AMENDMENT TO RIGHTS AGREEMENT Exhibit 4.1
AMENDMENT, dated as of November 8, 1994, to the Rights Agreement
between Instrument Systems Corporation, a Delaware corporation (the "Company"),
and American Stock Transfer Company, as Rights Agent (the "Rights Agent"), dated
as of April 2, 1986 (the "Rights Agreement").
The Company and the Rights Agent have heretofore executed and entered
into the Rights Agreement. Pursuant to Section 26 of the Rights Agreement, the
Company and the Rights Agent may from time to time supplement or amend the
Rights Agreement in accordance with the provisions of Section 26 thereof. All
acts and things necessary to make this Amendment a valid agreement, enforceable
according to its terms have been done and performed, and the execution and
delivery of this Amendment by the Company and the Rights Agent have been in all
respects duly authorized by the Company and the Rights Agent.
In consideration of the foregoing and the mutual agreements set forth
herein, the parties hereto agree as follows:
1. Section 1(a) of the Rights Agreement is hereby modified and
amended to read in its entirety as follows:
(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 15% or more of the Common Stock of the
Company then outstanding, but shall not include the Company, any wholly owned
subsidiary of the Company, any employee benefit plan of the Company or any
wholly owned subsidiary of the Company, or any entity holding shares of Common
Stock for or pursuant to the terms of any such plan. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of Common Stock by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Common Stock of the Company then
outstanding; provided, however, that if a Person shall become the Beneficial
Owner of 15% or more of the Common Stock of the Company then outstanding by
reason of share purchases by the Company and shall, after such share purchases
by the Company, become the Beneficial Owner of any additional Common Stock of
the Company, then such Person shall be deemed to be an "Acquiring Person".
2. Section 1(c)(ii) of the Rights Agreement is hereby modified and
amended to read in its entirety as follows:
(ii) which such Person or any of such Person's Affiliates or Associates
has (A) the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights
(other than these 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 or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange; or (B) the right
to vote 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 (1) arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations of the Exchange
Act and (2) is not also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
3. Section 1(c)(iii) of the Rights Agreement is hereby modified and
amended to read in its entirety as follows:
(iii) which 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 (other than customary agreements
with and between underwriters and selling group members with respect to a bona
fide public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to Section 1(c)(ii)(B))
or disposing of any securities of the Company.
4. Section 1(c) of the Rights Agreement is hereby modified and
amended by adding the following at the end thereof:
Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, the phrase "then outstanding", when used with reference to a Person's
Beneficial Ownership of securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number of such
securities not then actually issued and outstanding which such Person would be
deemed to own beneficially hereunder.
5. Section 1(j) of the Rights Agreement is hereby modified and
amended to read in its entirety as follows:
(j) "Substantial Block" shall mean a number of shares of the Common Stock
which equals or exceeds 15% of the number of shares of the Common Stock then
outstanding.
6. Section 1(k) of the Rights Agreement is hereby modified and
amended to read in its entirety as follows:
(k) "Triggering Event" shall mean any event described in Section
11(a)(ii) or Section 13(a).
7. Section 3(a) of the Rights Agreement is hereby modified and
amended by deleting the first two sentences thereof and by substituting
therefor the following:
(a) Until the earlier of (i) the tenth day after the Shares Acquisition
Date or (ii) the tenth business day (or such later date as may be determined by
action of the Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person (other than
the Company, any wholly owned subsidiary of the Company, any employee benefit
plan of the Company or of any wholly owned subsidiary of the Company or any
Person holding Common Stock for or pursuant to the terms of any such plan) or
the date of an announcement of an intention by any Person to commence, a tender
or exchange offer the consummation of which would result in any Person becoming
the Beneficial Owner of Common Stock aggregating 15% or more of the then
outstanding Common Stock (including any such date which is after the date of
this Agreement and prior to the issuance of the Rights; the earlier of such
dates being herein referred to as the "Distribution Date"), (x) the Rights will
be evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Stock registered in the names of the holders thereof
(which certificates shall also be deemed to be Right Certificates) and not by
separate Right Certificates, and (y) the right to receive Right Certificates
will be transferable only in connection with the transfer of Common Stock. As
soon as practicable after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign, and the Company will send or cause
to be sent (and the Rights Agent will, if requested, send) by first-class,
insured, postage-prepaid mail, to each record holder of Common Stock as of the
close of business on the Distribution Date, at the address of such holder shown
on the records of the Company, a Right Certificate, substantially in the form of
Exhibit A hereto (the "Right Certificate"), evidencing one Right for each share
of Common Stock so held.
8. Section 3(c) of the Rights Agreement is hereby modified and
amended to provide that this legend contained in such Section shall read in its
entirety as follows:
This certificates also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between INSTRUMENT SYSTEMS CORPORATION
and AMERICAN STOCK TRANSFER COMPANY, Rights Agent, dated as of April 2, 1986, as
amended (the "Rights Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal executive
offices of INSTRUMENT SYSTEMS CORPORATION. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. INSTRUMENT
SYSTEMS CORPORATION will mail to the holder of this certificate a copy of the
Rights Agreement (as in effect on the date of mailing) without charge promptly
after receipt of a written request therefor. Rights which are or were
beneficially owned by Acquiring Persons or their Affiliates or Associates (as
such terms are defined in the Rights Agreement) and any subsequent holder of
such Rights will be null and void.
9. Section 3(c) of the Rights Agreement is hereby further modified
and amended by adding the following at the end thereof:
In addition, subject to Section 11(a)(ii) hereof, in connection with the
issuance of Common Stock on or following the Distribution Date and prior to the
Final Expiration Date, the Company shall, with respect to Common Stock so issued
upon the exercise, conversion or exchange of options, warrants, securities,
notes or debentures issued by the Company prior to the Distribution Date (other
than shares issued upon exercise or exchange of the Rights), issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance; provided, however, that, (i) no such Rights Certificate shall be
issued if, and to the extent that, the Company shall be advised by counsel that
such issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Rights Certificate would
be issued, and (ii) no such Rights Certificate shall be issued if, and to the
extent that, appropriate adjustment (giving effect to the provisions of Sections
11(a)(ii) and 13 hereto) shall otherwise have been made in lieu of the issuance
thereof.
10. Section 4(b) of the Rights Agreement is hereby amended and
modified to provide that the legend contained therein shall read in its entirety
as follows:
The Rights represented by this Right Certificate are or were beneficially owned
by a Person who was or became an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement). This Right Certificate and the Rights represented hereby are null
and void.
11. Section 6 of the Rights Agreement is hereby modified and amended
by deleting the first sentence thereof and by substituting therefor the
following:
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
earlier of the Expiration Date or Final Expiration Date (as such terms are
defined in Section 7 hereof), any Right Certificate or Right Certificates (other
than Right Certificates representing Rights that have become void pursuant to
Section 11(a)(ii) hereof or that may have been exchanged pursuant to Section 23A
hereof) may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase a
like number of shares of Common Stock as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase.
12. Section 7(a) of the Rights Agreement is hereby modified and
amended by adding the words ", or (iii) the time at which the Rights are
exchanged as provided in Section 23A hereof" immediately prior to the words ";
provided, however, that" in such Section.
13. Section 7(c) of the Rights Agreement is hereby amended by
deleting the last sentence thereof.
14. Section 11(a)(ii) of the Rights Agreement is hereby modified
and amended to read in its entirety as follows:
(ii) In the event any Person shall become an Acquiring Person, each holder
of a Right shall thereafter have a right to receive, upon exercise thereof at a
price equal to the then current Purchase Price multiplied by the number of
halves of a share of Common Stock for which a Right is then exercisable, in
accordance with the terms of this Agreement, such number of shares of Common
Stock of the Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of halves of a share of Common
Stock for which a Right is then exercisable and dividing that product by (y) 50%
of the then current per share market price of the Company's Common Stock
(determined pursuant to Section 11(d) hereof) on the date on which any Person
shall become an Acquiring Person. In the event that any Person shall become an
Acquiring Person and the Rights shall then be outstanding, the Company shall not
take any action which would eliminate or diminish the benefits intended to be
afforded by the Rights.
Notwithstanding the foregoing or anything in this Agreement to the
contrary, any Rights that are or were acquired or beneficially owned by any
Acquiring Person (or any Associate or Affiliate of such Acquiring Person) shall
be void and any holder of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Agreement. No Right Certificate shall
be issued pursuant to Section 3 that represents Rights beneficially owned by an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof; no Right Certificate shall be issued at
any time upon the transfer of any Rights to an Acquiring Person whose Rights
would be void pursuant to the preceding sentence or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and
any Right Certificate delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights would be void pursuant to the preceding sentence shall be
cancelled.
15. Section 11(a)(iii) of the Rights Agreement is hereby deleted.
16. The first sentence of Section 23(a) of the Rights Agreement is
hereby modified and amended to delete the words "5:00 P.M., New York City time,
on".
17. Section 23(a) of the Rights Agreement is hereby further
modified and amended by adding the following at the end thereof:
The redemption of the Rights by the Board of Directors may be made effective at
such time on such basis and with such conditions as the Board of Directors in
its sole discretion may establish.
18. Section 23(b) of the Rights Agreement is hereby modified and
amended by adding the following after the first sentence thereof:
The Company shall promptly give public notice of any such redemption;
provided, however, that the failure to give, or any defect in, any such
notice shall not affect the validity of such redemption.
19. The Rights Agreement is hereby modified and amended to add a
new Section 23A thereto to read in its entirety as follows:
Section 23A. Exchange. (a) The Board of Directors of
the Company may, at its option, at any time after any Person becomes an
Acquiring Person, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 11(a)(ii) hereof) for Common Stock at an exchange ratio of
one share of Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any
wholly owned subsidiary of the Company, any employee benefit plan of the Company
or any such subsidiary, or any entity holding Common Stock for or pursuant to
the terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common Stock then
outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 23A and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the Common Stock for Rights will
be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void pursuant to
the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Stock
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 23A, the Company shall
take all such action as may be necessary to authorize additional Common Stock
for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of shares
of Common Stock or to distribute certificates which evidence fractional shares
of Common Stock. In lieu of such fractional shares of Common Stock, the Company
shall pay to the registered holders of the Right Certificates with regard to
which such fractional shares of Common Stock would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a whole
share of Common Stock. For the purposes of this paragraph (d), the current
market value of a whole share of Common Stock shall be the closing price of a
share of Common Stock (as determined pursuant to the second sentence of Section
11(d) hereof) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 23A.
20. The Rights Agreement is hereby modified and amended by deleting
the headnote to the Form of Right Certificate set forth as Exhibit A to the
Rights Agreement and replacing it with the following:
NOT EXERCISABLE AFTER MAY 2, 1996 OR EARLIER IF NOTICE OF REDEMPTION OR
EXCHANGE IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION
OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY ARE NULL AND VOID.]*
21. The Rights Agreement is hereby modified by deleting the sixth
paragraph of the Form of Right Certificate set forth as Exhibit A to the Rights
Agreement and substituting therefor the following:
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a redemption
price of $.01 per Right or (ii) may be exchanged in whole or in part for shares
of Common Stock.
22. The Rights Agreement is hereby modified and amended by adding
the following to the end of the Notice forming a part of the Form of Reverse
Side of Right Certificate set forth as Exhibit A to the Rights Agreement:
In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
23. This Amendment to the Rights Agreement shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes shall
be governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such State.
24. This Amendment to the Rights Agreement may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute one and the same instrument. Terms not
defined herein shall, unless the context otherwise requires, have the meanings
assigned to such terms in the Rights Agreement.
25. In all respects not inconsistent with the terms and provisions
of this Amendment to the Rights Agreement, the Rights Agreement is hereby
ratified, adopted, approved and confirmed. In executing and delivering this
Amendment, the Rights Agent shall be entitled to all the privileges and
immunities afforded to the Rights Agent under the terms and conditions of the
Rights Agreement.
26. If any term, provision, covenant or restriction of this
Amendment to the Rights 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 Amendment to the Rights
Agreement, and of the Rights Agreement, shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and attested, all as of the date and year first above written.
Attest: INSTRUMENT SYSTEMS CORPORATION
By: By:
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Name: Name:
Title: Title:
Attest: AMERICAN STOCK TRANSFER COMPANY
By: By:
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Name: Name:
Title: Title: