing
Directors, or if there are no Continuing Directors, by a nationally recognized
investment banking firm selected by the Board of Directors, which
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common
Stock in Section 11(d)(i) (other than the last sentence thereof).
If the current market price per share of Preferred Stock cannot
be determined in such manner, the "current market price" per
share of Preferred Stock shall be conclusively deemed to be an
amount equal to 100 (as such number may be appropriately adjusted
for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring
after the date of this Agreement) multiplied by the current
market price per share of Common Stock (as determined pursuant to
Section 11(d)(i) (other than the last sentence thereof)). If
neither the Common Stock nor the Preferred Stock is publicly held
or so listed or traded, the "current market price" per share of
the Preferred Stock shall be determined in the same manner as set
forth in the last sentence of Section 11(d)(i). For all purposes
of this Agreement, the "current market price" of one
one-thousandth of a share of Preferred Stock shall be equal to
the "current market price" of one share of Preferred Stock
divided by 100.
(iii) For the purpose of any computation hereunder, the
value of any securities or assets other than Common Stock or
Preferred Stock shall be the fair value as determined in good
faith by the Board of Directors of the Company, or, if at the
time of such determination there is an Acquiring Person, by a
majority of the Continuing Directors then in office, or, if there
are no Continuing Directors, by a nationally recognized
investment banking firm selected by the Board of Directors, which
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, no adjustment
in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided 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 or other share or
one-billionth of a share of Preferred Stock, as the case may be.
(f) If at any time, as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a), the holder of any Right shall be entitled
to receive upon exercise of such Right any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in
Section 11(a), 11(b), 11(c), 11(e), 11(g), 11(h), 11(i), 11(j), 11(k) and
11(m), and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made hereunder shall evidence the right to purchase, at the
Purchase Price then in effect, the then applicable number of one
one-thousandths of a share of Preferred Stock and other capital stock of the
Company issuable 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 Section 11(b) and 11(c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-thousandths of a share of Preferred Stock (calculated
to the nearest one-billionth) obtained by (i) multiplying (x) the number of one
one-thousandths of a share for which a Right was exercisable immediately prior
to this adjustment by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in lieu of any adjustment in
the number of one one-thousandths of a share of Preferred Stock issuable upon
the exercise of a Right. Each of the Rights outstanding after such adjustment
of the number of Rights shall be exercisable for the number of one
one-thousandths of a share of Preferred Stock for which such 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 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 one one-thousandths of a share of Preferred Stock issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one
one-thousandth of a 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 the par value, if any, of the number of one
one-thousandths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable such number of one one-thousandths of a
share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one one-thousandths of a share of Preferred Stock or other
capital stock of the Company, if any, issuable upon such exercise over and
above the number of one one-thousandths of a share of Preferred Stock or other
capital stock of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment; provided that the
Company shall deliver to such holder a due ▇▇▇▇ or other appropriate
instrument evidencing such holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it, in its sole discretion, shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any Preferred Stock at less than the current market price,
issuance wholly for cash of Preferred Stock or securities which by their terms
are convertible into or exercisable for Preferred Stock, stock dividends or
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to the holders of its Preferred Stock, shall not
be taxable to such stockholders.
(n) The Company covenants and agrees that it will not at any time
after the Distribution Date (i) consolidate, merge or otherwise combine with
or (ii) sell or otherwise transfer (and/or permit any of its Subsidiaries to
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
other Person or Persons if (x) at the time of or immediately after such
consolidation, merger, combination or sale there are any rights, warrants or
other instruments or securities outstanding or any agreements or arrangements
in effect which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights or (y) prior to, simultaneously
with or immediately after such consolidation, merger, combination or sale, the
stockholders of a Person who constitutes, or would constitute, the "Principal
Party" for the purposes of Section 13 shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that after the Distribution
Date, it will not, except as permitted by Sections 23, 24 and 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 substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the contrary, if
at any time after the date hereof and prior to the Distribution Date the
Company shall (i) pay a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock into a larger number of shares or (iii) combine the outstanding Common
Stock into a smaller number of shares, the number of Rights associated with
each share of Common Stock then outstanding, or issued or delivered thereafter
as contemplated by Section 3(c), 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
Preferred Stock and the Common Stock a copy of such certificate and (c) mail
a brief summary thereof to each holder of a Right Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in the manner set forth in Section 26. The Rights Agent shall
be fully protected in relying on any such certificate and on any adjustment
therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. (a) If, following the occurrence of a Section
11(a)(ii) Event, directly or indirectly,
(x) the Company shall consolidate with, merge into, or
otherwise combine with, any other Person, and the Company shall
not be the continuing or surviving corporation of such
consolidation, merger or combination,
(y) any Person shall merge into, or otherwise combine
with, the Company, and the Company shall be the continuing or
surviving corporation of such merger or combination and, in
connection with such merger or combination, all or part of the
outstanding shares of Common Stock shall be changed into or
exchanged for other stock or securities of the Company or any
other Person, cash or any other property, or
(z) the Company and/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 other Person or Persons,
then, and in each such case, proper provision shall promptly be made so that
(i) each holder of a Right shall thereafter be entitled to
receive, upon exercise thereof at the Purchase Price in effect
immediately prior to the first occurrence of any Triggering
Event, such number of duly authorized, validly issued, fully paid
and nonassessable shares of freely tradeable Common Stock of the
Principal Party (as hereinafter defined), not subject to any
rights of call or first refusal, liens, encumbrances or other
claims, as shall be equal to the result obtained by dividing
(A) the product obtained by multiplying the Purchase
Price in effect immediately prior to the first occurrence
of any Triggering Event by the number of one
one-thousandths of a share of Preferred Stock for which a
Right was exercisable immediately prior to such first
occurrence (such product being thereafter referred to as
the "Purchase Price" for each Right and for all purposes of
this Agreement) by
(B) 50% of the current market price (determined
pursuant to Section 11(d)(i)) per share of the Common Stock
of such Principal Party on the date of consummation of such
consolidation, merger, combination, sale or transfer;
provided, however, that the Purchase Price (as so adjusted pursuant to the
foregoing clause (i)(A)) and the number of shares of Common Stock of such
Principal Party so receivable upon exercise of a Right shall be subject to
further adjustment as appropriate in accordance with Section 11(f) to reflect
any events occurring in respect of the Common Stock of such Principal Party
after the occurrence of such consolidation, merger, sale or transfer;
(ii) the Principal Party shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger,
combination, 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 apply only to such
Principal Party following the first occurrence of a Section 13
Event; and
(iv) such Principal Party shall take such steps (including
the authorization and reservation of a sufficient number of
shares of its Common Stock to permit exercise of all outstanding
Rights in accordance with this Section 13(a)) 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 the shares of its
Common Stock thereafter deliverable upon the exercise of the
Rights.
(b) "Principal Party" means
(i) in the case of any transaction described in Section
13(a)(x) or (y), the Person that is the issuer of any securities
into which shares of Common Stock of the Company are converted in
such merger, consolidation or combination, and if no securities
are so issued, the Person that survives or results from such
merger, consolidation or combination; and
(ii) in the case of any transaction described in Section
13(a)(z), the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to
such transaction or transactions;
provided that in any such case, (A) 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 (B) 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 such consolidation,
merger, combination, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which are not
outstanding or otherwise 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
Section 13(a) and 13(b) and providing that, as soon as practicable after the
date of any consolidation, merger, combination, sale or transfer mentioned in
Section 13(a), the Principal Party will
(i) prepare and file a registration statement under the
Securities Act with respect to the securities issuable upon
exercise of the Rights, and will use its best efforts to cause
such registration statement (A) to become effective as soon as
practicable after such filing and (B) to remain effective (with a
prospectus at all times meeting the requirements of the
Securities Act) until 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.
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(p), or to distribute Right
Certificates which evidence fractional Rights. In lieu of any such fractional
Rights, the Company shall 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
price of a whole Right. For purposes of this Section 14(a), the current market
price of a whole Right shall be the closing price of a Right for the Trading
Day immediately prior to the date on which such fractional Rights would
otherwise have been issuable. The closing price of a Right 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, on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price, or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company, or, if at the time of such
selection there is an Acquiring Person, by a majority of the Continuing
Directors. If on any such date no such market maker is making a market in the
Rights, the current market price of the Rights on such date shall be as
determined in good faith by the Board of Directors of the Company, or, if at
the time of such determination there is an Acquiring Person, by a majority of
the Continuing Directors.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than fractions which are multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are multiples of one one-thousandth of a share of
Preferred Stock). In lieu of any such fractional shares of Preferred Stock,
the Company shall pay to the registered holders of Right Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market price of one one-thousandth of a share
of Preferred Stock. For purposes of this Section 14(b), the current market
price of one one-thousandth of a share of Preferred Stock shall be one
one-thousandth of the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)) for the Trading Day immediately prior
to the date of such exercise.
(c) Following the occurrence of any Triggering Event or upon any
exchange pursuant to Section 24, the Company shall not be required to issue
fractions of shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Common Stock. In
lieu of fractional shares of Common Stock, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are exercised
or exchanged as herein provided an amount in cash equal to the same fraction of
the current market price of a share of Common Stock. For purposes of this
Section 14(c), the current market price of a share of Common Stock shall be
the closing price of a share of Common Stock (as determined pursuant to
Section 11(d)(i)) for the Trading Day immediately prior to the date of such
exercise or exchange.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right except as permitted by this Section 14.
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, the registered
holders of certificates representing Common Stock); and any registered holder
of any Right Certificate (or, prior to the Distribution Date, of any
certificate representing Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of any certificate representing Common Stock), may, in his
own behalf and for his own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or otherwise
act in respect of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations
of, any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common
Stock;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights Agent
if surrendered at the principal office or offices of the Rights
Agent designated for such purposes, duly endorsed or accompanied
by a proper instrument of transfer and with the appropriate forms
and certificates fully executed;
(c) subject to Sections 6 and 7, the Company and the
Rights Agent may deem and treat the Person in whose name a Right
Certificate (or, prior to the Distribution Date, a certificate
representing shares of Common Stock) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Right Certificate or the certificate representing shares of
Common Stock made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent, subject to the last sentence of Section 7(d),
shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of
its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental
authority prohibiting or otherwise restraining performance of
such obligation; provided that the Company must use its best
efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of capital
stock which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except
as provided in Section 25), 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 execution or administration 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 administration of this Agreement or
the exercise or performance of its duties hereunder, including the costs and
expenses of defending against any claim of liability.
(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 the administration of this Agreement or the exercise or
performance of its duties hereunder 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, instruction, 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 or Consolidation or Change of Name of Rights
Agents. (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided 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 a 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, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the
identity of any "Acquiring Person" and the determination of
"current market price") be proved or established by the Company
prior to taking, suffering or omitting to take any action
hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by
the Chairman of the Board, the President or any Vice President
and by the Treasurer or any Assistant Treasurer or the Secretary
or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to
the Rights Agent for any action taken, suffered or omitted in
good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder 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 (except its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it
be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void
pursuant to Section 7(d)) or any adjustment in the terms of the
Rights (including the manner, method or amount thereof) provided
for in Sections 3, 11, 13, 23 or 24, 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 or Preferred Stock to be issued
pursuant to this Agreement or any Right Certificate or as to
whether any shares of Common Stock or Preferred Stock will, when
issued, be duly authorized, validly issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President or any
Vice President or the Secretary or any Assistant Secretary or the
Treasurer or any Assistant Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith in accordance
with instructions of any such officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not the
Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the
Company or for any other Person.
(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 or to any holders of Rights
resulting from any such act, default, neglect or misconduct,
provided that reasonable care was exercised in the selection and
continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to
purchase, as the cases may be, has either not been completed or
indicates an affirmative response to clause 1 or 2 thereof, the
Rights Agent shall not take any further action with respect to
such requested exercise or 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 and Preferred Stock by registered or
certified mail, and, subsequent to the Distribution Date, to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and, subsequent to the Distribution Date, to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate
for inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of any
state of the United States, in good standing, having a principal office in the
State of New York, which is authorized under such laws to exercise stock
transfer or 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
$50,000,000 or (b) an Affiliate of a corporation described in clause 21(a).
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the
Common Stock and the Preferred Stock, and, subsequent to the Distribution
Date, mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21, or
any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind
or class of shares of stock issuable upon exercise of the Rights made in
accordance with the provisions of this Agreement.
Section 23. Redemption. (a) The Board of Directors of the
Company may, at its option, at any time prior to the earlier of (i) the close
of business on the tenth day after the Stock Acquisition Date (or such later
date as a majority of the Continuing Directors may designate prior to such
time as the Rights are no longer redeemable) and (ii) the Final Expiration
Date, redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); provided that after any Person has
become an Acquiring Person, any redemption of the Rights shall be effective
only if there are Continuing Directors then in office, and such redemption
shall have been approved by a majority of such Continuing Directors.
Notwithstanding anything in this Agreement to the contrary, the Rights shall
not be exercisable after the first occurrence of a Section 11(a)(ii) Event
until such time as the Company's right of redemption hereunder has expired.
The redemption of the Rights may be made effective at such time, on such basis
and with such conditions as the Board of Directors in its sole discretion may
establish. The Redemption Price shall be payable, at the option of the
Company, in cash, shares of Common Stock, or such other form of consideration
as the Board of Directors shall determine.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights (or at such later time as the Board of
Directors may establish for the effectiveness of such redemption), and without
any further action and without any notice, the right to exercise the Rights
will terminate and thereafter the only right of the holders of Rights shall be
to receive the Redemption Price for each Right so held. The Company shall
promptly thereafter give notice of such redemption to the Rights Agent and the
holders of the Rights in the manner set forth in Section 26; provided that the
failure to give, or any defect in, such notice shall not affect the validity of
such redemption. 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) At any time after any Person
becomes an Acquiring Person, the Board of Directors of the Company may, at its
option, if there are Continuing Directors then in office and such exchange
shall have been approved by a majority of such Continuing Directors, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to Section 7(d)) for shares of
Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after an Acquiring Person, together with all Affiliates
and Associates of such Acquiring Person, becomes the Beneficial Owner of 50%
or more of the shares of Common Stock then outstanding. From and after the
occurrence of a Section 13 Event, any Rights that theretofore have not been
exchanged pursuant to this Section 24(a) shall thereafter be exercisable only
in accordance with Section 13 and may not be exchanged pursuant to this
Section 24(a). The exchange of the Rights by the Board of Directors may be
made effective at such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of the Board
of Directors electing to exchange any Rights pursuant to Section 24(a) and
without any further action and without any notice, the right to exercise such
Rights will terminate and thereafter the only right 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 thereafter give notice of such exchange to the Rights
Agent and the holders of the Rights to be exchanged in the manner set forth in
Section 26; provided that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the shares of Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to Section
7(d)) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute common stock equivalents (as defined in Section
11(a)(iii)) for shares of Common Stock exchangeable for Rights, at the initial
rate of one common stock equivalent for each share of Common Stock, as
appropriately adjusted to reflect adjustments in dividend, liquidation and
voting rights of common stock equivalents pursuant to the terms thereof, so
that each common stock equivalent delivered in lieu of each share of Common
Stock shall have essentially the same dividend, liquidation and voting rights
as one share of Common Stock.
Section 25. Notice of Proposed Actions. (a) In case the
Company shall propose, at any time after the Distribution Date, (i) to pay any
dividend payable in stock of any class to the holders of Preferred Stock or to
make any other distribution to the holders of Preferred Stock (other than a
regular quarterly cash dividend out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of its Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of Preferred
Stock or shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Preferred Stock (other
than a reclassification involving only the subdivision or combination of
outstanding shares of Preferred Stock) or (iv) to effect any consolidation or
merger with any other Person, or to effect and/or to permit one or more of its
Subsidiaries to effect any sale or other transfer, in one transaction or a
series of related transactions, of assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries,
taken as a whole, to any other Person or Persons, or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Right, 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 any such dividend,
distribution or offering of rights or warrants, or the date on which any 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 Preferred Stock, if any such date is to be fixed,
and such notice shall be so given in the case of any action covered by clause
25(a)(i) or 25(a)(ii) above at least 20 days prior to the record date for
determining holders of the Preferred Stock entitled to participate in such
dividend, distribution or offering, 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 Preferred Stock, whichever
shall be the earlier. The failure to give notice required by this section or
any defect therein shall not affect the legality or validity of the action
taken by the Company or the vote upon any such action.
(b) Notwithstanding anything in this Agreement to the contrary,
prior to the Distribution Date a public filing by the Company with the
Securities and Exchange Commission shall constitute sufficient notice to the
holders of securities of the Company, including the Rights, for purposes of
this Agreement and no other notice need be given to such holders.
(c) If a Triggering Event shall occur, then, in any such case, (i)
the Company shall as soon as practicable thereafter give to each holder of a
Right, 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) or 13, as the case may be, and (ii)
all references in Section 25(a) to Preferred Stock shall be deemed thereafter
to refer to Common Stock or other capital stock, as the case may be.
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 to or on the Company shall be sufficiently given or made if sent by
first-class mail (postage prepaid) to the address of the Company indicated on
the signature page hereof or such other address as the Company shall specify
in writing to the Rights Agent. 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 to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail (postage prepaid) to the
address of the Rights Agent indicated on the signature page hereof or such
other address as the Rights Agent shall specify in writing to the Company.
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, to the holder of any certificate representing shares
of Common Stock) shall be sufficiently given or made if sent by first-class
mail (postage prepaid) to the address of such holder shown on the registry
books of the Company.
Section 27. Supplements and Amendments. For so long as the
Rights are redeemable, the Company may, and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this Agreement in any
respect without the approval of any holders of certificates representing
shares of Common Stock. At any time when the Rights are no longer redeemable,
the Company may, and the Rights Agent shall if the Company so directs,
supplement or amend this Agreement without the approval of any holders of
Rights, provided, however, that no such supplement or amendment may (a)
adversely affect the interests of the holders of Rights as such (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person), (b)
cause this Agreement again to become amendable other than in accordance with
this sentence, or (c) cause the Rights again to become redeemable.
Notwithstanding the foregoing, after any Person has become an Acquiring
Person, any supplement or amendment shall be effective only if there are
Continuing Directors then in office, and such supplement or amendment shall
have been approved by a majority of such Continuing Directors. Upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the
terms of this Section, the Rights Agent shall execute such supplement or
amendment.
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. Determinations and Actions by the Board of
Directors, Etc. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding
shares of Common Stock of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) under the
Exchange Act as in effect on the date of this Agreement. The Board of
Directors of the Company (or, after any Person has become an Acquiring Person,
a majority of 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 or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including the right and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or exchange or not to redeem or
exchange the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done
or made by the Board (or, after any Person has become an Acquiring Person, by
the Continuing Directors) in good faith shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board of Directors of the Company or the
Continuing Directors to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the certificates representing the shares of Common
Stock) any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the certificates representing the shares of Common
Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided that, notwithstanding anything in this Agreement to the contrary, if
any such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of Directors of
the Company (or, after any Person has become an Acquiring Person, a majority
of the Continuing Directors) determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect the
purpose or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until the close of
business on the tenth day following the date of such determination by the
Board of Directors or Continuing Directors, as the case may be.
Section 32. Governing Law. This Agreement, each Right and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to contracts
to be made and performed entirely within such State, except that the rights and
obligations of the Rights Agent shall be governed by the law of the State of
New York.
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 one and the same instrument.
Section 34. Descriptive Headings. The captions herein are
included for convenience of reference only, do not constitute a part of this
Agreement and shall be ignored in the construction and interpretation hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
TEXAS INSTRUMENTS INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President,
Treasurer and Chief Financial
Officer
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Stock Transfer
Administration
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION
OF
SERIES B PARTICIPATING CUMULATIVE
PREFERRED STOCK
OF
TEXAS INSTRUMENTS INCORPORATED
Pursuant to Section 151 of the
General Corporation Law of the
State of Delaware
We, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Senior Vice President, Treasurer and
Chief Financial Officer, and O. ▇▇▇▇▇ ▇▇▇▇, Vice President and Assistant
Secretary, of Texas Instruments Incorporated, a corporation organized and
existing under the General Corporation Law of the State of Delaware ("Delaware
Law"), in accordance with the provisions thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Corporation, the Board of
Directors on June 18, 1998, adopted the following resolution creating a series
of Preferred Stock in the amount and having the designation, voting powers,
preferences and relative, participating, optional and other special rights and
qualifications, limitations and restrictions thereof as follows:
Section 1. Designation and Number of Shares. The shares of such
series shall be designated as "Series B Participating Cumulative Preferred
Stock" (the "Series B Preferred Stock"), and the number of shares constituting
such series shall be 2,200,000. Such number of shares of the Series B Preferred
Stock may be increased or decreased by resolution of the Board of Directors;
provided that no decrease shall reduce the number of shares of Series B
Preferred Stock to a number less than the number of shares then outstanding plus
the number of shares issuable upon exercise or conversion of outstanding rights,
options or other securities issued by the Corporation.
Section 2. Dividends and Distributions.
(a) The holders of shares of Series B Preferred Stock
shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the third Monday
of February, May, August and November of each year (each such
date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of any share or fraction of a share of
Series B Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (i) $1.00 and (ii) subject
to the provision for adjustment hereinafter set forth, 1000 times
the aggregate per share amount of all cash dividends or other
distributions and 1000 times the aggregate per share amount of
all non-cash dividends or other distributions (other than (A) a
dividend payable in shares of Common Stock, par value $1.00 per
share, of the Corporation (the "Common Stock") or (B) a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise)), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of
Series B Preferred Stock. If the Corporation shall at any time
after June 18, 1998 (the "Rights Declaration Date") pay any
dividend on Common Stock payable in shares of Common Stock or
effect a subdivision or combination of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case
the amount to which holders of shares of Series B Preferred Stock
were entitled immediately prior to such event under clause
2(a)(ii) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event.
(b) The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in
paragraph 2(a) above immediately after it declares a dividend or
distribution on the Common Stock (other than as described in
clauses 2(a)(ii)(A) and 2(a)(ii)(B) above); provided that if no
dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date (or,
with respect to the first Quarterly Dividend Payment Date, the
period between the first issuance of any share or fraction of a
share of Series B Preferred Stock and such first Quarterly
Dividend Payment Date), a dividend of $1.00 per share on the
Series B Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such
shares of Series B Preferred Stock, unless the date of issue of
such shares is on or before the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue and be cumulative from the date of
issue of such shares, or unless the date of issue is a date after
the record date for the determination of holders of shares of
Series B Preferred Stock entitled to receive a quarterly dividend
and on or before such Quarterly Dividend Payment Date, in which
case dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on shares of Series B
Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series
B Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall not be
more than 60 days prior to the date fixed for the payment
thereof.
Section 3. Voting Rights. In addition to any other voting
rights required by law, the holders of shares of Series B Preferred Stock shall
have the following voting rights:
(a) Subject to the provision for adjustment hereinafter
set forth, each share of Series B Preferred Stock shall entitle
the holder thereof to 1000 votes on all matters submitted to a
vote of stockholders of the Corporation. If the Corporation
shall at any time after the Rights Declaration Date pay any
dividend on Common Stock payable in shares of Common Stock or
effect a subdivision or combination of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case
the number of votes per share to which holders of shares of
Series B Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law, the
holders of shares of Series B Preferred Stock and the holders of
shares of Common Stock shall vote together as a single class on
all matters submitted to a vote of stockholders of the
Corporation.
(c) (i) If at any time dividends on any Series B Preferred
Stock shall be in arrears in an amount equal to six quarterly
dividends thereon, the occurrence of such contingency shall ▇▇▇▇
the beginning of a period (herein called a "default period")
which shall extend until such time when all accrued and unpaid
dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series B
Preferred Stock then outstanding shall have been declared and
paid or set apart for payment. During each default period, all
holders of Preferred Stock and any other series of Preferred
Stock then entitled as a class to elect directors, voting
together as a single class, irrespective of series, shall have
the right to elect two Directors.
(ii) During any default period, such voting right of
the holders of Series B Preferred Stock may be exercised
initially at a special meeting called pursuant to
subparagraph 3(c)(iii) hereof or at any annual meeting of
stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor
the right of the holders of any other series of Preferred
Stock, if any, to increase, in certain cases, the
authorized number of Directors shall be exercised unless
the holders of 10% in number of shares of Preferred Stock
outstanding shall be present in person or by proxy. The
absence of a quorum of holders of Common Stock shall not
affect the exercise by holders of Preferred Stock of such
voting right. At any meeting at which holders of Preferred
Stock shall exercise such voting right initially during an
existing default period, they shall have the right, voting
as a class, to elect Directors to fill such vacancies, if
any, in the Board of Directors as may then exist up to two
Directors or, if such right is exercised at an annual
meeting, to elect two Directors. If the number which may
be so elected at any special meeting does not amount to the
required number, the size of the Board of Directors will be
automatically increased without any action on the part of
the holders of Preferred Stock as shall be necessary to
permit the election by them of the required number. After
the holders of the Preferred Stock shall have exercised
their right to elect Directors in any default period and
during the continuance of such period, the number of
Directors shall not be increased or decreased except by
vote of the holders of Preferred Stock as herein provided
or pursuant to the rights of any equity securities ranking
senior to or pari passu with the Series B Preferred Stock.
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously
exercised their right to elect Directors, the Board of
Directors may order, or any stockholder or stockholders
owning in the aggregate not less than 10% of the total
number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of special
meeting of holders of Preferred Stock, which meeting shall
thereupon be called by the President, a Vice President or
the Secretary of the Corporation. Notice of such meeting
and of any annual meeting at which holders of Preferred
Stock are entitled to vote pursuant to this paragraph
3(c)(iii) shall be given to each holder of record of
Preferred Stock by mailing a copy of such notice to him at
his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not
earlier than 20 days and not later than 60 days after such
order or request or in default of the calling of such
meeting within 60 days after such order or request, such
meeting may be called on similar notice by any stockholder
or stockholders owning in the aggregate not less than 10%
of the total number of shares of Preferred Stock
outstanding, irrespective of series. Notwithstanding the
provisions of this paragraph 3(c)(iii), no such special
meeting shall be called during the period within 60 days
immediately preceding the date fixed for the next annual
meeting of stockholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the
whole number of Directors until the holders of Preferred
Stock shall have exercised their right to elect two
Directors voting as a class, after the exercise of which
right (x) the Directors so elected by the holders of
Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until
the expiration of the default period, and (y) any vacancy
in the Board of Directors may (except as provided in
paragraph 3(c)(ii) hereof) be filled by vote of a majority
of the remaining Directors theretofore elected by the
holders of the class of stock which elected the Director
whose office shall have become vacant. References in this
paragraph 3(c) to Directors elected by the holders of a
particular class of stock shall include Directors elected
by such Directors to fill vacancies as provided in clause
(y) of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as
a class to elect Directors shall cease, (y) the term of any
Directors elected by the holders of Preferred Stock as a
class shall terminate, and (z) the number of Directors
shall be such number as may be provided for in the
certificate of incorporation or bylaws irrespective of any
increase made pursuant to the provisions of paragraph
3(c)(ii) hereof (such number being subject, however, to
change thereafter in any manner provided by law or in the
certificate of incorporation or bylaws). Any vacancies in
the Board of Directors effected by the provisions of
clauses (y) and (z) in the preceding sentence may be filled
by a majority of the remaining Directors.
(d) The Certificate of Incorporation of the Corporation
shall not be amended in any manner (whether by merger or
otherwise) so as to adversely affect the powers, preferences or
special rights of the Series B Preferred Stock without the
affirmative vote of the holders of a majority of the outstanding
shares of Series B Preferred Stock, voting separately as a class.
(e) Except as otherwise provided herein, holders of Series
B Preferred Stock shall have no special voting rights, and their
consent shall not be required for taking any corporate action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as provided
in Section 2 are in arrears, thereafter and until all accrued
and unpaid dividends and distributions, whether or not declared,
on outstanding shares of Series B Preferred Stock shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series B Preferred Stock;
(ii) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Preferred Stock, except
dividends paid ratably on the Series B Preferred Stock and
all such other parity stock on which dividends are payable
or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem, purchase or otherwise acquire for value
any shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the
Series B Preferred Stock; provided that the Corporation may
at any time redeem, purchase or otherwise acquire shares of
any such junior stock in exchange for shares of stock of
the Corporation ranking junior (as to dividends and upon
dissolution, liquidation or winding up) to the Series B
Preferred Stock; or
(iv) redeem, purchase or otherwise acquire for value
any shares of Series B Preferred Stock, or any shares of
stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the
Board of Directors) to all holders of Series B Preferred
Stock and all such other parity stock upon such terms as
the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for value any shares
of stock of the Corporation unless the Corporation could, under
paragraph 4(a), purchase or otherwise acquire such shares at
such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series B Preferred
Stock redeemed, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock without designation as to series and may be
reissued as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors as permitted by the Certificate of
Incorporation or as otherwise permitted under Delaware Law.
Section 6. Liquidation, Dissolution and Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the Series B
Preferred Stock unless, prior thereto, the holders of shares of Series B
Preferred Stock shall have received $1.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment; provided that the holders of shares of
Series B Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1000 times the aggregate amount to be distributed per share to holders of
Common Stock, or (2) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series B
Preferred Stock, except distributions made ratably on the Series B Preferred
Stock and all such other parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. If the Corporation shall at any time after the
Rights Declaration Date pay any dividend on Common Stock payable in shares of
Common Stock or effect a subdivision or combination of the outstanding shares
of Common Stock (by reclassification or otherwise) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, Etc. If the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash or any other property, then in any such case the shares of
Series B Preferred Stock shall at the same time be similarly exchanged for or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1000 times the aggregate amount of stock,
securities, cash or any other property, as the case may be, into which or for
which each share of Common Stock is changed or exchanged. If the Corporation
shall at any time after the Rights Declaration Date pay any dividend on Common
Stock payable in shares of Common Stock or effect a subdivision or combination
of the outstanding shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock, then in each such
case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series B Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The Series B Preferred Stock shall
not be redeemable.
Section 9. Rank. The Series B Preferred Stock shall rank
junior (as to dividends and upon liquidation, dissolution and winding up) to
all other series of the Corporation's preferred stock except any series that
specifically provides that such series shall rank junior to the Series B
Preferred Stock.
Section 10. Fractional Shares. Series B Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series B Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate this __ day of June, 1998.
______________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Senior Vice President, Treasurer and
Chief Financial Officer
______________________________________
O. ▇▇▇▇▇ ▇▇▇▇
Vice President and Assistant Secretary
EXHIBIT B
FORM OF RIGHT CERTIFICATE
No. R- _______________ Rights
NOT EXERCISABLE AFTER THE EARLIER OF JUNE 18, 2008 AND THE DATE ON WHICH THE
RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET FORTH
IN THE RIGHTS AGREEMENT. AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED
OR TRANSFERRED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY
ANY SUBSEQUENT HOLDER, MAY BE NULL AND VOID.
RIGHT CERTIFICATE
TEXAS INSTRUMENTS INCORPORATED
This Right Certificate certifies that ______________________, or
registered assigns, is the registered holder of the number of Rights set forth
above, each of which entitles the holder (upon the terms and subject to the
conditions set forth in the Rights Agreement dated as of June 18, 1998 and as
amended from time to time (the "Rights Agreement") between Texas Instruments
Incorporated, a Delaware corporation (the "Company"), and ▇▇▇▇▇▇ Trust and
Savings Bank (the "Rights Agent")) to purchase from the Company, at any time
after the Distribution Date and prior to the Expiration Date, [one]
one-thousandth[s] of a fully paid, nonassessable share of Series B
Participating Cumulative Preferred Stock (the "Preferred Stock") of the
Company at a purchase price of $200 per one one-thousandth of a share (the
"Purchase Price"), payable in lawful money of the United States of America,
upon surrender of this Right Certificate, with the form of election to purchase
and related certificate duly executed, and payment of the Purchase Price at an
office of the Rights Agent designated for such purpose.
Terms used herein and not otherwise defined herein have the
meanings assigned to them in the Rights Agreement.
The number of Rights evidenced by this Right Certificate (and
the number and kind of shares issuable upon exercise of each Right) and the
Purchase Price set forth above are as of ____________, ____, and may have been
or in the future may be adjusted as a result of the occurrence of certain
events, as more fully provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Right Certificate are beneficially owned by (a) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (b) a transferee of
an Acquiring Person (or any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (c) under certain
circumstances specified in the Rights Agreement, a transferee of an Acquiring
Person (or any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such, such Rights shall
become null and void, and no holder hereof shall have any right with respect
to such Rights from and after the occurrence of such Section 11(a)(ii) Event.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Right
Certificates, which limitations of rights include the temporary suspension of
the exercisability of such Rights under the specific circumstances set forth
in the Rights Agreement.
Upon surrender at the principal office or offices of the Rights
Agent designated for such purpose and subject to the terms and conditions set
forth in the Rights Agreement, any Rights Certificate or Certificates may be
transferred or exchanged for another Rights Certificate or Certificates
evidencing a like number of Rights as the Rights Certificate or Certificates
surrendered.
Subject to the provisions of the Rights Agreement, the Board of
Directors of the Company may, at its option,
(a) at any time prior to the earlier of (i) the close of
business on the tenth day after the Stock Acquisition Date (or
such later date as a majority of the Continuing Directors may
designate prior to such time as the Rights are no longer
redeemable) and (ii) the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption
price of $.01 per Right; or
(b) at any time after any Person becomes an Acquiring
Person (but before such Person becomes the Beneficial Owner of
50% or more of the shares of Common Stock then outstanding),
exchange all or part of the then outstanding Rights (other than
Rights held by the Acquiring Person and certain related Persons)
for shares of Common Stock at an exchange ratio of one share of
Common Stock per Right. If the Rights shall be exchanged in
part, the holder of this Right Certificate shall be entitled to
receive upon surrender hereof another Right Certificate or
Certificates for the number of whole Rights not exchanged.
No fractional shares of Preferred Stock are required to be
issued upon the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Certificates for the number of whole
Rights not exercised.
No holder of this Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of
capital stock which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Right Certificate shall have been exercised as
provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal by its authorized officers.
Dated as of __________, ____
TEXAS INSTRUMENTS INCORPORATED
By: ___________________________
Name:
Title:
Countersigned:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Rights Agent
By: __________________________
Authorized Signature
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed if the registered holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ___________________________________________________________
hereby sells, assigns and transfers unto _____________________________________
______________________________________________________________________________
(Please print name and address of transferee)
______________________________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ______________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _____________________, ____
_______________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate ___are ___are
not being assigned by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it ___did ___did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: __________, ____ __________________________________
Signature
-------------------
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
-------------------
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise Rights
represented by the Right Certificate.)
To: Texas Instruments Incorporated
The undersigned hereby irrevocably elects to exercise
____________ Rights represented by this Right Certificate to purchase shares
of Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon
the exercise of the Rights) and requests that certificates for such securities
be issued in the name of and delivered to:
Please insert social security
or other identifying number
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
Dated: _____________________, ____
_______________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate ___are ___are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it ___did ___did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: __________, ____ __________________________________
Signature
-------------------
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
-------------------
EXHIBIT C
As set forth in the Rights Agreement, Rights issued or transferred to, or held
by, any Person who is, was or becomes an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent holder, may
be null and void.
SUMMARY OF RIGHTS
TEXAS INSTRUMENTS INCORPORATED
STOCKHOLDER RIGHTS PLAN
Summary of Terms
Form of Security The Board of Directors has declared a dividend of one
preferred stock purchase right for each outstanding
share of the Company's Common Stock, payable on June
30, 1998 to holders of record as of the close of
business on that date (each a "Right" and collectively,
the "Rights")
Transfer Prior to the Distribution Date(1), generally will be
evidenced by the certificates for and will be
transferred with the Common Stock, and the registered
holders of the Common Stock will be deemed to be the
registered holders of the Rights.
After the Distribution Date, the Rights Agent will mail
separate certificates evidencing the Rights to each
record holder of the Common Stock as of the close of
business on the Distribution Date, and thereafter the
Rights will be transferable separately from the Common
Stock.
Exercise Prior to the Distribution Date, the Rights will not be
exercisable.
After the Distribution Date, prior to the occurrence of
an event described below under "Flip In" and "Flip
Over," each Right will be exercisable to purchase, for
$200 (the "Purchase Price"), one one-thousandth of a
share of Series B Participating Cumulative Preferred
Stock, par value $1.00 per share, of the Company.
Flip-In Subject to certain exceptions, if any person or group
(an "Acquiring Person") becomes the beneficial owner of
20% or more of the Company's Common Stock, then each
Right (other than Rights beneficially owned by the
Acquiring Person and certain affiliated persons) will
entitle the holder to purchase, for the Purchase Price,
a number of shares of the Company's Common Stock having
a market value of twice the Purchase Price.
------------
1 Distribution Date generally means the earlier of:
(1) the 10th day after public announcement that any person or
group has become the beneficial owner of 20% or more of the
Company's Common Stock and
(2) the 10th business day after the date of the commencement of a
tender or exchange offer by any person which would, if
consummated, result in such person becoming the beneficial owner
of 20% or more of the Company's Common Stock,
in each case, subject to extension by a majority of the Directors
not affiliated with the Acquiring Person.
Flip-Over If, after any person has become an Acquiring Person,
(1) the Company is involved in a merger or other
business combination in which the Company is not the
surviving corporation or its Common Stock is exchanged
for other securities or assets or (2) the Company
and/or one or more of its subsidiaries sell or
otherwise transfer assets or earning power aggregating
more than 50% of the assets or earning power of the
Company and its subsidiaries, taken as a whole, then
each Right will entitle the holder to purchase, for the
Purchase Price, a number of shares of common stock of
the other party to such business combination or sale
(or in certain circumstances, an affiliate) having a
market value of twice the Purchase Price.
Exchange At any time after any person has become an
Acquiring Person (but before any person becomes
the beneficial owner of 50% or more of the
Company's Common Stock), the Board of Directors
(with the approval of a majority of the
Directors not affiliated with the Acquiring
Person) may exchange all or part of the Rights
(other than the Rights beneficially owned by the
Acquiring Person and certain affiliated persons)
for shares of Common Stock at an exchange ratio
of one share of Common Stock per Right.
Redemption The Board of Directors may redeem all of the
Rights at a price of $.01 per Right at any time
prior to the close of business on the 10th day
after public announcement that any person has
become an Acquiring Person (subject to extension
by a majority of the Directors not affiliated
with the Acquiring Person).
After any person has become an Acquiring Person,
the Rights may be redeemed only with the
approval of a majority of the Directors not
affiliated with the Acquiring Person.
Expiration The Rights will expire on June 18, 2008, unless
earlier exchanged or redeemed.
Amendments For so long as the Rights are redeemable, the
Rights Agreement may be amended in any respect.
At any time after the Rights are no longer
redeemable, the Rights Agreement may be amended
by the Board of Directors (with the approval of
a majority of the Directors not affiliated with
the Acquiring Person) in any respect that does
not (i) adversely affect the Rights holders
(other than any Acquiring Person and certain
affiliated persons), (ii) cause the Rights
Agreement again to become amendable other than
in accordance with this paragraph or (iii) cause
the Rights again to become redeemable.
After any person has become an Acquiring Person,
the Rights Agreement may be amended only with
the approval of a majority of the Directors not
affiliated with the Acquiring Person.
Voting Rights Rights holders have no rights as a stockholder of
the Company, including the right to vote and to
receive dividends.
Antidilution Provisions The Rights Agreement includes standard
antidilution provisions designed to protect the
efficacy of the Rights.
Taxes While the dividend of the Rights will not be
taxable to stockholders or to the Company,
stockholders or the Company may, depending upon
the circumstances, recognize taxable income in
the event that the Rights become exercisable as
set forth above.
--------------
A copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as Exhibit A to this Registration Statement on Form 8-A. A copy of
the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, as amended
from time to time, the complete terms of which are hereby incorporated by
reference.
--------------