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Item 3.03.
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Material Modification to Rights of Security Holders.
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On September 20, 2020, the Board of
Directors (the “Board of Directors”) of Cubic Corporation (the “Company”) declared a dividend
of one preferred stock purchase right (a “Right”) for each share of common stock, no par value (the “Common
Stock”), of the Company outstanding at the close of business on October 1, 2020 (the “Record Date”).
As long as the Rights are attached to the
Common Stock, the Company will issue one Right (subject to adjustment) with each new share of Common Stock so that all such shares
will have attached Rights. When exercisable, each Right will entitle the registered holder to purchase from the Company one one-thousandth
of a share of Series A Junior Participating Preferred Stock, without par value (the “Preferred Shares”),
of the Company at a price of $315.00 per one one-thousandth of a Preferred Share (the “Purchase Price”), subject
to certain anti-dilution adjustments. The description and terms of the Rights are set forth in a Rights Agreement (the “Rights
Agreement”), dated as of September 20, 2020, between the Company and Broadridge Corporate Issuer Solutions, Inc.,
as Rights Agent (the “Rights Agent”).
The Board of Directors authorized the adoption
of the Rights Agreement to protect against any coercive or abusive takeover tactics, and to help ensure that the Company’s
stockholders are not deprived of the opportunity to realize the full and fair value of their investment.
The Rights Agreement should not interfere
with any merger or other business combination approved by the Board of Directors, and the Rights Agreement also has an exception
for qualifying offers as described below.
In general terms, and subject to certain
exceptions, the Rights Agreement restricts any person or group of affiliated or associated persons from acquiring, or obtaining
the right to acquire, beneficial ownership of 15% (20% in the case of a Passive Institutional Investor, as such term is defined
in the Rights Agreement) or more of the Common Stock (including certain synthetic equity positions created by derivative securities)
(an “Acquiring Person”), and any person or group of affiliated or associated persons from making a tender offer
or exchange offer the consummation of which would result in a person or group becoming an Acquiring Person. The Rights Agreement
provides that any person or group that, together with its affiliates and associates, as of immediately prior to the first public
announcement of the adoption of the Rights Agreement, beneficially owns 15% or more of the outstanding shares of Common Stock (an
“Existing Holder”) so long as such person or group continues to beneficially own at least 15% of the outstanding
shares of Common Stock and does not acquire shares of Common Stock to beneficially own an amount equal to or greater than the greater
of 15% and the sum of the lowest beneficial ownership of such person or group since the public announcement of the adoption of
the Rights Agreement plus one share of Common Stock.
In addition, the Rights Agreement provides
that no person or group will become an Acquiring Person as a result of share purchases or issuances directly from the Company or
through an underwritten offering approved by the Board of Directors. Also, a person or group will not be an Acquiring Person if
the Board of Directors determines that such person or group has become an Acquiring Person inadvertently and such person or group
as promptly as practicable divests a sufficient number of shares so that such person or group would no longer be an Acquiring Person.
An Acquiring Person does not include (i) the Company or any subsidiary of the Company, (ii) any officer or member of
the Board of Directors acting in their fiduciary capacity or (iii) any employee benefit plan of the Company or of any subsidiary
of the Company or any entity or trustee holding (or acting in a fiduciary capacity in respect of) shares of capital stock of the
Company for or pursuant to the terms of any such plan, or for the purpose of funding other employee benefits for employees of the
Company or any subsidiary of the Company.
Initially, the Rights will attach to the
Common Stock outstanding as of the Record Date and no separate Rights certificates will be distributed. The Rights will separate
from the Common Stock and a Distribution Date for the Rights will occur at the close of business on the tenth business day following
a public announcement that a person or group of affiliated or associated persons has become an Acquiring Person or at the close
of business on the tenth business day (or such later date as may be determined by action of the Board of Directors prior to such
time as any person or group of affiliated or associated persons becomes an Acquiring Person) following the commencement or announcement
by a person or group of affiliated or associated persons of an intention to make a tender offer or exchange offer the consummation
of which would result in a person or group of affiliated or associated persons becoming an Acquiring Person.
Until the Distribution Date (or earlier
redemption, exchange, termination or expiration of the Rights):
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the Rights will be transferred with and only with the Common Stock;
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new Common Stock certificates issued after the close of business on the Record Date upon transfer
or new issuance of the Common Stock will contain a notation incorporating the Rights Agreement by reference, and the Company will
deliver a notice to that effect upon the transfer or new issuance of book entry shares; and
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the surrender for transfer of any certificates for Common Stock or any book entry shares, with
or without such notation, notice or a copy of the Summary of Rights included as Exhibit C to the Rights Agreement,
will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate or the book entry
shares.
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As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights (“Right Certificates”) will be mailed to holders of record
of the Common Stock as of the close of business on the Distribution Date and such separate Right Certificates alone will evidence
the Rights.
The Rights are not exercisable until the
Distribution Date. The Rights will expire on September 19, 2021, subject to the Company’s right to extend such date,
unless earlier redeemed or exchanged by the Company or terminated as described below.
The Purchase Price payable, and the number
of Preferred Shares or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution:
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in the event of a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares;
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upon the grant to holders of the Preferred Shares of certain rights or warrants to subscribe for
or purchase Preferred Shares or convertible securities at less than the current market price of the Preferred Shares; or
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upon the distribution to holders of the Preferred Shares of evidences of indebtedness, cash, securities
or assets (excluding regular periodic cash dividends at a rate not in excess of 125% of the rate of the last regular periodic cash
dividend theretofore paid or, in case regular periodic cash dividends have not theretofore been paid, at a rate not in excess of
50% of the average net income per share of the Company for the four quarters ended immediately prior to the payment of such dividend,
or dividends payable in Preferred Shares (which dividends will be subject to the adjustment described in the first bullet above))
or of subscription rights or warrants (other than those referred to above).
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No adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1% in the Purchase Price. No fractional Preferred Shares
or Common Stock will be issued (other than fractions of Preferred Shares which are integral multiples of one one-thousandth of
a Preferred Share, which may, at the election of the Company, be evidenced by depository receipts), and in lieu thereof, a payment
in cash will be made based on the market price of the Preferred Shares or Common Stock on the last trading date prior to the date
of exercise.
The provisions of the Rights Agreement
do not apply with respect to any Qualifying Offer (as defined below) if the holders of a majority of the outstanding shares of
Common Stock (other than shares held by the person making the Qualifying Offer or such person’s affiliates or associates)
vote in favor of a resolution exempting the Qualifying Offer from the provisions of the Rights Agreement.
A “Qualifying Offer”
is defined as an offer determined by the Board of Directors in good faith to be:
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a fully financed all-cash tender offer or an exchange offer that has commenced under Securities
and Exchange Commission rules and is for shares of common stock of the offeror or a combination of cash and such shares of
common stock, in each case for all of the outstanding shares of Common Stock at the same per-share consideration;
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an offer that is conditioned only on customary terms and conditions and on the tender of a minimum
of at least a majority of (a) the shares of Common Stock outstanding on a fully-diluted basis and (b) the outstanding
shares of Common Stock not held by the offeror (or its affiliates or associates) (which minimum tender condition shall not be waivable);
and
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an offer pursuant to which the Company has received an irrevocable, legally binding written commitment
by the offeror as to the offer period, the consummation of a second-step transaction as promptly as practicable upon successful
completion of the offer and that no amendments will be made to change the terms of the offer in a way that is adverse to a tendering
stockholder.
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In the event that a person becomes an Acquiring
Person or if the Company were the surviving corporation in a merger with an Acquiring Person or any affiliate or associate of an
Acquiring Person and shares of the Common Stock were not changed or exchanged, each holder of a Right, other than Rights that are
or were acquired or beneficially owned by the Acquiring Person (which Rights will thereafter be void), will thereafter have the
right to receive upon exercise that number of shares of Common Stock having a market value of two times the then current Purchase
Price of the Right. In the event that, after a person has become an Acquiring Person, the Company were acquired in a merger or
other business combination transaction or more than 50% of its assets or earning power were sold, proper provision shall be made
so that each holder of a Right shall thereafter have the right to receive, upon the exercise thereof at the then current Purchase
Price of the Right, that number of shares of common stock of the acquiring company which at the time of such transaction would
have a market value of two times the then current Purchase Price of the Right.
At any time after a person becomes an Acquiring
Person and prior to the earlier of (i) the acquisition of the Company in a merger or other business combination or the sale
of more than 50% of its assets or earning power or (ii) the acquisition by such Acquiring Person of 50% or more of the then
outstanding Common Stock, the Board of Directors may cause the Company to exchange the Rights (other than Rights owned by an Acquiring
Person which will have become void), in whole or in part, for shares of Common Stock at an exchange rate of one share of Common
Stock per Right (subject to adjustment).
The Rights may be redeemed in whole, but
not in part, at a price of $0.0001 per Right (the “Redemption Price”) by the Board of Directors at any time
prior to the time that an Acquiring Person has become such. The redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board of Directors in its sole discretion may establish. Immediately upon any redemption
of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
Until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder of the Company beyond those as an existing stockholder, including, without
limitation, the right to vote or to receive dividends.
Any of the provisions of the Rights Agreement
may be amended by the Board of Directors, or a duly authorized committee thereof, for so long as the Rights are then redeemable,
and after the Rights are no longer redeemable, the Company may amend or supplement the Rights Agreement in any manner that does
not adversely affect the interests of the holders of the Rights (other than an Acquiring Person or any affiliate or associate of
an Acquiring Person).
A copy of the Rights Agreement (including
all exhibits thereto) is filed with this Current Report on Form 8-K as Exhibit 4.1 and is incorporated by reference herein.
This summary description of the Rights Agreement and the Rights does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement.