Exhibit 10.33
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RIGHTS AGREEMENT
By and Between
HORIZON PHARMACIES, INC.
and
Computershare Investor Services, L.L.C.,
as Rights Agent
Dated as of February 6, 2001
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TABLE OF CONTENTS
Section
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1. Certain Definitions......................................................................................... 1
2. Appointment of Rights Agent................................................................................. 6
3. Issuance of Rights Certificates............................................................................. 6
4. Form of Rights Certificates................................................................................. 8
5. Countersignature and Registration........................................................................... 9
6. Transfer, Split Up, Combination and Exchange of Rights Certificates: Mutilated, Destroyed, Lost or
Stolen Rights Certificates................................................................................... 9
7. Exercise of Rights: Purchase Price; Expiration Date of Rights............................................... 10
8. Cancellation and Destruction of Rights Certificates......................................................... 11
9. Reservation and Availability of Preferred Stock............................................................. 11
10. Record Date of Preferred Stock Ownership................................................................... 13
11. Adjustment of Purchase Price, Number of Shares or Number of Rights......................................... 13
12. Certificate of Adjusted Purchase Price or Number of Shares................................................. 20
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power....................................... 21
14. Fractional Rights and Fractional Shares.................................................................... 23
15. Rights of Action........................................................................................... 24
16. Agreement of Holders of the Rights......................................................................... 25
17. Rights Certificate Holder Not Deemed a Shareholder......................................................... 25
18. Concerning the Rights Agent................................................................................ 26
19. Merger or Consolidation of the Rights Agent................................................................ 26
i
20. Duties of the Rights Agent................................................................................. 27
21. Change of the Rights Agent................................................................................. 29
22. Issuance of New Rights Certificates........................................................................ 30
23. Redemption................................................................................................. 30
24. Exchange................................................................................................... 32
25. Notice to Holders of Rights Certificates of Certain Events................................................. 33
26. Other Notices.............................................................................................. 34
27. Supplements and Amendments................................................................................. 34
28. Successors................................................................................................. 35
29. Determinations and Actions by the Board of Directors, etc.................................................. 35
30. Benefits of this Agreement................................................................................. 36
31. Severability............................................................................................... 36
32. Governing Law.............................................................................................. 36
33. Counterparts............................................................................................... 36
34. Descriptive Headings....................................................................................... 36
ii
Exhibit A - Form of Certificate of Designation Establishing Series A Junior
Participating Preferred Stock
Exhibit B - Form of Rights Certificate
Exhibit C - Summary of Rights to Purchase Shares of Series A Junior
Participating Preferred Stock
iii
RIGHTS AGREEMENT
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This Rights Agreement (this "Agreement") is made and entered into as of
the 6th day of February 2001 by and between Horizon Pharmacies, Inc., a Delaware
corporation (the "Company"), and Computershare Investor Services, L.L.C., a
Delaware limited liability company (the "Rights Agent").
W I T N E S S E T H :
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WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend of one preferred stock purchase right (individually a
"Right" and collectively the "Rights") for each share of Common Stock (as
hereinafter defined) of the Company outstanding on February 23, 2001 (the
"Record Date"), each Right representing the right to purchase one one-hundredth
of a share of Preferred Stock (as hereinafter defined) upon the terms and
subject to the conditions herein set forth, and has further authorized and
directed (i) the issuance of one Right with respect to each share of Common
Stock which shall become outstanding between the Record Date and the earliest of
the Distribution Date, the Redemption Date and the Final Expiration Date (as
each of such terms is hereinafter defined) and (ii) the issuance of one Right
with respect to each share of Common Stock which shall become outstanding
between the Distribution Date and the earlier of the Redemption Date and the
Final Expiration Date by reason of the exercise of any option, warrant, right or
conversion or exchange privilege contained in any option, warrant, right or
convertible or exchangeable security (other than the Rights) issued by the
Company prior to the Distribution Date, unless the Company's Board of Directors
shall expressly provide to the contrary at the time of issuance of any such
option, warrant, right or convertible or exchangeable security.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
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following terms have the respective meanings indicated.
(a) "Acquiring Person" shall mean any Person who or which,
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together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of fifteen percent (15%) or more of the shares of Common Stock
of the Company then outstanding, but shall not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the Company or of
any Subsidiary of the Company or any entity holding such 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 by the
Company of its shares of Common Stock which, by reason of reducing the number of
such shares of Common Stock outstanding, increases the number of shares of
Common Stock Beneficially Owned by such Person to fifteen percent (15%) or more
of such shares of Common Stock then outstanding; provided, however, that if any
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Person, other than a Person excepted in the first sentence of this definition,
shall become the Beneficial Owner of fifteen percent (15%) or more of such
outstanding shares of Common Stock by reason of any purchase by the Company of
its shares of Common Stock and shall, after such purchase, become
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the Beneficial Owner of any additional such shares of Common Stock, then such
Person shall be deemed to be an "Acquiring Person".
(b) "Adjustment Event" shall mean any Section 11(a)(ii) Event or
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any Section 13 Event.
(c) "Adjustment Shares" shall have the meaning set forth in
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Section 11(a)(ii).
(d) "Affiliate" and "Associate" shall have the respective meanings
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ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement; provided, however,
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that any Subsidiary of the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company or any entity holding shares of Common Stock of
the Company for or pursuant to the terms of any such plan shall not be deemed an
Affiliate or Associate.
(e) A Person shall be deemed the "Beneficial Owner" of, and shall
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be deemed to "Beneficially Own," any securities which:
(i) such Person and such Person's Affiliates and Associates
beneficially own, directly or indirectly for purposes of Section 13(d)
of the Exchange Act and Rule 13d-3 thereunder (or any comparable or
successor law or regulation);
(ii) such Person and such Person's Affiliates or Associates,
directly or indirectly, have: (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 among underwriters and selling group
members with respect to a bona fide public offering of securities),
upon the exercise of conversion or exchange rights, rights (other than
the Rights), warrants or options or otherwise; provided, however, that
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a Person shall not be deemed the Beneficial Owner of, or to
Beneficially Own, (I) 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, (II) securities issuable upon
exercise of the Rights at any time prior to the occurrence of an
Adjustment Event or (III) securities issuable upon exercise of the
Rights from and after the occurrence of an Adjustment Event if such
Rights were acquired by such Person or such Person's Affiliates or
Associates prior to the Distribution Date, pursuant to Section 3(a) or
Section 22 or pursuant to Section 11(a)(i) in connection with an
adjustment made with respect to any of the Rights heretofore specified
in this clause (III); or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that a
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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 (I) arises solely from a revocable proxy or consent
given to such Person or any of such Person's Affiliates or Associates
in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act, or (II) is made in connection with,
or is to otherwise participate in, a
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proxy or consent solicitation made or to be made pursuant to, and in
accordance with, the applicable rules and regulations promulgated
under the Exchange Act, in the case of either clause (I) or (II) of
this proviso whether or not such agreement, arrangement or
understanding is also then reportable by such Person on Schedule 13D
promulgated under the Exchange Act (or any comparable or successor
report then in effect); or
(iii) 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 among 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(e)(ii)(B)) or disposing of any
securities of the Company.
Notwithstanding anything in this definition to the contrary, (A) 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, plus the number or amount of such securities not
then actually issued and outstanding which such Person would be deemed to
Beneficially Own under this definition; (B) any agreement, arrangement or
understanding (whether or not in writing), or any communication or discussion,
among two or more Persons with respect to any matter relating to the management,
operation or conduct of the business of the Company, including any discussion or
agreement on, or any communication with respect to, a position with respect to
any such matter and the disclosure of such communication, discussion, agreement
or position to other Persons (including shareholders of the Company) or to the
Company shall not constitute an agreement, arrangement or understanding
contemplated by Section 1(e)(ii)(B); and (C) a Person shall not be deemed to be
the "Beneficial Owner" of, or to "Beneficially Own," pursuant to subparagraph
(i), (ii) or (iii) of this subsection (e), shares of Common Stock or other
securities of the Company (1) beneficially owned by the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of any Subsidiary of
the Company or any entity holding shares of Common Stock of the Company for or
pursuant to the terms of any such plan; or (ii) if such Person is engaged in the
business as an underwriter of securities and acquired such securities through
such Person's participation in good faith in a firm commitment "underwriting"
registered under the Securities Act of 1933, as amended, until the expiration of
forty (40) days after the date of such acquisition.
(f) "Business Day" shall mean any day other than a Saturday, a
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Sunday or a day on which banking institutions in the State of Texas are
authorized or obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00 P.M.,
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Dallas, Texas time, on such date or, if such date is not a Business Day, then
5:00 P.M., Dallas, Texas time, on the next succeeding Business Day.
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(h) "Common Stock" when used with reference to the Company, shall
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mean the Common Stock, $.01 par value, of the Company. "Common Stock," when used
with reference to any Person other than the Company, shall mean the capital
stock (or equity interest) with the greatest voting power of such other Person
or, if such other Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.
(i) "Current Per Share Market Price" shall have the meaning set
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forth in Section 11(d)(i).
(j) "Current Value" shall have the meaning set forth in Section
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11(a)(iii).
(k) "Disinterested Director" shall mean any member of the
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Company's Board of Directors who is unaffiliated with an Acquiring Person or any
Affiliate or Associate of an Acquiring Person and was a member of the Company's
Board of Directors prior to the time that an Acquiring Person became such, and
any successor of a Disinterested Director who is unaffiliated with an Acquiring
Person or any Affiliate or Associate of an Acquiring Person and is recommended
to succeed a Disinterested Director by a majority of Disinterested Directors
then on the Company's Board of Directors.
(l) "Distribution Date" shall have the meaning set forth in
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Section 3(a).
(m) "Equivalent Common Stock" shall have the meaning set forth in
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Section 11(a)(iii).
(n) "Equivalent Preferred Stock" shall have the meaning set forth
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in Section 11(b).
(o) "Exchange Act" shall mean the Securities Exchange Act of 1934,
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as amended.
(p) "Exchange Rate" shall have the meaning set forth in Section
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24(a).
(q) "Final Expiration Date" shall have the meaning set forth in
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Section 7(a).
(r) "Group" shall mean two or more Persons acting as a partnership,
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limited partnership, syndicate or other group for the purpose of acquiring,
holding or disposing of the shares of Common Stock of the Company.
(s) "Person" shall mean any individual, firm, corporation,
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partnership or other entity or Group, and shall include any successor (by merger
or otherwise) thereof; provided, however, that when two or more Persons act as a
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partnership, limited partnership, syndicate or other Group for the purpose of
acquiring, holding or disposing of the shares of Common Stock of the Company,
such partnership, limited partnership, syndicate or other Group shall be deemed
a single "Person".
(t) "Preferred Stock" shall mean the Series A Junior Participating
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Preferred Stock, $.01 par value, of the Company having the rights and
preferences set forth in the Certificate of Designation attached to this
Agreement as Exhibit A.
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(u) "Principal Party" shall have the meaning set forth in Section
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13(b).
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(v) "Purchase Price" shall have the meaning set forth in Section
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4.
(w) "Record Date" shall have the meaning set forth in the recital
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clause at the beginning of this Agreement.
(x) "Redemption Date" shall have the meaning set forth in Section
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7(a).
(y) "Rights" shall have the meaning set forth in the recital
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clause at the beginning of this Agreement.
(z) "Rights Certificate" shall have the meaning set forth in
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Section 3(a).
(aa) "Section 11(a)(ii) Adjustment Date" shall have the meaning set
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forth in Section 11(a)(iii).
(bb) "Section 11(a)(ii) Event" shall mean the event transaction set
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forth in Section 11(a)(ii).
(cc) "Section 13 Event" shall mean any event or transaction set
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forth in clause (i), (ii) or (iii) of Section 13(a).
(dd) "Share Acquisition Date" shall mean the first date on which
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there shall be a public announcement by the Company or an Acquiring Person that
an Acquiring Person has become such.
(ee) "Spread" shall have the meaning set forth in Section
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11(a)(iii).
(ff) "Subsidiary" of any Person shall mean any corporation or other
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entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
(gg) "Substitution Period" shall have the meaning set forth in
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Section 11(a)(iii).
(hh) "Summary of Rights" shall have the meaning set forth in
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Section 3(b).
(ii) "Trading Day" shall have the meaning set forth in Section
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11(d)(i).
Section 2. Appointment of Rights Agent. The Company hereby appoints the
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Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof. 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 (10) days' prior written notice to the Rights Agent. The
Rights Agent shall have no duty to supervise, and shall in no event be liable
for the acts or omissions of any such Co-Rights Agent. In the event the Company
appoints one or more Co-Rights Agents, the respective duties of the Rights Agent
and of any Co-Rights Agents shall be as the Company shall determine.
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Section 3. Issuance of Rights Certificates. (a) Until the earlier of
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(i) the tenth (10th) day after the Share Acquisition Date, and (ii) the tenth
(10th) Business Day (or such later date as may be determined by action of the
Board of Directors of the Company prior to such time as any Person shall become
an Acquiring Person) after the date of (x) the commencement by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company or any entity holding shares of
Common Stock of the Company for or pursuant to the terms of any such plan) of,
or (y) the first public announcement of the intention of any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding such shares of
Common Stock for or pursuant to the terms of any such plan) to commence, a
tender or exchange offer the consummation of which would result in any Person
becoming the Beneficial Owner of such shares of Common Stock aggregating fifteen
percent (15%) or more of such shares of Common Stock then outstanding, including
any such date which is after the date of this Agreement and prior to the
issuance of the Rights (the earlier of clause (i) and (ii) being hereinafter
called the "Distribution Date"), the Rights shall be evidenced (subject to the
provisions of Section 3(b)) by the certificates for shares of Common Stock
(which certificates shall also be deemed to be Rights Certificates) and not by
separate Rights Certificates, and the right to receive Rights Certificates shall
be transferable only in connection with the transfer of such shares of Common
Stock. As soon as practicable after the Distribution Date or, with respect to
any such shares of Common Stock issued on or after the Distribution Date and
prior to the earlier of the Redemption Date and the Final Expiration Date by
reason of the exercise of any option, warrant, right or conversion or exchange
privilege contained in any option, warrant, right or convertible or exchangeable
security (other than the Rights) issued by the Company prior to the Distribution
Date, unless the Company's Board of Directors shall expressly provide to the
contrary at the time of the issuance of any such option, warrant, right or
convertible or exchangeable security, simultaneously with the issuance of such
shares of Common Stock, the Company shall prepare and execute, the Rights Agent
shall countersign and the Company shall send or cause to be sent (or the Rights
Agent will, if requested, send, at the Company's expense), by first class mail,
postage prepaid, to each record holder of such shares of Common Stock as of the
Close of Business on the Distribution Date or, with respect to shares of Common
Stock issued on or after the Distribution Date (unless otherwise provided with
respect thereto as aforesaid), to the record holder of such shares of Common
Stock on the date of issuance, at the address of such holder shown on the
records of the Company, a Rights Certificate in substantially the form of
Exhibit B hereto (a "Rights Certificate"), evidencing one Right for each such
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share of Common Stock so held. As of and after the Distribution Date, the Rights
shall be evidenced solely by such Rights Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company shall send a copy of the Summary of Rights to Purchase Series A Junior
Participating Preferred Stock, in substantially the form of Exhibit C hereto
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(the "Summary of Rights"), by first class mail, postage prepaid, to each record
holder of shares of Common Stock of the Company as of the Close of Business on
the Record Date, at the address of such holder shown on the records of the
Company. Certificates for shares of Common Stock of the Company outstanding as
of the Record Date, until the Distribution Date or the earlier of the Redemption
Date or the Final Expiration Date, shall be deemed also to constitute
certificates for the Rights associated with the shares of Common Stock
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represented by such certificates, together with a copy of the Summary of Rights
attached thereto, and the registered holders of the shares of Common Stock
represented thereby shall also be registered holders of the associated Rights.
Until the Distribution Date or the earlier of the Redemption Date and the Final
Expiration Date, the surrender for transfer of any such certificate, with or
without a copy of the Summary of Rights attached thereto, shall also constitute
the transfer of the Rights associated with the shares of Common Stock
represented thereby.
(c) Certificates for shares of Common Stock of the Company which
become outstanding (including, without limitation, shares of Common Stock
referred to in the last sentence of this subsection (c) which shall be
subsequently reissued) after the Record Date and prior to the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date shall also
be deemed to constitute certificates for the Rights, but shall have impressed,
printed or written thereon, or otherwise affixed thereto, the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement, dated as of
February 6, 2001 (the "Rights Agreement"), by and between Horizon
Pharmacies, Inc. and Computershare Investor Services, LLC, the terms of
which are incorporated herein by reference and a copy of which is on
file at the principal executive office of Horizon Pharmacies, Inc.
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. Horizon Pharmacies, Inc. will mail to
the holder of this certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor. Under certain
circumstances described in the Rights Agreement, Rights issued to or
held by any Person who is, was or becomes an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person or
any subsequent holder, may become null and void.
Certificates containing the foregoing legend, until the Distribution
Date or the earlier of the Redemption Date and the Final Expiration Date, shall
also be deemed to constitute certificates for the Rights associated with the
shares of Common Stock represented by such certificates, and the surrender for
transfer of any such certificate shall also constitute the transfer of the
Rights associated with the shares of Common Stock represented thereby. In the
event that the Company shall purchase or acquire any of its shares of Common
Stock after the Record Date but prior to the Distribution Date, any Rights
associated with such shares of Common Stock shall be deemed cancelled and
retired so that the Company shall not be entitled to exercise any Rights
associated with shares of Common Stock which are no longer outstanding.
Section 4. Form of Rights Certificates. (a) The Rights Certificates
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(and the Form of Election to Purchase and Certification of Status and the Form
of Assignment and Certification of Status to be printed on the reverse thereof)
shall be substantially in the form set forth in Exhibit B hereto and may have
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such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or any
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rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed, or to
conform to usage. The Rights Certificates shall be in a machine printable format
and in a form reasonably satisfactory to the Rights Agent. Subject to the
provisions of Sections 11 and 22, the Rights Certificates, whenever distributed,
shall be dated as of the Record Date (or, in the case of Rights with respect to
shares of Common Stock originally issued after the Record Date, the same date as
the certificate evidencing such shares of Common Stock), shall show the date of
countersignature and shall entitle the holders thereof to purchase such number
of one one-hundredths of a share of Preferred Stock as shall be set forth
therein at the price per one one-hundredths of a share of Preferred Stock set
forth therein (the "Purchase Price"), but the number of such one one-hundredths
of a share of Preferred Stock and the Purchase Price shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring
Person or any Associate or Affiliate of such Acquiring Person, (ii) a transferee
of an Acquiring Person or an Affiliate or Associate of such Acquiring Person who
becomes a transferee after the Acquiring Person becomes such or (iii) a
transferee of an Acquiring Person or an Affiliate or Associate of such Acquiring
Person who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights, or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of Section 11(a)(ii), and any
Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who is, was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby are or may become void in
the circumstances specified in Section 11(a)(ii) of such Rights
Agreement.
The Company shall instruct the Rights Agent in writing of the Rights
Certificates which should be so legended and shall supply the Rights Agent with
such legended Rights Certificates.
Section 5. Countersignature and Registration. The Rights Certificates
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shall be executed on behalf of the Company by its Chairman of the Board, its
President, any of its Vice Presidents or its Treasurer, either manually or by
facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof attested by the Secretary or any of its Assistant Secretaries,
either manually or by facsimile signature. The Rights Certificates shall be
manually countersigned by an authorized signatory of the Rights Agent and shall
not be valid for any purpose unless so countersigned. In case any officer of
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the Company who shall have executed any of the Rights Certificates or who shall
have attested the Company's seal thereon shall cease to be such officer of the
Company before countersignature by an authorized signatory of the Rights Agent
and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who executed
such Rights Certificates or who attested the Company's seal thereon had not
ceased to be such officer of the Company; and any Rights Certificate may be
executed on behalf of the Company and the Company's seal may be attested by any
person who, at the actual date of such execution or attestation, shall be a
proper officer of the Company, although at the date of the execution of this
Rights Agreement such person was not such an officer.
After the Distribution Date, the Rights Agent shall keep or cause to be
kept, at its principal office, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each Rights Certificate and the date of each Rights
Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
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Certificates: Mutilated, Destroyed, Lost or Stolen Rights Certificates. Subject
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to the provisions of Section 4(b) and Section 14, at any time after the Close of
Business on the Distribution Date, and at or prior to the Close of Business on
the earlier of the Redemption Date and the Final Expiration Date, any Rights
Certificate or Rights Certificates (other than Rights Certificates representing
Rights which shall have become void pursuant to Section 11(a)(ii) or which have
been exchanged pursuant to Section 24) may be transferred, split up, combined or
exchanged for one or more Rights Certificates, entitling the registered holder
to purchase the same number of one one-hundredths of a share of Preferred Stock
as the Rights Certificate or Rights Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Rights Certificates shall make
such request in a writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Rights Certificates to be transferred, split up, combined
or exchanged, with the Form of Assignment and Certification of Status properly
executed, along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request, at the designated
office of the Rights Agent. Thereupon the Company shall prepare and execute and
the Rights Agent shall countersign and deliver to the person entitled thereto
one or more Rights Certificates as so requested. The Company may require payment
by the holders of Rights Certificates 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 Rights Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in the case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, along with a signature guarantee and such
other and further documentation as the Rights Agent may reasonably request, the
Company shall prepare and execute, and the Rights Agent shall countersign and
deliver to the registered holder in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated, a new Rights Certificate of like tenor.
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Section 7. Exercise of Rights; Purchase Price; Expiration Date of
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Rights. (a) Subject to Section 11(a)(ii), the registered holder of any Rights
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Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇▇(▇)(▇▇▇) and Section 23(a)), in
whole or in part, at any time after the Distribution Date, upon surrender of
such Rights Certificate, with the Form of Election to Purchase and Certification
of Status on the reverse side thereof duly executed, to the Rights Agent at the
designated office of the Rights Agent, along with a signature guarantee and such
other and further documentation as the Rights Agent may reasonably request,
together with payment of the Purchase Price for each one one-hundredth of a
share of Preferred Stock (or such other securities, cash or assets, as the case
may be) as to which the Rights are then being exercised, at or prior to the
earliest of (i) the Close of Business on December 31, 2010 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 (the "Redemption Date"), and (iii) the time at which such Rights are
exchanged as provided in Section 24.
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock upon the exercise of a Right shall initially be Twenty Dollars
($20.00), shall be subject to adjustment from time to time as provided in
Sections 11 and 13 and shall be payable in lawful money of the United States of
America in accordance with subsection (c) of this Section 7.
(c) Upon receipt of a Rights Certificate representing then
exercisable Rights, with the Form of Election to Purchase and Certification of
Status on the reverse side thereof duly executed, accompanied by payment of the
Purchase Price for the shares of Preferred Stock (or such other securities, cash
or assets, as the case may be) to be purchased and an amount equal to any
applicable transfer tax (as determined by the Rights Agent) required to be paid
by the holder of such Rights Certificate in accordance with Section 9 by
certified or cashier's check or money order payable to the order of the Company,
the Rights Agent shall thereupon promptly (i) requisition from any transfer
agent of the shares of Preferred Stock certificates for the number of shares of
Preferred Stock to be purchased, the Company hereby irrevocably authorizing any
such transfer agent to comply with all such requests, or otherwise requisition
or obtain from the appropriate Person or Persons such other securities, cash or
assets, as the case may be, the Company hereby irrevocably authorizing any such
request, (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of the issuance of fractional shares in accordance with
Section 14, (iii) after receipt of such certificates, other securities or assets
cause the same to be delivered to or upon the order of the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such registered holder, and (iv) after receipt, deliver such cash to or upon
the order of the registered holder of such Rights Certificate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing the Rights remaining unexercised shall be prepared and executed by
the Company and countersigned and delivered by the Rights Agent to the
registered holder of such Rights Certificate or to his duly authorized assigns,
subject to the provisions of Section 14.
(e) Notwithstanding subsection (a) of this Section 7, a holder of
a Right may exercise such Right after the Distribution Date but prior to the
receipt of the associated Rights Certificate by
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so notifying the Rights Agent in writing and furnishing to the Rights Agent such
information and evidence as to such election as the Rights Agent may reasonably
request; provided, however, that the Rights Agent shall not be required to take
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any of the actions specified in subsection (c) of this Section 7 until such
holder has satisfied the requirements specified therein.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to any Rights or Rights Certificate upon the purported
transfer or exercise thereof unless the registered holder thereof shall have (i)
completed and signed the Certification of Status following the Form of Election
to Purchase or the Form of Assignment set forth on the reverse side of the
Rights Certificate surrendered for such exercise or assignment, and (ii)
provided such additional evidence as to the identity of the Beneficial Owner (or
former Beneficial Owner) thereof or the Affiliates or Associates thereof as the
Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
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Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form
or, if surrendered to the Rights Agent, shall be cancelled by it; and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation,
and the Rights Agent shall cancel, any other Rights Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof.
Section 9. Reservation and Availability of Preferred Stock. (a) The
-----------------------------------------------
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock (and,
following an Adjustment Event, shares of Common Stock or other securities), or
any authorized and issued shares of Preferred Stock (and, following an
Adjustment Event, shares of Common Stock or other securities) held in its
treasury, the number of shares of Preferred Stock (and, following an Adjustment
Event, shares of Common Stock or other securities) required to permit the
exercise in full of all outstanding Rights.
(b) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all shares of Preferred Stock (and,
following an Adjustment Event, shares of Common Stock or other securities)
delivered upon exercise of the Rights shall, at the time of delivery of the
certificates for such shares of Preferred Stock, Common Stock or other
securities upon payment of the Purchase Price therefor, be duly and validly
authorized and issued and fully paid and nonassessable.
(c) So long as the shares of Preferred Stock (and, following an
Adjustment Event, shares of Common Stock or other securities) issuable upon the
exercise of the Rights are listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after the Distribution
Date, all shares of Preferred Stock (and, following an Adjustment Event, shares
of Common Stock or other securities) reserved for such issuance to be listed on
such exchange upon official notice of issuance.
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(d) The Company shall use its best efforts, as soon as practicable
following the first occurrence of an Adjustment Event, to (i) file a
registration statement under the Securities Act of 1933, as amended (the "Act"),
with respect to the securities purchasable upon exercise of the Rights (and, if
legally required, the Rights themselves) on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
expiration of the Rights. The Company will also take such action as may be
appropriate under the blue sky laws of the various states. The Company may
temporarily suspend, for a period of time not to exceed ninety (90) days, the
exercisability of the Rights in order to prepare and file such registration
statement or in order to comply with such blue sky laws. Upon any such
suspension, the Company shall issue a public announcement, and shall give
simultaneous written notice to the Rights Agent, stating that the exercisability
of the Rights has been temporarily suspended. Notwithstanding any provision of
this Rights Agreement to the contrary, the Rights shall not be exercisable in
any jurisdiction, unless the requisite qualification in such jurisdiction shall
have been obtained, or an exemption therefrom shall be available and until any
necessary registration statement has been declared effective. In the absence of
actual written notice from the Company, the Rights Agent may assume that any
Right exercised is permitted to be exercised under applicable law and shall have
no liability for acting in reliance upon such assumption.
(e) The Company further covenants and agrees that, subject to
Section 6, it will pay when due and payable any and all federal and state
original issue or transfer taxes and charges which may be payable in respect of
the issuance or delivery of the Rights Certificates or of any shares of
Preferred Stock (or Common Stock or other securities) issued upon the exercise
of the Rights. The Company shall not, however, be required to pay any transfer
tax which may be payable in respect of any transfer or delivery of any Rights
Certificate to a person other than, or the issuance of certificates for shares
of Preferred Stock (or Common Stock or other securities) upon exercise of the
Rights represented thereby in a name other than that of, the registered holder
of such Rights Certificate or to issue or deliver any certificates for shares of
Preferred Stock (or Common Stock or other securities) upon such exercise until
any such tax shall have been paid (any such tax being payable by the holder of
such Rights Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such tax is due.
Section 10. Record Date of Preferred Stock Ownership. Each Person in
----------------------------------------
whose name any certificate for shares of Preferred Stock (or Common Stock or
other securities) is issued upon the exercise of any Rights shall for all
purposes be deemed to have become the holder of record of the shares of
Preferred Stock (or Common Stock or other securities) represented thereby on,
and such certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered to the Rights Agent with proper
payment of the Purchase Price and all applicable transfer taxes; provided,
--------
however, that if the date of such surrender and payment shall be a date upon
-------
which the transfer books of the Company for the Preferred Stock (or Common Stock
or other securities) are closed, such Person shall be deemed to have become the
record holder of such shares of Preferred Stock (or Common Stock or other
securities) on, and such certificate shall be dated, the next succeeding
Business Day on which the transfer books of the Company for the Preferred Stock
(or Common Stock or securities) are open.
-12-
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
-----------------------------------------------------------
Rights. The Purchase Price, the number and kind of shares covered by each Right
------
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event that the Company shall at any time after the
date of this Agreement (A) declare a dividend on its Preferred Stock payable in
shares of Preferred Stock, (B) subdivide its outstanding shares of Preferred
Stock, (C) combine its outstanding shares of Preferred Stock into a smaller
number of shares of Preferred Stock, or (D) issue any shares of any class in a
reclassification of its Preferred Stock (including any such reclassification in
connection with a combination or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this Section 11(a),
the Purchase Price in effect at the time of the record date for such dividend or
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of any class issuable upon exercise of the Rights at
such time, shall be proportionately adjusted so that the registered holder of
any Right exercised after such time shall be entitled to receive the aggregate
number and kind of shares of any class which, if such Right had been exercised
immediately prior to such time and at a time when the Preferred Stock transfer
books of the Company were open, such holder would have owned upon such exercise
and after giving effect to such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration to
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be paid upon the exercise of one Right be less than the aggregate par value of
the shares of the Company issuable upon the exercise thereof. If an event occurs
which would require an adjustment under both this Section 11(a)(i) and Section
(11)(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) Subject to Section 24, in the event that any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or any entity holding
shares of Common Stock of the Company for or pursuant to the terms of any such
plan) shall become the Beneficial Owner of fifteen percent (15%) or more of such
shares of Common Stock then outstanding (such occurrence being deemed to be a
"Section 11(a)(ii) Event"), then proper provision shall be made so that each
holder of a Right, except as otherwise provided in this paragraph (ii), shall
thereafter have a right to receive, upon the exercise thereof at a price equal
to the then current Purchase Price multiplied by the number of one
one-hundredths of a share of Preferred Stock for which a Right is then
exercisable, in accordance with the terms of this Agreement, and in lieu of
shares of Preferred Stock, such number of shares of Common Stock of the Company
determined by (x) multiplying such current Purchase Price by the number of one
one-hundredths of a share of Preferred Stock for which a Right is then
exercisable, and (y) dividing the product so obtained by fifty percent (50%) of
the then Current Per Share Market Price of the shares of Common Stock of the
Company, determined as provided in Section 11(d), on the fifth (5th) day after
the date of the occurrence or the date of first public announcement, whichever
shall be less, of the Section 11(a)(ii) Event requiring such adjustment (the
number of shares of Common Stock so determined being hereinafter called the
"Adjustment Shares"); provided, however, that if the Section 11(a)(ii) Event
otherwise requiring such adjustment is also subject to the provisions of Section
13, then only the provisions of Section 13 shall apply and no adjustment shall
be made pursuant to this Section 11(a)(ii).
-13-
From and after the first occurrence of a Section 11(a)(ii) Event, any
Rights that are or were acquired or Beneficially Owned by (i) an Acquiring
Person or any Affiliate or Associate of such Acquiring Person, (ii) a transferee
of an Acquiring Person or any Affiliate or Associate of such Acquiring Person
who becomes a transferee after such Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person or any Affiliate or Associate of such
Acquiring Person who becomes a transferee prior to or concurrently with such
Acquiring Person becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from such Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights, or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 11(a)(ii)
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 Rights
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 to any Affiliate or Associate thereof; no Rights
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 to any Affiliate or Associate thereof or to any nominee of such Acquiring
Person, Affiliate or Associate; no Rights Certificate shall be issued at any
time upon the transfer of any Rights to any transferee whose Rights would be
void pursuant to the preceding sentence; and any Rights Certificate delivered to
the Rights Agent for transfer to any Person whose Rights would be void pursuant
to the preceding sentence shall be cancelled.
(iii) In the event that the number of shares of Common Stock
authorized by the Company's Certificate of Incorporation, as amended (the
"Certificate"), which are not outstanding or reserved for issuance for purposes
other than the exercise of the Rights is insufficient to permit the exercise in
full of the Rights in accordance with paragraph (ii) of this subsection (a), the
Company shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of each Right (the "Current Value") over (2)
the Purchase Price (such excess being hereinafter called the "Spread") and (B)
with respect to each Right, make adequate provision to substitute for the
Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2)
a reduction in such Purchase Price, (3) Common Stock or other equity securities
of the Company having the same rights, privileges and preferences as the Common
Stock (hereinafter called "Equivalent Common Stock"), (4) debt securities of the
Company, (5) other assets or (6) any combination of the foregoing having an
aggregate value equal to the Current Value, such aggregate value to be
determined by the Board of Directors of the Company based upon the advice of a
nationally recognized investment banking firm selected by such Board of
Directors; provided, however, that if the Company shall not have made adequate
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provision to deliver aggregate value pursuant to clause (B) above within thirty
(30) days following the later of (x) the first occurrence of a Section 11(a)(ii)
Event, and (y) the date on which the Company's right to redeem the Rights
pursuant to Section 23(a) shall expire (the later of such events being
hereinafter called the "Section 11(a)(ii) Adjustment Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of each Right and
without requiring payment of such Purchase Price, shares of Common Stock (to the
extent available) and then, if and to the extent necessary, cash, which shares
of Common Stock and/or cash have an aggregate value equal to the Spread. If the
Board of Directors
-14-
of the Company shall determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon exercise
in full of the Rights, the thirty (30) day period specified in the preceding
sentence may be extended to the extent necessary, but in no event more than
ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the
Company may seek shareholder approval for the authorization of such additional
shares of Common Stock (such thirty (30) day period, as it may be extended,
being hereinafter called the "Substitution Period"). To the extent that the
Company shall determine that action is required to be taken pursuant to the
first and/or second sentences of this Section 11(a)(iii), the Company (A) shall
provide, subject to Section 11(a)(ii), that such action shall apply uniformly to
all outstanding Rights, and (B) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide upon the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement of the time after which
such suspension shall no longer be in effect. For purposes of this Section
11(a)(iii), the value of the Adjustment Shares shall be calculated upon the
basis of the Current Per Share Market Price of the shares of Common Stock of the
Company, determined as provided in Section 11(d), on the Section 11(a)(ii)
Adjustment Date, and the value of any share of Equivalent Common Stock shall be
deemed to be equal to such Current Per Share Market Price.
(b) In the event that the Company shall fix a record date for the
issuance of options, warrants or rights to all holders of its Preferred Stock
entitling them (for a period expiring within forty-five (45) calendar days after
such record date) to subscribe for or purchase shares of Preferred Stock (or
equity securities of the Company having the same rights, privileges and
preferences as the Preferred Stock, the "Equivalent Preferred Stock") or
securities convertible into or exchangeable for Preferred Stock or Equivalent
Preferred Stock at a price per share of Preferred Stock or per Equivalent
Preferred Stock (or having a conversion or exchange price per share, in the case
of securities convertible into or exchangeable for Preferred Stock or Equivalent
Preferred Stock) less than the then Current Per Share Market Price of such
shares of Preferred Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Stock so to be offered (and/or the aggregate offering price
of the convertible or exchangeable securities so to be offered) would purchase
at such Current Per Share Market Price, and the denominator of which shall be
the number of shares of Preferred Stock outstanding on such record date, plus
the number of additional shares of Preferred Stock and/or Equivalent Preferred
Stock so to be offered (or into or for which the convertible or exchangeable
securities so to be offered are initially convertible or exchangeable);
provided, however, that in no event shall the consideration to be paid upon the
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exercise of one Right be less than the aggregate par value of the shares of the
Company issuable upon the exercise thereof. In case such subscription price may
be paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights
Agent. Preferred Stock owned by or held for the
-15-
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such options, warrants, rights or
securities are not so issued, the Purchase Price shall be adjusted to the
Purchase Price which would have been in effect if such record date had not been
fixed.
(c) In the event that the Company shall fix a record date for the
making of any distribution to all holders of its Preferred Stock (including any
such distribution made in connection with a combination or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend at a rate not in excess
of 125% of the rate of the last regular quarterly cash dividend theretofore paid
or a dividend payable in such shares of Preferred Stock) or options, warrants or
rights (excluding those referred to in Section 11(b)), the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the then Current Per Share Market Price of such
Preferred Stock on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent) of the evidences of indebtedness or assets so to be
distributed, or of such options, warrants or rights, properly attributable to
one share of Preferred Stock and the denominator of which shall be such Current
Per Share Market Price; provided, however, that in no event shall the
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consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of the Company issuable upon the exercise
thereof. Such adjustment shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made, the Purchase
Price shall be adjusted to the Purchase Price which would have been in effect if
such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), the "Current Per Share Market
Price" of any security, including the shares of Common Stock of the Company
(hereinafter in this Section 11(d)(i) called a "Security"), on any date shall be
deemed to be the average of the daily closing prices per share of such Security
for the thirty (30) consecutive Trading Days immediately prior to such date and,
for the purpose of computations made pursuant to Section 11(a)(iii), the
"Current Per Share Market Price" of any Security on any date shall be deemed to
be the average of the daily closing prices per share of such Security for the
ten (10) consecutive Trading Days immediately following such date; provided,
--------
however, that in the event that the Current Per Share Market Price of any
-------
Security is determined during a period commencing with the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
payable in such Security or securities convertible into or exchangeable for such
Security, or (B) any subdivision, combination or reclassification of such
Security, and ending prior to the expiration of such thirty (30) Trading Days or
ten (10) Trading Days, as the case may be, after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the Current Per Share Market
Price of such Security shall be appropriately adjusted to reflect the effect of
such dividend, distribution, subdivision, combination or reclassification. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale shall take 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
-16-
a national exchange or, if the Security is not listed or admitted to trading on
a national exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the
principal national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other system then in use or, if on any such
day the Security is not quoted by any such organization, the average of the
closing bid and asked prices, as furnished by a professional market maker making
a market in the Security selected by the Board of Directors of the Company. The
term "Trading Day" shall mean a day on which the principal national securities
exchange on which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to trading
on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the Current
Per Share Market Price of the Preferred Stock shall be determined in accordance
with the method set forth in Section 11(d)(i). If the Preferred Stock is not
publicly traded, the Current Per Share Market Price of the Preferred Stock shall
be conclusively deemed to be the Current Per Share Market Price of the Common
Stock as determined pursuant to Section 11(d)(i) (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof), multiplied by one hundred (100). If neither the Common Stock
nor the Preferred Stock of the Company is publicly traded, the "Current Per
Share Market Price" thereof shall mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least one percent
(1%) in the Purchase Price; provided, however, that any adjustments which by
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reason of this subsection (e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the nearest one
one-millionth of a share of Preferred Stock or one ten-thousandth of any other
share or security, as the case may be. Notwithstanding the first sentence of
this subsection (e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three (3) years from the date of the event or
transaction which requires such adjustment, and (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)
or Section 13(a) the holder of any Right thereafter exercised shall become
entitled to receive any shares of any class of the Company other than Preferred
Stock, thereafter the number of such other shares so receivable upon exercise of
any 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 the
Preferred Stock contained in subsections (a), (b), (c), (e), (g), (h), (i), (j),
(k), (m) and (n) of this Section 11, and the provisions of Sections 7, 9, 10, 13
and 14 with respect to the Preferred Stock shall apply on like terms to any such
other shares.
-17-
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised the election provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations required to be made by subsection (b) or (c) of this Section 11,
each Right outstanding immediately prior to the making of such Purchase Price
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-hundredth of a share of Preferred Stock
(calculated to the nearest one one-millionth determined by (i) multiplying the
number of one one-hundredths of a share of Preferred Stock purchasable upon
exercise of such Right immediately prior to such Purchase Price adjustment by
the Purchase Price in effect immediately prior to such Purchase Price
adjustment, and (ii) dividing the product so obtained by the Purchase Price in
effect immediately after such Purchase Price adjustment.
(i) The Company may elect, on or after the date of any adjustment
of the Purchase Price, to adjust the number of Rights outstanding, in
substitution for any adjustment in the number of one one-hundredths of a share
of Preferred Stock purchasable upon the exercise of a Right. Each Right
outstanding after such adjustment in the number of Rights shall be exercisable
for the same number of one one-hundredths of a share of Preferred Stock as a
Right was exercisable for immediately prior to such adjustment. Each Right held
of record prior to such adjustment shall become the number of Rights (calculated
to the nearest one ten-thousandth) determined by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase Price. The Company
shall make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment and, if known at such time, the
amount of the adjustment to be made. Such record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) days after the date of
such public announcement. If the Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this subsection (i), the Company
shall, as promptly as practicable, but subject to Section 11(a)(ii), cause to be
distributed to each registered holder of the Rights Certificates on such record
date Rights Certificates evidencing, subject to Section 14, the additional
Rights to which such registered holder shall be entitled as a result of such
adjustment or, at the option of the Company, shall cause to be distributed to
each such registered holder, in substitution and replacement for the Rights
Certificates held by such registered holder prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such registered holder shall be entitled
after such adjustment. Rights Certificates so to be distributed shall be
executed and countersigned in the manner provided for herein and shall be
registered in the names of the registered holders of the Rights Certificates on
the record date specified in the aforesaid public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the
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number of one one-hundredths of a share of Preferred Stock which were expressed
in the Rights Certificates originally issued hereunder.
(k) Before taking any action which would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par value, if
any, of the shares of Preferred Stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable shares of Preferred Stock at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the Preferred Stock and other shares or securities of the Company, if any,
issuable upon such exercise in excess of the shares of Preferred Stock and other
shares or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
--------
however, that the Company shall deliver to such holder a due ▇▇▇▇ or other
-------
appropriate instrument evidencing such holder's right to receive such additional
shares of Common Stock and other shares or securities, if any, upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to the 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 combination or subdivision of its shares of Preferred Stock,
or any issuance of its shares of Preferred Stock solely for cash at less than
the current market price thereof, any issuance solely for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, any dividend on its shares of
Preferred Stock payable in shares of Preferred Stock or any issuance of options,
warrants or rights subject to Section 11(b) hereafter made by the Company to the
holders of its shares of Preferred Stock, shall not be taxable to such
stockholders.
(n) In the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the shares of Common Stock payable in shares of Common Stock, or
(ii) effect a subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in any
such case (i) the number of one one-hundredths of a share of Preferred Stock
purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-hundredths of a share of
Preferred Stock so purchasable immediately prior to such event by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately before such event and the denominator of which is the number of
shares of Common Stock outstanding immediately after such event, and (ii) each
share of Common Stock outstanding immediately after such event shall have issued
with respect to it that number of Rights which each share of Common Stock
outstanding immediately prior to such event had issued with respect to it. The
adjustments provided for in this subsection (n) shall be made successively
whenever such a dividend is declared
-19-
or paid or such a subdivision, combination or consolidation is effected. If such
an event occurs which would require an adjustment under Section 11(a)(ii) and
this subsection (n), the adjustment provided for in this subsection (n) shall be
in addition to and prior to any adjustment required pursuant to Section
11(a)(ii).
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
----------------------------------------------------------
Whenever any adjustment shall be required by Section 11 or 13, the Company shall
promptly (i) prepare a certificate setting forth such adjustment and a brief
statement of the facts requiring such adjustment, (b) file with the Rights Agent
and with each transfer agent for the Common Stock or the Preferred Stock of the
Company a copy of such certificate, and (c) mail a brief summary thereof to each
registered holder of a Rights Certificate in accordance with Section 25.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
------------------------------------------------------
Earning Power. (a) In the event that, on or after the Share Acquisition Date,
-------------
directly or indirectly: (i) the Company shall consolidate with, or merge with
and into, any other Person and the Company shall not be the continuing or
surviving corporation, (ii) any Person shall consolidate with the Company, or
merge with and into the Company, and the Company shall be the continuing or
surviving corporation and, in connection with such consolidation or merger, all
or part of the outstanding shares of Common Stock of the Company shall be
changed into or exchanged for shares or other securities of any other Person (or
the Company), cash and/or other property, or (iii) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in a transaction or a series of transactions other than in the
ordinary course of business, assets or earning power aggregating fifty percent
(50%) or more 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, then, and in each such case, proper
provision shall be made so that (w) each holder of a Right (except as otherwise
provided herein) shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price multiplied by the
number of one one-hundredths of a share of Preferred Stock for which a Right is
then exercisable in accordance with the terms of this Agreement and in lieu of
shares of Preferred Stock, the number of freely tradable shares of Common Stock
of the Principal Party, free and clear of all liens, encumbrances or other
adverse claims, determined by (A) multiplying such current Purchase Price by the
number of one one-hundredths of a share of Preferred Stock for which a Right is
then exercisable, and (B) dividing the product so obtained by fifty percent
(50%) of the then Current Per Share Market Price of the shares of Common Stock
of such Principal Party, determined as provided in Section 11(d), on the date of
consummation of such consolidation, merger, sale or transfer; (x) such Principal
Party shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the
Company under this Agreement; (y) the term "Company" shall thereafter be deemed
to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 shall apply to such Principal Party; and (z) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its shares of Common Stock in accordance
with Section 9) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably possible, in relation to the shares of Common Stock thereafter
deliverable upon the exercise of the Rights. The Company shall not consummate
any such consolidation, merger, sale or transfer unless prior thereto the
Company and such Principal Party shall have executed and
-20-
delivered to the Rights Agent a supplemental agreement so providing. The Company
shall not enter into any transaction of the kind set forth in this subsection
(a) if at the time of the consummation of such transaction there are any
options, warrants, rights, conversion or exchange provisions or securities
outstanding or any agreements or arrangements in effect which, as a result of
the consummation of such transaction, would eliminate or substantially diminish
the benefits intended to be afforded by the Rights. The provisions of this
Section 13 shall similarly apply to successive mergers, consolidations, sales or
other transfers. If, in the case of a transaction of the kind described in
clause (iii) of the first sentence of this subsection (a), the Person or Persons
to whom assets or earning power are sold or otherwise transferred are
individuals, then the preceding sentences of this subsection (a) shall be
inapplicable, and the Company shall require as a condition to such sale or
transfer that such Person or Persons pay to each holder of a Rights Certificate,
upon its surrender to the Rights Agent and in exchange therefor (without
requiring any payment by such holder), cash in the amount determined by
multiplying the then current Purchase Price by the number of one one-hundredths
of a share of Preferred Stock for which a Right is then exercisable.
(b) "Principal Party" shall mean, in the case of any transaction
of the kind described in clause (i) or (ii) of the first sentence of Section
13(a), the Person which is the issuer of any securities into which shares of
Common Stock of the Company are converted in such transaction or, if there shall
be more than one such issuer, the issuer having shares of Common Stock with the
greatest aggregate market value; or if no securities are so issued, the Person
which is the other party to such transaction or, if there is more than one such
Person, the Person having shares of Common Stock with the greatest aggregate
market value; and in the case of any transaction of the kind described in clause
(iii) of the first sentence of Section 13(a), the Person which is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions; provided, however, that in any
-------- -------
such case (i) if the shares of Common Stock of such Person shall not at the time
of the consummation of such transaction have been continuously registered under
Section 12 of the Exchange Act during the preceding twelve (12) month period,
and such Person shall be a direct or indirect Subsidiary of another Person the
shares of Common Stock of which shall have been so registered, "Principal Party"
shall mean such other Person; (ii) if the Common Stock of such Person is not
registered Common Stock or such Person is not a corporation, and such Person is
a direct or indirect Subsidiary of another Person, but is not a direct or
indirect Subsidiary of another Person which has registered Common Stock
outstanding, "Principal Party" shall refer to the ultimate parent entity of such
first-mentioned Person; (iii) if such Person shall be a Subsidiary, directly or
indirectly, of more than one Person, the shares of Common Stock of two (2) or
more of which shall have been so registered, "Principal Party" shall mean
whichever of such Persons is the issuer of shares of Common Stock having the
greatest aggregate market value; and (iv) if the Common Stock of such Person is
not registered Common Stock or such Person is not a corporation, and such Person
is directly or indirectly controlled by more than one Person, and none of such
other Persons has registered Common Stock outstanding, "Principal Party" shall
refer to whichever ultimate parent entity is the corporation having the greatest
shareholders' equity or, if no such ultimate parent entity is a corporation,
shall refer to whichever ultimate parent entity is the entity having the
greatest net assets.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have sufficient Common
Stock authorized to permit the full exercise
-21-
of the Rights and prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in Sections 13(a) and (b) above and further providing
that, as soon as practicable after the date of any consolidation, merger or sale
of assets mentioned in Section 13(a) above, the Principal Party will:
(i) prepare and file a registration statement under the Act,
with respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after such
filing, and (B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Final Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under the
Exchange Act.
In the event that one of the transactions described in Section 13(a)
hereof shall occur at any time after a Section 11(a)(ii) Event, the Rights which
have not theretofore been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
(d) In no event shall the Rights Agent have any liability in
respect of any such Principal Party transactions, including, without limitation,
the propriety thereof. The Rights Agent may rely and be fully protected in
relying upon a certificate of the Company stating that the provisions of this
Section 13 have been fulfilled. Notwithstanding anything in this Agreement to
the contrary, the prior written consent of the Rights Agent, which consent shall
not be unreasonably withheld, must be obtained in connection with any
supplemental agreement which alters the rights or duties of the Rights Agent.*
Section 14. Fractional Rights and Fractional Shares. (a) The Company
---------------------------------------
shall not be required to issue fractional Rights or to distribute Rights
Certificates which evidence fractional Rights. In lieu of fractional Rights,
there shall be paid to the registered holders of the Rights Certificates with
respect to which fractional Rights would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of one Right. For the
purposes of this Section 14(a), the current market value of one Right shall be
the closing price per Right for the Trading Day immediately prior to the date on
which fractional Rights would have been otherwise issuable. The closing price
for any Trading Day shall be the last sale price, regular way, or, in case no
such sale shall take place on such Trading Day, the average of the closing bid
and asked prices as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the principal
national securities exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
NASDAQ or such other system then in use or, if on any such Trading Day the
Rights are not quoted by any such organization, the average of the closing bid
and asked prices, as furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Company. If on any such
Trading Day no such market maker is making a market in the Rights, the current
market value of one Right on such Trading Day shall be
-22-
the fair value thereof as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent.
(b) The Company shall not be required to issue fractional shares
of Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-hundredth of a share of Preferred Stock,
the Company shall pay to the registered holders of the Rights Certificates at
the time Rights represented thereby are exercised, as herein provided, an amount
in cash equal to the same fraction of the current market value per share of
Preferred Stock. For the purposes of this Section 14(b), the Current Market
Value Per Share of Preferred Stock shall be the closing price per share of
Preferred Stock (determined as provided in Section 11(d)) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of an Adjustment Event, the Company
shall not be required to issued fractional shares of Common Stock upon exercise
of the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company shall
pay to the registered holders of the Rights Certificates at the time Rights
represented thereby are exercised, as herein provided, an amount in cash equal
to the same fraction of the Current Market Value Per Share of Common Stock. For
the purposes of this Section 14(c), the Current Market Value per Share of Common
Stock shall be the closing price per share of Common Stock (determined as
provided in Section 11(d)) for the Trading Day immediately prior to the date of
such exercise.
(d) Each holder of a Right, by accepting the same, expressly
waives such holder's right to receive any fractional Rights or any fractional
shares of Common Stock or Preferred Stock upon exercise of such Right (except as
provided above).
Section 15. Rights of Action. All rights of action in respect of this
----------------
Agreement, excepting the specific rights of action given to the Rights Agent
under Section 18, are vested in the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
shares of Common Stock); and any registered holder of any Rights Certificate
(or, prior to the Distribution Date, of the shares of Common Stock), without the
consent of the Rights Agent or of the holder of any other Rights Certificate
(or, prior to the Distribution Date, of the shares of Common Stock), may, on
such registered holder's own behalf and for such registered holder's own
benefit, enforce, and may institute and maintain any suit, action or proceeding
solely against the Company, not the Rights Agent, to enforce, or otherwise act
in respect of, such registered holder's right to exercise its Rights in the
manner provided in such Rights Certificate and in this Agreement. Without
limiting the generality of the foregoing or any remedies available to the
holders of the Rights, it is specifically acknowledged that the registered
holders of the Rights would not have an adequate remedy at law for any breach of
this Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against any actual or threatened violations of the
obligations of any Person subject to, this Agreement. Each holder of the Rights
shall be entitled to
-23-
recover the reasonable costs and expenses, including attorneys' fees, incurred
by such holder in any action-to enforce the provisions of this Agreement.
Section 16. Agreement of Holders of the Rights. Each holder of a Right,
----------------------------------
by accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(i) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Stock of the
Company;
(ii) after the Distribution Date, the Rights Certificates will
be transferable on the registry books of the Rights Agent only if surrendered at
the designated office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms on the reverse side
thereof fully executed, along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably request;
(iii) subject to Sections 6 and 11(a)(ii), the Company and the
Rights Agent may deem and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights represented thereby
(notwithstanding any notations of ownership or other writing on such Rights
Certificates or the associated Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary; and
(iv) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided that the Company must use its best
--------
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Shareholder. No
--------------------------------------------------
holder, as such, of any Rights Certificate shall be entitled to vote, to receive
dividends or other distributions or to exercise any preemptive rights, or shall
be deemed for any other purpose to be the holder of shares of Preferred Stock or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby; nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights 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 other 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) or to receive dividends,
subscription rights or other distributions, until the Right or Rights
represented by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.
-24-
Section 18. Concerning the Rights Agent. The Company agrees to pay to
---------------------------
the Rights Agent such compensation as shall be agreed to in writing between the
Company and the Rights Agent for all services rendered by it hereunder and, from
time to time, on request of the Rights Agent, its reasonable expenses and
counsel fees and expenses incurred in the acceptance and administration of this
Agreement and the performance of its duties hereunder. The Company also agrees
to indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, damages or expense, incurred without gross negligence, bad faith or
willful misconduct on its part, for anything done or omitted by it in connection
with the acceptance and administration of this Agreement, including the costs
and expenses of defending against any demand or claim of liability arising
therefrom, directly or indirectly. The provisions of this Section 18 shall
survive the expiration of the Rights and the termination of this Agreement.
The Rights Agent shall be protected and shall incur no liability for,
or in respect of, any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any Rights Certificate or
certificate for Preferred Stock or Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document believed by it to be genuine and to be signed and executed by
the proper Person or Persons, or in reliance upon the advice of counsel as set
forth in Section 20.
Section 19. Merger or Consolidation of the Rights Agent. Any
-------------------------------------------
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer or
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as successor Rights Agent under the provisions of Section 21. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement any of the Rights Certificates shall have been countersigned but not
delivered, such successor Rights Agent may adopt the countersignature of its
predecessor Rights Agent and deliver the Rights Certificates so countersigned;
and in case at such time any of the Rights Certificates shall not have been
countersigned, such successor Rights Agent may countersign such Rights
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 Rights Certificates
shall have the full effect provided therein and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver the Rights Certificates so countersigned; and in case at such
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full effect provided therein and in this Agreement.
-25-
Section 20. Duties of the Rights Agent. The Rights Agent undertakes the
--------------------------
duties and obligations expressly imposed by this Agreement (and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent) upon the following terms and conditions, by all of which the Company and
the holders of Rights Certificates, by accepting the same, shall be bound:
(a) The Rights Agent may consult with legal counsel of its
selection (who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full and complete
authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith in reliance upon such certificate.
(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.
(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
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii)), for any
adjustment or change in the terms of the Rights (including any adjustment or
change in the Purchase Price or in the number or kind of shares or other
securities or property issuable upon the exercise thereof) provided for in
Section 3, 11, 13, 23 or 24 or for ascertaining the existence of facts which
would require any such change or adjustment (except with respect to the exercise
of Rights evidenced by Rights Certificates after actual notice that such change
or adjustment is required); nor shall it by any act hereunder be deemed to make
any representation-or warranty as to the authorization or reservation of any
shares of Preferred Stock or Common Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Preferred
Stock or Common Stock will, when issued, be validly authorized and issued and
fully paid and nonassessable, nor shall the Rights Agent be responsible for the
legality of the terms hereof in its capacity as an administrative agent.
-26-
(f) The Company agrees that it will inform the Rights Agent
promptly upon the Company's determination that a Person has become an Acquiring
Person, and the Rights Agent will not be responsible for determining whether a
Person has become an Acquiring Person prior to such notification, except as such
status may be indicated in the Form of Certification of Status accompanying a
Rights Certificate submitted to the Rights Agent. The Company further agrees
that it will perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of this
Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the
Treasurer or the Secretary of the Company, and to apply to such officers for
advice or instructions in connection with its duties; and the Rights Agent shall
not be liable for any action taken or omitted by it in good faith in accordance
with the written instructions of any such officer or for any delay in acting
while waiting for such instructions. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on and/or after which such action shall
be taken or such omission shall be effective. The Rights Agent shall not be
liable for any action taken by, or omission of, the Rights Agent in accordance
with a proposal included in such application on or after the date specified in
such application which date shall not be less than five (5) Business Days after
the date any officer of the Company actually receives such application, unless
any such officer shall have consented in writing to any earlier date) unless
prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in the Rights, the Common
Stock or any other securities of the Company or become peculiarly interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company, and may otherwise act as fully and freely as though it
were not the Rights Agent under this Agreement; and nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any of its duties hereunder either
directly 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 attorney or agent or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided the Rights Agent exercised
reasonable care in the selection of such attorney or agent.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the Form of Certification of Status
attached to the Form of Election to Purchase or the Form of Assignment, as the
case may be, has either not been completed or indicates an affirmative response
to Question 1 and/or 2 thereof, the Rights Agent shall not take any further
action with respect to the requested exercise or transfer without first
consulting with the Company.
-27-
(k) No provision of this Agreement shall require the Rights Agent
to expand or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its rights
if there shall be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not reasonably
assured to it.
(l) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action taken
or omitted by it in connection with its administration of this Agreement if such
acts or omissions are in reliance upon (i) the proper execution of the Form of
Certification of Status attached to the Form of Election to Purchase or the Form
of Assignment unless the Rights Agent shall have actual knowledge that, as
executed, such certification is untrue, or (ii) the nonexecution of such
certification, including, without limitation, any refusal to honor any otherwise
permissible assignment or election by reason of such non-execution.
(m) The Company agrees to give the Rights Agent prompt written
notice of any event or ownership which would prohibit the exercise or transfer
of the Rights Certificates.
Section 21. Change of the Rights Agent. The Rights Agent or any
--------------------------
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' prior notice mailed to the Company. The Company
may remove the Rights Agent or any successor Rights Agent upon thirty (30) days'
prior notice mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Stock and Preferred Stock by
registered or certified mail, postage prepaid, and to each registered holder of
the Rights Certificates by first class mail, postage prepaid. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor Rights Agent. If the Company shall fail to
make such appointment within thirty (30) days after giving notice of such
removal or after receiving notice of such resignation or incapacity either from
the resigning or incapacitated Rights Agent or from the registered holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then the Rights Agent or the registered holder
of any Rights Certificate may apply to any court of competent jurisdiction for
the appointment of a successor Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States of America, be in good
standing under the laws of the jurisdiction of its incorporation, be authorized
under such laws to exercise corporate trust or stock transfer powers, be subject
to supervision or examination by federal or state authority and have at the time
of its appointment as Rights Agent a combined capital and surplus of at least
Fifty Million Dollars ($50,000,000). After its appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock and Preferred Stock, and mail notice thereof
to the registered holders of the Rights Certificates. Failure to give any notice
provided for in this
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Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
any successor Rights Agent.
Section 22. Issuance of New Rights Certificates. Notwithstanding any
-----------------------------------
other provision of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing the Rights in such
form as may be approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price or in the number or kind of shares or other
securities or property issuable upon the exercise of the Rights in accordance
with the provisions of this Agreement; 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 to the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption. (a) The Board of Directors of the Company may,
----------
at its option, at any time prior to the earlier of (i) the Close of Business on
the tenth (10th) Business Day after the Share Acquisition Date, and (ii) the
Final Expiration Date, redeem all, but not less than all, of the then
outstanding Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter called
the "Redemption Price"); provided, however, that if the Board of Directors of
-------- -------
the Company shall authorize the redemption of the Rights in the circumstances
set forth in clause (i) or (ii) below, then there must be Disinterested
Directors in office and such authorization shall require the concurrence of a
majority of such Disinterested Directors: (i) such authorization occurs on or
after the date a Person becomes an Acquiring Person, or (ii) such authorization
occurs on or after the date of a change (resulting from a solicitation of either
proxies or one or more shareholder written consents) in a majority of the
directors in office at the commencement of such solicitation if any Person who
shall be a participant in the solicitation of such proxies or consents has
stated (or, if upon the commencement of any such solicitation, a majority of the
Board of Directors of the Company shall determine in good faith) that such
Person (or any of its Affiliates or Associates) intends to take, or may consider
taking, any action which would result in such Person becoming an Acquiring
Person or which would cause the occurrence of an Adjustment Event. In
considering whether to redeem the Rights, the Board of Directors of the Company
may consider (x) the effects on the Company's employees, suppliers, creditors
and customers; (y) the effects on the communities in which the Company operates;
and (z) the long-term and short-term interests of the Company and its
shareholders, including the possibility that such interests may be best served
by the continued independence of the Company and any other pertinent factors,
whether or not they are enumerated in the Company's Articles of Incorporation
then in effect. The redemption of the Rights by such Board of Directors may be
made effective at such time, on such basis and with such conditions as such
Board of Directors in its sole discretion may establish. In addition to the
right of redemption reserved in the first sentence of this subsection (a), if
there are Disinterested Directors then in office, such Board of Directors may
redeem, with the concurrence of a majority of such Disinterested Directors, all,
but not less than all, of the then outstanding Rights at the Redemption Price
after the occurrence of a Share Acquisition Date, but prior to the occurrence of
any transaction of the kind described in Section 13(a), if either (i) a Person
who is an Acquiring Person shall have transferred or otherwise disposed of such
number of shares of Common Stock of the Company, in
-29-
one transaction or a series of transactions not directly or indirectly involving
the Company or any of its Subsidiaries or the occurrence of any transaction of
the kind described in Section 13(a), as shall result in such Person thereafter
being a Beneficial Owner of ten percent (10%) or less of the outstanding shares
of Common Stock of the Company, and after such transfer or other disposition
there are no other Acquiring Persons, or (ii) in connection with any transaction
of the kind described in Section 13(a) in which all holders of the shares of
Common Stock of the Company are treated the same and which shall not involve an
Acquiring Person, an Affiliate or Associate of an Acquiring Person, any other
Person in which such Acquiring Person, Affiliate or Associate has any interest
or any other Person acting, directly or indirectly, on behalf of or in
association with any such Acquiring Person, Affiliate or Associate.
Notwithstanding any other provision of this Agreement, the Rights shall not be
exercisable after the first occurrence of a Section 11(a)(ii) Event until such
time as the Company's right of redemption hereunder has expired.
(b) Immediately after any action by the Board of Directors of the
Company directing the redemption of the Rights pursuant to subsection (a) of
this Section 23, notice of which shall be filed with the Rights Agent, and
without any further action and without any notice, the right to exercise the
Rights shall terminate and each registered holder of the Rights shall thereafter
be entitled to receive only the Redemption Price per Right. The Company shall
give prompt public notice of any redemption directed pursuant to such subsection
(a); provided, however, that the failure to give, or any defect in, any such
-------- -------
notice shall not affect the validity of such redemption. Within ten (10) days
after action by such Board of Directors directing the redemption of the Rights,
the Company shall mail a notice of redemption to all registered holders of the
then outstanding Rights at their last addresses appearing upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock of the Company. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not received by the registered holder to whom sent; provided, however, that the
-------- -------
failure to give, or any defect in, any such notice shall not affect the validity
of any such redemption. Each such notice of redemption shall state the method by
which payment of the Redemption Price shall be made.
(c) The Company may, at its option, pay the Redemption Price in
cash, shares of Common Stock (based on the Current Per Share Market Price of the
shares of Common Stock at the date of redemption) or any other form of
consideration deemed appropriate by the Board of Directors of the Company.
Section 24. Exchange. (a) The Board of Directors of the Company may, at
--------
its option, at any time after any Person shall have become an Acquiring Person,
exchange all or any part of the then outstanding and exercisable Rights (which
shall not include Rights which have become void pursuant to the provisions of
Section 11(a)(ii)) for shares of Common Stock of the Company at an exchange rate
of one share of Common Stock per Right, appropriately adjusted to reflect any
transaction of the type specified in clauses (A) through (D), inclusive, of
Section 11(a)(i) but with respect to the Common Stock and Section 11(n) and
occurring after the date hereof (such exchange rate being hereinafter called the
"Exchange Rate"); provided, however, that the Board of Directors shall not be
-------- -------
empowered to effect such an exchange at any time after any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company or any entity holding shares of Common
Stock of the Company for or
-30-
pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, shall have become the Beneficial Owner of fifty
percent (50%) or more of the shares of Common Stock of the Company then
outstanding.
(b) Immediately after any action by the Board of Directors of the
Company directing the exchange of any Rights pursuant to subsection (a) of this
Section 24, notice of which shall be filed with the Rights Agent, and without
any further action and without any notice, the right to exercise such Rights
shall terminate and each registered holder of such Rights shall thereafter be
entitled to receive only the number of shares of Common Stock which shall equal
the number of such Rights held by such registered holder multiplied by the
Exchange Rate. The Company shall give prompt public notice of any exchange
directed pursuant to such subsection (a); provided, however, that the failure to
-------- -------
give, or any defect in, any such notice shall not affect the validity of such
exchange. Within ten (10) days after action by such Board of Directors directing
the exchange of such Rights, the Company shall mail a notice of exchange to all
registered holders of such Rights at their last addresses appearing upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the shares of Common Stock of the
Company. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not received by the registered holder to whom sent;
provided, however, that the failure to give, or any defect in, any such notice
-------- -------
shall not affect the validity of any such exchange. Each such notice shall state
the method by which the exchange of shares of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata among the
registered holders of the Rights based upon the number of Rights held (excluding
Rights which have become void pursuant to the provisions of Section 11(a)(ii));
and in such case, a new Rights Certificate evidencing the Rights not being
exchanged shall be prepared and executed by the Company and countersigned and
delivered by the Rights Agent to the registered holder of such Rights, subject
to the provisions of Section 14.
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute shares of Preferred Stock (or Equivalent Preferred
Stock) for shares of Common Stock exchangeable for Rights, at the initial rate
of one one-hundredth of a share of Preferred Stock (or Equivalent Preferred
Stock) for each share of Common Stock, as appropriately adjusted to reflect
adjustments in the voting rights of the Preferred Stock pursuant to the terms
thereof, so that the fraction of a share of Preferred Stock delivered in lieu of
each share of Common Stock shall have the same voting rights as one share of
Common Stock.
(d) In the event that there shall be an insufficient number of
shares of Common Stock or Preferred Stock authorized but unissued or issued and
held in the treasury of the Company to permit an exchange of Rights directed by
the Board of Directors of the Company, the Company shall take all such action as
may be necessary to authorize additional shares of Common Stock or Preferred
Stock for issuance upon such exchange of the Rights. In any such exchange, the
Company may, at its option, substitute shares of Equivalent Common Stock for
some or all of the shares of Common Stock otherwise exchangeable for the Rights.
(e) The Company shall not be required to issue fractional shares
of Common Stock or Preferred Stock in exchange for Rights or to distribute
certificates which evidence fractional shares
-31-
of Common Stock or Preferred Stock. In lieu of fractional shares of Common Stock
or Preferred Stock, the Company shall pay to the registered holders of the
Rights with respect to which such fractional shares of Common Stock or Preferred
Stock would otherwise be issuable an amount in cash equal to the same fraction
of the Current Market Value Per Share of Common Stock or Preferred Stock. For
the purposes of this subsection (e), the Current Market Value Per Share of
Common Stock or Preferred Stock shall be determined as provided in Section 14.
Section 25. Notice to Holders of Rights Certificates of Certain Events.
----------------------------------------------------------
(a) In the event that the Company shall propose (i) to pay any dividend payable
in shares of any class to the holders of its Preferred Stock or to make any
other distribution to the holders of its Preferred Stock (other than a regular
quarterly cash dividend at a rate not in excess of 125% of the rate of the last
regular quarterly cash dividend theretofore paid), (ii) to distribute to the
holders of its Preferred Stock options, warrants or rights to subscribe for or
purchase any additional shares of Preferred Stock or shares of any other class
or any other securities, rights or options, (iii) to effect any reclassification
of its Preferred Stock (other than a reclassification involving only the
subdivision of its outstanding shares of Preferred Stock), (iv) to effect any
consolidation or merger into or with, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions not in the ordinary course of business,
of fifty percent (50%) or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or pay
any dividend on the Common Stock payable in shares of Common Stock or to effect
a subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in shares of Common
Stock) then, in each such case, the Company shall give to each registered holder
of the Rights, and to the Rights Agent, in the manner provided in Section 26,
written notice of such proposed action, which shall specify the record date for
such stock dividend or distribution or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up is
expected to take place (and the date of participation therein by the holders of
the Common Stock and/or Preferred Stock if any such date is to be fixed). Such
notice shall be given (a) in the case of any action covered by clause (i) or
(ii) of the preceding sentence, at least six (6) days prior to the record date,
and (b) in the case of any other such action, at least ten (10) days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of Common Stock and/or the Preferred Stock, whichever
shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then the
Company shall, as soon as practicable thereafter, give to each registered holder
of the Rights, and to the Rights Agent, in the manner provided in Section 26,
written notice of the occurrence of such transaction, which notice shall
describe such transaction and its consequences in reasonable detail.
Section 26. Other Notices. Notices or demands authorized by this
-------------
Agreement to be given or made by the Rights Agent or by the registered holder of
any Rights or Rights Certificate to or on the Company shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address shall be filed in writing with the Rights Agent) as follows:
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Horizon Pharmacies, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the registered holder of any
Rights or Rights Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address shall be filed in writing with the Company) as follows:
Computershare Investor Services, LLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the registered holder of any Rights or Rights
Certificate shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the last address of such holder as
shown on the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Stock of the
Company.
Section 27. Supplements and Amendments. Prior to the Distribution Date,
--------------------------
the Company and the Rights Agent shall, if so directed by the Company,
supplement or amend any provision of this Agreement, without the approval of any
holders of certificates representing the Common Stock. From and after the
Distribution Date, the Company and the Rights Agent shall, if so directed by the
Company, supplement or amend this Agreement, without the approval of any holders
of the Rights or the Rights Certificates, in order: (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision herein, (iii) to shorten or
lengthen any time period specified hereunder, or (iv) to change or supplement
the provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect, as determined by the Company,
the interests of the holders of the Rights or the Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, however, that this Agreement may not be supplemented or amended
-------- -------
pursuant to clause (iii) of this sentence (A) to lengthen any time period unless
(1) approved by a majority of the Disinterested Directors, and (2) such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the registered holders of the Rights, or (B) to
lengthen any time period relating to when the Rights may be redeemed if at such
time the Rights are not then redeemable. Upon the delivery of a certificate from
an appropriate officer of the Company stating 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. Prior to the Distribution Date, the
interests of the holders of the Rights shall be deemed coincident with the
interests of the holders of the Common Stock of the Company. Notwithstanding any
other provision hereof, the Rights Agent's consent, which consent shall not be
unreasonably
-33-
withheld, must be obtained regarding any amendment or supplement pursuant to
this Section 27 which alters the Rights Agent's rights or duties.
Section 28. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns.
Section 29. Determinations and Actions by the Board of Directors, etc.
---------------------------------------------------------
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the percentage of such outstanding shares of Common Stock of which
any Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board of Directors of the Company (or, as set forth herein,
certain specified members thereof) shall have the power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement, including, without limitation, a
determination to redeem or not to redeem the Rights or to supplement or amend
this Agreement. All such calculations, actions, interpretations and
determinations (including, for purposes of clause (ii) below, all omissions with
respect to the foregoing) which are done or made by the Board of Directors of
the Company (or such specified members thereof) in good faith shall (i) be
final, conclusive and binding on the Company, the Rights Agent and the holders
of the Rights, and (ii) not subject any director to any liability to the holders
of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
--------------------------
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights and the Rights Certificates (and, prior to
the Distribution Date, the registered holders of the Common Stock of the
Company) any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights and the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock of the Company).
Section 31. Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction or
other lawful authority to be invalid, void or unenforceable, the remaining
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that, notwithstanding anything in this Agreement to the
-------- -------
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company shall determine in good faith that severing the same
from this Agreement would adversely affect the purposes or effect of this
Agreement, the right of redemption set forth in Section 23 shall be reinstated
and shall not expire until the Close of Business on the twentieth (20th) day
following the date of such determination by the Board of Directors of the
Company.
-34-
Section 32. Governing Law. This Agreement and each Rights Certificate
-------------
issued hereunder shall be deemed to be a contract made under the substantive
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.
Section 33. Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall for all purposes be deemed to be an
original, but all such counterparts shall together 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.
-35-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be affixed and attested,
all as of the day and year first above written.
HORIZON PHARMACIES, INC.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(Corporate Seal) Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
Attest:
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
COMPUTERSHARE INVESTOR SERVICES,
LLC, as Rights Agent
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇
(Corporate Seal) Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: Relationship Manager
Attest:
By: /s/▇▇▇▇▇▇▇ ▇. Ulk
Name: ▇▇▇▇▇▇▇ ▇. Ulk
Title: Relationship Manager
-36-
Exhibit A
---------
FORM OF CERTIFICATE OF DESIGNATION ESTABLISHING
SERIES A JUNIOR
PARTICIPATING PREFERRED STOCK
A-1
Exhibit B
---------
FORM OF RIGHTS CERTIFICATE
B-1
Exhibit C
---------
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF SERIES A JUNIOR
PARTICIPATING PREFERRED STOCK
C-1