EXHIBIT 99.1
FORM OF RIGHTS AGREEMENT
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▇▇▇▇▇ HEALTHCARE CORPORATION
and
THE BANK OF NEW YORK,
as Rights Agent
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RIGHTS AGREEMENT
Dated as of December 22, 1998
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TABLE OF CONTENTS
SECTION PAGE
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1. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. APPOINTMENT OF RIGHTS AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . .7
3. ISSUANCE OF RIGHTS CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . .7
4. FORM OF RIGHTS CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . .9
5. COUNTERSIGNATURE AND REGISTRATION . . . . . . . . . . . . . . . . . . . . . . . 10
6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES . . . . . . . . . . 11
7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS . . . . . . . . . 12
8. CANCELLATION OF RIGHTS CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . 14
9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK . . . . . . . . . . . . . . . . . 14
10. PREFERRED STOCK RECORD DATE. . . . . . . . . . . . . . . . . . . . . . . . . . 16
11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. . 17
12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES . . . . . . . . . . 27
13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS, CASH FLOW OR EARNING
POWER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. . . . . . . . . . . . . . . . . . . . 30
15. RIGHTS OF ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
16. AGREEMENT OF RIGHTS HOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . 32
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17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER . . . . . . . . . . . . . . 33
18. CONCERNING THE RIGHTS AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . 34
19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. . . . . . . . . . . 34
20. DUTIES OF RIGHTS AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
21. CHANGE OF RIGHTS AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
22. ISSUANCE OF NEW RIGHTS CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . 38
23. REDEMPTION AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . 39
24. EXCHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
25. NOTICE OF CERTAIN EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
26. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
27. SUPPLEMENTS AND AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 43
28. SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
29. DETERMINATIONS AND ACTIONS BY THE BOARD, ETC.. . . . . . . . . . . . . . . . . 44
30. BENEFITS OF THIS AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 45
31. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
32. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
33. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
34. DESCRIPTIVE HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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EXHIBITS
Exhibit A -- Form of Certificate of Designation,
Preferences and Rights
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of December 22, 1998 (this "AGREEMENT"),
between ▇▇▇▇▇ Healthcare Corporation, a Nevada corporation (the "COMPANY"), and
The Bank of New York, a New York banking corporation, as Rights Agent (the
"RIGHTS AGENT").
W I T N E S S E T H
WHEREAS, at 5:00 P.M., Eastern time, on December 22, 1998 (the "RIGHTS
DIVIDEND DECLARATION DATE"), the Board of Directors of the Company (the "BOARD")
authorized and declared a dividend distribution of one Right for each share of
common stock, par value $0.075 per share, of the Company (the "COMMON STOCK")
outstanding at 5:00 P.M., Eastern time, on December 22, 1998 (the "RECORD
DATE"), and has authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of Section 11(p) hereof) for
each share of Common Stock issued between the Record Date (whether originally
issued or delivered from the Company's treasury) and the Distribution Date (as
hereinafter defined), each Right initially representing the right to purchase
one one-thousandth of a share of Series B Junior Participating Preferred Stock
of the Company (the "PREFERRED STOCK"), having the rights, powers and
preferences set forth in the form of Certificate of Designation, Preferences and
Rights of the Company attached hereto as EXHIBIT A, upon the terms and subject
to the conditions hereinafter set forth (the "RIGHTS");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person who or which,
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
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, (iv) any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan, (v) any Person who,
prior to
December 22, 1998, became the Beneficial Owner of fifteen percent (15%) or
more of the shares of Common Stock, unless such Person becomes the Beneficial
Owner of three percent (3%) or more of the shares of Common Stock then
outstanding in excess of the percentage of shares of Common Stock
beneficially owned by such Person on December 22, 1998 or thereafter,
whichever is the least; PROVIDED that such percentage shall not be less than
fifteen percent (15%), (vi) any Person who becomes the Beneficial Owner of
fifteen percent (15%) or more of the shares of Common Stock then outstanding
as a result of a reduction in the number of shares of Common Stock
outstanding due to the repurchase of shares of Common Stock by the Company
unless and until such Person, after becoming aware that such Person has
become the Beneficial Owner of fifteen percent (15%) or more of the then
outstanding shares of Common Stock, subsequently acquires beneficial
ownership of additional shares of Common Stock representing an additional
three percent (3%) or more of the shares of Common Stock then outstanding or
(vii) any Person who would otherwise be an Acquiring Person; PROVIDED that
the event causing such person to become an Acquiring Person is an acquisition
of shares of Common Stock pursuant to an acquisition agreement relating to a
merger or other business combination transaction or a tender offer or an
exchange offer for all outstanding shares of Common Stock, in any such case
at a price and on terms determined by at least a majority of the members of
the Board who are not officers of the Company and who are not
representatives, nominees, Affiliates or Associates of an Acquiring Person,
after receiving advice from one or more investment banking firms, to be (a)
at a price that is fair to stockholders (taking into account all factors that
such members of the Board deem relevant) and (b) otherwise in the best
interests of the Company and its stockholders.
(b) "ACT" shall mean the Securities Act of 1933, as amended.
(c) "ADJUSTMENT SHARES" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(d) "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended and in effect
on the date of this Agreement (the "EXCHANGE ACT").
(e) A Person shall be deemed the "BENEFICIAL OWNER" of, and
shall be deemed to "beneficially own," any securities:
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(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (A) securities
tendered pursuant to a tender or exchange offer made by such Person
or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (B) securities
issuable upon exercise of Rights at any time prior to the occurrence
of a Triggering Event or (C) securities issuable upon exercise of
Rights from and after the occurrence of a Triggering Event which
Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant
to Section 3(a) or Section 22 hereof (the "ORIGINAL RIGHTS") or
pursuant to Section 11(i) hereof in connection with an adjustment
made with respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined pursuant
to Rule 13d-3 promulgated under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or
not in writing; PROVIDED, HOWEVER, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," any security
under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding: (A) arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable provisions of the rules promulgated under the Exchange
Act, and (B) is not reportable by such Person on Schedule 13D under
the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with
which such Person (or any of such Person's Affiliates or Associates)
has any agreement, arrangement or understanding (whether or not in
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writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (e)) or disposing of any voting
securities of the Company;
PROVIDED, HOWEVER, that nothing in this paragraph (e) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of, or to "beneficially own," any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty (40) days after the date of such acquisition.
(f) "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(g) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M.,
Eastern time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 P.M., Eastern time, on the next succeeding
Business Day.
(h) "COMMON STOCK" shall mean the common stock, par value $0.075
per share, of the Company, except that "Common Stock" when used with reference
to any Person other than the Company shall mean the capital stock of such Person
with the greatest voting power, or the equity securities or other equity
interest having power to control or direct the management, of such Person.
(i) "COMMON STOCK EQUIVALENTS" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(j) "CURRENT MARKET PRICE" shall have the meaning set forth in
Section 11(d)(i) hereof.
(k) "CURRENT VALUE" shall have the meaning set forth in Section
11(a)(iii) hereof.
(l) "DISTRIBUTION DATE" shall have the meaning set forth in
Section 3(a) hereof.
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(m) "EXCHANGE ACT" shall have the meaning set forth in Section
1(d) hereof.
(n) "EXCHANGE RATIO" shall have the meaning set forth in Section
24 hereof.
(o) "EXPIRATION DATE" shall have the meaning set forth in
Section 7(a) hereof.
(p) "FINAL EXPIRATION DATE" shall have the meaning set forth in
Section 7(a) hereof.
(q) "PERSON" shall mean any individual, firm, corporation,
partnership, limited liability company, trust or other entity.
(r) "PREFERRED STOCK" shall mean shares of Series B Junior
Participating Preferred Stock par value $0.01 per share, of the Company, and, to
the extent that there are not a sufficient number of shares of Series B Junior
Participating Preferred Stock authorized to permit the full exercise of the
Rights, any other series of preferred stock of the Company designated for such
purpose containing terms substantially similar to the terms of the Series B
Junior Participating Preferred Stock.
(s) "PRINCIPAL PARTY" shall have the meaning set forth in
Section 13(b) hereof.
(t) "PURCHASE PRICE" shall have the meaning set forth in Section
4(a) hereof.
(u) "RECORD DATE" shall have the meaning set forth in the
WHEREAS clause at the beginning of this Agreement.
(v) "REDEMPTION PRICE" shall have the meaning set forth in
Section 23(a) hereof.
(w) "RIGHTS" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.
(x) "RIGHTS AGENT" shall have the meaning set forth in the
parties clause at the beginning of this Agreement.
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(y) "RIGHTS CERTIFICATES" shall have the meaning set forth in
Section 3(a) hereof.
(z) "RIGHTS DIVIDEND DECLARATION DATE" shall have the meaning
set forth in the WHEREAS clause at the beginning of this Agreement.
(aa) "SECTION 11(A)(ii) EVENT" shall mean any event described in
Section 11(a)(ii) hereof.
(bb) "SECTION 11(A)(ii) TRIGGER DATE" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(cc) "SECTION 13 EVENT" shall mean any event described in clauses
(x), (y), or (z) of Section 13(a) hereof.
(dd) "SPREAD" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ee) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed or amended pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has
become such.
(ff) "SUBSIDIARY" shall mean, with reference to any Person, any
corporation, partnership, limited liability company or other entity of which an
amount of voting securities sufficient to elect at least a majority of the
directors of such corporation, partnership, limited liability company or other
entity is beneficially owned, directly or indirectly, by such Person, or such
corporation, partnership, limited liability company or other entity is otherwise
controlled by such Person.
(gg) "SUBSTITUTION PERIOD" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(hh) "SUMMARY OF RIGHTS" shall have the meaning set forth in
Section 3(b) hereof.
(ii) "TRADING DAY" shall have the meaning set forth in Section
11(d)(i) hereof.
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(jj) "TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-rights agents as it may deem
necessary or desirable upon ten (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.
Section 3. ISSUANCE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the close of business on the tenth
business day after the Stock Acquisition Date (or, if the tenth business day
after the Stock Acquisition Date occurs before the Record Date, 5:00 P.M.,
Eastern time, on the Record Date) or (ii) the close of business on the tenth
business day (or such later date as the Board shall determine) after the date
that a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, or any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan) is
first published or sent or given within the meaning of Rule 14d-2(a) promulgated
under the Exchange Act, if upon consummation thereof, such Person would be an
Acquiring Person (the earlier of (i) and (ii) being herein referred to as the
"DISTRIBUTION DATE"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates and (y) the Rights will be transferable
only in connection with the transfer of the underlying shares of Common Stock
(including a transfer to the Company). The Company shall give the Rights Agent
prompt written notice of the Distribution Date. As soon as practicable after
the Distribution Date, and receipt of written notice of the Distribution Date
from the Company, the Rights Agent will at the Company's expense, send by
first-class, insured, postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, one or more right certificates,
in substantially the form of EXHIBIT B hereto (the "RIGHTS CERTIFICATES"),
evidencing one Right for each share of Common Stock so held, subject to
adjustment as provided herein. In the event that an adjustment in the number of
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Rights per share of Common Stock has been made pursuant to Section 11(p)
hereof, at the time of distribution of the Rights Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in accordance
with Section 14(a) hereof) so that Rights Certificates representing only
whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
(b) The Company will make available a copy of a Summary of
Rights, in substantially the form attached hereto as EXHIBIT C (the "SUMMARY OF
RIGHTS"), to any holder of Rights who may so request from time to time. With
respect to certificates for the Common Stock outstanding as of the Record Date
or which were or shall be issued subsequent to the Record Date, unless and
until the Distribution Date shall occur, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the Common Stock
shall also be the registered holders of the associated Rights. Until the
earlier of the Distribution Date or the Expiration Date (as hereinafter
defined), the transfer of any certificates representing shares of Common Stock
in respect of which Rights have been issued shall also constitute the transfer
of the Rights associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common
Stock which are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date. Certificates representing such shares of Common
Stock shall also be deemed to be certificates for Rights, and shall bear the
following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement between ▇▇▇▇▇
Healthcare Corporation (the "COMPANY") and the Rights Agent
thereunder (the "RIGHTS AGREEMENT"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at
the principal offices of the Company. 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. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date
of mailing, without charge, promptly after receipt of a written
request therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any Person who is,
was or becomes an Acquiring Person or any Affiliate or Associate
thereof (as such terms are defined in the Rights
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Agreement), whether currently held by or on behalf of such Person or
by any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in EXHIBIT B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any 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 Section 11 and Section 22 hereof, the
Rights Certificates, whenever distributed, shall be dated as of the Record Date,
show the date of countersignature, and on their face shall entitle the holders
thereof to purchase such number of one one-thousandths of a share of Preferred
Stock as shall be set forth therein at the price set forth therein (such
exercise price per one one-thousandth of a share of Preferred Stock, the
"PURCHASE PRICE"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a),
Section 11(i) or Section 22 hereof that represents Rights beneficially owned by:
(i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes such or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such
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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 (whether or not in writing) regarding
the transferred Rights or (B) a transfer which the Board has determined is
part of a plan, arrangement or understanding (whether or not in writing)
which has as a primary purpose or effect avoidance of Section 7(e) hereof,
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 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 may become null and
void in the circumstances specified in Section 7(e) of the Rights
Agreement.
The Company shall instruct the Rights Agent in writing of the Rights
which should be so legended and shall supply the Rights Agent with such legended
Rights Certificates.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any Vice President,
either manually or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer of the
Company, either manually or by facsimile signature. The Rights Certificates
shall be manually or by facsimile countersigned by the Rights Agent and shall
not be valid for any purpose unless so countersigned. In case any officer of
the Company who shall have signed any of the Rights Certificates shall cease to
be such officer of the Company before countersignature by 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 signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer
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of the Company to sign such Rights Certificate, although at the date of the
execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, 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 of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the close of business on the Distribution
Date, and at or prior to 5:00 P.M., Eastern time, on the Expiration Date, any
Rights Certificate or Certificates (other than Rights Certificates representing
Rights that may have been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of one
one-thousandths of a share of Preferred Stock (or, following a Triggering Event,
Common Stock, other securities, cash or other assets, as the case may be) as the
Rights Certificate or Certificates surrendered then entitles such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the principal office or offices of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e), Section
14 and Section 24 hereof, countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment by holders of Rights of a sum
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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.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and 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, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of one one-thousandths of a share (or other securities, cash or
other assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earliest of (i) 5:00 P.M. Eastern time, on
December 22, 2008 (the "FINAL EXPIRATION DATE") or (ii) the time at which the
Rights are redeemed as provided in Section 23 and Section 24 hereof (the earlier
of (i) and (ii) being herein referred to as the "EXPIRATION DATE").
(b) The Purchase Price for each one one-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right initially shall be $120,
shall be subject to adjustment from time to time as provided in Section 11 and
Section 13(a) hereof and shall be payable in accordance with paragraph (c)
below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one one-thousandth of a share of Preferred Stock (or other shares,
securities, cash or other assets, as the case may be) to be purchased as set
forth below and an
12
amount equal to any applicable transfer tax, the Rights Agent shall, subject
to Section 20(k) hereof, thereupon promptly (i) (A) requisition from any
transfer agent of the shares of Preferred Stock (or make available, if the
Rights Agent is the transfer agent for such shares) certificates for the
total number of one one-thousandths of a share of Preferred Stock to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) if the Company shall have elected to
deposit the total number of shares of Preferred Stock issuable upon exercise
of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of one
one-thousandths of a share of Preferred Stock as are to be purchased (in
which case certificates for the shares of Preferred Stock represented by such
receipts shall be deposited by the transfer agent with the depositary agent)
and the Company will direct the depositary agent to comply with such request,
(ii) requisition from the Company the amount of cash, if any, to be paid in
lieu of fractional shares in accordance with Section 14 hereof, (iii) after
receipt of such certificates or depositary receipts, 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
holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights Certificate. The payment
of the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) shall be made in cash or by certified bank check or bank
draft payable to the order of the Company. In the event that the Company is
obligated to issue other securities (including Common Stock) of the Company,
pay cash and/or distribute other property pursuant to Section 11(a) hereof,
the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate. The Company reserves the right to
require prior to the occurrence of a Triggering Event that, upon any exercise
of Rights, a number of Rights be exercised so that only whole shares of
Preferred Stock would be issued.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and 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 holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person,
13
(ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such,
or (iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person
to holders of equity interests in such Acquiring Person or to any Person with
whom the Acquiring Person has any continuing agreement, arrangement or
understanding (whether or not in writing) regarding the transferred Rights or
(B) a transfer which the Board has determined is part of a plan, arrangement
or understanding (whether or not in writing) which has as a primary purpose
or effect the avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. The Rights Agent will endeavor to
comply with the provisions hereof to the extent it has received instructions
from the Company concerning such matters.
(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 a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. CANCELLATION OF RIGHTS CERTIFICATES. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or 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
any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificate purchased or
14
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock (and,
following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities or out of its authorized
and issued shares held in its treasury), the number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock and/or other
securities) that, as provided in this Agreement including Section 11(a)(iii)
hereof, will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities) issuable
and deliverable upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
(c) The Company shall use its best efforts to (i) file, as soon
as practicable following the earliest date after the first occurrence of a
Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, a registration statement under the Act, with respect
to the securities purchasable upon exercise of the Rights 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 earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the date of the expiration of the
Rights. The Company will also take such action as may be appropriate under, or
to ensure compliance with, the securities or "blue sky" laws of the various
states in connection with the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed ninety (90) days after
the date set forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement, in each case with simultaneous
written notice to the Rights Agent stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at
15
such time as the suspension is no longer in effect. In addition, if the
Company shall determine that a registration statement is required following
the Distribution Date, the Company may temporarily suspend the exercisability
of the Rights until such time as a registration statement has been declared
effective. Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction has not been obtained, the exercise
thereof is not permitted under applicable law or a registration statement has
not been declared effective. The Rights Agent may assume that any Rights
exercised is permitted to be exercised under applicable law and shall have no
liability for acting in reliance upon such assumption.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all one one-thousandths of a share of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for a number of one one-thousandths of a
share of Preferred Stock (or Common Stock and/or other securities, as the case
may be) upon the exercise of 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 Rights Certificates to a Person other than, or the issuance or
delivery of a number of one one-thousandths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights Certificates evidencing
Rights surrendered for exercise or to issue or deliver any certificates for a
number of one one-thousandths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until 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
satisfaction that no such tax is due.
Section 10. PREFERRED STOCK RECORD DATE. Each person in whose name
any certificate for a number of one one-thousandths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) is issued
upon the exercise
16
of Rights shall for all purposes be deemed to have become the holder of
record of such fractional shares of Preferred Stock (or Common Stock and/or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; PROVIDED, HOWEVER, that if the
date of such surrender and payment is a date upon which the Preferred Stock
(or Common Stock and/or other securities, as the case may be) transfer books
of the Company are closed, such Person shall be deemed to have become the
record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled
to any rights of a Stockholder of the Company with respect to shares for
which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES
OR NUMBER OF RIGHTS. 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 the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares or (D) issue any shares of its capital
stock in a reclassification of the Preferred Stock (including any
such reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e)
hereof, the Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares
of Preferred Stock or capital stock, as the case may be, issuable on
such date, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to receive,
upon payment of the Purchase Price then in effect, the aggregate
number and kind of shares of Preferred Stock
17
or capital stock, as the case may be, which, if such Right had been
exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, such holder
would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification.
If an event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event any Person, alone or together with its
Affiliates and Associates, shall, at any time after the Rights Dividend
Declaration Date, become an Acquiring Person, unless the event causing
such Person to become an Acquiring Person is a transaction set forth in
Section 13(a) hereof, or is an acquisition of shares of Common Stock
pursuant to a tender offer or an exchange offer for all outstanding
shares of Common Stock at a price and on terms determined by at least a
majority of the members of the Board who are not officers of the
Company and who are not representatives, nominees, Affiliates or
Associates of an Acquiring Person, after receiving advice from one or
more investment banking firms, to be (a) at a price that is fair to
stockholders (taking into account all factors that such members of the
Board deem relevant including, without limitation, prices that could
reasonably be achieved if the Company or its assets were sold on an
orderly basis designed to realize maximum value) and (b) otherwise in
the best interests of the Company and its stockholders, then, promptly
following the occurrence of such event, proper provision shall be made
so that each holder of a Right (except as provided below and in Section
7(e) hereof) shall thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the terms
of this Agreement, in lieu of a number of one one-thousandths of a
share of Preferred Stock, such number of shares of Common Stock of the
Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the then number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event, and (y)
dividing that product (which, following such first occurrence, shall
thereafter be referred to as the "PURCHASE PRICE" for each Right
18
for all purposes of this Agreement) by fifty percent (50%) of the
Current Market Price (determined pursuant to Section 11(d) hereof) per
share of Common Stock on the date of such first occurrence (such number
of shares, the "ADJUSTMENT SHARES").
(iii) In the event that the number of shares of Common Stock
that are authorized by the Company's Amended and Restated Articles of
Incorporation but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights are not sufficient to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall (A)
determine the value of the Adjustment Shares issuable upon the exercise
of a Right (the "CURRENT VALUE"), and (B) with respect to each Right
(subject to Section 7(e) hereof), make adequate provision to substitute
for the Adjustment Shares, upon the exercise of a Right and payment of
the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or other equity securities of the
Company (including, without limitation, shares, or units of shares, of
preferred stock, such as the Preferred Stock, which the Board has
deemed to have essentially the same value or economic rights as shares
of Common Stock (such shares of preferred stock being referred to as
"COMMON STOCK EQUIVALENTS")), (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 (less the amount of any
reduction in the Purchase Price), where such aggregate value has been
determined by the Board based upon the advice of a nationally
recognized investment banking firm selected by the Board; PROVIDED,
HOWEVER, that if the Company shall not have made adequate provision to
deliver 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 of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being
referred to herein as the "SECTION 11(a)(ii) TRIGGER DATE"), then the
Company shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, shares
of Common Stock (to the extent available) and then, if necessary, cash,
which shares and/or cash have an aggregate value equal to the Spread.
For purposes of the preceding sentence, the term "SPREAD" shall mean
the excess of (i) the Current Value over (ii) the Purchase Price. If
the
19
Board determines 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 set forth
above may be extended to the extent necessary, but not more than ninety
(90) days after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be extended,
is herein called the "SUBSTITUTION PERIOD"). To the extent that action
is to be taken pursuant to the first and/or third sentences of this
Section 11(a)(iii), the Company (1) shall provide, subject to Section
7(e) hereof, that such action shall apply uniformly to all outstanding
Rights and (2) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek such stockholder
approval for such authorization of additional shares and/or to decide
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 at such time as the suspension is no
longer in effect. For purposes of this Section 11(a)(iii), the value of
each Adjustment Share shall be the current market price per share of
the Common Stock on the Section 11(a)(ii) Trigger Date and the per
share or per unit value of any Common Stock Equivalent shall be deemed
to equal the current market price per share of the Common Stock on such
date.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Stock entitling them
to subscribe for or purchase (for a period expiring within forty-five (45)
calendar days after such record date) Preferred Stock (or shares having the same
rights, privileges and preferences as the shares of Preferred Stock ("EQUIVALENT
PREFERRED STOCK")) or securities convertible into Preferred Stock or Equivalent
Preferred Stock at a price per share of Preferred Stock or per share of
Equivalent Preferred Stock (or having a conversion price per share, if a
security convertible into Preferred Stock or Equivalent Preferred Stock) less
than the Current Market Price (as determined pursuant to Section 11(d) hereof)
per share of Preferred Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record
20
date, plus the number of shares of Preferred Stock that 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 initial
conversion price of the convertible securities so to be offered) would
purchase at such Current Market Price, and the denominator of which shall be
the number of shares of Preferred Stock outstanding on such record date, plus
the number of additional shares of Preferred Stock and/or Equivalent
Preferred Stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case
such subscription price may be paid by delivery of consideration part or all
of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board, whose determination shall
be described in a statement filed with the Rights Agent and shall be binding
on the Rights Agent and the holders of the Rights. Shares of Preferred Stock
owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed, and in the event
that such rights or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price that would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current Market
Price (as determined pursuant to Section 11(d) hereof) per share of Preferred
Stock on such record date, less the fair market value (as determined in good
faith by the Board, whose determination shall be described in a statement filed
with the Rights Agent) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to a share of Preferred Stock and the denominator of which shall be
such Current Market Price (as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock. Such adjustments 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 be the Purchase Price which would
have been in effect if such record date had not been fixed.
21
(d)(i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "CURRENT
MARKET PRICE" per share of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such Common Stock for
the thirty (30) consecutive Trading Days (as hereinafter defined)
immediately prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the Current Market Price per share
of Common Stock on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the ten (10) consecutive
Trading Days immediately following such date; PROVIDED, HOWEVER, that in
the event that the Current Market Price per share of the Common Stock is
determined during a period following the announcement by the issuer of
such Common Stock of (A) a dividend or distribution on such Common Stock
payable in shares of such Common Stock or securities convertible into
shares of such Common Stock (other than the Rights), or (B) any
subdivision, combination or reclassification of such Common Stock, and the
ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification shall not have occurred
prior to the commencement of the requisite thirty (30) Trading Day or ten
(10) Trading Day period, as set forth above, then, and in each such case,
the Current Market Price shall be properly adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the shares of Common Stock are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
the shares of Common Stock are listed or admitted to trading or, if the
shares of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System ("NASDAQ") or such other system then in
use, or, if on any such date the shares of Common Stock are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Stock selected by the Board. If on any such date no market maker is
making a market in the Common Stock, the
22
fair value of such shares on such date as determined in good faith by
the Board shall be used. The term "TRADING DAY" shall mean a day on
which the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, a
Business Day. If the Common Stock is not publicly held or not so
listed or traded, Current Market Price per share shall mean the fair
value per share as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the Current
Market Price per share of Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in clause (i) of this
Section 11(d) (other than the last sentence thereof). If the Current
Market Price per share of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not publicly held or
listed or traded in a manner described in clause (i) of this Section
11(d), the Current Market Price per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 1,000 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock occurring after the
date of this Agreement) multiplied by the Current Market Price per share
of the Common Stock. If neither the Common Stock nor the Preferred Stock
is publicly held or so listed or traded, Current Market Price per share of
the Preferred Stock shall mean the fair value per share as determined in
good faith by the Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in the Purchase
Price; PROVIDED, HOWEVER, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a share of
Common Stock or other share or ten-millionth of a share of Preferred Stock, as
the case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be
23
made no later than the earlier of (i) three (3) years from the date of the
transaction that mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths 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 its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-thousandths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one one-thousandths
of a share covered by a Right immediately prior to this adjustment, by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any adjustment
in the number of one one-thousandths of a share of Preferred Stock purchasable
upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of one
one-thousandths of a share of Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately
24
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Rights Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i),
the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the additional Rights
to which such holders shall be entitled as a result of such adjustment, or,
at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Rights Certificates held by
such holders 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 holders shall be entitled after such adjustment. Rights
Certificates so to be distributed shall be issued, executed and countersigned
in the manner provided for herein (and may bear, at the option of the
Company, the adjusted Purchase Price) and shall be registered in the names of
the holders of record of Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the Purchase Price per one
one-thousandth of a share and the number of one one-thousandths of a share that
were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of the number
of one one-thousandths of a share of Preferred Stock issuable upon exercise of
the Rights, the Company shall take any corporate action that may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable such number of one one-thousandths of a share
of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified
25
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date of the
number of one one-thousandths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise over
and above the number of one one-thousandths of a share of Preferred Stock and
other capital stock 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 (fractional or otherwise) or securities upon
the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment the Board
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any
shares of Preferred Stock at less than the Current Market Price, (iii)
issuance wholly for cash of shares of Preferred Stock or securities which by
their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of
its Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets,
cash flow or earning power aggregating more than fifty percent (50%) of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the stockholders of the Person who
constitute, or would constitute, the "PRINCIPAL PARTY" for purposes of
Section
26
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23, Section 24
or Section 27 hereof, take (or permit any Subsidiary to take) any action if
at the time such action is taken it is reasonably foreseeable that such
action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock
or (iii) combine the outstanding shares of Common Stock into a smaller number
of shares, the number of Rights associated with each share of Common Stock
then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any
such event shall equal the result obtained by multiplying the number of
Rights associated with each share of Common Stock immediately prior to such
event by a fraction the numerator of which shall be the total number of
shares of Common Stock outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of such event.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 and Section
13 hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent, and with each transfer
agent for the Preferred Stock and the Common Stock, a copy of such
certificate and (c) if a Distribution Date has occurred, mail a brief summary
thereof to each holder of a Rights Certificate in accordance with Section 26
hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS,
CASH FLOW OR EARNING POWER.
27
(a) In the event that, following the Distribution Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person or any such Person's Affiliates or Associates
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), and the Company shall not be the continuing or
surviving corporation of such consolidation or merger, (y) any Person or any
such Person's Affiliates or Associates (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the Company shall
be the continuing or surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all or part of the
outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other property,
or (z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, assets, cash flow or earning power
aggregating more than fifty percent (50%) of the assets, cash flow or earning
power of the Company and its Subsidiaries (taken as a whole) to any Person or
Persons or their Affiliates or Associates (other than the Company or any
Subsidiary of the Company in one or more transactions each of which complies
with Section 11(o) hereof), then, and in each such case each Right shall
become exercisable (except as may be contemplated by Section 13(d) hereof),
and proper provision shall be made so that: (i) each holder of a Right,
except as provided in Section 7(e) hereof, shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and freely tradeable shares
of Common Stock of the Principal Party (as such term is hereinafter defined),
not subject to any liens, encumbrances, rights of first refusal or other
adverse claims, as shall be equal to the result obtained by (1) multiplying
the then current Purchase Price by the number of one one-thousandths of a
share of Preferred Stock for which a Right is exercisable immediately prior
to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii)
Event has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such one one-thousandths of a share for which a
Right was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event by the Purchase Price in effect immediately prior to such
first occurrence), and dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as the "PURCHASE
PRICE" for each Right and for all purposes of this Agreement) by (2) fifty
percent (50%) of the Current Market Price (determined pursuant to Section
11(d)(i) hereof) per share of the Common Stock of such Principal Party on the
date of consummation of such Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section
13 Event,
28
all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "COMPANY" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) in connection with the consummation of
any such transaction as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in relation
to its shares of Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the first occurrence of any Section 13 Event.
(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a) hereof, the Person
that is the issuer of any securities into which shares of Common
Stock of the Company are converted in such merger or consolidation,
and if no securities are so issued, the Person that is the other
party to such merger or consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a) hereof, the Person
that is the party receiving the greatest portion of the assets, cash
flow or earning power transferred pursuant to such transaction or
transactions;
PROVIDED, HOWEVER, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Stock of which is and has been so registered, "Principal Party" shall refer
to such other Person; and (2) in case such Person is a Subsidiary, directly
or indirectly, of more than one Person, the Common Stocks of two or more of
which are and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the
greatest aggregate market value.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued or
reserved for
29
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the date
of any consolidation, merger or sale of assets mentioned in paragraph (a) of
this Section 13, 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 Expiration Date; and
(ii) take all such other actions as may be necessary to
enable the Principal Party to issue securities purchasable upon exercise
of the Rights, including but not limited to the registration or
qualification of such securities under all requisite securities laws of
jurisdictions of the various states and the listing of such securities on
such exchanges and trading markets as may be necessary or commercially
appropriate for the benefit of the holders of the Rights; and
(iii) will 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.
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. In the event that a Section
13 Event shall occur at any time after the occurrence of 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) hereof.
(d) Notwithstanding anything in this Agreement to the
contrary, this Section 13 shall not be applicable to a transaction described
in subparagraphs (x) and (y) of Section 13(a) hereof if (i) such transaction
is consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a tender offer or exchange offer for all outstanding shares of
Common Stock which complies with the
30
provisions of Section 11(a)(ii) hereof (or a wholly owned subsidiary of any
such Person or Persons), (ii) the price per share of Common Stock offered in
such transaction is not less than the price per share of Common Stock paid to
all holders of shares of Common Stock whose shares were purchased pursuant to
such tender offer or exchange offer and (iii) the form of consideration being
offered to the remaining holders of shares of Common Stock pursuant to such
transaction is the same as the form of consideration paid pursuant to such
tender offer or exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
(e) 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 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 fractions of
Rights, except prior to the Distribution Date as provided in Section 11(p)
hereof, or to distribute Rights Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right. For purposes of
this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed 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
31
market, as reported by NASDAQ or such other system then in use or, if on any
such date the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board. If on any such date no
such market maker is making a market in the Rights the fair value of the
Rights on such date as determined in good faith by the Board shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions that are integral multiples
of one one-thousandth of a share of Preferred Stock) upon exercise of the
Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions that are integral multiples of one
one-thousandth of a share of Preferred Stock). In lieu of fractional shares
of Preferred Stock that are not integral multiples of one one-thousandth of a
share of Preferred Stock, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of
one one-thousandth of a share of Preferred Stock. For purposes of this
Section 14(b), the current market value of one one-thousandth of a share of
Preferred Stock shall be one one-thousandth of the closing price of a share
of Preferred Stock (as determined pursuant to Section 11(d)(ii) hereof) for
the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, the Company may pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one (1) share of
Common Stock. For purposes of this Section 14(c), the current market value
of one share of Common Stock shall be the closing price of one share of
Common Stock (as determined pursuant to Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Rights
Certificates
32
(and, prior to the Distribution Date, the registered holders of the Common
Stock); and any registered holder of any Rights Certificate (or, prior to the
Distribution Date, of the 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 Common Stock), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such Rights Certificate in the
manner provided in such Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and shall be entitled
to specific performance of the obligations hereunder and injunctive relief
against actual or threatened violations of the obligations hereunder of any
Person subject to this Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right
by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, 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 evidenced thereby (notwithstanding any notations of ownership or
writing on the 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, subject to the last
sentence of Section 7(e) hereof, shall be required to be affected by any
notice to the contrary; and
33
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability
to any holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
PROVIDED, HOWEVER, 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 STOCKHOLDER.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number of
one one-thousandths of a share of Preferred Stock or any other securities of
the Company that 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 stockholder of the Company or any right to
vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent 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 demand of the Rights Agent, its reasonable expenses and counsel fees
and disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim (whether asserted by the Company, the
holder of a Rights Certificate or any other person) of liability in the
premises.
34
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
Rights Certificate or certificate for Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, instruction, direction, consent,
certificate, statement or other paper or document believed by it to be
genuine and to be signed, and executed by the proper Person or Persons and,
where necessary, to be verified or acknowledged.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust or stock transfer business of
the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto; but only
if such corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21 hereof. 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, any such successor Rights Agent may adopt the countersignature of
a predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, any successor Rights Agent may countersign such
Rights Certificates either in the name of the predecessor or in the name of
the successor Rights Agent; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that 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 force provided in the
Rights Certificates and in this Agreement.
35
Section 20. DUTIES OF 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 their acceptance thereof,
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 (including, without limitation, the identity of any Acquiring
Person and the determination of Current Market Price) be proved or
established by the Company prior to taking 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 the Chairman of the Board, the
President, the Chief Financial Officer, any Vice President, the Treasurer,
any Assistant Treasurer, the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its
own 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 or be required to verify the same (except as to its
countersignature on such Rights Certificates), 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
36
adjustment required under the provisions of Section 11, Section 13 or Section
24 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced
by Rights Certificates after the Rights Agent's receipt of actual notice of
any such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares of Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Common
Stock or Preferred Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable, and no implied duties or obligations
shall be read into this Agreement against the Rights Agent.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, the President, the Chief Financial Officer,
any Vice President, the Secretary, any Assistant Secretary, the Treasurer or
any Assistant Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those 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 three
Business Days after the date any 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.
37
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall
not be answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct; PROVIDED, HOWEVER, reasonable
care was exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with
the Company.
(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 certification concerning beneficial ownership appended to
the form of assignment and the form of election to purchase exercise attached
hereto unless the Rights Agent shall have actual knowledge that, as executed,
such certification is untrue, or (ii) the non-execution of such certification
including, without limitation, any refusal to honor any otherwise permissible
assignment or election by reason of such nonexecution.
38
(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 RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon sixty (60) days' notice in writing mailed to the Company,
and to each transfer agent of the Common Stock and Preferred Stock, by
registered or certified mail, and to the holders of the Rights Certificates
by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be. If the
Rights Agent shall resign or be removed or shall otherwise become incapable
of acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of sixty (60)
days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), then
the Rights Agent or any registered holder of any Rights Certificate may, at
the expense of the Company, apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation or
other legal business entity organized and doing business under the laws of
the United States or of any State thereof, in good standing, which is
authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by Federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) an affiliate of a
corporation or other legal business entity described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment, the Company shall
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock and the Preferred Stock, and mail a notice
thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation
39
or removal of the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights
in such form as may be approved by the Board to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Rights Certificates made
in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or expiration of the Rights,
the Company (a) shall, with respect to shares of Common Stock so issued or
sold pursuant to the exercise of stock options or under any employee plan or
arrangement, granted or awarded as of the Distribution Date, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate
by the Board, issue Rights Certificates representing the appropriate number
of Rights in connection with such issuance or sale; PROVIDED, HOWEVER, that
(i) no such Rights Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 23. REDEMPTION AND TERMINATION.
(a) The Board may, at its option, at any time prior to the
earlier of (i) the close of business on the tenth business day (or such later
date as the Board shall determine) following the Stock Acquisition Date (or,
if the Stock Acquisition Date shall have occurred prior to the Record Date,
the close of business on the tenth business day following the Record Date)(
or such later date as the Board shall determine), or (ii) 5:00 P.M., Eastern
time, on the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $0.01 per Right, as such amount
may be appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "REDEMPTION PRICE"). Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Section 11(a)(ii) Event until
such time
40
as the Company's right of redemption hereunder has expired. The Company may,
at its option, pay the Redemption Price in cash, shares of Common Stock
(based on the Current Market Price, as defined in Section 11(d)(i) hereof, of
the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board.
(b) Immediately upon the action of the Board ordering the
redemption of the Rights, evidence of which shall have been filed with the
Rights Agent and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so
held. Promptly after the action of the Board ordering the redemption of the
Rights, the Company shall give notice of such redemption to the Rights Agent
and the holders of the then outstanding Rights by mailing such notice to all
such holders at each holder's last address as it appears 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. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.
Section 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all or
part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 7(e)
hereof) for Common Stock at an exchange ratio of one share of Common Stock
per Right, appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "EXCHANGE RATIO"). Notwithstanding the
foregoing, the Board of Directors of the Company shall not be empowered to
effect such 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 such Subsidiary, or any entity holding Common Stock for or pursuant to
the terms of any such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the Common Stock
then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to subsection (a) of
this
41
Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of shares of Common
Stock equal to the number of such Rights held by such holder multiplied by
the Exchange Ratio. The Company shall promptly give public notice of any
such exchange; PROVIDED, HOWEVER, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of
such Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of exchange will state the method by which the exchange of the
Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute Preferred Stock (or Equivalent Preferred Stock,
as such term is defined in paragraph (b) of Section 11 hereof) for Common
Stock exchangeable for Rights, at the initial rate of one one-thousandth of a
share of Preferred Stock (or Equivalent Preferred Stock) for each share of
Common Stock, as appropriately adjusted to reflect stock splits, stock
dividends and other similar transactions after the date hereof.
(d) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit
any exchange of Rights as contemplated in accordance with this Section 24,
the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares of
Common Stock, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional shares of Common Stock
would otherwise be issuable, an amount in cash equal to the same fraction of
the current market value of a whole share of Common Stock. For the purposes
of this subsection (e), the current market value of a whole share of Common
Stock shall be the closing price of a share of Common Stock (as
42
determined pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular quarterly cash dividend out
of earnings or retained earnings of the Company), or (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or to purchase
any additional shares of Preferred Stock or shares of stock of any class or
any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock), or
(iv) to effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), 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
transaction or a series of related transactions, of more than fifty percent
(50%) of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more transactions each
of which complies with Section 11(o) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights Certificate and to
the Rights Agent, to the extent feasible and in accordance with Section 25
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least twenty
(20) days prior to the record date for determining holders of the shares of
Preferred Stock for purposes of such action, and in the case of any such
other action, at least twenty (20) days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of
the shares of Preferred Stock whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii)
hereof shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate and to the
Rights
43
Agent, to the extent feasible and in accordance with Section 26 hereof, a
notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii)
hereof, and (ii) all references in the preceding paragraph to Preferred Stock
shall be deemed thereafter to refer to Common Stock and/or, if appropriate,
other securities.
Section 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
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 is filed in writing with the Rights Agent) as follows:
▇▇▇▇▇ Healthcare Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any 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 is
filed in writing with the Company) as follows:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. Prior to the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common Stock.
From and after the Distribution
44
Date, the Company and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of
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 provisions herein, (iii) to shorten or lengthen
any time period 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 the interests of the holders of Rights
Certificates; PROVIDED, from and after the Distribution Date, this Agreement
may not be supplemented or amended, pursuant to clause (iii) of this
sentence, to lengthen any time period hereunder unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or
the benefits to, the holders of Rights. Upon the delivery of a certificate
from an appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27,
the Rights Agent shall execute such supplement or amendment. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock. Notwithstanding
anything contained herein to the contrary, this Agreement may not be amended
at a time when the Rights are not redeemable. Notwithstanding any other
provision hereof, the Rights Agent's consent 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 hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD, ETC. For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) promulgated under
the Exchange Act. The Board shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable
in the administration of this Agreement, including, 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 a determination to redeem or not redeem the
Rights or to amend the Agreement). All such actions, calculations,
interpretations and
45
determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) which are done or made by the Board in good
faith, shall (x) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other parties, and (y) not subject
the Board or any directors to any liability to the holders of the Rights.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, 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 determines
in its good faith judgment that severing the invalid language from this
Agreement would adversely affect the purpose or effect of this Agreement, the
right of redemption set forth in Section 23 hereof shall be reinstated and shall
not expire until the close of business on the tenth business day following the
date of such determination by the Board.
Section 32. GOVERNING LAW. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Nevada and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State, provided, however, that the
rights and obligations of the Rights Agent shall be governed by and construed in
accordance with the laws of the State of New York.
Section 33. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
46
deemed to be an original, and all such counterparts shall together constitute
but 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.
47
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the day and year first above written.
▇▇▇▇▇ HEALTHCARE CORPORATION
By:
----------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Rights Agent
By:
----------------------------------
Name:
Title:
EXHIBIT A
CERTIFICATE OF DESIGNATION
OF
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
OF
▇▇▇▇▇ HEALTHCARE CORPORATION
------------------------
Pursuant to Section 78.1955 of the
Nevada Revised Statutes
------------------------
▇▇▇▇▇ HEALTHCARE CORPORATION (the "CORPORATION"), a corporation
organized and existing under and by virtue of the provisions of the Nevada
Revised Statutes (the "NRS"), certifies as follows:
FIRST: The Amended and Restated Articles of Incorporation of the
Corporation (the "ARTICLES") authorize the issuance of 2,500,000 shares of
Preferred Stock, par value $.01 per share (the "PREFERRED STOCK"), and
further, authorizes the Board of Directors of the Corporation (the "BOARD")
to provide for the issuance of all or any shares of Preferred Stock in one or
more classes or series, and to fix for each such class or series such voting
powers, full or limited, or no voting powers, and such distinctive
designations, preferences and relative, participating, optional or other
special rights and such qualifications, limitations or restrictions thereof,
as shall be stated and expressed in the resolution or resolutions adopted by
the Board providing for the issuance of such class or series and as may be
permitted by the NRS, including, without limitation, the authority to provide
that any such class or series may be (i) subject to redemption at such time
or times and at such price or prices; (ii) entitled to receive dividends
(which may be cumulative or non-cumulative) at such rates, on such
conditions, and at such times, and payable in preference to, or in such
relation to, the dividends payable on any other class or classes or any other
series; or (iii) entitled to such rights upon the dissolution of, or upon any
distribution of the assets of, the Corporation, all as may be stated in such
resolution or resolutions.
SECOND: That pursuant to the authority conferred upon the Board by
the Articles, the said Board on December 2, 1998 adopted the following
resolution creating a series of 700,000 shares of Preferred Stock designated as
Series B Junior Participating Preferred Stock:
A-1
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its Amended
and Restated Articles of Incorporation, a series of Preferred Stock of the
Corporation be and it hereby is created, and that the designation and amount
thereof and the voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall
be designated as "SERIES B JUNIOR PARTICIPATING PREFERRED STOCK" and the number
of shares constituting such series shall be 700,000.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series B Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series B Junior Participating Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the fifteenth day of March, June, September and December in each year (each such
date being referred to herein as a "QUARTERLY DIVIDEND PAYMENT DATE"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series B Junior Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $0.01 or (b) subject to the provision for adjustment hereinafter set
forth, 1,000 times the aggregate per share amount of all cash dividends, and
1,000 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock, par value $0.01
per share, of the Corporation (the "COMMON STOCK") since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series B Junior Participating Preferred Stock. In the
event the Corporation shall at any time after 5:00 p.m. Eastern time on December
22, 1998 (the "RIGHTS DECLARATION DATE") (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which holders of shares of Series B
Junior Participating Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
A-2
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series B Junior Participating Preferred Stock as provided in Paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); PROVIDED that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $0.01 per share on the
Series B Junior Participating Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
B Junior Participating Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of shares of
Series B Junior Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series B Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares of
Series B Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series B Junior
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series B Junior Participating Preferred Stock shall entitle the
holder thereof to 1,000 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number
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of votes per share to which holders of shares of Series B Junior
Participating Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series B Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series B Junior
Participating Preferred Stock shall be in arrears in an amount equal
to six (6) quarterly dividends thereon, the occurrence of such
contingency shall ▇▇▇▇ the beginning of a period (herein called a
"DEFAULT PERIOD") which shall extend until such time when all
accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all shares
of Series B Junior Participating Preferred Stock then outstanding
shall have been declared and paid or set apart for payment. During
each default period, all holders of Preferred Stock (including
holders of the Series B Junior Participating Preferred Stock) with
dividends in arrears in an amount equal to six (6) quarterly
dividends thereon, voting as a class, irrespective of series, shall
have the right to nominate and elect two (2) directors.
(ii) During any default period, such voting right of the
holders of Series B Junior Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders,
provided that such voting right shall not be exercised unless the
holders of ten percent (10%) in number of shares of Preferred Stock
outstanding shall be present in person or by proxy. The absence of
a quorum of the holders of Common Stock shall not affect the
exercise by the holders of Preferred Stock of such voting right. At
any meeting at which the holders of Preferred Stock shall exercise
such voting right initially during an existing default period, they
shall have the right, voting as a class, to elect directors to fill
such vacancies, if any, in the Board of Directors as may then exist
up to two (2) directors or, if such right is exercised at an annual
meeting, to elect two (2) directors. If the number which may be so
elected at any special meeting does not amount to the
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required number, the holders of the Preferred Stock shall have the
right to make such increase in the number of directors as shall be
necessary to permit the election by them of the required number. After
the holders of the Preferred Stock shall have exercised their right to
elect directors in any default period and during the continuance of
such period, the number of directors shall not be increased or
decreased except by vote of the holders of Preferred Stock as herein
provided or pursuant to the rights of any equity securities ranking
senior to or PARI PASSU with the Series B Junior Participating
Preferred Stock.
(iii) Unless the holders of Preferred Stock, during an
existing default period, previously shall have exercised their right
to elect directors, the Board of Directors may order, or any
stockholder or stockholders owning in the aggregate not less than
ten percent (10%) of the total number of shares of Preferred Stock
outstanding, irrespective of series, may request, the calling of
special meeting of the holders of Preferred Stock, which meeting
shall thereupon be called by the President, a Vice-President or the
Secretary of the Corporation. Notice of such meeting and of any
annual meeting at which holders of Preferred Stock are entitled to
vote pursuant to this Paragraph (C)(iii) shall be given to each
holder of record of Preferred Stock by mailing a copy of such notice
to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier
than 20 days and not later than 60 days after such order or request
or in default of the calling of such meeting within 60 days after
such order or request, such meeting may be called on similar notice
by any stockholder or stockholders owning in the aggregate not less
than ten percent (10%) of the total number of shares of Preferred
Stock outstanding. Notwithstanding the provisions of this Paragraph
(C)(iii), no such special meeting shall be called during the period
within 60 days immediately preceding the date fixed for the next
annual meeting of the stockholders (but not any postponement,
adjournment or extension thereof).
(iv) In any default period, the holders of Common Stock,
and other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of directors until
the holders of Preferred Stock shall have exercised their right to
elect two (2) directors voting as a class, after the exercise of
which right (x) the directors so elected by the holders of Preferred
Stock shall continue in office until their successors shall have
been elected by such holders or until the expiration of the default
period, and (y) any vacancy in the Board of Directors may (except as
provided in Paragraph (C)(ii) of this
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Section 3) be filled by vote of a majority of the remaining directors
theretofore elected by the holders of the class of stock which elected
the director whose office shall have become vacant. References in this
Paragraph (C) to directors elected by the holders of a particular class
of stock shall include directors elected by such directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period,
(x) the right of the holders of Preferred Stock as a class to elect
directors shall cease, (y) the term of any directors elected by the
holders of Preferred Stock as a class shall terminate, and (z) the
number of directors shall be such number as may be provided for in
the Amended and Restated Articles of Incorporation or By-laws
irrespective of any increase made pursuant to the provisions of
Paragraph (C)(ii) of this Section 3 (such number being subject,
however, to change thereafter in any manner provided by law or in
the Amended and Restated Articles of Incorporation or By-laws). Any
vacancies in the Board of Directors effected by the provisions of
clauses (y) and (z) in the preceding sentence may be filled by a
majority of the remaining directors.
(D) Except as set forth herein, holders of Series B Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series B Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series B Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking PARI PASSU (either as
to dividends or upon liquidation, dissolution or winding up) with
the
A-6
Series B Junior Participating Preferred Stock, except dividends paid
ratably on the Series B Junior Participating Preferred Stock and all
such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares
are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking PARI PASSU (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series B Junior Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series B Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Series B Junior Participating Preferred Stock, or any
shares of stock ranking PARI PASSU with the Series B Junior
Participating Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series
or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under Paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. REACQUIRED SHARES. Any shares of Series B Junior
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as
A-7
to dividends or upon liquidation, dissolution or winding up) to the Series B
Junior Participating Preferred Stock unless, prior thereto, the holders of
shares of Series B Junior Participating Preferred Stock shall have received
$1.00 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment
(the "SERIES B LIQUIDATION PREFERENCE"). Following the payment of the full
amount of the Series B Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series B Junior Participating
Preferred Stock unless, prior thereto, the holders of shares of Common Stock
shall have received an amount per share (the "COMMON ADJUSTMENT") equal to
the quotient obtained by dividing (i) the Series B Liquidation Preference by
(ii) 1,000 (as appropriately adjusted as set forth in subparagraph (C) below
to reflect such events as stock splits, stock dividends and recapitalizations
with respect to the Common Stock) (such number in clause (ii), the
"ADJUSTMENT NUMBER"). Following the payment of the full amount of the Series
B Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series B Junior Participating Preferred Stock and
Common Stock, respectively, holders of Series B Junior Participating
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed in
the ratio of the Adjustment Number to 1 with respect to such Preferred Stock
and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series B Liquidation Preference
and the liquidation preferences of all other series of preferred stock, if
any, which rank PARI PASSU with the Series B Junior Participating Preferred
Stock, then such remaining assets shall be distributed ratably to the holders
of such parity shares in proportion to their respective liquidation
preferences. In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
A-8
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction
in which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
the shares of Series B Junior Participating Preferred Stock shall at the same
time be similarly exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 1,000 times the
aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series
B Junior Participating Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. NO REDEMPTION. The shares of Series B Junior
Participating Preferred Stock shall not be redeemable.
Section 9. RANKING. The Series B Junior Participating Preferred
Stock shall rank junior to all other series of the Corporation's Preferred
Stock as to the payment of dividends and the distribution of assets, unless
the terms of such series shall provide otherwise.
Section 10. AMENDMENT. At any time when any shares of Series B
Junior Participating Preferred Stock are outstanding, neither the Amended and
Restated Articles of Incorporation of the Corporation nor this Certificate of
Designation shall be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series B Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding
shares of Series B Junior Participating Preferred Stock, voting separately as
a class.
Section 11. FRACTIONAL SHARES. Series B Junior Participating
Preferred Stock may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the
benefit of all other rights of holders of Series B Junior Participating
Preferred Stock.
A-9
IN WITNESS WHEREOF, the undersigned has executed and subscribed
this Certificate on behalf of the Corporation and does affirm the foregoing
as true under the penalties of perjury this __ day of December 1998.
▇▇▇▇▇ HEALTHCARE CORPORATION
By:
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman of the Board and
Chief Executive Officer
Attest:
-----------------------------
By:
-------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary
Attest:
-----------------------------
A-10
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER DECEMBER 22, 2008 OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO 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 MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.](*)
Rights Certificate
▇▇▇▇▇ Healthcare Corporation
This certifies that , or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions
of the Rights Agreement, dated as of December 22, 1998 (the "RIGHTS
AGREEMENT"), between ▇▇▇▇▇ Healthcare Corporation, a Nevada corporation (the
"COMPANY"), and The Bank of New York, a New York banking corporation, (the
"RIGHTS AGENT"), to purchase from the Company at any time prior to 5:00 P.M.,
Eastern time, on December 22, 2008 at the office or offices of the Rights
Agent designated for such purpose, or its successors as Rights Agent, one
one-thousandth of a fully paid, non-assessable share of Series B Junior
Participating Preferred Stock (the "PREFERRED STOCK") of the Company, at a
purchase price of $120 per one one-thousandth of a share (the "PURCHASE
PRICE"),
----------
(*) The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
B-1
upon presentation and surrender of this Rights Certificate with the Form of
Election to Purchase and related Certificate duly executed. The number of
Rights evidenced by this Rights Certificate (and the number of shares which
may be purchased upon exercise thereof) set forth above, and the Purchase
Price per share set forth above, are the number and Purchase Price as of
December 22, 1998, based on the Preferred Stock as constituted at such date.
The Company reserves the right to require prior to the occurrence of a
Triggering Event (as such term is defined in the Rights Agreement) that a
number of Rights be exercised so that only whole shares of Preferred Stock
will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate
or Associate of any such Acquiring Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate
or Affiliate or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right
with respect to such Rights from and after the occurrence of such Section
11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Preferred Stock or other securities, which may
be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events.
This Rights Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Rights
Certificates, which limitations of rights include the temporary suspension of
the exercisability of such Rights under the specific circumstances set forth
in the Rights Agreement. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available upon
written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate
or Rights Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of one one-thousandths of a share
of Preferred Stock as the Rights evidenced
B-2
by the Rights Certificate or Rights Certificates surrendered shall have
entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at
a redemption price of $0.01 per Right at any time prior to the earlier of (i)
the close of business on the tenth business day following the Stock
Acquisition Date (as such time period may be extended pursuant to the Rights
Agreement) and (ii) 5:00 P.M., Eastern time, on the Final Expiration Date.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than, except that the
possible requirement that prior to the occurrence of a Triggering Event only
whole shares of Preferred Stock be issued, fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock, which may, at
the election of the Company, be evidenced by depositary receipts), but in
lieu thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action,
or, to receive notice of meetings or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by
this Rights Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by an Authorized Signatory of
the Rights Agent.
B-3
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of __________________
ATTEST: ▇▇▇▇▇ HEALTHCARE CORPORATION
---------------------------------- ---------------------------------------
Secretary Title:
Countersigned:
THE BANK OF NEW YORK
By Date:
----------------------------- --------------------------
Authorized Signatory
B-4
[Form of Reverse Side of Rights Certificate)
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED __________________________________________________________
hereby sells, assigns and transfers unto_____________________________________
_____________________________________________________________________________
(Please print name and address of transferee)
_____________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated:
-----------------------
-------------------------------------
Signature
Signature Guaranteed:
B-5
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(a) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(b) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:
--------------------------- ----------------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-6
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by the
Rights Certificate.)
To: ▇▇▇▇▇ Healthcare Corporation
The undersigned hereby irrevocably elects to exercise _________ Rights
represented by this Rights Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
Please insert social security
or other identifying number
------------------------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------------------------
B-7
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
------------------------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------------------------
Dated:
---------------------------
------------------------------------------
Signature
Signature Guaranteed:
B-8
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person.
Dated:
---------------------------
------------------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
B-9
EXHIBIT C
SUMMARY OF ▇▇▇▇▇ HEALTHCARE CORPORATION
1998 STOCKHOLDERS' RIGHTS PLAN
INTRODUCTION
On December 2, 1998, the Board of Directors (the "Board") of ▇▇▇▇▇
Healthcare Corporation ("Tenet" or the "Company") adopted a new stockholders'
rights plan (the "New Rights Plan") to replace an existing stockholders'
rights plan that expires at 5:00 p.m. Eastern time on December 22, 1998.
Under the terms of the New Rights Plan, each stockholder of record at 5:00
p.m. Eastern time on December 22, 1998 (the "Record Date") will receive a
Right that will become exercisable only upon the occurrence of certain
events, described below. Once the Right becomes exercisable, it will entitle
the holder to purchase, upon payment of the purchase price, shares of the
Company's common stock (the "Common Stock"), or under certain circumstances
common stock of a company acquiring the Company, at 50% of their then-current
market value.
The New Rights Plan is described in more detail below. The following
summary does not purport to be complete and is subject to, and qualified in
its entirety by, the terms of the New Rights Plan set forth in a Rights
Agreement between the Company and The Bank of New York, as Rights Agent,
which is incorporated herein by this reference. A copy of the Rights
Agreement is available upon request to the Company's corporate Secretary,
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, (805)
563-7000. A copy of the Rights Agreement also has been filed with the
Securities and Exchange Commission as an Exhibit to a Current Report on Form
8-K.
DESCRIPTION OF THE RIGHTS
Each Right, upon becoming exercisable as described below, will entitle
its registered holder to purchase from the Company one one-thousandth of a
share of Series B Preferred Stock (the "Preferred Stock") of the Company
(which is intended to be roughly the economic equivalent of the Common
Stock), at a purchase price initially intended to reflect the long-term
trading value of a share of Common Stock (the "Purchase Price").
C-1
After consulting with the Company's advisors, the Board set the Purchase
Price at $120.00 per Right.
Each share of Preferred Stock in turn will entitle its registered
holder (except for an Acquiring Person, as defined below, and its affiliates)
to purchase shares of the Company's Common Stock (or, under circumstances,
the shares of an acquiring company) having a value of two times the Purchase
Price.
In general, the Rights will become exercisable ten business days (or
such later date as the Board shall determine) after:
(i) a person (acting alone or together with others) becomes the beneficial
owner of 15% or more of the Company's Common Stock (an "Acquiring Person")
or
(ii) a person publishes or mails an exchange or tender offer pursuant to which
such person would become an Acquiring Person.
The earlier of (i) and (ii) is referred to as the "Distribution Date." Under
certain circumstances, a person will not be an Acquiring Person even if that
person acquires 15% or more of the Company's Common Stock, such as when the
transaction is approved by a majority of the Board who are not officers and
who are not affiliated with the Acquiring Person or the person referred to in
(ii) above. Upon the occurrence of either (i) or (ii) above, all Rights held
by the Acquiring Person or the person described in (ii) above (and their
affiliates and associates), as the case may be, will become null and void.
From and after the Distribution Date, each holder of a Right (other
than an Acquiring Person, and its affiliates and associates, whose Rights are
voided) thereafter will have the Right to receive, upon exercise of the Right
at the Purchase Price, Common Stock having a value of two times the Purchase
Price. Under certain circumstances, the Company may distribute to holders a
combination of cash, Common Stock, other securities and/or other assets.
For example, if the Purchase Price is $100 per Right, each Right that
has not been voided, as described above, will entitle its holder to purchase
$200 worth of Common Stock for $100. Assuming that the Common Stock had a
per share value of $50 at such time, the holder of each valid Right would pay
the Purchase Price of $100 and would receive Common Stock with a value of
$200, or four shares (since $200 divided by $50 equals four).
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If a person becomes an Acquiring Person and the Company then
(i) engages in a merger or other business combination transaction with another
person in which the Common Stock is changed or exchanged, or
(ii) sells or transfers 50% or more of its assets, cash flow or earning power
to another person or persons,
from and after the Distribution Date, each Right (other than Rights of the
Acquiring Person and its affiliates and associates, which will have been
voided), thereafter will entitle its holder to receive, upon exercise of the
Right at the Purchase Price, common stock of such other person (or, in
certain circumstances, of an affiliate of such other person) having a value
of two times the Purchase Price.
At any time after a person or group becomes an Acquiring Person, but
prior to the acquisition by such person or group of fifty percent (50%) or
more of the outstanding Common Stock, the Board may exchange the Rights
(other than Rights owned by such person or group, which will have become
void), in whole or in part, at an exchange ratio of (i) (a) one share of
Common Stock, or (b) one one-thousandth of a share of Preferred Stock (or of
a share of a class or series of the Company's Preferred Stock having
equivalent Rights, preferences and privileges), per (ii) each Right (subject
to adjustment).
Until the Distribution Date, the Rights (i) will be evidenced by the
Common Stock certificates and no separate certificates evidencing the Rights
will be issued, (ii) may be transferred with and only with the Common Stock
and may not be transferred separately from the Common Stock, and (iii) will
not be exercisable.
On the Distribution Date, the Rights will become exercisable. As soon
as practicable after the Distribution Date, separate certificates evidencing
the Rights will be distributed to the holders of record of the Common Stock.
After the Distribution Date, the Common Stock and the Rights will trade
separately.
Until a Right is exercised, its holder has no stockholder rights (such
as voting rights or rights to receive dividends). The terms of the Rights,
generally, may be amended by the Board in any manner prior to the
Distribution Date. Thereafter, the terms of the Rights may be amended to
shorten or lengthen any time period under the New Rights Plan and in any
other manner, as long as the amendment does not adversely affect the
interests of holders of Rights.
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OPTIONAL REDEMPTION OF THE RIGHTS
At any time prior to the Distribution Date, the Company may redeem the
Rights in whole, but not in part, at a price of $0.01 per Right (payable in
cash, Common Stock or other consideration deemed appropriate by the Board).
Immediately upon the action of the Board ordering redemption of the Rights,
the Rights will terminate and the only right holders of Rights will have is
to receive the $0.01 redemption price.
EXPIRATION OF THE RIGHTS
The Rights will expire at 5:00 p.m., Eastern time, December 22, 2008,
unless earlier redeemed by the Company. The Board generally may redeem the
Rights for $0.01 per Right until the Distribution Date. Generally, so long
as the Rights are redeemable the Board may extend the period for redemption
by extending the Distribution Date.
AMENDMENT OF THE RIGHTS AGREEMENT
Any of the provisions of the Rights Agreement may be amended by the
Board prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in order to
cure any ambiguity, to make changes which do not adversely affect the
interests of holders of Rights or to shorten or lengthen any time period
under the Rights Agreement; PROVIDED, HOWEVER, that no amendment may be made
after the Rights are no longer redeemable.
TAX CONSEQUENCES
The distribution of the Rights will not be a taxable event for
stockholders or the Company. Depending upon the circumstances, stockholders
may recognize taxable income in the event that the Rights become exercisable
for Common Stock, common stock of the acquiring company or other
consideration, or in the event of the Company redeems the Rights.
WHY THE NEW RIGHTS PLAN WAS ADOPTED
The New Rights Plan is designed to deter coercive takeover tactics and
otherwise to encourage third parties interested in acquiring the Company to
negotiate with the Board. In particular, the New Rights Plan is intended to
help
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(i) reduce the risk of acquisitions that offer greater consideration to some
stockholders than to others (such as coercive two-tiered, front-end loaded
or partial offers) and that thus may not offer fair value to all
stockholders;
(ii) mitigate against market accumulators who through open market and/or
private purchases may achieve a position of substantial influence or
control without paying to selling or remaining stockholders a fair control
premium or who are simply interested in putting the Company "into play;"
(iii) preserve the Board's bargaining power and flexibility to deal with
third-party acquirors and otherwise to seek to maximize values for all
stockholders;
(iv) enhance the Company's ability to respond to an inadequate offer; and
(v) convey to the marketplace that the Company intends to aggressively
preserve its bargaining power and deter coercive takeover activities.
The New Rights Plan achieves these goals by confronting a potential
acquiror with the possibility that the Company's stockholders will be able to
dilute substantially the acquiror's equity interest by exercising the Rights
and buying additional shares in the Company (or in certain cases, in the
acquiror) at a fifty percent discount, unless the acquiror negotiates with
the Board and the Board (i) elects to redeem the Rights for nominal
consideration or (ii) otherwise makes the New Rights Plan inapplicable to the
proposed transaction. In this regard, the New Rights Plan serves a useful
function in the context of unsolicited takeovers by providing a negotiating
tool for the Company's Board and by helping to ensure that the Board has
ample time to explore alternatives.
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