Exhibit 4.1
RIGHTS AGREEMENT
dated as of February 17, 2003
by and between
COMPEX TECHNOLOGIES, INC.
and
REGISTRAR AND TRANSFER COMPANY
as Rights Agent
TABLE OF CONTENTS
Page
No.
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Section 1. Certain Definitions ......................................... 1
Section 2. Appointment of Rights Agent ................................. 5
Section 3. Issuance of Right Certificates .............................. 5
Section 4. Form of Right Certificates .................................. 7
Section 5. Countersignature and Registration ........................... 8
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates ................................................ 8
Section 7. Exercise of Rights .......................................... 9
Section 8. Cancellation and Destruction of Right Certificates .......... 11
Section 9. Reservation and Availability of Capital Stock ............... 11
Section 10. Securities Record Date ...................................... 12
Section 11. Adjustment of Exercise Price, Number of Shares Issuable Upon
Exercise of Rights or Number of Rights ...................... 12
Section 12. Certificate of Adjusted Exercise Price or Number of Shares
Issuable Upon Exercise of Rights ............................ 17
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power ............................................... 18
Section 14. Fractional Rights and Fractional Shares ..................... 20
Section 15. Rights of Action ............................................ 21
Section 16. Agreement of Right Holders .................................. 21
Section 17. Right Holder and Right Certificate Holder Not Deemed a
Shareholder ................................................. 22
Section 18. Concerning the Rights Agent ................................. 22
Section 19. Merger or Consolidation or Change of Name of Rights Agent ... 23
Section 20. Duties of Rights Agent ...................................... 23
Section 21. Change of Rights Agent ...................................... 26
Section 22. Issuance of New Right Certificates .......................... 27
Section 23. Redemption of Rights ........................................ 27
Section 24. Exchange of Rights .......................................... 28
Section 25. Notice of Certain Events .................................... 29
Section 26. Notices ..................................................... 29
Section 27. Supplements and Amendments .................................. 30
Section 28. Certain Covenants ........................................... 30
Section 29. Successors .................................................. 31
Section 30. Benefits of this Agreement .................................. 31
Section 31. Severability ................................................ 31
Section 32. Governing Law ............................................... 31
Section 33. Counterparts ................................................ 31
Section 34. Descriptive Headings ........................................ 31
Section 35. Determination and Actions by the Board of Directors ......... 31
TABLE OF EXHIBITS
Exhibit A--Form of Right Certificate
ii
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT (the "Agreement") is made and entered into as of the
17th day of February 2003 by and between Compex Technologies, Inc., a Minnesota
corporation (the "Company"), and Registrar and Transfer Company as rights agent
(the "Rights Agent").
WHEREAS, the Board of Directors of the Company (the "Board of Directors")
has authorized and declared a dividend of one preferred share purchase right (a
"Right") for each Common Share (as hereinafter defined) of the Company
outstanding as of the Close of Business on February 28, 2003 (the "Record
Date"), each Right representing the right to purchase one one-hundredth of a
Preferred Share (as hereinafter defined), upon the terms and subject to the
conditions set forth herein, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date or the Expiration Date (as such terms are hereinafter
defined).
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, the parties hereto hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
"Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 promulgated under the Exchange Act, as in effect on the
date hereof.
"Acquiring Person" shall mean any Person that Beneficially Owns 15% or
more of the Voting Shares of the Company then outstanding; provided, however,
that the term "Acquiring Person" shall not include: (i) an Exempt Person; (ii)
any Person that would not otherwise be an Acquiring Person but for a reduction
in the number of outstanding Voting Shares resulting from a stock repurchase
program or other similar plan of the Company or from a self tender offer of the
Company, which plan or tender offer commenced on or after the date hereof;
provided, however, that the term "Acquiring Person" shall include such Person
described in this subclause (ii) from and after the first date upon which (A)
such Person, since the date of the commencement of such plan or tender offer,
shall have acquired Beneficial Ownership of, in the aggregate, a number of
Voting Shares of the Company equal to 1% or more of the Voting Shares of the
Company then outstanding and (B) such Person, together with all Affiliates and
Associates of such Person, shall Beneficially Own 15% or more of the Voting
Shares of the Company then outstanding; (iii) any Person that would not
otherwise be an Acquiring Person but for its Beneficial Ownership of Rights; or
(iv) any Person that is the Beneficial Owner of 15% or more of the outstanding
Voting Shares of the Company solely as the result of the operation of clause
(iv) of the definition of "Beneficial Owner" if and during such period as the
Board of Directors shall have determined that the operation of such clause
should be waived in the best interests of the Company and its shareholders;
provided, however, that any determination pursuant to this clause (iv) shall
have been made prior to any change in the composition of the Board of Directors
following the date that such Person shall have become the Beneficial Owner of
such Voting Shares if such change in composition involved the election of two or
more new members of the Board of Directors. In calculating the percentage of the
outstanding Voting
Shares that are Beneficially Owned by a Person for purposes of this definition,
Voting Shares that are Beneficially Owned by such Person shall be deemed
outstanding, and Voting Shares that are not Beneficially Owned by such Person
and that are subject to issuance upon the exercise or conversion of outstanding
conversion rights, exchange rights, rights, warrants or options shall not be
deemed outstanding. Any determination made by the Board of Directors of the
Company as to whether any Person is or is not an Acquiring Person shall be
conclusive and binding upon all holders of Rights.
"Acquisition Date" shall mean the first date of public announcement
(which, for purposes of this definition, shall include, without limitation, a
report filed pursuant to Section 13(d) of the Exchange Act) by the Company or an
Acquiring Person containing the facts by virtue of which a Person has become an
Acquiring Person.
A Person shall be deemed the "Beneficial Owner" of and shall be deemed to
"Beneficially Own" any securities:
(i) that such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly, for purposes of Section
13(d) of the Exchange Act and Rule 13d-3 promulgated under the
Exchange Act, in each case as in effect on the date hereof;
(ii) that such Person or any of such Person's Affiliates or Associates
has the right to acquire (whether such right is exercisable
immediately, or only after the passage of time, compliance with
regulatory requirements, the fulfillment of a condition or
otherwise) pursuant to any agreement, arrangement or understanding,
or upon the exercise of conversion rights, exchange rights (other
than these Rights), rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to Beneficially Own, securities tendered pursuant to a
tender offer or exchange offer made by or on behalf of such Person
or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange;
(iii) that such Person or any such Person's Affiliates or Associates has
the right to vote, whether alone or in concert with others, pursuant
to any agreement, arrangement or understanding; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
Beneficially Own, any security if the agreement, arrangement or
understanding to vote such security (A) arises solely from a
revocable proxy given to such Person or any of such Person's
Affiliates or Associates in response to a public proxy solicitation
made pursuant to and in accordance with the applicable rules and
regulations promulgated under the Exchange Act, and (B) is not also
then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report);
(iv) that are Beneficially Owned, directly or indirectly, by any other
Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting (other than voting pursuant to
a revocable proxy as described in the
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proviso to clause (iii) of this definition of "Beneficial Owner") or
disposing of any securities of the Company; and
(v) that, on any day on or after the Distribution Date, evidence Rights
that prior to such date were represented by certificates for Common
Shares that such Person Beneficially Owns on such day.
Notwithstanding anything to the contrary in this Section, a Person engaged
in business as an underwriter of securities shall not be deemed to be the
Beneficial Owner of, or to Beneficially Own, any securities acquired through
such Person's participation in good faith in a firm commitment underwriting
until the expiration of 40 days after the date of such acquisition.
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which banking institutions in the State of New Jersey are authorized or
obligated by law or executive order to close.
"Certificate of Designation" shall mean the certificate of designation of
preferences designating the rights, preferences and privileges of the Preferred
Shares in accordance with the Minnesota Business Corporations Act.
"Close of Business" on any given date shall mean 5:00 p.m., Eastern time,
on such date; provided, however, that if such date is not a Business Day, it
shall mean 5:00 p.m., Eastern time, on the next succeeding Business Day.
"Closing Price" of a stock or other security on any day shall be the last
sale price, regular way, per share of such stock or unit of such other security
on such day 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 such stock
or other security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which such stock or other security is listed or admitted to trading or, if
such stock or other security is not listed or admitted to trading on any
national securities exchange, the last sale price of such security reported on
the Nasdaq National Market, or if not qualified for trading on the Nasdaq
National Market, the 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 on the
Nasdaq Small Cap or OTC Bulletin Board or such other system then in use or, if
on any such date such stock or other security is not quoted by any such
organization, the average of the closing bid and asked prices as determined in
good faith by the Board of Directors of the Company.
"Common Share" shall mean one share of the Common Stock of the Company,
$0.10 par value per share, unless used with reference to a Person other than the
Company, in which case it shall mean one share of each class of stock of such
Person having the right to vote generally in the election of directors or, if
such Person is a Subsidiary of another Person, one Common Share of the Person
that ultimately controls such Person.
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"Common Share Equivalent" shall have the meaning ascribed to it in Section
11(a)(iii) hereof.
"Current Market Price" per share of a stock or unit of any other security
on any date shall mean the average of the daily Closing Prices of such stock or
other security for the 30 consecutive Trading Days through and including the
Trading Day immediately preceding the date in question; provided, however, that
if any event shall have caused the Closing Price on any Trading Day during such
30-day period not to be fully comparable with the Closing Price on the date in
question (or, if no Closing Price is available on the date in question, on the
Trading Day immediately preceding the date in question), then each such
non-comparable Closing Price so used shall be appropriately adjusted by the
Board of Directors in order to make the Closing Price on each Trading Day during
the period used for the determination of the Current Market Price fully
comparable with the Closing Price on such date in question (or, if applicable,
the immediately preceding Trading Day). "Current Market Price" per share of any
stock or unit of such other security that is not publicly held or so listed or
traded, and "Current Market Price" of any other property, shall mean the fair
value per share of such stock or unit of such other security, or the fair value
of such other property, respectively, as determined in good faith by the Board
of Directors of the Company based upon such appraisals or valuation reports of
such independent experts as the Board of Directors shall in good faith determine
appropriate, which determination shall be described in a statement filed by the
Company with the Rights Agent.
"Distribution Date" shall have the meaning ascribed to it in Section 3
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exempt Person" shall mean (i) any wholly-owned Subsidiary of the Company,
(ii) any employee benefit plan of the Company or of a Subsidiary of the Company,
and (iii) any Person holding Voting Shares for or pursuant to the terms of any
such employee benefit plan.
"Exercise Price" shall have the meaning ascribed to it in Section 7(c)
hereof.
"Expiration Date" shall mean February 17, 2013.
"Person" shall mean any individual, firm, partnership, corporation,
association, trust, joint venture, limited liability company, unincorporated
organization, group (as such term is used in Rule 13d-5 promulgated under the
Exchange Act as in effect on the date hereof) or other entity, and shall include
any successor (by merger or otherwise) of such entity.
"Preferred Share" shall mean one share of the Series A Preferred Stock, no
par value per share, of the Company, which shall have the rights, preferences
and privileges set forth in the Certificate of Designation for the Preferred
Shares.
"Preferred Share Equivalents" shall have the meaning ascribed to it in
Section 11(b) hereof.
"Record Date" shall have the meaning ascribed to it in the recitals
hereto.
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"Redemption Date" shall mean the date of the action of the Board of
Directors of the Company authorizing and directing the redemption of the Rights
pursuant to Section 23(a) hereof or the exchange of the Rights pursuant to
Section 24(a) hereof.
"Redemption Price" shall have the meaning ascribed to it in Section 23(a)
hereof.
"Right Certificate", as that term is used with respect to any period prior
to the Distribution Date, shall have the meaning ascribed to it in Section 3(b)
hereof, and, as that term is used with respect to any period on or after the
Distribution Date, shall have the meaning ascribed to it in Section 3(c) hereof.
"Rights Expiration Date" shall mean the Expiration Date, except if there
has been a Distribution Date, then it shall mean the tenth anniversary of the
Distribution Date.
"Section 11(a)(ii) Event" shall have the meaning ascribed to it in Section
11(a)(ii) hereof.
"Section 13(a) Event" shall have the meaning ascribed to it in Section
13(a) hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Subsidiary" of any Person shall mean any corporation or other Person of
which equity securities or equity interests representing a majority of the
voting power are owned, directly or indirectly, or which is effectively
controlled, by such Person.
"Surviving Person" shall have the meaning ascribed to it in Section 13(a)
hereof.
"Trading Day" shall mean, as to any stock or other security, a day on
which the principal national securities exchange on which such stock or other
security is listed or admitted to trading is open for the transaction of
business or, if such stock or other security is not listed or admitted to
trading on any national securities exchange, a Business Day.
"Voting Share" shall mean (i) a Common Share of the Company and (ii) any
other share of capital stock of the Company entitled to vote generally in the
election of directors or entitled to vote together with the Common Shares in
respect of any merger, consolidation, sale of all or substantially all of the
Company's assets, liquidation, dissolution or winding up. References in this
Agreement to a percentage or portion of the outstanding Voting Shares shall be
deemed a reference to the percentage or portion of the total votes entitled to
be cast by the holders of the outstanding Voting Shares.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable upon ten days prior written notice to the Rights Agent.
The Rights Agent shall have no duty to supervise, and in no event shall be
liable for, the acts or omissions of any such co-Rights Agent.
SECTION 3. ISSUANCE OF RIGHT CERTIFICATES.
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(a) "Distribution Date" shall mean the date, after the date hereof,
that is the earliest of (i) the tenth Business Day (or such later day as shall
be designated by the Board of Directors of the Company) following the date of
the commencement of, or the first public announcement of the intent of any
Person (other than an Exempt Person) to commence, a tender offer or exchange
offer, the consummation of which would cause any Person to become an Acquiring
Person, (ii) the date of the first Section 11(a)(ii) Event or (iii) the date of
the first Section 13(a) Event.
(b) Until the Distribution Date, (i) the Rights shall be represented
by certificates for Common Shares (all of which certificates for Common Shares
shall be deemed to be Right Certificates) and not by separate Right
Certificates, (ii) the record holder of the Common Shares represented by each of
such certificates shall be the record holder of the Rights represented thereby
and (iii) the Rights shall be transferable only in connection with the transfer
of the Common Shares representing the corresponding Rights. Until the earliest
of the Distribution Date, the Redemption Date or the Expiration Date, the
surrender for transfer of such certificates for Common Shares shall also
constitute the surrender for transfer of the corresponding Rights represented
thereby.
(c) As soon as practicable on or after the Distribution Date, the
Company shall promptly notify the Rights Agent in writing of the occurrence of
the Distribution Date and provide the Rights Agent with the names and addresses
of all record holders of Common Shares (together with all other necessary
information), and after such notification by the Company, the Rights Agent shall
send to each record holder of Common Shares as of the Close of Business on the
Distribution Date a Right Certificate substantially in the form of Exhibit A
hereto representing one Right for each Common Share held. Such Right
Certificates shall be sent at the Company's expense by first-class mail, postage
prepaid to the address of each such record holder shown on the records of the
Company. From and after the Distribution Date, the Rights shall be represented
solely by such Right Certificates and may only be transferred by the transfer of
such Right Certificates and the holders of such Right Certificates (as listed in
the records of the Company or any transfer agent or registrar for such Rights)
shall be the record holders of such Rights.
(d) Certificates for Common Shares issued at any time after the
Record Date and prior to the earliest of (i) the Distribution Date, (ii) the
Redemption Date or (iii) the Expiration Date, shall have impressed on, printed
on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement dated as of February 17,
2003 by and between Compex Technologies, Inc. and Registrar and Transfer
Company, as Rights Agent (the "Rights Agreement"), as amended to date, the
terms and conditions of which are incorporated herein by reference and a
copy of which is on file at the principal executive offices of Compex
Technologies, Inc. Under certain circumstances specified in the Rights
Agreement, such Rights will be represented by separate certificates and
will no longer be represented by this certificate. Under certain
circumstances specified in the Rights Agreement, Rights beneficially owned
by certain Persons may become null and void. Compex
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Technologies, Inc. will mail to the record holder of this certificate a
copy of the Rights Agreement without charge promptly following receipt of
a written request therefor. As described in the Rights Agreement, Rights
Beneficially Owned by any Person who becomes an Acquiring Person or any
Affiliate or Associate of an Acquiring Person (as such capitalized terms
are defined in the Rights Agreement) shall become null and void.
(e) Certificates for Common Shares issued at any time on or after
the Distribution Date and prior to the earlier of the Redemption Date or the
Rights Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate does not represent any Right issued pursuant to the
terms of a Rights Agreement dated as of February 17, 2003 by and between
Compex Technologies, Inc. and Registrar and Transfer Company, as Rights
Agent.
(f) In the event that at any time on or after the earlier of (i) the
date of the first Section 11(a)(ii) Event or (ii) the date of the first Section
13(a) Event and prior to the earlier (x) of the Redemption Date or (y) the
Rights Expiration Date, the Company shall issue any Common Shares pursuant to
the exercise of conversion rights, exchange rights, rights (other than Rights),
warrants or options that shall have been issued or granted prior to the earlier
of (A) the date of the first Section 11(a)(ii) Event or (B) the date of the
first Section 13(a) Event, then, unless the Board of Directors of the Company
shall have provided otherwise at the time of the issuance or grant of such
conversion rights, exchange rights, rights (other than Rights), warrants or
options, the Rights Agent shall, as soon as practicable after the date of such
event and after written notice from the Company of such event, send a Right
Certificate substantially in the form of Exhibit A hereto representing one Right
for each Common Share so issued by first-class, postage-prepaid mail to the
record holder of such Common Shares at the address of such holder as shown on
the records of the Company.
(g) Notwithstanding the foregoing provisions of this Section 3, the
Rights Agent shall not send any Right Certificate to any Acquiring Person or any
of its Affiliates or Associates or to any Person if the Rights held by such
Person are Beneficially Owned by an Acquiring Person or any of its Affiliates or
Associates. Any determination made by the Board of Directors of the Company as
to whether any Common Shares are or were Beneficially Owned at any time by an
Acquiring Person or an Affiliate or Associate of an Acquiring Person shall be
conclusive and binding upon all holders of Rights.
SECTION 4. FORM OF RIGHT CERTIFICATES. The Right Certificates and the form
of assignment, including certificate, and the form of election to purchase,
including certificate, printed on the reverse thereof, when, as and if issued,
shall be substantially the same as Exhibit A hereto. Such instruments and
documents may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
(provided that such marks, legends, summaries and endorsements do not affect the
rights, duties or responsibilities of the Rights Agent) and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange
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upon which the Rights or the securities of the Company issuable upon exercise of
the Rights may from time to time be listed, or to conform to usage. Subject to
Section 22 hereof, Right Certificates, whenever issued, that are issued in
respect of Common Shares that were issued and outstanding as of the Close of
Business on the Distribution Date, shall be dated as of the Distribution Date.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the
Company by any of its Chairman of the Board, its Chief Executive Officer, its
President or any Vice President, either manually or by facsimile signature, and
may have affixed thereto the Company's seal or a facsimile thereof attested to
by its Secretary or any Assistant Secretary, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the Right Certificates
shall cease to be an 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
by the Company with the same force and effect as though the Person who signed
such Right Certificates had not ceased to be an officer of the Company. Any
Right Certificate may be signed on behalf of the Company by any person who is a
proper officer of the Company to sign such Right Certificate as of the actual
date of such execution, even though such person was not a proper officer at the
date of the execution of this Agreement.
(b) Following the Distribution Date and receipt by the Rights Agent
of all relevant information not in the Rights Agent's control or possession, the
Rights Agent shall keep or cause to be kept at its offices designated for such
purpose pursuant to Section 26 books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of Right Certificates, the number of Rights represented
on its face by each Right Certificate and the date of each Right Certificate.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 6(c), 7(d) and 14 hereof,
at any time after the Close of Business on the Distribution Date, and so long as
the Rights represented thereby remain outstanding, any one or more Right
Certificates may be transferred, split-up, combined or exchanged for one or more
Right Certificates representing the same aggregate number of Rights as the Right
Certificates surrendered. Any registered holder desiring to transfer, split up,
combine or exchange one or more Right Certificates shall deliver such request in
writing to the Rights Agent, and shall surrender the Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose with the form of assignment, including certificate,
on the reverse side thereof completed and duly executed, with signature
guaranteed. Neither the Rights Agent nor the Company shall be obligated to take
any action whatsoever with respect to the transfer of any such surrendered Right
Certificate until the registered holder shall have properly completed and signed
the certificate contained in the form of assignment on the reverse side of such
Right Certificate. Thereupon, the Rights Agent shall countersign and deliver to
the Person entitled thereto one or
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more Right Certificates, as so requested. The Company may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates. The Rights Agent shall have no duty or obligation under this
Section 6 or any other similar provision of this Agreement unless and until it
is reasonably satisfied that all such taxes and/or governmental charges have
been paid in full.
(b) Upon receipt by the Company and the Rights Agent of evidence
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 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 such Right
Certificate if mutilated, the Company shall issue and deliver to the Rights
Agent for delivery to the record holder of such Right Certificate a new Right
Certificate of like tenor in lieu of such lost, stolen, destroyed or mutilated
Right Certificate.
(c) Notwithstanding anything to the contrary in this Section 6, the
Rights Agent shall not countersign and deliver a Right Certificate to any Person
if such Right Certificate represents, or would represent when held by such
Person, Rights that had become or would become null and void pursuant to Section
7(d) hereof.
SECTION 7. EXERCISE OF RIGHTS.
(a) Until the Distribution Date, no Right may be exercised.
(b) Subject to Section 7(d) and (g) hereof and the other provisions
of this Agreement, at any time after the Close of Business on the Distribution
Date and prior to the Close of Business on the earlier of the Redemption Date or
the Rights Expiration Date, the registered holder of any Right Certificate may
exercise the Rights represented thereby in whole or in part upon surrender of
such Right Certificate, with the form of election to purchase, including
certificate, on the reverse side thereof completed and duly executed, with
signature guaranteed, to the Rights Agent at the office of the Rights Agent set
forth in Section 26, together with payment of the Exercise Price for each Right
exercised. Upon the exercise of an exercisable Right and payment of the Exercise
Price in accordance with the provisions of this Agreement, the holder of such
Right shall be entitled to receive, subject to adjustment as provided herein,
one one-hundredth of a Preferred Share (or, following the occurrence of a
Section 11(a)(ii) Event or a Section 13(a) Event, Common Shares and/or other
securities).
(c) The "Exercise Price" for the exercise of each Right shall
initially be $20.00 and shall be payable in lawful money of the United States of
America in accordance with Section 7(f) hereof. The Exercise Price and the
number of Preferred Shares (or, following the occurrence of a Section 11(a)(ii)
Event or a Section 13(a) Event, Common Shares and/or other securities) to be
acquired upon exercise of a Right shall be subject to adjustment from time to
time as provided in Sections 7(e), 11 and 13 hereof and the other provisions of
this Agreement.
(d) Notwithstanding anything in this Agreement to the contrary, from
and after the earlier of (i) the date of the first Section 11(a)(ii) Event and
(ii) the date of the first Section 13(a) Event, any Rights that are or were
Beneficially Owned by an Acquiring Person or
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any Affiliate or Associate of an Acquiring Person at any time on or after the
Distribution Date shall be null and void, and for all purposes of this Agreement
such Rights shall thereafter be deemed not to be outstanding, and any holder of
such Rights (whether or not such holder is an Acquiring Person or an Affiliate
or Associate of an Acquiring Person) shall thereafter have no right to exercise
such Rights.
(e) Prior to the Distribution Date, if the Board of Directors of the
Company shall have determined that such action adequately protects the interests
of the holders of Rights, the Company may, in its discretion, substitute for all
or any portion of the Preferred Shares that would otherwise be issuable after
the Close of Business on the Distribution Date and upon the exercise of each
Right and payment of the Exercise Price: (i) cash, (ii) other equity securities
of the Company, (iii) debt securities of the Company, (iv) other property or (v)
any combination of the foregoing, in each case having an aggregate Current
Market Price equal to the aggregate Current Market Price of the Preferred Shares
for which substitution is made. Subject to Section 7(d) hereof, in the event
that the Company takes any action pursuant to this Section 7(e), such action
shall apply uniformly to all outstanding Rights.
(f) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase, including certificate, properly
completed and duly executed, with signature guaranteed, accompanied by payment
of the Exercise Price for each Right to be exercised and an amount equal to any
applicable tax or governmental charge required to be paid by the holder of such
Right Certificate in accordance with Section 9 hereof by certified check or
cashier's check payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) requisition from the transfer agent of the Preferred
Shares (or, following the occurrence of a Section 11(a)(ii) Event or a Section
13(a) Event, Common Shares and/or securities) certificates for the number of
Preferred Shares or such other securities) to be purchased, and the Company
hereby irrevocably authorizes such transfer agent to comply with all such
requests, and/or, as provided in Section 14 hereof, requisition from the
depositary agent described therein depositary receipts representing such number
of one-hundredths of a Preferred Share or such other securities as are to be
purchased (in which case certificates for the Preferred Shares or such other
securities represented by such receipts shall be deposited by the transfer agent
with such depositary agent), and the Company hereby directs such depositary
agent to comply with such request, (ii) when necessary to comply with this
Agreement, requisition from the Company the amount of cash to be paid in lieu of
issuance of fractional Preferred Shares or such other securities in accordance
with Section 14 hereof, (iii) after receipt of such certificates, depositary
receipts or cash, cause the same to be delivered to or upon the order of the
registered holder, of such Right Certificate, registered in such name or names
as may be designated by such holder, and (iv) when necessary to comply with this
Agreement, after receipt thereof, deliver such cash to or upon the order of the
registered holder of such Right Certificate.
(g) Notwithstanding the foregoing provisions of this Section 7, the
exercisability of the Rights shall be suspended for such period as shall
reasonably be necessary for the Company to register and qualify the Preferred
Shares and/or Common Shares or other securities to be issued pursuant to the
exercise of the Rights under the Securities Act and any applicable securities
law of any jurisdiction; provided, however, that nothing contained in this
Section 7 shall relieve the Company of its obligations under Section 9(c)
hereof.
10
(h) In case the registered holder of any Right Certificate shall
exercise less than all of the Rights represented thereby, a new Right
Certificate representing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to such holder's duly authorized assigns, subject to the
provisions of Section 14 hereof.
(i) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action whatsoever with respect to a registered holder of Rights upon the
occurrence of any purported exercise as set forth in this Section 7, unless the
certificate contained in the form of election to purchase set forth on the
reverse side of the Right Certificate surrendered for such exercise shall have
been duly completed and signed by the registered holder thereof and the Company
shall have been provided with such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company or the Rights Agent shall request.
(j) Neither the Company nor the Rights Agent shall have any
liability to any holder of Rights or any other Person as a result of the
Company's failure to make any determination under this Section 7 or any other
section with respect to an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall (i) if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or (ii) if surrendered to the Rights Agent, shall be canceled by the Rights
Agent, 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 retirement, and the Rights Agent promptly shall
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise of such Right Certificate. The Rights
Agent shall deliver all canceled Right Certificates to the Company or shall, at
the written request of the Company, destroy such canceled 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) Subject to Sections 7(e) and 9(f) hereof, the Company shall
cause to be reserved and kept available out of its authorized and unissued
equity securities the number of such equity securities that will from time to
time be sufficient to permit the exercise in full of all outstanding Rights.
(b) In the event that any securities issuable upon exercise of the
Rights are listed on any national securities exchange, the Company shall use its
best efforts, from and after such time as the Rights become exercisable, to
cause all such securities issued or reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
(c) If necessary to permit the issuance of securities upon exercise
of the Rights, the Company shall use its best efforts, from and after the
Distribution Date, to register
11
and qualify such securities under the Securities Act, the Exchange Act and any
other applicable securities laws and to keep such registration effective until
the earlier of the Redemption Date or the Rights Expiration Date.
(d) The Company shall take all such action as may be necessary to
ensure that all securities delivered upon exercise of the Rights shall, at the
time of delivery of the certificates for such securities (subject to payment of
the Exercise Price), be duly and validly authorized and issued and fully paid
and nonassessable securities.
(e) The Company shall pay when due and payable any and all taxes and
charges that may be payable in respect of the issuance or delivery of the Right
Certificates or of any securities upon the exercise of Rights. The Company shall
not, however, be required to pay any tax or charge that may be payable in
respect of any transfer or delivery of a Right Certificate to a Person other
than, or the issuance or delivery of a certificate for securities in respect of
a name other than that of, the registered holder of the Right Certificate
representing Rights surrendered for exercise, or to issue or deliver any
certificate for securities upon the exercise of any Right until any such tax or
charge shall have been paid (such tax or charge being payable by the holder of
such Right Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax or charge is due.
(f) With respect to the Common Shares and/or other securities
issuable pursuant to Section 11(a)(ii) and (iii) hereof, the foregoing covenants
shall be applicable only upon and following the occurrence of a Section
11(a)(ii) Event.
SECTION 10. SECURITIES RECORD DATE. Each Person in whose name any
certificate for securities of the Company is issued upon the exercise of Rights
shall be deemed to have become the holder of record of the securities
represented thereby for all purposes on, and such certificate shall be dated,
the date upon which the Right Certificate representing such Rights was duly
surrendered and payment of the Exercise Price (and any applicable taxes and
governmental charges) was made; provided, however, that if the date of such
surrender and payment is a date upon which the securities transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such securities on, and such certificate shall be dated, the next succeeding
Business Day on which the securities transfer books of the Company are open.
SECTION 11. ADJUSTMENT OF EXERCISE PRICE, NUMBER OF SHARES ISSUABLE UPON
EXERCISE OF RIGHTS OR NUMBER OF RIGHTS. The Exercise Price, the number and kind
of securities that may be purchased upon exercise of a Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a) (i) In the event that the Company shall at any time after the Close of
Business on the Record Date and prior to the Close of Business on the
earlier of the Redemption Date or the Rights Expiration Date (A) declare
or pay any dividend on the Preferred Shares payable in Preferred Shares or
Voting Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares
or (D) issue Preferred Shares or other securities of the Company (other
than those issuances for which an adjustment is required under Section
11(b) hereof) in a
12
reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) or in a reorganization
of the Company, then, and upon each such event, the number and kind of
Preferred Shares or other securities issuable upon the exercise of a Right
on the date of such event shall be proportionately adjusted so that the
holder of any Right exercised on or after such date shall be entitled to
receive, upon the exercise thereof and payment of the Exercise Price, the
aggregate number and kind of Preferred Shares or other securities or other
property, as the case may be, that, if such Right had been exercised
immediately prior to such date and at a time when such Right was
exercisable and the transfer books of the Company were open, such holder
would have owned upon such exercise and would have been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs that would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required under Section
11(a)(ii) hereof.
(ii) In the event that an Acquisition Date shall have occurred and
neither the Redemption Date nor the Expiration Date shall have occurred
prior to the tenth Business Day following such Acquisition Date (a
"Section 11(a)(ii) Event"), then, and upon each such Section 11(a)(ii)
Event, proper provision shall be made so that, except as provided in
Section 7(d) hereof, each holder of a Right shall thereafter have the
right to receive, upon the exercise thereof in accordance with the terms
of this Agreement and payment of the then current Exercise Price, the
number of Common Shares of the Company as equals the result obtained by
(A) multiplying the then current Exercise Price by the then number of
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such Section 11(a)(ii) Event (or, if the Distribution
Date shall not have occurred prior to the date of such Section 11(a)(ii)
Event, the number of one-hundredths of a Preferred Share for which a Right
would have been exercisable if the Distribution Date had occurred on the
Business Day immediately preceding the date of such Section 11(a)(ii)
Event), and (B) dividing that product by 50% of the Current Market Price
of a Common Share on the date of occurrence of the relevant Section
11(a)(ii) Event (such number of shares being hereinafter referred to as
the "Adjustment Shares"). Successive adjustments shall be made pursuant to
this paragraph each time a Section 11(a)(ii) Event occurs.
(iii) In the event that on the date of a Section 11(a)(ii) Event the
aggregate number of Common Shares that are authorized by the Company's
Certificate of Incorporation, as amended from time to time, but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights is less than the aggregate number of Adjustment Shares
thereafter issuable upon the exercise in full of the Rights in accordance
with Section 11(a)(ii) hereof (the excess of such number of Adjustment
Shares over and above such number of Common Shares being hereinafter
referred to as the "Unavailable Adjustment Shares"), then, and upon each
such event, the Company shall substitute for the pro rata portion of the
Unavailable Adjustment Shares that would otherwise be issuable thereafter
upon the exercise of each Right and payment of the Exercise Price (A)
cash, (B) other equity securities of the Company (including, without
limitation, shares of preferred stock of the Company or units of such
shares having the same Current
13
Market Price as one Common Share (a "Common Share Equivalent")), (C) debt
securities of the Company, (D) other property or (E) any combination of
the foregoing, in each case having an aggregate Current Market Price equal
to the aggregate Current Market Price of the Unavailable Adjustment Shares
for which substitution is made. Subject to Section 7(d) hereof, in the
event that the Company takes any action pursuant to this Section
11(a)(iii), such action shall apply uniformly to all outstanding Rights.
(b) In the event that the Company shall, at any time after the Close
of Business on the Record Date and prior to the Close of Business on the earlier
of the Redemption Date or the Rights Expiration Date, fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling such holders initially to subscribe for or purchase Preferred Shares
(or shares having the same rights, privileges and preferences as the Preferred
Shares ("Preferred Share Equivalents")) or securities convertible into Preferred
Shares or Preferred Share Equivalents, at a price per Preferred Share or
Preferred Share Equivalent (or having a conversion price per share, if a
security convertible into Preferred Shares or Preferred Share Equivalents) less
than the Current Market Price per Preferred Share on such record date, then, and
upon each such event, the Exercise Price to be in effect after such record date
shall be determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be equal
to the sum of the number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares that the aggregate offering price of the
total number of Preferred Shares and/or Preferred Share Equivalents to be so
offered (and/or the aggregate initial conversion price of the convertible
securities to be so offered) would purchase at such Current Market Price, and
the denominator of which shall be equal to the number of Preferred Shares
outstanding on such record date plus the number of additional Preferred Shares
and/or Preferred Share Equivalents to be offered for subscription or purchase
(or into which the convertible securities to be so offered are initially
convertible); provided, however, that if such rights, options or warrants are
not exercisable immediately upon issuance but become exercisable only upon the
occurrence of a specified event or the passage of a specified period of time,
then the adjustment to the Exercise Price shall be made and become effective
only upon the occurrence of such event or such passage of time, and such
adjustment shall be made as if the record date for the issuance of such rights,
options or warrants had been the Business Day immediately preceding the date
upon which such rights, options or warrants became exercisable. Preferred Shares
owned by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment to the Exercise Price
shall be made successively whenever such a record date is fixed, and in the
event that such rights or warrants are not so issued, the Exercise Price shall
be adjusted to be the Exercise Price that would then be in effect if such record
date had not been fixed.
(c) In the event that the Company shall, at any time after the Close
of Business on the Record Date and prior to the Close of Business on the earlier
of the Redemption Date or the Rights Expiration Date, fix a record date for the
making of a distribution of assets to all holders of the Preferred Shares
(including any such distribution made in connection with a consolidation or
merger in which the Company is the surviving corporation, other than a
distribution for which an adjustment is required under Section 11(a)(i) or (b)
hereof or a regular quarterly cash dividend), then the Exercise Price to be in
effect after such record date shall be determined by multiplying the Exercise
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be equal to the excess of the Current Market Price per
14
Preferred Share on such record date over and above the fair market value of the
portion of the securities or assets to be so distributed with respect to one
Preferred Share, and the denominator of which shall be equal to such Current
Market Price per Preferred Share. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such a distribution
is not so made, the Exercise Price shall be adjusted to be the Exercise Price
that would then be in effect if such record date had not been fixed.
(d) For the purpose of any computation under this Section 11, if the
Preferred Shares are not publicly held or traded, the "Current Market Price" per
Preferred Share conclusively shall be deemed to be the Current Market Price per
Common Share multiplied by 100.
(e) No adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the then
current Exercise Price; provided, however, that any adjustments that are not
required to be made by reason of this Section 11(e) shall be cumulated and taken
into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one-thousandth of a
Common Share or other share or one-millionth of a Preferred Share, as the case
may be.
(f) If, as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right shall be entitled to receive any securities of
the Company other than Preferred Shares upon exercise of such Right, and if an
event occurs in respect of such securities that, if it were to occur in respect
of Preferred Shares, would require an adjustment under this Section 11 in
respect of Preferred Shares, then the number of such other securities so
receivable upon exercise of each Right shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to Preferred Shares contained in this Section 11, and
the other provisions of this Agreement with respect to Preferred Shares shall
apply on like terms to any such other securities.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall represent the right to
purchase, at the adjusted Exercise Price, the number of one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i) below, upon each adjustment of the Exercise Price as a result
of the calculations made in Sections 11(b) and (c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
represent the right to purchase, at the adjusted Exercise Price, that number of
one-hundredths of a Preferred Share (calculated to the nearest one-millionth of
a Preferred Share) obtained by multiplying (i) the number of one-hundredths of a
Preferred Share purchasable upon the exercise of one Right immediately prior to
such adjustment of the Exercise Price by (ii) the Exercise Price in effect
immediately prior to such adjustment, and dividing the product so obtained by
the Exercise Price in effect immediately after such adjustment.
(i) The Company may elect, on or after the date of any adjustment of
the Exercise Price, to adjust the number of Rights instead of making any
adjustment in the number
15
of Preferred Shares purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be exercisable
for the number of one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one one-thousandth of a Right) obtained by
dividing the Exercise Price in effect immediately prior to the adjustment of the
Exercise Price by the Exercise Price in effect immediately after such adjustment
of the Exercise Price. The Company shall promptly notify the Rights Agent in
writing of any such election and shall make a public announcement of its
election to adjust the number of Rights pursuant to this Section 11(i),
indicating the record date for the adjustment and, if known at the time, the
amount of the adjustment to be made. Such record date may be the date on which
the Exercise Price is adjusted or any day thereafter, but, if separate Right
Certificates have been issued, it shall be at least ten days after the date of
such public announcement. If separate 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 Right Certificates representing
the additional Rights to which such holders are entitled as a result of such
adjustment to be distributed, subject to Section 14 hereof, to holders of record
of Right Certificates on such record date or, at the option of the Company,
cause new Right Certificates representing all the Rights to which such holders
are entitled after such adjustment 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 such adjustment, and upon surrender thereof if required by
the Company. Right Certificates to be so distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Exercise 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 Exercise Price
or the number of one-hundredths of a Preferred Share issuable upon the exercise
of one Right, the Right Certificates theretofore and thereafter issued may
continue to express the Exercise Price per one one-hundredth of a Preferred
Share and the number of Preferred Shares issuable upon the exercise of one Right
that were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Exercise Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action that may, in the advice or opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable one one-hundredths of a Preferred Share at such adjusted Exercise
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer (with prompt written notice
thereof to the Rights Agent), until the occurrence of such event, the issuance
to the holder of any Right exercised after such record date of the number of
one-hundredths of a Preferred Share and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the number of
one-hundredths of a Preferred Share and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the Exercise Price
in effect prior to such adjustment; provided, however, that the
16
Company shall deliver to such holder a due xxxx or other appropriate instrument
representing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Notwithstanding anything to the contrary in this Section 11, the
Company shall be entitled to make such further adjustments in the number of
one-hundredths of a Preferred Share that may be purchased upon exercise of one
Right, and such further adjustments in the Exercise Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent that the
Company in its sole discretion shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Shares, (ii) issuance wholly
for cash of any Preferred Shares at less than the Current Market Price thereof,
(iii) issuance wholly for cash of Preferred Shares or securities that by their
terms are convertible into or exchangeable for Preferred Shares, (iv) dividends
on Preferred Shares payable in Preferred Shares or (v) issuance of rights,
options or warrants referred to in Section 11(b) hereof, hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such
shareholders.
(n) In the event that the Company shall, at any time after the Close
of Business on the Record Date and prior to the Close of Business on the
earliest of (i) the date of the first Section 11(a)(ii) Event, (ii) the date of
the first Section 13(a) Event, (iii) the Redemption Date or (iv) the Rights
Expiration Date, either (A) pay any dividend on the Common Shares payable in
Common Shares, (B) subdivide the outstanding Common Shares, (C) combine the
outstanding Common Shares into a smaller number of Common Shares or (D) issue
Common Shares in a reclassification of the Common Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, and upon each such
event, the Exercise Price to be in effect after such event shall be determined
by multiplying the Exercise Price in effect immediately prior to such event by a
fraction, the numerator of which shall be the number of Common Shares
outstanding immediately prior to such event and the denominator of which shall
be the number of Common Shares outstanding immediately after such event.
Successive adjustments shall be made pursuant to this Section 11(n) each time
such a dividend is paid or such a subdivision, combination or reclassification
is effected. If an event occurs that would require an adjustment under both this
Section 11(n) and Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(n) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
SECTION 12. CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES
ISSUABLE UPON EXERCISE OF RIGHTS. Whenever an adjustment is made as provided in
Section 11 hereof, the Company shall promptly (a) prepare a certificate setting
forth such adjustment and a brief, reasonably detailed, statement of the facts,
methodology and computations giving rise to such adjustment, (b) file with the
Rights Agent and with each transfer agent for the securities issuable upon
exercise of the Rights a copy of such certificate and (c) mail a brief summary
thereof to each holder of Rights in accordance with Section 25 hereof.
Notwithstanding the foregoing sentence, the failure of the Company to make such
certification or to give such notice shall not affect the validity or the force
and effect of such adjustment. Any adjustment to be made pursuant to Sections 11
or 13 hereof shall be effective as of the date of the event giving rise to such
adjustment. The Rights Agent shall be fully authorized and protected in relying
on any such certificate and on any adjustment therein contained, and shall not
be obligated or
17
responsible for calculating any adjustment nor shall it be deemed to have any
duty with respect to or any knowledge of such an adjustment unless and until it
shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) In the event (a "Section 13(a) Event") that, at any time on or
after the Acquisition Date and prior to the earlier of the Redemption Date or
the Rights Expiration Date, (1) the Company shall, directly or indirectly,
consolidate with or merge with and into any other Person and the Company shall
not be the continuing or surviving corporation in such consolidation or merger,
(2) any Person shall, directly or indirectly, consolidate with or merge with and
into the Company and the Company shall be the continuing or surviving
corporation in such merger and, in connection with such merger, all or part of
the Common Shares shall be changed into or exchanged for stock or other
securities of any Person or cash or any other property, or (3) the Company
and/or any one or more of its Subsidiaries shall, directly or indirectly, sell
or otherwise transfer, in one or more transactions (other than transactions in
the ordinary course of business), assets or earning power aggregating more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to any Person or Persons other than the Company or one or more of its
wholly-owned Subsidiaries (such Persons, together with the Persons described in
clauses (1) and (2) above shall be collectively referred to in this Section as
the "Surviving Person"), then, and in each such case, proper provision shall be
made so that:
(i) except as provided in Section 7(d) hereof, each holder of a
Right shall thereafter have the right to receive, upon the exercise
thereof in accordance with the terms of this Agreement and payment of the
then current Exercise Price, in lieu of the securities or other property
otherwise purchasable upon such exercise, such number of validly
authorized and issued, fully paid and nonassessable Common Shares of the
Surviving Person (and if such Surviving Person has more than one class or
series of Common Shares, such number of validly authorized and issued,
fully paid and nonassessable Common Shares of each series or class) as
shall be equal to a fraction, the numerator of which is:
(A) if a Section 11(a)(ii) Event has not occurred prior to
such Section 13(a) Event, the product of the then current Exercise
Price multiplied by the number of one-hundredths of a Preferred
Share purchasable upon the exercise of one Right immediately prior
to the first Section 13(a) Event (or, if the Distribution Date shall
not have occurred prior to the date of such Section 13(a) Event, the
number of one-hundredths of a Preferred Share that would have been
so purchasable if the Distribution Date had occurred on the Business
Day immediately preceding the date of such Section 13(a) Event), or
(B) if a Section 11(a)(ii) Event has occurred prior to such
Section 13(a) Event, the product of the Exercise Price in effect
immediately prior to such Section 11(a)(ii) Event multiplied by the
number of one-hundredths of a Preferred Share purchasable upon the
exercise of one Right immediately prior to such
18
Section 11(a)(ii) Event (or, if the Distribution Date shall not have
occurred prior to the date of such Section 11(a)(ii) Event, the
number of one-hundredths of a Preferred Share that would have been
so purchasable if the Distribution Date had occurred on the Business
Day immediately preceding the date of such Section 11(a)(ii) Event),
and the denominator of which is 50% of the Current Market Price per
Common Share of the Surviving Person on the date of consummation of
such Section 13(a) Event;
(ii) the Surviving Person shall thereafter be liable for and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to the
Surviving Person; and
(iv) the Surviving Person shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares in
accordance with Section 9 hereof) in connection with such consummation as
may be necessary to ensure that the provisions hereof shall thereafter be
applicable to its Common Shares thereafter deliverable upon the exercise
of Rights.
(b) Notwithstanding the foregoing, if the Section 13(a) Event is the
sale or transfer in one or more 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), but less than 100% thereof, then each Person
acquiring all or a portion thereof shall assume the obligations of the Company
as to a fraction of each of the Rights equal to the fraction of the assets of
the Company and its Subsidiaries (taken as a whole) acquired by such Person, and
the obligations of the Company as to the remaining fraction of each of the
Rights shall continue to be the obligations of the Company.
(c) The Company shall not consummate a Section 13(a) Event unless
prior thereto the Company and the Surviving Person shall have executed and
delivered to the Rights Agent a supplemental agreement confirming that such
Surviving Person shall, upon consummation of such Section 13(a) Event, assume
this Agreement in accordance with Section 13 hereof, that all rights of first
refusal or preemptive rights in respect of the issuance of Common Shares of such
Surviving Person upon exercise of outstanding Rights have been waived and that
such Section 13(a) Event shall not result in a default by such Surviving Person
under this Agreement, and further providing that, as soon as practicable after
the date of consummation of such Section 13(a) Event, such Surviving Person
shall:
(i) prepare and file a registration statement under the Securities
Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, use its best efforts to
cause such registration statement to become effective as soon as
practicable after such filing, use its best efforts to cause such
registration statement to remain effective until the Rights Expiration
Date (with a prospectus at all times meeting the requirements of the
Securities Act), and similarly comply with all applicable state securities
laws;
19
(ii) use its best efforts to list (or continue the listing of) the
Rights and the Common Shares of the Surviving Person purchasable upon
exercise of the Rights on a national securities exchange, or use its best
efforts to cause the Rights and such Common Shares to meet the eligibility
requirements for quotation on Nasdaq; and
(iii) deliver to holders of the Rights historical financial
statements for such Surviving Person that comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act.
(d) In the event that at any time after the occurrence of a Section
11(a)(ii) Event some or all of the Rights shall not have been exercised pursuant
to Section 11 hereof prior to the date of a Section 13(a) Event, such Rights
shall thereafter be exercisable only in the manner described in Section 13(a)
hereof. In the event that a Section 11(a)(ii) Event occurs on or after the date
of a Section 13(a) Event, Rights shall not be exercisable pursuant to Section 11
hereof but shall instead be exercisable pursuant to, and only pursuant to, this
Section 13.
(e) The provisions of this Section 13 shall apply to each successive
merger, consolidation, sale or other transfer constituting a Section 13(a)
Event.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates that represent fractional Rights. If the
Company shall determine not to issue such fractional Rights, the Company shall
pay to the registered holders of the Right Certificates with respect to which
such fractional Rights would otherwise be issuable, at the time such fractional
Rights would otherwise have been issued as provided herein, an amount in cash
equal to the same fraction of the Current Market Price of a whole Right on the
Business Day immediately prior to the date upon which such fractional Rights
would otherwise have been issuable.
(b) The Company shall not be required to issue fractions of Common
Shares or Preferred Shares upon exercise of Rights (other than fractions that
are integral multiples of one one-hundredth of a Preferred Share), or to
distribute certificates that represent fractional Common Shares or Preferred
Shares (other than fractions that are integral multiples of one one-hundredth of
a Preferred Share). Fractions of Preferred Shares in integral multiples of one
one-hundredth of a Preferred Share may, at the election of the Company, be
represented by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it; provided, however, that any such
agreement shall provide that the holders of such depositary receipts shall have
all the rights, privileges and preferences to which they are entitled as
beneficial owners of Preferred Shares. If the Company shall determine not to
issue fractional Common Shares or Preferred Shares (or depositary receipts in
lieu of Preferred Shares), the Company shall promptly notify the Rights Agent in
writing thereof and shall pay to the registered holders of Right Certificates to
whom such fractional Common Shares or Preferred Shares would otherwise be
issuable, at the time such Rights are exercised as provided herein, an amount in
cash equal to the same fraction of the Current Market Price of a whole Common
Share or Preferred Share, as the case may be. For purposes of this Section
14(b), the Current Market
20
Price of a whole Common Share or Preferred Share shall be the Closing Price per
share for the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right, by the acceptance of such Right,
expressly waives such holder's right to receive any fractional Rights or any
fractional Common Shares or Preferred Shares upon exercise of such Right, except
as permitted by this Section 14.
(d) The Rights Agent shall have no duty or obligation with respect
to this Section 14 unless and until it has received specific instructions (and
sufficient cash, if required) from the Company with respect to its duties and
obligations under such Section.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, except the rights of action given to the Rights Agent under Section
18 and Section 20 hereof, are vested in the respective registered holders of the
Right Certificates and certificates for Common Shares representing Rights, and
any registered holder of any Right Certificate or of such certificate for Common
Shares, without the consent of the Rights Agent or of the holder of any other
Right Certificate or any other certificate for Common Shares may, in such
holder's own behalf and for such holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise the
Rights represented by such Right Certificate or by such certificate for Common
Shares in the manner provided in such Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to specific
performance, and injunctive relief against actual or threatened violations, of
the obligations of any Person under 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 every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be represented
by certificates for Common Shares registered in the name of the holders of such
Common Shares (which certificates for Common Shares shall also constitute Right
Certificates), and each such Right shall be transferable only in connection with
the transfer of such Common Shares;
(b) after the Distribution Date, the Right Certificates shall only
be transferable on the registry books of the Rights Agent if surrendered at the
office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer (with all required certifications
completed) and such further documentation as the Rights Agent may require; and
(c) the Company and the Rights Agent may deem and treat the Person
in whose name the Right Certificate is registered as the absolute owner thereof
and of the Rights represented thereby for all purposes whatsoever
(notwithstanding any notations of ownership or writing on the Right Certificate
by anyone other than the Company or the Rights Agent), and neither the Company
nor the Rights Agent shall be affected by any notice to the contrary.
21
(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, judgment or ruling (whether interlocutory or
final) issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, that the Company must use commercially reasonable efforts to
have any such order, decree, judgment or ruling lifted, rescinded or otherwise
overturned as soon as possible.
SECTION 17. RIGHT HOLDER AND RIGHT CERTIFICATE HOLDER NOT DEEMED A
SHAREHOLDER. No holder, as such, of any Right or Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of
the securities of the Company that may at any time be issuable upon 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 or Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, to give or withhold consent to any
corporate action, to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, in each case until such Right or the
Rights represented 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, its fees and
disbursements of counsel and other disbursements incurred in the preparation,
delivery, acceptance, administration, execution and amendment 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 the Rights Agent harmless
against, any loss, liability, damage, judgment, ruling (interlocutory or final),
fine, penalty, claim, demand, settlement, cost or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent (as finally determined by a court of competent jurisdiction or
arbitrational tribunal if any such matter is submitted to binding arbitration),
for any action taken, suffered or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement or the exercise or
performance of its duties hereunder, including, without limitation, the costs
and expenses of defending against any claim of liability. The costs and expenses
of enforcing this right of indemnification shall also be paid by the Company.
The indemnification provided for hereunder shall survive the expiration of the
Rights and the termination of this Agreement.
(b) The Rights Agent shall be authorized to conclusively rely upon
and 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 acceptance and
administration of this Agreement in reliance upon any Right Certificate or
certificate for Preferred Shares or Common Shares or for other securities
22
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons, or otherwise upon the advice or opinion of its counsel as set
forth in Section 20 hereof. The Rights Agent shall not be deemed to have any
duty or notice unless and until the Company has provided the Rights Agent with
actual written notice to the extent required hereunder.
(c) Notwithstanding anything to the contrary in this Agreement, in
no event shall the Rights Agent be liable for special, punitive, indirect
incidental or consequential loss or damage of any kind whatsoever (including,
but not limited to, lost profits), even if the Rights Agent has been advised of
the possibility of such loss or damage and regardless of the form of the action.
Any liability of the Rights Agent under this Agreement shall be limited to the
amount of fees paid by the Company to the Rights Agents.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
shareholder services business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided, however, that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. If any of the Right Certificates shall have been countersigned but not
delivered at the time such successor Rights Agent succeeds to the agency created
by this Agreement, such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and if 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 and effect provided in such Right Certificate and in
this Agreement.
(b) If 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 if 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
and effect provided in such Right Certificate and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties
and obligations expressly imposed by this Agreement upon the following terms and
conditions (and no implied duties or obligations shall be read into this
Agreement), by all of which terms and conditions the Company and the holders of
Right Certificates, by their acceptance of the Rights, shall be bound:
23
(a) Before the Rights Agent acts or refrains from acting, it may
consult with legal counsel (who may be legal counsel for the Company), and the
advice or opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent, and the Rights Agent shall incur no liability
for or in respect of any action taken, suffered or omitted by it in good faith
and in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking, suffering or omitting to
take any action hereunder, such fact or matter may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman of the
Board, the Chief Executive Officer, the President or any Vice President, the
Treasurer, the Secretary or any Assistant Secretary of the Company and delivered
to the Rights Agent (unless other evidence in respect thereof is specifically
prescribed herein); and such certificate shall be full authorization and
protection to the Rights Agent, and the Rights Agent shall incur no liability
for or in respect of any action taken, suffered or omitted in good faith by it
under the provisions of this Agreement in reliance upon such certificate (unless
other evidence in respect thereof is specifically prescribed herein).
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own gross negligence, bad faith or willful
misconduct (as finally determined by a court of competent jurisdiction or
arbitrational tribunal if any such matter is submitted to binding arbitration).
(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 have any liability for, nor be under
any responsibility regarding the validity of this Agreement or the execution and
delivery hereof (except the due authorization, execution and delivery of this
Agreement by the Rights Agent) or in respect of the validity or execution of any
Right Certificate (except its countersignature thereof); nor shall the Rights
Agent be responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate; nor shall the Rights
Agent have any liability for, nor be responsible for any change in the
exercisability of the Rights (including any Rights becoming null and void
pursuant to Section 7(d) hereof) or any adjustment in the terms of the Rights
provided for in Sections 7, 11, 13 and 23 hereof (including the manner, method
or amount thereof), or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise of
Rights represented by Right Certificates after actual notice that such change or
adjustment is required); nor shall the Rights Agent by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any Preferred Shares or Common Shares or other securities to be
issued pursuant to this Agreement or any Right Certificate, or as to whether any
Preferred Shares or Common Shares or other securities will be validly authorized
and issued, fully paid and nonassessable when issued.
24
(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 the
advice or instructions regarding the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Financial Officer, the Secretary or the
Treasurer of the Company, and to seek advice or instructions from such officers
in connection with its duties under this Agreement, and such advice or
instructions shall be full authorization and protection to the Rights Agent and
the Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted to be taken by it in good faith in accordance with such
advice or instructions or for any delay in acting while waiting for such advice
or instructions. Any application by the Rights Agent for written advice or
instructions from the Company may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken, suffered or omitted by the Rights
Agent under this Agreement and the date on or after which such action shall be
taken or suffered or such omission shall be effective. The Rights Agent shall
not be liable for any action taken or suffered by, or omission of, the Rights
Agent in accordance with a proposal included in any such application on or after
the date specified in such application (which date shall not be less than ten
Business Days after the date any officer of the Company actually receives such
application, unless such officer shall have consented in writing to an earlier
date) unless, prior to taking or suffering any such action (or the effective
date in the case of an omission), the Rights Agent receives written advice or
instructions from the Company in response to such application to the contrary.
The Rights Agent may conclusively rely on the most recent advice or instructions
given by any such officer.
(h) The Rights Agent and any stockholder, affiliate, 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 take a pecuniary interest 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 resulting from any such act, default,
neglect or misconduct, absent gross negligence, bad faith or willful misconduct
(as finally determined by a court of competent jurisdiction or arbitrational
tribunal to which any such action may be submitted for binding arbitration) 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 grounds for believing that repayment of such funds or adequate
indemnification against such risk or liability is not assured to it.
25
(k) The Rights Agent shall not be required to take notice or be
deemed to have notice of any fact, event or determination under this Agreement
(including, without limitation, any dates or events defined in this Agreement or
the designation of any Person as an Acquiring Person, Affiliate or Associate)
unless and until the Rights Agent is specifically notified by the Company of
such fact, event or determination in writing.
(l) 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 case may be, has not been
properly completed, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the
Company; provided, however, that the Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken, suffered or omitted in
connection with any such Right Certificate surrendered to the Rights Agent for
exercise or transfer, absent gross negligence, bad faith or willful misconduct
(as determined by a court of competent jurisdiction or arbitrational tribunal to
which any such action may be submitted for binding arbitration). The Company
agrees to give the Rights Agent prompt written notice of any event or ownership
of which the Company is aware that would prohibit the exercise or transfer of
the Right Certificates.
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' written notice mailed to the Company and to each transfer agent of
the Common Shares and Preferred Shares by registered or certified mail, and, at
the expense of the Company 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' written notice, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares and Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting as such, the
Company shall appoint a successor to the Rights Agent. If the Company shall fail
to make such appointment within 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 such holder's Right Certificate for
inspection by the Company), then the Company shall become the Rights Agent and
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 (i)
a Person organized, in good standing, and doing business under the laws of the
United States that is authorized under such laws to conduct stockholder services
business or exercise stock transfer powers and is subject to supervision or
examination by federal or state authority and that has a combined capital and
surplus of at least $50,000,000 at the time of its appointment as Rights Agent
or (ii) an Affiliate of such Person described in clause (i) of this sentence
that, in the determination of the Board of Directors and its advisors, is
capable of performing and fulfilling all of the rights, obligations,
responsibilities and duties of a Rights Agent hereunder. 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; provided, however, that the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by the predecessor Rights Agent hereunder, and shall
26
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose of this Agreement and so that the successor Rights Agent may
appropriately act as Rights Agent hereunder. Not later than the effective date
of any such appointment, the Company shall file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the Common Shares and
Preferred Shares, and shall mail a notice thereof in writing to the registered
holders of the Right Certificates; provided, however, that neither the failure
to give any notice provided for in this Section 21 nor any defect therein shall
affect the legality or validity of the resignation or removal of the predecessor
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 Right Certificates to the contrary, the
Company may, at its option, issue new Right Certificates in such form as may be
approved by the Board of Directors in order to reflect any adjustment or change
in the Exercise Price and the number or kind or class of shares or other
securities or property issuable or purchasable upon exercise of the Rights in
accordance with the provisions of this Agreement.
SECTION 23. REDEMPTION OF RIGHTS.
(a) Until the earliest of (i) the date of the first Section
11(a)(ii) Event, (ii) the date of the first Section 13(a) Event or (iii) the
Rights Expiration Date, the Board of Directors of the Company may, at its
option, authorize and direct the redemption of all, but not less than all, of
the then outstanding Rights at a redemption price of $.005 per Right, as such
redemption price shall be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (the
"Redemption Price"), and the Company shall so redeem the Rights.
(b) Immediately upon the action of the Board of Directors of the
Company authorizing and directing the redemption of the Rights pursuant to
clause (a) of this Section 23, or at such time and date thereafter as the Board
of Directors may specify, and without any further action and without any notice,
the right to exercise Rights shall terminate and the only right of the holders
of Rights thereafter shall be to receive the Redemption Price. Within ten
Business Days after the date of such action, the Company shall promptly notify
the Rights Agent in writing of such redemption and shall give notice of such
redemption to the holders of Rights by mailing written notice to all holders of
Rights at their last addresses as they appear upon the registry books of the
Rights Agent or, if prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Any notice that is mailed in the manner
provided herein shall be deemed given, whether or not the holder receives such
notice; provided, however, that neither the failure to give any such notice nor
any defect therein shall affect the legality or validity of such redemption.
Each such notice of redemption shall state the method by which the payment of
the Redemption Price will be made. Neither the Company nor any of its Affiliates
or Associates may, directly or indirectly, redeem, acquire or purchase for value
any Rights in any manner other than that specifically set forth in Section 24
hereof or in this Section 23, or in connection with the purchase of Common
Shares prior to the earlier of the date of the first Section 11(a)(ii) Event or
the date of the first Section 13(a) Event.
27
(c) The Company may, at its option, pay the Redemption Price in
cash, Common Shares, Preferred Shares, other equity securities of the Company,
debt securities of the Company, other property or any combination of the
foregoing, in each case having an aggregate Current Market Price on the
Redemption Date equal to the Redemption Price.
SECTION 24. EXCHANGE OF RIGHTS.
(a) At any time during the period of 180 days after a Section
11(a)(ii) Event, the Board of Directors of the Company may, at its option,
authorize and direct the exchange of all, but not less than all, of the then
outstanding Rights for Common Shares, one one-hundredths of Preferred Shares,
debt securities of the Company, other property, or any combination of the
foregoing, in each case having an aggregate Current Market Price equal to the
result obtained by (i) multiplying the Current Market Price per Common Share on
the record date for such exchange by the number of Common Shares for which a
Right is exercisable on such record date and (ii) subtracting from such product
the Exercise Price on such Record Date (the "Exchange Ratio"), and the Company
shall so exchange the Rights.
(b) Immediately upon the action of the Board of Directors of the
Company authorizing and directing the exchange of the Rights pursuant to
subsection (a) of this Section 24, or at such time and date thereafter as it may
specify, and without any further action and without any notice, the right to
exercise Rights shall terminate and the only right thereafter of the holders of
Rights shall be to receive the securities described in Section 24(a) in
accordance with the Exchange Ratio. Within ten Business Days after the date of
such action, the Company shall promptly notify the Rights Agent in writing of
such exchange and give notice of such exchange to the holders of Rights by
mailing such notice to all holders of Rights at their last addresses as they
appear upon the registry books of the Rights Agent or, if prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Any notice that is mailed in the manner provided herein shall be deemed
given, whether or not the holder receives such notice; provided, however, that
neither the failure to give any such notice nor any defect therein shall affect
the legality or validity of such exchange. Each such notice of exchange shall
state the method by which the Rights will be exchanged.
(c) Notwithstanding the foregoing, in the event that the aggregate
number of Common Shares that are authorized by the Company's Certificate of
Incorporation, as amended from time to time, but not outstanding or reserved for
issuance for purposes other than upon exercise or exchange of the Rights is less
than the aggregate number of Common Shares issuable upon the exchange of the
Rights in accordance with this Section 24 (the excess of such number of
authorized Common Shares over and above such number of issuable Common Shares
being hereinafter referred to as the "Unavailable Exchange Shares"), then the
Company shall substitute for the pro rata portion of the Unavailable Exchange
Shares that would otherwise be issuable upon the exchange of the Rights in
accordance with this Section 24 (i) cash, (ii) other equity securities of the
Company (including, without limitation, Common Share Equivalents), (iii) debt
securities of the Company, (iv) other property or (v) any combination of the
foregoing, in each case having an aggregate Current Market Price equal to the
aggregate Current Market Price of the Unavailable Exchange Shares for which
substitution is made. Subject to Section 7(d) hereof, in the event that the
Company takes any action pursuant to this Section 24, such action shall apply
uniformly to all outstanding Rights.
28
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In the event that the Company shall propose (i) to declare or
pay any dividend on or make any distribution with respect to its Common Shares
or Preferred Shares (other than a regular quarterly cash dividend), (ii) to
offer to the holders of its Common Shares or Preferred Shares options, rights or
warrants to subscribe for or to purchase any additional shares thereof or shares
of stock of any class or any other securities, rights or options, (iii) to
effect any reclassification of its Common Shares or Preferred Shares (other than
a reclassification involving only the subdivision of outstanding shares), (iv)
to effect any consolidation or merger with or into any other Person, or to
effect any sale or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer) of more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) in one or more
transactions to any other Person or Persons, or (v) to effect the liquidation,
dissolution or winding up of the Company, then and in each such case, the
Company shall give to the Rights Agent and to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed
action that shall specify the record date for the purpose of such dividend or
distribution, or the date upon which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution or winding up is to take place
and the date of participation therein by the holders of record of the Common
Shares or Preferred Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii) above
at least 20 days prior to the record date for determining holders of the Common
Shares or Preferred Shares for purposes of such action, and in the case of any
such other action, at least 20 days prior to the earlier of the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares or Preferred Shares; provided, however, that
neither the failure to give the notice required by this Section 25 nor any
defect therein shall affect the legality or validity of the action taken by the
Company or the vote upon any such action.
(b) Upon the occurrence of each Section 11(a)(ii) Event and each
Section 13(a) Event, the Company shall as soon as practicable thereafter give to
the Rights Agent and each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such event, specifying the
event and the consequences of the event to holders of Rights under Sections 11
and 13 hereof.
SECTION 26. NOTICES. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Compex Technologies, Inc.
0000 Xxx Xxxxxxx 0
Xxx Xxxxxxxx, XX 00000
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made to or on the Rights Agent (i)
by the Company shall be sufficiently given or made if sent, postage prepaid, by
registered or certified mail, addressed to the office of the Rights Agent
designated for such purpose as set forth below (until another address is filed
in writing with the Company) or (ii) by the holder of any Right Certificate
shall
29
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to the designated office of the Rights Agent as set forth below (until
another address is filed in writing with the Company), and shall be deemed given
upon actual receipt. The Company hereby agrees that it shall encourage the
holders of the Right Certificates, in any and all writings to such holders
regarding the Rights or this Agreement, to give or make any notice or demand
authorized by this Agreement by registered or certified mail, addressed to the
designated office of the Rights Agent as follows (until another address is filed
in writing with the Company):
Registrar and Transfer Company
00 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS.
(a) The Board of Directors of the Company may from time to time
supplement or amend any provision of this Agreement in any manner without the
approval of any holders of Rights, whether or not such supplement or amendment
is adverse to any holder of Rights, and further may direct the Rights Agent to
so supplement or amend such provision, and the Rights Agent shall so supplement
or amend such provision; provided, however, that from and after the earliest of
(i) the date of the first Section 11(a)(ii) Event, (ii) the date of the first
Section 13(a) Event, (iii) the Redemption Date or (iv) the Expiration Date, this
Agreement shall not be supplemented or amended in any manner that would
materially and adversely affect the Rights Agent or any holder of outstanding
Rights other than an Acquiring Person or a Surviving Person.
(b) From and after the earlier of the date of the first Section
11(a)(ii) Event or the date of the first Section 13(a) Event and prior to the
Rights Expiration Date, the Company shall not effect any amendment to the
Certificate of Designation for the Preferred Shares that would materially and
adversely affect the rights, privileges or preferences of the Preferred Shares
without the prior approval of the holders of two-thirds or more of the then
outstanding Rights. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment that changes the rights, obligations,
liabilities and duties of the Rights Agent under this Agreement in any manner
adverse to the Rights Agent will be effective against the Rights Agent without
the consent and execution of such supplement or amendment by the Rights Agent.
SECTION 28. CERTAIN COVENANTS. Subject to Section 27 hereof and the other
provisions of this Agreement, from and after the earlier of the date of the
first Section 11(a)(ii) Event or the date of the first Section 13(a) Event and
prior to the earlier of the Redemption Date or the Rights Expiration Date, the
Company shall not (a) issue or sell, or permit any Subsidiary to issue or sell,
30
to an Acquiring Person or a Surviving Person, or any Affiliate or Associate of
an Acquiring Person or a Surviving Person, or any Person holding Voting Shares
of the Company that are Beneficially Owned by an Acquiring Person or a Surviving
Person, (i) any rights, options, warrants or convertible securities on terms
similar to, or that materially adversely affect the value of, the Rights or (ii)
Preferred Shares, Common Shares or shares of any other class of capital stock,
if such sale is intended to or would materially adversely affect the value of
the Rights, or (b) take any other action that is intended to or would materially
adversely affect the value of the Rights.
SECTION 29. 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 permitted assigns hereunder.
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 (other than those representing
Rights that have become null and void) and the certificates for Common Shares
representing Rights (other than those Rights that have become null and void) any
legal or equitable right, remedy or claim under this Agreement, and this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and such registered holders of Right Certificates and certificates for
Common Shares representing Rights.
SECTION 31. SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
SECTION 32. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Minnesota and for all purposes shall be governed by and construed in
accordance with the laws of such state applicable to contracts made and
performed entirely within such state; provided, however, that all provisions
regarding the rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of Minnesota
applicable to contracts made and to be performed entirely within such state.
SECTION 33. COUNTERPARTS. This Agreement may be executed by facsimile and
in two or more counterparts, each of which shall be deemed to be an original and
all of which when taken together shall constitute one and the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
SECTION 35. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS. The Board
of Directors shall have the exclusive power and authority to administer this
Agreement and to exercise the rights and powers specifically granted to the
Board of Directors or to the Company
31
(subject to any express limitations of or conditions to such power, authority
and rights set forth in this Agreement). All such actions, calculations,
interpretations and determinations that are done or made by the Board of
Directors in good faith and pursuant to or permitted by the terms and provisions
of this Agreement shall be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights, as such, and all other applicable
Persons. The Rights Agent shall always be entitled to assume that the Board of
Directors acted in good faith and shall be fully protected and incur no
liability in reliance thereon.
[signature page follows]
32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
COMPEX TECHNOLOGIES, INC.
By: /s/ Xxx Xxxxxxx
-------------------------------------
Name: Xxx Xxxxxxx
Title: CEO and President
REGISTRAR AND TRANSFER COMPANY, as Rights
Agent
By: /s/ Xxxxxxx X. Tatler
-------------------------------------
Name: Xxxxxxx X. Tatler
Title: Vice President
33
EXHIBIT A
NOT EXERCISABLE AFTER _________________ OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.005 PER RIGHT (SUBJECT TO
ADJUSTMENT) AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY A PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) AND SUBSEQUENT HOLDERS OF SUCH RIGHTS MAY BECOME NULL AND
VOID.
RIGHT CERTIFICATE
COMPEX TECHNOLOGIES, INC.
This certifies that __________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of February 17, 2003 (the "Rights Agreement"), between
Compex Technologies, Inc., a Minnesota corporation (the "Company"), and
Registrar and Transfer Company (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 P.M., Minneapolis time, on
________________________ at the office or offices of the Rights Agent designated
for such purpose, or of its successor as Rights Agent, one one-hundredth of a
fully paid non-assessable share of Series A Preferred Stock, no par value per
share (the "Preferred Shares"), of the Company, at a purchase price of
$__________ (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of one
one-hundredths of a Preferred Share which may be purchased upon exercise hereof)
set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of __________, based on the Preferred Shares as constituted at
such date. As provided in the Rights Agreement, the Purchase Price and the
number of one one-hundredths of a Preferred Share which may be purchased upon
the exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the office or offices of the Rights Agent and will be mailed without
charge by the Company or the Rights Agent to the holder of this certificate
promptly following receipt by the Company or the Rights Agent of a written
request therefor.
From and after the occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement), any Rights that are or were acquired or
beneficially owned by any Acquiring Person (or any Associate or Affiliate of
such Acquiring Person) (as such terms are defined in the Rights Agreement) shall
be void and any holder of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Agreement.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Preferred Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this certificate (i) may, but are not required to, be redeemed by the Company at
a redemption price of $.005 per Right, subject to adjustment as provided in the
Rights Agreement, and (ii) may, but are not required to, be exchanged by the
Company in whole or in part for Common Shares.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by scrip or depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the manual or facsimile signature of the proper officer of the
Company.
Dated:
-------------------------------
COMPEX TECHNOLOGIES, INC.
By
--------------------------------
Its
----------------------------
Countersigned for purposes
of authentication only:
REGISTRAR AND TRANSFER COMPANY
By
----------------------------------
Authorized Signature
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers
unto _____________________ (print name of transferee) ________________________
(print 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.
Please insert social security
number, taxpayer identification
number or other identifying number:
-------------------------------------------
Dated:
-----------------------
-------------------------------------
Signature
Signature Guaranteed:
----------------------------------------------------------
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
Form of Reverse Side of Right Certificate--continued
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best of its
knowledge) by checking the appropriate boxes that:
(1) this Right Certificate
[ ] is
or
[ ] is not
being transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are defined
in the Rights Agreement); and
(2) the undersigned
[ ] did
or
[ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
-----------------------------------
Signature
NOTICE
The signature(s) on the foregoing Assignment and Certificate must
correspond to the name(s) as written upon the face of this Right Certificate in
every particular, with out alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the foregoing
Assignment, is not completed, the Company and the Rights Agent will deem the
beneficial owner of the Rights evidenced by this Right Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and such Assignment will not be honored.
Form of Reverse Side of Right Certificate--continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: COMPEX TECHNOLOGIES, INC.
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:
Please insert social security
number, taxpayer identification
number or other identifying number:
-------------------------------------------
-------------------------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
---------------------------
Please insert social security
number, taxpayer identification
number or other identifying number:
-------------------------------------------
-------------------------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------------------------
Dated:
----------------------
-------------------------------------
Signature
Signature Guaranteed:
----------------------------------------------------------
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
Form of Reverse Side of Right Certificate--continued
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best of its
knowledge) by checking the appropriate boxes that:
(1) this Right Certificate
[ ] is
or
[ ] is not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement); and
(2) the undersigned
[ ] did
or
[ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
------------------------------------
Signature
NOTICE
The signature(s) on the foregoing Election to Purchase and Certificate
must correspond to the name(s) as written upon the face of this Right
Certificate in every particular, with out alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the foregoing Election
to Purchase is not completed, the Company and the Rights Agent will deem the
beneficial owner of the Rights evidenced by this Right Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and such Election to Purchase will not be honored.
