RIGHTS AGREEMENT between ORTHOLOGIC CORP. and THE BANK OF NEW YORK Dated: As of June 19, 2007
between
and
THE
BANK
OF NEW YORK
Dated:
As
of June 19, 2007
Table
of
Contents
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Page
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Section
1.
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Certain
Definitions. For purposes of this Agreement, the following terms
have the
meanings indicated:
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1
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Section
2.
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Appointment
of Rights Agent
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4
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Section
3.
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Issue
of Right Certificates
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4
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Section
4.
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Form
of Right Certificates
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6
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Section
5.
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Countersignature
and Registration
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7
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Section
6.
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Transfer,
Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates
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7
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Section
7.
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Exercise
of Rights; Purchase Price; Expiration Date of Rights
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8
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Section
8.
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Cancellation
and Destruction of Right Certificates
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9
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Section
9.
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Reservation
and Availability of Series A Shares; ▇▇▇▇▇▇▇▇▇▇▇▇
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▇▇
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▇▇▇▇▇▇▇
▇▇.
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Series
A Shares Record Date
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11
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Section
11.
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Adjustment
of Purchase Price, Number and Kind of Shares or Number of
Rights
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11
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Section
12.
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Certificate
of Adjusted Purchase Price or Number of Shares
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17
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Section
13.
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Consolidation,
Merger or Sale or Transfer Assets or Earning Power
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18
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Section
14.
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Fractional
Rights and Fractional Shares
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20
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Section
15.
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Rights
of Action
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21
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Section
16.
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Agreement
of Right Holders
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21
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Section
17.
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Right
Certificate Holder Not Deemed a Shareholder
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22
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Section
18.
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Concerning
the Rights Agent
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22
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Section
19.
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Merger
or Consolidation or Change of Name of Rights Agent
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23
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Section
20.
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Duties
of Rights Agent
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23
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Section
21.
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Change
of Rights Agent
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25
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Section
22.
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Issuance
of New Right Certificates
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26
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Section
23.
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Redemption
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26
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Section
24.
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Exchange
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26
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Section
25.
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Notice
of Certain Events
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27
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Section
26.
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Notices
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28
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Section
27.
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Supplements
and Amendments
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29
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Section
28.
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Successors;
Assignment
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29
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Section
29.
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Benefits
of this Agreement
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29
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Section
30.
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Severability
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30
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Section
31.
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Governing
Law
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30
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Section
32.
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Special,
Indirect and Consequential Damages
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30
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Section
33.
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Counterparts
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30
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Section
34.
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Descriptive
Headings
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30
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Exhibits:
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Exhibit
A:
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Series
A Preferred Stock Designation
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Exhibit
B:
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Form
of Right Certificate and related documents
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Exhibit
C:
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Summary
of Rights to Purchase Series A Preferred Stock
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i
Rights
Agreement, dated as of June 19, 2007, is between ORTHOLOGIC CORP., a Delaware
corporation (the “Company”), and THE BANK OF NEW YORK, a New York corporation
(the “Rights Agent”).
The
Board
of Directors of the Company has authorized and declared a dividend of one
preferred share purchase right (a “Right”) for each Common Share (as hereinafter
defined) of the Company outstanding at the close of business on July 2, 2007
(the “Record Date”), each Right representing the right to purchase one
one-hundredth (1/100) of a share of Series A Preferred Stock, par value $.0005
per share, of the Company (“Series A Preferred Stock”) having the rights and
preferences set forth in the form of Preferred Stock Designation with respect
to
the Series A Preferred Stock, a copy of which is attached hereto as Exhibit
A.
The Board of Directors has further authorized the issuance of one Right with
respect to each Common Share that shall become outstanding (whether originally
issued or delivered from the Company’s treasury) after the Record Date and on or
prior to the earliest of the Separation Date, the Redemption Date and the Final
Expiration Date (each as hereinafter defined).
Accordingly,
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, together with all Affiliates and Associates
of such Person, shall hereafter become the Beneficial Owner of twenty percent
(20%) or more of the Common Shares then outstanding, but shall not include
the
Company, any wholly-owned Subsidiary of the Company, any employee benefit plan
of the Company or any Subsidiary of the Company, or any entity holding Common
Shares for or pursuant to the terms of any such plan.
(b) “Affiliate”
and “Associate” shall have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations (the “Rules”) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), as in effect
on the Record Date.
(c) A
Person
shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially
own” any securities:
(i) which
such Person or any of such Person’s Affiliates or Associates beneficially owns,
directly or indirectly;
(ii) which
such Person or any of such Person’s Affiliates or Associates has (A) the right
to acquire (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), or upon
the
exercise of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person shall not
be
deemed the Beneficial Owner of, or to beneficially own, securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person
or
any of such Person’s Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, any security
if
the agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person in response to
a
public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations promulgated under the Exchange Act and
(2)
is not also then reportable 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 with which
such
Person or any of such Person’s Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring, holding, voting (except
to
the extent contemplated by the proviso to Section 1(c)(ii)(B) hereof) or
disposing of any securities of the Company.
Notwithstanding
anything in this definition of Beneficial Ownership to the contrary, the phrase
“then outstanding,” when used with reference to a Person’s Beneficial Ownership
of securities of the Company, shall mean the number of such securities then
issued and outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to own
beneficially hereunder.
(d) “Board”
means the Board of Directors of the Company.
(e) “Business
Day” shall mean any day other than a Saturday, Sunday, or a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to close.
(f) “Close
of
business” on any given date shall mean 5:00 P.M., New York, New York time, on
such date; provided, however, that if such date is not a Business Day it shall
mean 5:00 P.M., New York, New York time, on the next succeeding Business
Day.
(g) “Common
Shares” when used with reference to the Company shall mean shares of Common
Stock, par value $.0005 per share, of the Company. “Common Shares” or “common
shares,” 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.
(h) “Person”
shall mean any individual, firm, corporation, partnership, limited liability
company or other entity and shall include any successor (by merger or otherwise)
of such entity.
(i) “Section
11(a)(ii) Event” shall mean any event described in Section
11(a)(ii).
-2-
(j) “Section
13(a) Event” shall mean any event described in clause (x), (y) or (z) of Section
13(a).
(k) “Series
A
Shares” shall mean shares of Series A Preferred Stock, par value $.0005 a share,
of the Company, including any authorized fraction of a Series A Share, unless
the context otherwise requires.
(l) “Shares
Acquisition Date” shall mean the first date of public announcement (including,
without limitation, a report filed pursuant to Section 13(d) or 14(d) under
the
Exchange Act) by the Company or an Acquiring Person indicating that an Acquiring
Person has become such.
(m) “Subsidiary”
shall mean, with reference to any Person, any corporation or other entity of
which a majority of the voting power of the voting securities or voting
interests is owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.
(n) “Triggering
Event” shall mean any Section 11(a)(ii) Event or Section 13(a)
Event.
The
following terms shall have the meanings indicated in the following Sections
of
this Agreement:
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(i)
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“Act”
-- Section 9(c).
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(ii)
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“Adjustment
Shares” -- Section 11(a)(ii).
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(iii)
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“Common
Share equivalent” -- Section
11(a)(iii)
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(iv)
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“Current
Value” -- Section 11(a)(iii).
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(v)
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“equivalent
preferred shares” -- Section 11(b).
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(vi)
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“Exchange
Act” -- Section 1(b).
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(vii)
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“Extension
Date” -- Section 27.
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(viii)
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“Final
Expiration Date” --Section 7(a).
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(ix)
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“Principal
Party” -- Section 13(b).
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(x)
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“Purchase
Price” -- Section 4(a) and 13(a).
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(xi)
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“Record
Date” -- Preamble.
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(xii)
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“Redemption
Date” -- Section 7(a).
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(xiii)
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“Redemption
Price” -- Section 23(a)(i).
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-3-
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(xiv)
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“Rules”
-- Section 1(b).
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(xv)
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“Separation
Date” -- Section 3(a).
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(xvi)
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“Series
A Preferred Stock” -- Preamble.
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(xvii)
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“Spread”
-- Section 11(a)(iii).
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(xviii)
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“Springing
Right of Redemption” -Section
23(a)(i).
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(xix)
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“Substitution
Period” -- Section 11(a)(iii).
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(xx)
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“Summary
of Rights -- Section 3(b).
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(xxi)
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“Trading
Day” -- Section 11(d)(i).
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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 and agrees to act as Rights Agent under this Agreement.
The Company may from time to time appoint such co-rights agents as it may deem
necessary or desirable.
Section
3. Issue
of Right Certificates.
(a) Until
the
earlier of (i) the tenth day following the Shares Acquisition Date or (ii)
the
close of business on the tenth Business Day after the date on which a tender
or
exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first commenced within
the meaning of Rule 14d-2(a) of the Rules, if upon consummation thereof, such
Person would be the Beneficial Owner of twenty percent (20%) or more of the
Common Shares then outstanding (the earlier of (i) and (ii) being herein
referred to as the “Separation Date”), (x) the Rights will be evidenced (subject
to the provisions of paragraph (b) of this Section 3) by the certificates for
Common Shares registered in the names of the holders thereof (which certificates
shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares. As soon
as
practicable after the Separation Date, the Rights Agent will send, by
first-class, insured, postage-prepaid mail, to each record holder of Common
Shares as of the close of business on the Separation 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, evidencing one Right for each
Common Share so held. In the event that an adjustment in the number of Rights
per Common Share has been made pursuant to Section 11(p) hereof, at the time
of
distribution of the Right Certificates, the Company shall make the necessary
and
appropriate rounding adjustments (in accordance with Section 14(a) hereof)
so
that Right Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after
the Separation Date, the Rights will be evidenced solely by such Right
Certificates.
-4-
(b) As
soon
as practicable following the Record Date, the Company will send a copy of a
Summary of Rights to Purchase Series A Preferred Stock, in substantially the
form attached hereto as Exhibit C (the “Summary of Rights”), by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the close
of
business on the Record Date, at the address of such holder shown on the records
of the Company. With respect to certificates for Common Shares outstanding
as of
the Record Date, until the Separation Date, the Rights will be evidenced by
such
certificates registered in the names of the holders thereof and the registered
holders of the Common Shares shall also be the registered holders of the
associated Rights. Until the earliest of the Separation Date, the Redemption
Date or the Final Expiration Date, the surrender for transfer of any certificate
for Common Shares outstanding on the Record Date shall also constitute the
transfer of the Rights associated with the Common Shares represented
thereby.
(c) Certificates
for Common Shares issued after the Record Date but prior to the earliest of
the
Separation Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
THIS
CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS
AS
SET FORTH IN A RIGHTS AGREEMENT BETWEEN ORTHOLOGIC CORP. AND THE BANK OF NEW
YORK DATED AS OF JUNE 19, 2007 (THE “RIGHTS AGREEMENT”), THE TERMS OF WHICH ARE
HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL EXECUTIVE OFFICES OF ORTHOLOGIC CORP. 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. ORTHOLOGIC
CORP. WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT
WITHOUT CHARGE PROMPTLY FOLLOWING 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 AGREEMENT),
WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT
HOLDER, MAY BECOME NULL AND VOID.
-5-
Section
4. Form
of Right Certificates.
(a) The
Right
Certificates (and the forms of assignment and election to purchase Series A
Shares to be printed on the reverse thereof) shall be substantially the same
as
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. Subject to the provisions of Section 11 and Section 22 hereof, the Right
Certificates, whenever distributed, shall be dated as of the Record Date and
on
their face shall entitle the holders thereof to purchase such number of one
one-hundredths of a share of Series A Preferred Stock as shall be set forth
therein at the price per one one-hundredth of a Series A Share set forth therein
(the “Purchase Price”), but the amount and type of the securities purchasable
(or other consideration to be made available) upon the exercise of each Right
and the Purchase Price thereof shall be subject to adjustment as provided
herein.
(b) Any
Right
Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents
Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or
such Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such (other than a bona fide purchaser for value who has no knowledge
that the transferor was an Acquiring Person or an Associate or Affiliate of
an
Acquiring Person) or (iii) a transferee of an Acquiring Person (or 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
regarding the transferred Rights or (B) a transfer that the Board has determined
is part of a plan, arrangement or understanding that has as a primary purpose
or
effect avoidance of Section 7(e) hereof, and any Right Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement
or adjustment of any other Right Certificate referred to in this sentence,
shall
contain (to the extent feasible) the following legend:
THE
RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED
BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF
AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.
-6-
Section
5. Countersignature
and Registration.
(a) The
Right
Certificates shall be executed on behalf of the Company by its Chairman of
the
Board or its President, Chief Executive Officer or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the Company’s
seal, if any attested by the Secretary, the Treasurer or any Assistant Secretary
or Assistant Treasurer of the Company, or shall bear a facsimile thereof. The
Right Certificates shall not be valid for any purpose unless countersigned
by
the Rights Agent. In case any officer of the Company who shall have signed
any
of the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right 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 Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement
any
such person was not such an officer.
(b) Following
the Separation Date, the Rights Agent will keep or cause to be kept, at its
office or agency designated for such purpose, books for registration and
transfer of the Right Certificates issued or to be issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates, the certificate number of each of the Right Certificates and
the
date of each of the Right Certificates.
Section
6. Transfer,
Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates.
(a) Subject
to the provisions of Sections 4(b), 7(e) and 14 hereof, at any time after the
close of business on the Separation Date, and at or prior to the close of
business on the earlier of the Redemption Date or the Final Expiration Date,
any
Right Certificate or Right Certificates may be transferred, split up, combined
or exchanged for another Right Certificate or Right Certificates, entitling
the
registered holder to purchase a like number of Series A Shares (or, following
a
Section 11(a)(ii) Event or Section 13(a) Event, Common Shares, other securities
or property, as the case may be) as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office 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
Right Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side of
such
Right 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 countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
-7-
(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 Right Certificate,
and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company’s request, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto,
and
upon surrender to the Rights Agent and cancellation of the Right Certificate
if
mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Right 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 Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein)
in
whole or in part at any time after the Separation Date upon surrender of the
Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the principal office of the Rights
Agent designated for such purpose, together with payment of the Purchase Price
for each one one-hundredth of a Series A Share as to which the Rights are
exercised, at or prior to the close of business on the earlier of (i) June
19,
2010 (the “Final Expiration Date”) or (ii) the date on which the Rights are
redeemed as provided in Section 23 hereof (the “Redemption Date”).
(b) The
Purchase Price for each one one-hundredth of a Series A Share pursuant to the
exercise of a Right shall initially be Six Dollars ($6.00), shall be subject
to
adjustment from time to time as provided in Sections 11 and 13 hereof and shall
be payable in lawful money of the United States of America in accordance with
paragraph (c) below.
(c) Upon
receipt of a Right Certificate representing exercisable Rights, with the form
of
election to purchase duly executed, accompanied by payment of the Purchase
Price
for the Series A Shares (or other shares, securities or property, as the case
may be) to be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in accordance with
Section 9 hereof, in cash, or by certified check or cashier’s check payable to
the order of the Company, the Rights Agent shall, subject to Section 20(k)
hereof, thereupon promptly (i) either (A) requisition from any transfer agent
of
the Series A Shares (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the number of Series A Shares (or
fractions thereof) 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 Series A Shares issuable upon exercise
of the Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of one one-hundredths of
a
Series A Share as are to be purchased (in which case certificates for the Series
A Shares represented by such receipts shall be deposited by the transfer agent
with the depositary agent) and the Company hereby directs the depositary agent
to comply with such request, (ii) when appropriate, requisition from the Company
the amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) promptly 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 Right Certificate, registered in
such
name or names as may be designated by such holder and (iv) when appropriate,
after receipt, promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate. In the event that the Company is obligated
to
issue other securities (including Common Shares) or assets pursuant to Section
11(a) hereof, the Company will make all arrangements necessary so that such
other securities or assets are available for distribution by the Rights Agent,
if and when appropriate.
-8-
(d) In
case
the registered holder of any Right Certificate shall exercise less than all the
rights evidenced thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the Rights Agent to
the
registered holder of such Right Certificate or to his duly authorized assigns
subject to the provisions of Section 14 hereof.
(e) Notwithstanding
anything in this Agreement to the contrary, from and after the occurrence of
a
Triggering Event, any Rights beneficially owned by (i) an Acquiring Person
or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee from an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such (other than a bona fide
purchaser for value who has no knowledge that the transferor was an Acquiring
Person or an Associate or Affiliate of an Acquiring Person) or (iii) a
transferee of an Acquiring Person (or 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 regarding the transferred
Rights or (B) a transfer that the Board has determined is part of a plan,
arrangement or understanding that has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action, and any holder of such Rights shall thereupon have no 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 Right 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.
(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 Right 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
and Destruction of Right Certificates.
All
Right Certificates surrendered for the purpose of exercise, transfer, split
up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted
by
any of the provisions of this Rights Agreement. The Company shall deliver to
the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right Certificates, and in such case
shall
deliver a certificate of destruction thereof to the Company.
-9-
Section
9. Reservation
and Availability of Series A Shares; Registration.
(a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Series A Shares the number of
Series A Shares that will be sufficient to permit the exercise in full of all
outstanding Rights. Prior to the occurrence of a Triggering Event, the Company
shall not be obliged to cause to be reserved and kept available out of its
authorized and unissued Common Shares or shares of preferred stock (other than
Series A Shares), any such Common Shares or any shares of preferred stock (other
than the Series A Shares) to permit exercise of outstanding Rights.
(b) If
the
Series A Shares issuable upon the exercise of Rights are 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) If
then
required by applicable law, the Company shall use its best efforts to (i) file,
as soon as practicable following the earliest date after the occurrence of
a
Triggering Event as to which the consideration to be delivered by the Company
upon exercise of the Rights has been determined pursuant to this Agreement,
or
as soon as is required by law following the Separation Date, as the case may
be,
a registration statement under the Securities Act of 1933 (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 Final
Expiration Date. If then required by applicable law, the Company will also
take
such action as may be appropriate under the securities or “blue sky” laws of the
various states. 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 this Section
9(c), the exercisability of the Rights in order to prepare and file such
registration statement. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite qualification in such jurisdiction shall have been
obtained.
(d) The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Series A Shares 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 shares.
-10-
(e) The
Company covenants and agrees that it will pay when due and payable any and
all
federal and state transfer taxes and charges that may be payable in respect
of
the issuance or delivery of the Right Certificates or of any Series A Shares
(or
Common Shares 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
that
may be payable in respect of any transfer or delivery of Right Certificates
to a
person other than, or the issuance or delivery of certificates for the Series
A
Shares (or Common Shares and/or other securities, as the case may be) in a
name
other than that of, the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or to issue or deliver any certificates for
Series A Shares (or Common Shares and/or other securities, as the case may
be)
upon the exercise of any Rights until any such tax shall have been paid (any
such tax being payable by the holder of such Right Certificate at the time
of
surrender) or until it has been established to the Company’s satisfaction that
no such tax is due.
Section
10. Series
A Shares Record Date.
Each
person in whose name any certificate for Series A Shares (or Common Shares
and/or other securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record
of
the Series A Shares (or Common Shares and/or other securities, as the case
may
be) represented thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date
upon
which the Series A Shares (or Common Shares 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 on, and such certificate shall
be
dated, the next succeeding Business Day on which the Series A Shares (or Common
Shares 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 Right Certificate shall not be entitled (in such holder’s capacity
as such) to any rights of a shareholder of the Company with respect to shares
for which the Rights shall be exercisable, including, without limitation, the
right to vote any shares, to receive dividends or other distributions with
respect to any shares or to exercise any preemptive rights with respect to
any
shares, 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 that the Company shall at any time after the date of this Agreement (A)
declare a dividend on the Series A Shares payable in Series A Shares, (B)
subdivide the outstanding Series A Shares, (C) combine the outstanding Series
A
Shares into a smaller number of Series A Shares or (D) issue any shares of
its
capital stock in a reclassification of the Series A Shares (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 capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled
to
receive the aggregate number and kind of shares of capital stock that, if such
Right had been exercised immediately prior to such date and at a time when
the
Series A Shares 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.
-11-
(ii) Subject
to Sections 24 and 7(e) hereof, in the event any Person becomes an Acquiring
Person other than pursuant to any transaction set forth in Section 13(a), each
holder of a Right shall thereafter have a right to receive, upon exercise
thereof at a price equal to the then current Purchase Price multiplied by the
number of one one-hundredths of a Series A Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu of
Series A Shares, such number of Common Shares as shall equal the result obtained
by (A) multiplying the then current Purchase Price by the number of one
one-hundredths of a Series A Share for which a Right is then exercisable and
dividing that product by (B) 50% of the then current per share market price
of
the Common Shares (determined pursuant to Section 11(d) hereof) on the date
the
Person became an Acquiring Person, but not less than the par value thereof
(the
“Adjustment Shares”).
(iii) In
the
event that the total of the Common Shares that are issued but not outstanding
and authorized but unissued (excluding Common Shares reserved for issuance
pursuant to the specific terms of any indenture, option plan or other agreement)
is not sufficient to permit the exercise in full of the Rights in accordance
with Section 11(a)(ii) hereof, and subject to such limitations as are necessary
to prevent a default under any agreement for money borrowed to which the Company
is a party and to comply with applicable law, then the Board shall: (A)
determine the excess of (1) the value, based upon the current per share market
price of the Common Shares (determined pursuant to Section 11(d) hereof), of
the
Adjustment Shares issuable upon the exercise of a Right (the “Current Value”)
over (2) the Purchase Price (such excess, the “Spread”) and (B) with respect to
each Right, make adequate provision to substitute for, or provide an election
to
acquire in lieu of, the Adjustment Shares, upon payment of the applicable
Purchase Price (which term shall include any reduced Purchase Price) any
combination of the following having an aggregate value equal to the Current
Value (such aggregate value to be determined by the Board based upon the advice
of a nationally recognized investment banking firm selected by the Board):
(1) a
reduction in the Purchase Price, (2) Common Shares and/or other equity
securities of the Company (including, without limitation, shares or units of
shares of any series of preferred stock that the Board has deemed to have the
same value as Common Shares (such shares or units of share of preferred stock
hereinafter referred to as “Common Share equivalents”)) and/or (3) debt
securities of the Company and/or cash and other assets having an aggregate
value
equal to the Current Value, 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 first occurrence of a Triggering Event,
then the Company shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, Common Shares
(to the extent available) and then, if necessary, cash, which securities and/or
cash in the aggregate are equal to the Spread. If the Board shall determine
in
good faith that it is likely that sufficient additional Common Shares 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 following the first occurrence of a Triggering Event,
in
order that the Company may seek shareholder approval for the authorization
of
such additional shares (such period, as it may be extended, the “Substitution
Period”). To the extent that the Company determines that some action needs to be
taken pursuant to the first and/or second sentences of this Section 11(a)(iii),
the Company (x) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period
in
order to seek any authorization of additional shares and/or to decide 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 the Common Shares shall be the current per share market price
(as
determined pursuant to Section 11(d) hereof) of the Common Shares on the date
of
the first occurrence of a Triggering Event.
-12-
The
provisions of this Section 11(a)(iii) shall apply only to Common Shares of
the
Company and shall not apply to the securities of any other Person.
(b) In
case
the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Series A Shares entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe for or purchase
Series A Shares (or shares having the same rights, privileges and preferences
as
the Series A Shares (“equivalent preferred shares”)) or securities convertible
into Series A Shares or equivalent preferred shares at a price per Series A
Share or equivalent preferred share (or having a conversion price per share,
if
a security convertible into Series A Shares or equivalent preferred shares)
less
than the current per share market price of the Series A Shares (as defined
in
Section 11(d) hereof) 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 Series A Shares outstanding on such record date
plus the number of Series A Shares that the aggregate offering price of the
total number of Series A Shares and/or equivalent preferred shares 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 Series A Shares outstanding on
such
record date plus the number of additional Series A Shares and/or equivalent
preferred shares 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 in a consideration part or all of which shall
be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board, whose determination shall be described
in
a statement filed with the Rights Agent and shall be binding on the holders
of
the Rights. Series A Shares owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation. Such
adjustments 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.
-13-
(c) In
case
the Company shall fix a record date for the distribution to all holders of
the
Series A Shares (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing corporation)
of
any debt securities, cash or assets (other than a regular quarterly cash
dividend or a dividend payable in Series A Shares) 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 per share market price
of
the Series A Shares (as defined in Section 11(d) hereof) 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
and
binding on the holders of Rights) of the portion of the assets or debt
securities so to be distributed or of such subscription rights or warrants
applicable to one Series A Share and the denominator of which shall be such
current per share market price of the Series A Shares (as determined pursuant
to
Section 11(d) hereof). 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 again be adjusted to be the Purchase Price that would
then be in effect if such record date had not been fixed.
(d) i) For
the
purpose of any computation hereunder, the “current per share market price” of
the Common Shares on any date shall be deemed to be the lesser of (x) the
average of the daily closing prices per Common Share for the 30 consecutive
Trading Days immediately prior to such date or (y) the average of the daily
closing prices per Common Share for the 30 consecutive Trading Days immediately
following such date; provided, however, that in the event that the current
per
share market price of the Common Shares is determined during a period following
the announcement by the issuer of such Common Shares of a dividend or
distribution on such Common Shares payable in such Common Shares or securities
convertible into such Common Shares (other than the Rights), or any subdivision,
combination or reclassification of such Common Shares, and prior to the
expiration of 20 Trading Days after the ex-dividend date for such dividend
or
distribution, then, and in each such case, the current market price shall be
appropriately adjusted to reflect the current market price per Common Share
equivalent. 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 on the principal national securities exchange, if any, on which the
Common Shares are then listed or admitted to trading or, if the Common Shares
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 OTC Bulletin
Board or such other system then in use, or, if on any such date the Common
Shares 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 Shares selected by the Board. The term “Trading Day” shall mean a day
on which the principal national securities exchange on which the Common Shares
are listed or traded or are admitted to trading is open for the transaction
of
business or, if the Common Shares are not listed or admitted to trading on
any
national securities exchange, a Business Day.
(ii) For
the
purpose of any computation hereunder, the “current per share market price” of
the Series A Shares shall be determined in the same manner as set forth above
for Common Shares in clause (i) of this Section 11(d). If the current per share
market price of the Series A Shares cannot be determined in the manner provided
above, the “current per share market price” of the Series A Shares shall be
conclusively deemed to be the current per share market price of the Common
Shares (appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof), multiplied by one hundred.
If neither the Common Shares nor the Series A Shares are publicly held or so
listed or traded, “current per share market price” 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 binding on the holders
of Rights.
-14-
(e) No
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in the Purchase
Price; provided, however, that any adjustments that 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 the nearest one-hundredth of a Common
Share
or other share or one ten-thousandth of a Series A Share, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
provided for in this Section 11 shall be made no later than the earlier of
(i)
three years from the date of the transaction that requires such adjustment
or
(ii) the Final Expiration Date.
(f) If
as a
result of an adjustment made pursuant to Section 11(a) or Section 13(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any property, other securities (other than shares of capital stock of the
Company) or shares of capital stock of the Company other than Series A Shares,
thereafter the amount of such property, other securities (other than shares
of
capital stock of the Company) and the number of such other shares of capital
stock so receivable upon exercise of any Right (as well as any consideration
to
be paid therefor) 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 Series A Shares (and the Purchase Price) contained in this Section 11,
and the provisions of Sections 7, 9, 10 and 13 with respect to the Series A
Shares shall apply on like terms to any such property, other securities and
other shares of capital stock.
(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 Series A Shares 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-hundredths of a Series A Share
(calculated to the nearest one ten-thousandth of a Series A Share) obtained
by
(i) multiplying (x) the number of one one-hundredths 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.
-15-
(i) The
Company may elect on or after the date of any adjustment of the Purchase Price
to adjust the number of Rights, in substitution for any adjustment in the number
of Series A Shares purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be exercisable
for the number of one one-hundredths of a Series A Share for which a Right
was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become the number of
Rights (calculated to the nearest one 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 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 Right Certificates have been issued, shall be at least 10 days later
than
the date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i),
the
Company shall, as promptly as practicable, cause to be distributed to holders
of
record of Right Certificates on such record date Right 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 Right Certificates held by such holders prior to the date
of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective
of any adjustment or change in the Purchase Price or the number of Series A
Shares issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase Price
per
one one-hundredth of a share and the number of shares that were expressed in
the
initial Right Certificates issued hereunder.
(k) Before
taking any action that would cause an adjustment reducing the Purchase Price
below one one-hundredth of the then stated value, if any, of the Series A Shares
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 Series A
Shares at such adjusted Purchase Price.
(l) In
any
case in which this Section 11 requires that an adjustment in the Purchase Price
be made effective as of a record date for a specified event, the Company may
elect to defer until the occurrence of such event the issuing to the holder
of
any Right exercised after such record date of the Series A Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the Series A Shares 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 upon the occurrence of the
event requiring such adjustment.
-16-
(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
its good faith judgment the Board shall determine to be advisable in order
that
any (i) consolidation or subdivision of the Series A Shares, (ii) issuance
wholly for cash of any of the Series A Shares at less than the current market
price, (iii) issuance wholly for cash of Series A Shares or securities that
by
their terms are convertible into or exchangeable for Series A Shares, (iv)
dividends on Series A Shares payable in Series A Shares or (v) issuance of
rights, options or warrants referred to in this Section 11, hereafter made
by
the Company to holders of its Series A Shares shall not be taxable to such
shareholders.
(n) The
Company covenants and agrees that it shall not, and shall not permit any
Subsidiary, at any time after the Separation Date, to (i) consolidate with,
(ii)
merge with or into or (iii) sell or transfer, in one or more transactions,
assets or earning power aggregating more than 50% of the assets or earning
power
of the Company and its Subsidiaries (taken as a whole) to, any other Person
if
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 that would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights.
(o) The
Company covenants and agrees that, after the Separation 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 that at the time it is reasonably
foreseeable will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights; provided, however, that the issuance
of
additional Rights pursuant hereto, including by action of the Board under
Section 22 hereof, shall not be deemed to violate this Section
11(o).
(p) Anything
in this Agreement to the contrary notwithstanding, in the event that the Company
shall at any time after the Record Date (i) declare a dividend on the
outstanding Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares or (iii) combine the outstanding Common Shares into
a
smaller number of shares, the number of Rights associated with each Common
Share
then outstanding, or issued or delivered thereafter, shall be proportionately
adjusted so that the number of Rights thereafter associated (whether before
or
after the Separation Date) with each Common Share following any such event
shall
equal the result obtained by multiplying the number of Rights associated with
each Common Share immediately prior to such event by a fraction the numerator
of
which shall be the total number of Common Shares outstanding immediately prior
to the occurrence of the event and the denominator of which shall be the total
number of Common Shares outstanding immediately following the occurrence of
such
event. For purposes of this Section 11(p), any Common Shares issued after the
Separation Date that were not issued together with a Right (pursuant to the
Preamble hereto or by action of the Board pursuant to Section 22 hereof) shall
not be counted as outstanding.
Section
12. Certificate
of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 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 Common Shares
or
the Series A Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate (or, if prior to the Separation
Date, to each holder of a certificate representing Common Shares) in accordance
with Section 25 hereof. The Rights Agent shall be fully protected in relying
on
any such certificate and on any adjustment therein contained.
-17-
Section
13. Consolidation,
Merger or Sale or Transfer Assets or Earning Power.
(a) In
the
event that, following the Shares Acquisition Date, directly or indirectly,
(x)
the Company shall consolidate with, or merge with and into, any other Person
(other than a Subsidiary of the Company in a transaction that 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 (other than a
Subsidiary of the Company in a transaction that 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 or any Person or Persons (other than a Subsidiary of the Company
in a
transaction that complies with Section 11(o) hereof) shall consummate a share
exchange with the Company, and, in connection with such consolidation, merger
or
share exchange, all or part of the Common Shares 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 a single transaction
or a
series of related transactions, assets 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 Person or Persons (other than the Company
or any Subsidiary of the Company in a transaction that complies with Section
11(o) hereof), then, and in each such case, 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, nonassessable and freely
tradeable Common Shares of the Principal Party, not subject to any rights of
first refusal, redemption or repurchase, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the number of
one
one-hundredths of a Series A Share for which a Right is exercisable immediately
prior to the first occurrence of a Section 13(a) Event (or, if a Section
11(a)(ii) Event has occurred prior to the Section 13(a) Event, multiplying
the
number of such fractional shares for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase
Price
immediately prior to such first occurrence), and dividing that product (which,
following the Section 13(a) Event, shall thereafter be referred to as the
“Purchase Price” for all purposes of this Agreement) by (2) fifty percent (50%)
of the current per share market price (determined pursuant to Section 11(d)
hereof) per Common Share (or other securities or property as provided for
herein) of such Principal Party on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company 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(a) Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number
of
its Common Shares) 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 Common Shares
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Sections 11(a)(ii) and 11(a)(iii) hereof shall thereafter be of no effect
following the first occurrence of a Section 13(a) Event.
-18-
(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), the Person that is the issuer of any securities into which Common
Shares 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), the Person that is the party receiving the greatest portion of the assets
or earning power transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of such
Person are not at such time and have 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
Shares of which are and have 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 Shares 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 Shares 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 Common
Shares, which have not been issued or reserved for 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
Final Expiration Date; and
(ii) deliver
to holders of the Rights historical financial statements for the Principal
Party
and each of its Affiliates that 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 one of the transactions described in Section
13(a) hereof shall occur at any time after the occurrence of a transaction
described in Section 11(a)(ii) hereof, the Rights that have not theretofore
been
exercised shall thereafter become exercisable in the manner described in Section
13(a).
-19-
Section
14. Fractional
Rights and Fractional Shares.
(a) The
Company shall not be required to issue fractions of Rights, except prior to
the
Separation Date as provided in Section 11(p) hereof, or to distribute Right
Certificates that evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Right 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 the 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 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 on the principal national securities exchange, if any, on which the
Rights are then listed or admitted to trading or, if the Rights are not listed
or admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices
in
the over-the-counter market, as reported by the OTC Bulletin Board 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 the Rights are not publicly held or so listed or traded,
the
current market value of a whole Right shall mean the fair value of a whole
Right
as determined in good faith by the Board, whose determination shall be described
in a statement filed with the Rights Agent and binding on the holders of
Rights.
(b) The
Company shall not be required to issue fractions of Series A Shares (other
than
fractions that are integral multiples of one one-hundredth of a Series A Share)
upon exercise of the Rights or to distribute certificates that evidence
fractional Series A Shares (other than fractions that are integral multiples
of
one one-hundredth of a Series A Share). Fractions of Series A Shares in integral
multiples of one one-hundredth of a Series A Share may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled
as
beneficial owners of the Series A Shares. In lieu of fractional Series A Shares
that are not integral multiples of one one-hundredth of a Series A Share, the
Company shall pay to the registered holders of Right 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 Series A Share. For purposes of
this
Section 14(b), the current market value of a Series A Share shall be the closing
price of a Series A Share (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 Common Shares upon exercise of the Rights or to distribute
certificates that evidence fractional Common Shares. In lieu of fractional
Common Shares, the Company may pay to the registered holders of Right
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 Common
Share. For purposes of this Section 14(c), the current market value of one
Common Share shall be the closing price of one Common Share (as determined
pursuant to Section 11(d)(1) hereof) for the Trading Day immediately prior
to
the date of such exercise.
-20-
(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 otherwise set forth herein.
Section
15. Rights
of Action.
All
rights of action in respect of this Agreement, excepting the rights of action
given to the Rights Agent under Section 18 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to the Separation
Date,
the registered holders of any certificate representing Common Shares); and
any
registered holder of any Right Certificate (or, prior to the Separation Date,
of
any other certificate representing Common Shares), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or, prior to
the
Separation Date, of the Common Shares), 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 Right Certificate in the manner provided
in such Right 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 will be entitled to specific performance
of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this
Agreement.
Section
16. Agreement
of Right Holders.
Every
holder of a Right, by accepting the same, consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) prior
to
the Separation Date, the Rights will be transferable only in connection with
the
transfer of the Common Shares;
(b) after
the
Separation Date, the Right Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal office of the Rights
Agent designated for such purpose, duly endorsed or accompanied by a proper
instrument of transfer and with appropriate forms and certificates fully
executed; and
(c) the
Company and the Rights Agent may deem and treat the person in whose name the
Right Certificate (or, prior to the Separation Date, the associated Common
Shares certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificates or the associated Common Shares certificates made
by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any notice
to
the contrary.
(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.
-21-
Section
17. Right
Certificate Holder Not Deemed a Shareholder.
No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Series A Shares, 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 Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or
any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section
18. Concerning
the Rights Agent.
(a) The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees 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 negligence 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 of liability in the
premises.
(b) The
Rights Agent shall be fully indemnified against, shall be protected from, and
shall incur no liability or expense (including without limitation attorneys’
fees and expenses) 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 Right Certificate or certificate for the Series A Shares or Common Shares
or
for other securities of the Company, instrument of assignment or transfer,
power
of attorney, endorsement, affidavit, letter, notice, direction, instruction,
consent, certificate, statement or other paper or document believed by it to
be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons, or otherwise upon the advice
of
its counsel as set forth in Section 20 hereof.
(c) Notwithstanding
anything in this Agreement to the contrary, in no event shall the Rights Agent
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights
Agent
has been advised of the likelihood of such loss or damage and regardless of
the
form of the action, and the Company agrees to indemnify the Rights Agent and
to
hold it harmless against any loss, liability or expense incurred as a result
of
claims for special, indirect or consequential loss or damages of any kind
whatsoever.
-22-
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
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto;
provided, however, that such 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 Right Certificates shall have been countersigned but
not
delivered, any such successor Rights Agent may adopt the countersignature of
the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right 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 Right Certificates shall have been countersigned but not delivered,
the
Rights Agent may adopt the countersignature under its prior name and deliver
Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its changed name; and
in
all such cases such Right Certificates shall have the full force provided in
the
Right Certificates and in this Agreement.
Section
20. Duties
of Rights Agent.
The
Rights Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be
bound:
(a) The
Rights Agent may consult with legal counsel (who may be legal counsel for the
Rights Agent or the Company), and the opinion of such counsel shall be full
and
complete authorization and protection to the Rights Agent as to any action
taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever
in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action hereunder, such fact
or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Treasurer or the Secretary
of
the Company and delivered to the Rights Agent; and such certificate shall be
full 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.
-23-
(c) The
Rights Agent shall be liable hereunder to the Company and any other Person
only
for its own negligence or willful misconduct; provided, however, that in no
event shall the Rights Agent be liable for special, indirect or consequential
loss or damages of any kind whatsoever.
(d) The
Rights Agent shall not be liable for or by reason of any of the statements
of
fact or recitals contained in this Agreement or in the Right Certificates
(except its countersignature thereof) or be required to verify the same, but
all
such statements and recitals are and shall be deemed to have been made by the
Company only.
(e) The
Rights Agent shall not 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
Right 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 Right Certificate; nor shall it be responsible
for
any adjustment required under the provisions of Section 11 or Section 13 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 Right Certificates
after 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 Series A Shares to be issued pursuant to this Agreement
or
any Right Certificate or as to whether any Series A Shares will, when issued,
be
validly authorized and issued, fully paid and nonassessable.
(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 any one of the Chairman
of the Board, the Chief Executive Officer, the President, any Vice President,
the Secretary or the 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.
(h) The
Rights Agent and any shareholder, 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 reasonable care was exercised in the selection and continued employment
thereof.
-24-
(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 Right Certificate surrendered to the Rights Agent for exercise
or
transfer, the certificate attached to the form of assignment or form of election
to purchase, as the case may be, has either not been completed or indicates
an
affirmative response to clause 1 and/or 2 on such certificate attached to the
form of assignment or form of election to purchase, the Rights Agent shall
not
take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
Section
21. Change
of Rights Agent.
The
Rights Agent or any successor Rights Agent may resign and be discharged from
its
duties under this Agreement upon 30 days’ notice in writing mailed to the
Company and to each transfer agent of the Common Shares and Series A Shares
by
registered or certified mail. In such event, the Company shall give written
notice of such resignation to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days’ notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares and Series A Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the Rights Agent
shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall fail to
make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity
by
the resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company
or by
such a court, shall be a corporation organized and doing business under the
laws
of the United States or of any state of the United States, in good standing,
that is authorized under such laws to exercise corporate trust powers and is
subject to supervision or examination by federal or state authority and that
has
at the time of its appointment as Rights Agent a combined capital and surplus
of
at least $50,000,000. 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 Shares and Series A Shares, and mail a notice thereof in writing
to
the registered holders of the Right 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 or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may
be.
-25-
Section
22. Issuance
of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by the Board to reflect any
adjustment or change in the Purchase Price per share and the number or kind
or
class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement. In
addition, the Company may, if deemed necessary or appropriate by the Board,
issue Right Certificates in connection with the issuance or sale of Common
Shares following the Separation Date.
Section
23. Redemption.
(a) The
Board
may, at its option, at any time prior to such time as any Person becomes an
Acquiring Person, redeem all but not less than all the then outstanding Rights
at a redemption price of One Cent ($0.01) per Right, appropriately adjusted
to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter referred to as the
“Redemption Price”). The redemption of the Rights by the Board may be made
effective at such time, on such basis and with such conditions as the Board,
in
its sole discretion, may establish.
(b) Immediately
upon the action of the Board ordering the redemption of the Rights 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. The Company shall promptly give public notice
of
any such redemption; provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of such redemption. Within
10
days after such action of the Board ordering the redemption of the Rights,
the
Company shall mail a notice of redemption to the holders of the then outstanding
Rights by mailing such notice to all such holders at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Separation Date, on the registry books of the Transfer Agent for the Common
Shares. Any notice that is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption shall state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner
other
than that specifically set forth in this Section 23 or in Section 24 hereof,
and
other than in connection with the purchase of Common Shares prior to the
Separation Date.
Section
24. Exchange.
(a) The
Board
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 Shares at an exchange ratio of one Common Share 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 shall not be empowered to effect such exchange at any time after
any
Person (other than the Company, any Subsidiary or the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding Common
Shares for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of fifty
percent (50%) or more of the Common Shares then outstanding.
-26-
(b) Immediately
upon the action of the Board ordering the exchange of any Rights pursuant to
subsection (a) of this 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 Common
Shares equal to the number of such Rights held by such holder multiplied by
the
Exchange Ratio. The Company shall promptly give notice to the Rights Agent
and
public notice of any such exchange; provided, however, that 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 that 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 Common Shares for
Rights will be effected and, in the event of any partial exchange, the number
of
Rights that will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights that 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
Series A Shares for Common Shares at the rate of one one-hundredth of a Series
A
Share for each Right.
(d) The
Company shall not be required to issue fractions of Common Shares or to
distribute certificates that evidence fractional Series A Shares (except as
hereinafter provided) or fractional Common Shares, but if the exchange is for
Series A Shares, the Company shall be obligated to issue fractional shares
so
long as any fraction of a Series A Share so to be issued is at least equal
to
one one-hundredth of a Series A Share. In lieu of such fractional shares, the
Company shall pay to the registered holders of the Rights Certificates with
regard to which such fractional shares would otherwise be issuable an amount
in
cash equal to the same fraction of the current market value of a whole share.
For the purposes of this Section 24(d), (i) the current market value of a whole
Common Share shall be the per share market price determined as of the day
immediately following the day of the public announcement by the Company that
an
exchange is to be effected pursuant to this Section 24 and (ii) the current
market value of a Series A Share or fraction of a Series A Share shall be the
current market value on such day of a Series A Share (or fraction of a Series
A
Share) as determined in accordance with Section 11(d)(ii) hereof.
Section
25. Notice
of Certain Events.
(a) In
case
the Company shall propose, at any time after the Separation Date, (i) to pay
any
dividend payable in stock of any class to the holders of Series A Shares or
to
make any other distribution to the holders of Series A Shares (other than a
regular quarterly cash dividend), (ii) to offer to the holders of its Series
A
Shares rights or warrants to subscribe for or to purchase any additional Series
A Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of Series A Shares (other than
a
reclassification involving only the subdivision of outstanding Series A Shares),
(iv) to effect any consolidation or merger into or with, or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of 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 (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 Right Certificate, to the extent feasible and in accordance
with Section 26 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, or 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 Common Shares and/or
Series A Shares, if any such date is to be fixed, and such notice shall be
so
given in the case of any action covered by clause (i) or (ii) above at least
20
days prior to the record date for determining holders of the Series A Shares
for
purposes of such action, and in the case of any such other action, at least
20
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Series A
Shares, whichever shall be the earlier.
-27-
(b) In
case
of the occurrence of a Section 11(a)(ii) Event, then, in any such case, (i)
the
Company shall as soon as practicable thereafter give to each holder of a Right
Certificate, 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), and
(ii)
all references in the preceding paragraph to Series A Shares shall be deemed
thereafter to refer to Common Shares 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 Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent)
as
follows:
▇▇▇▇
▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Chief Executive Officer
Subject
to the provisions of Section 21 hereof, any notice or demand authorized by
this
Agreement to be given or made by the Company or by the holder of any Right
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:
Stock Transfer Administration - ▇▇▇▇▇ ▇▇▇▇▇
-28-
Notices
or demands authorized by this Agreement to be given or made by the Company
or
the Rights Agent to the holder of any Right Certificate shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Rights Agent.
Section
27. Supplements
and Amendments.
Prior
to the Separation Date and subject to the penultimate sentence of this Section
27, the Company may 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 Common Shares. From and after the
Separation Date and subject to the penultimate sentence of this Section 27,
the
Company may and the Rights Agent shall, if the Company shall so direct,
supplement or amend this Agreement without the approval of any holders of Right
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein that 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 that
the
Company may deem necessary or desirable and that shall not adversely affect
the
interests of the holders of Right Certificates (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person); provided that, from and
after the Separation Date this Agreement may not be supplemented or amended
to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating
to when the Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period 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. Notwithstanding anything contained
in this Agreement to the Contrary, no supplement or amendment shall be made
which changes the Redemption Price. Prior to the Separation Date, the interests
of the holders of Rights shall be deemed coincident with the interests of the
holders of Common Shares.
Section
28. Successors;
Assignment.
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. This Agreement shall extend to and shall
be
binding upon the parties hereto and their respective successors and assigns;
provided however, that this Agreement shall not be assignable by either party
without prior written consent of the other party; and provided, further, that
(a) the foregoing proviso shall not apply to assignments by the Rights Agent
to
an affiliate or subsidiary of the Rights Agent and (b) any reorganization,
merger, consolidation, sale of assets or other form of business combination
by
the Rights Agent shall not be deemed to constitute an assignment of this
Agreement.
Section
29. Benefits
of this Agreement.
Nothing
in this Agreement shall be construed to give to any person or corporation other
than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Separation Date, the Common Shares) 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 Right Certificates (and, prior to the Separation
Date,
the Common Shares).
-29-
Section
30. Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section
31. Governing
Law.
This
Agreement and each Right Certificate issued hereunder shall be deemed to be
a
contract made under the laws of the State of Delaware, 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;
except for Sections 18, 19, 20 and 21 hereof which for all purposes shall be
governed by and construed under the laws of the State of New York. Any provision
of this Agreement and each such Right Certificate relating to the internal
corporate governance or other affairs of the Company shall be governed by and
construed in accordance with the laws of the State of Delaware.
Section
32. Special,
Indirect and Consequential Damages.
Neither
party to this Agreement shall be liable to the other party for special, indirect
or consequential loss or related damages.
Section
33. Counterparts.
This
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be 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 of reference only and shall not control or affect the meaning or
construction of any of the provisions hereof.
-30-
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
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By:
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/s/
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III
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|
|
|
Name:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III
|
|
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|
Title:
Executive Chairman
|
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THE
BANK OF NEW YORK
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title:
AVP
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EXHIBIT
A
AMENDED
AND RESTATED
CERTIFICATE
OF DESIGNATION
OF
SERIES
A
PREFERRED STOCK
OF
The
undersigned, being the Executive Chairman of OrthoLogic Corp. (the
“Corporation”), a corporation organized and existing under the Delaware General
Corporation Law, hereby certifies that, pursuant to the provisions of Section
151 of the Delaware General Corporation Law, the Board of Directors of the
Corporation duly adopted the following resolution on June 19, 2007, which
resolution remains in full force and effect as of the date hereof:
Series
A Preferred Stock
RESOLVED,
that the Board of Directors of the Corporation, pursuant to authority vested
in
it by the provisions of the Corporation’s Amended and Restated Certificate of
Incorporation (the “Charter”),
hereby authorize and direct an increase in the Series A Preferred Stock of
the
Corporation and amends the number of shares of such series and restates the
powers, designations, preferences and relative, participating, optional or
other
rights of such series, and the qualifications, limitations or restrictions
thereof, as follows:
The
first
series of Preferred Stock, par value $.0005 per share, of the Corporation shall
be, and hereby is, designated “Series A Preferred Stock” (the “Series
A Shares”),
and
the number of shares constituting such series shall be One Million (1,000,000).
The relative rights and preferences of the Series A Shares shall be as
follows:
Section
A. Dividends
and Distributions.
(1) Subject
to the prior and superior rights of the holders of any shares of any series
of
stock prior and superior to the Series A Shares with respect to dividends,
the
holders of Series A Shares, in preference to the holders of Common Stock, par
value $.0005 per share, of the Corporation (the “Common
Stock”)
and of
any other junior stock, shall be entitled to receive, when and as declared
by
the Board of Directors, out of any funds lawfully available therefor, cash
dividends thereon, payable quarterly, from the date of issuance thereof, upon
the tenth days of January, April, July and October 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 Series A Share, in an amount per share (rounded to the nearest cent) equal
to the greater of (a) $10.00 or (b) subject to the provisions for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of
all
non-cash dividends or other distributions, other than a dividend or distribution
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
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
Series A Share. In the event the Corporation shall at any time after July 2,
2007 (i) declare any dividend on the 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 amounts to which holders of Series A Shares were entitled immediately prior
to such event under clause (a) and clause (b) of the preceding sentence shall
be
adjusted by multiplying each 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.
(2) The
Corporation shall declare a dividend or distribution on the Series A Shares
as
provided in paragraph (1) of this Section immediately after it declares a
dividend or distribution on the Common Stock (other than a dividend or
distribution payable in shares of Common Stock); provided,
however,
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 $10.00 per share
on
the Series A Shares shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date; and provided further,
that
nothing contained in this paragraph (2) shall be construed so as to conflict
with any provision relating to the declaration of dividends contained in the
Charter.
(3) Dividends
shall begin to accrue and be cumulative on outstanding Series A Shares from
the
Quarterly Dividend Payment Date next preceding the date of issue of such Series
A Shares, 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 Series A Shares 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 Series A Shares 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 Series A Shares entitled to receive payment
of a
dividend or distribution declared thereon.
A-2
Section
B. Redemption. The
Series A Shares are not redeemable.
Section
C. Liquidation,
Dissolution or Winding Up.
In the
event of the voluntary or involuntary liquidation of the Corporation the
“preferential amount” that the holders of the Series A Shares shall be entitled
to receive out of the assets of the Corporation shall be $100.00 per share
plus
all accrued and unpaid dividends thereon.
(1) Upon
any
liquidation, dissolution or winding up of the Corporation, no distribution
shall
be made to the holders of shares of stock ranking junior (upon liquidation,
dissolution or winding up) to the Series A Shares unless, prior thereto, the
holders of Series A Shares shall have received $100.00 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
A Liquidation Preference”).
Following the payment of the full amount of the Series A Liquidation Preference,
no additional distributions shall be made to the holders of Series A Shares
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 A Liquidation Preference
by
(ii) 100 (as appropriately adjusted as set forth in paragraph (3) of this
Section C 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 A Liquidation Preference
and the Common Adjustment in respect of all outstanding Series A Shares and
Common Stock, respectively, holders of Series A Shares 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
one
with respect to the Series A Shares and Common Stock, on a per share basis,
respectively.
(2) In
the
event, however, that there are not sufficient assets available to permit payment
in full of the Series A Liquidation Preference and the liquidation preferences
of all other series of preferred stock, if any, that rank on a parity with
the
Series A Shares, then all such available assets shall be distributed ratably
to
the holders of the Series A Shares and 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 any such remaining assets shall be distributed ratably
to the holders of Common Stock.
(3) In
the
event the Corporation shall at any time after July 2, 2007 (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.
Section
D. Sinking
Fund. The
Preferred Shares shall not be entitled to the benefit of any sinking fund for
the redemption or purchase of such shares.
A-3
Section
E. Conversion.
(1) Subject
to paragraph (2) of this Section E, the Preferred Shares shall not be
convertible.
(2) 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 Series A Shares 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 100 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 declare or pay any dividend
on
the Common Stock payable in shares of Common Stock, or effect a subdivision
or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of Series A Shares 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
F. Voting
Rights.
(1) The
holders of Series A Shares shall have no voting rights except as provided by
Delaware statutes or by paragraph (2) of this Section F.
(2) So
long
as any Series A Shares shall be outstanding, and in addition to any other
approvals or consents required by law, without the consent of the holders of
66-
2/3% of the Series A Shares outstanding as of a record date fixed by the Board
of Directors, given either by their affirmative vote at a special meeting called
for that purpose, or, if permitted by law, in writing without a meeting:
(i) The
Corporation shall not sell, transfer or lease all or substantially all the
properties and assets of the Corporation; provided,
however,
that
nothing herein shall require the consent of the holders of Series A Shares
for
or in respect of the creation of any mortgage, pledge, or other lien upon all
or
any part of the assets of the Corporation.
(ii) The
Corporation shall not effect a merger or consolidation with any other
corporation or corporations unless as a result of such merger or consolidation
and after giving effect thereto holders of Series A Shares are entitled to
receive a per share amount and type of consideration equal to 100 times the
per
share amount and type of consideration received by holders of shares of Common
Stock, or (1) either (A) the Corporation shall be the surviving corporation
or
(B) if the Corporation is not the surviving corporation, the successor
corporation shall be a corporation duly organized and existing under the laws
of
any state of the United States of America or the District of Columbia, and
all
obligations of the Corporation with respect to the Series A Shares shall be
assumed by such successor corporation, (2) the Series A Shares then outstanding
shall continue to be outstanding and (3) there shall be no alteration or change
in the designation or the preferences, relative rights or limitations applicable
to outstanding Series A Shares prejudicial to the holders
thereof.
A-4
(iii) The
Corporation
shall not amend, alter or repeal any of the provisions of its Certificate of
Incorporation in any manner that adversely affects the relative rights,
preferences or limitations of the Series A Shares or the holders
thereof.
Section
G. Certain
Restrictions.
(1) Whenever
quarterly dividends or other dividends or distributions payable on the Series
A
Shares as provided in Section A are in arrears, thereafter and until all accrued
and unpaid dividends and distributions, whether or not declared, on Series
A
Shares 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 (as
to
dividends) to the Series A Shares;
(ii) declare
or pay dividends on or make any other distributions on any shares of stock
ranking on a parity (as to dividends) with the Series A Shares, except dividends
paid ratably on the Series A Shares 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
junior (as to dividends) to the Series A Shares; provided,
however,
that
the Corporation may at any time redeem, purchase or otherwise acquire shares
of
any such junior stock in exchange for shares of any stock of the Corporation,
ranking junior (as to dividends) to the Series A Shares; and
(iv) purchase
or otherwise acquire for consideration any Series A Shares, or any shares of
stock ranking on a parity (as to dividends) with the Series A Shares, 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.
(2) 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 (1) of this Section G, purchase
or
otherwise acquire such shares at such time and in such manner.
A-5
Section
H. Fractional
Shares.
The
Corporation may issue fractions and certificates representing fractions of
Series A Shares in integral multiples of 1/100th of a Series A Share, or in
lieu
thereof, at the election of the Board of Directors of the Corporation at the
time of the first issue of any Series A Shares, evidence such fractions by
depositary receipts, pursuant to an appropriate agreement between the
Corporation and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all rights,
privileges and preferences to which they would be entitled as beneficial owners
of Series A Shares. In the event that fractional Series A Shares are issued,
the
holders thereof shall have all the rights provided herein for holders of full
Series A Shares in the proportion that such fraction bears to a full
share.
IN
WITNESS WHEREOF, the Corporation has caused this Amended and Restated
Certificate of Designation of Series A Preferred Stock to be signed as of this
19th day of June, 2007.
|
By:
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/s/
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III
|
|
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Name:
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, III
|
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Title:
|
Executive
Chairman
|
|
EXHIBIT
B
[Form
of
Right Certificate]
|
Certificate
No. R-
|
____________
Rights
|
NOT
EXERCISABLE AFTER JUNE 19, 2010 OR EARLIER IF REDEEMED OR EXCHANGED 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 (AS HEREINAFTER DEFINED)) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS 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
RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BE OR BECOME VOID IN
THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE AGREEMENT.]1
Right
Certificate
ORTHOLOGIC
CORP.
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 June 19, 2007 (the “Rights Agreement”), between
OrthoLogic Corp., a Delaware corporation (the “Company”), and The Bank of New
York, a New York corporation (the “Rights Agent”), to purchase from the Company
at any time after the Separation Date (as such term is defined in the Rights
Agreement) and prior to the close of business (5:00 PM New York, New York time)
on June 19, 2010 at the office or offices of the Rights Agent designated for
such purpose, or its successors as Rights Agent, one one-hundredth of a fully
paid, nonassessable share of Series A Preferred Stock, par value $.0005 per
share (“Series A Share”) of the Company, at a purchase price of Six Dollars
($6.00) per one one-hundredth of a share (the “Purchase Price”), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase and related Certificate duly executed. The number of rights
evidenced by this Right Certificate (and the number of shares that 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 July 2, 2007,
based on the Series A Shares as constituted at such date.
Upon
the
occurrence of a Triggering Event (as such term is defined in the Rights
Agreement), if the Rights evidenced by this Right Certificate are beneficially
owned by (a) an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights Agreement), (b) a
transferee of any such Acquiring Person, Associate or Affiliate (other than
a
bona fide purchaser for value who has no knowledge that the transferor was
an
Acquiring Person or an Associate or Affiliate of an Acquiring Person) or (c)
under certain circumstances specified in the Rights Agreement, a transferee
of a
person or entity who, after such transfer, became 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 any such Triggering
Event.
1
The portion of the legend in the brackets shall be inserted if applicable
and shall replace the preceding sentence.
As
provided in the Rights Agreement, the Purchase Price and the number and kind
of
Series A Shares or other securities or other property that may be purchased
upon
the exercise of the Rights evidenced by this Right Certificate are subject
to
modification and adjustment upon the happening of certain events.
This
Right Certificate is subject to all of the terms, provisions and conditions
of
the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability
of
such Rights for not more than ninety (90) days at the election of the Company
and under certain circumstances specified in such 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 Company.
This
Right Certificate, with
or
without other Right Certificates, upon surrender at the principal office or
offices of the Rights Agent designated for such purpose, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number
of
Series A Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If the
Rights evidenced by this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed at a redemption price of One Cent ($0.01) per Right
or (ii) may be exchanged in whole or in part for shares of the Company’s Common
Stock, par value $.0005 per share, or Series A Shares.
The
terms
of the Rights evidenced by this Certificate may be supplemented or amended
without the approval of any holder of the Rights (or the Common Shares) as
set
forth in the Rights Agreement.
No
fractional Series A Shares will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions that are integral multiples of
one
one-hundredth of a Series A Share, 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.
B-2
No
holder
of this Right Certificate, as such, shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of Series A Shares or of
any
other securities of the Company that 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 Rights evidenced by this Right Certificate shall have been exercised as
provided in the Rights Agreement.
This
Right Certificate shall not be valid or obligatory for any purpose until it
shall have been countersigned by the Rights Agent.
B-3
WITNESS
the facsimile signatures of the proper officers of the Company.
Dated:
____________________, 20____
|
Countersigned
|
ORTHOLOGIC
CORP.
|
|||
|
THE
BANK OF NEW YORK
|
||||
|
as
Rights Agent
|
||||
|
By:
|
||||
|
Name:
|
||||
|
By:
|
Title:
|
|||
|
Attest:
|
||||
|
Name:
|
||||
|
Title:
|
||||
|
(Corporate
Seal)
|
||||
B-4
[Form
of
Reverse Side of Right Certificate]
FORM
OF
ASSIGNMENT
(To
be
executed by the registered holder if such holder desires
to
transfer the Right Certificate.)
FOR
VALUE
RECEIVED ____________________ hereby sells, assigns and transfers unto
_______________________
(Please
print name and address of Trustee)
this
Right Certificate, together with all right, title and interest therein, and
does
hereby irrevocably constitute and appoint ____________________ attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated:
____________________, 20____
|
Signature
|
Signature
Guaranteed:
B-5
Certificate
_________
The
undersigned hereby certifies by checking the appropriate boxes
that:
(i) 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 in the Rights Agreement);
(ii) to
the
best knowledge of the undersigned, it [ ] did
[ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
|
Dated:
____________________,
20____
|
|||||
|
Signature
|
|||||
B-6
NOTICE
__________
The
signature(s) to the foregoing Assignment and Certificate must correspond to
the
name(s) as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.
B-7
FORM
OF
ELECTION TO PURCHASE
_____________________________
(To
be
executed if holder desires to exercise
Rights
represented by the Right Certificate.)
To: ORTHOLOGIC
CORP.
The
undersigned hereby irrevocably elects to exercise ____________________ Rights
represented by this Right Certificate to purchase the Series A Shares (or
fractions thereof) issuable upon the exercise of such Rights (or such other
securities of the Company or of any other entity that may be issuable upon
the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of:
|
Please
insert social security
|
|
|
or
other identifying number:
|
|
|
(Please
print name and address)
|
|
If
such
number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance 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:
____________________,
20____
|
|||||
|
Signature
|
|||||
Signature
Guaranteed:
B-8
Certificate
__________
The
undersigned hereby certifies by checking the appropriate boxes
that:
(i) the
Rights evidenced by this Right 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 in the Rights
Agreement);
(2) to
the
best knowledge of the undersigned, it [ ] did
[ ] not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
|
Dated:
____________________,
20____
|
|||||
|
Signature
|
|||||
B-9
NOTICE
__________
The
signature(s) to the foregoing Election to Purchase and Certificate must
correspond to the name(s) as written upon the face of this Right Certificate
in
every particular, without alteration or enlargement or any change
whatsoever.
B-10
EXHIBIT
C
ORTHOLOGIC
CORP.
Summary
of Rights to Purchase Series A Preferred Stock
On
June
19, 2007, the Board of Directors of OrthoLogic Corp. (the “Company”) declared a
dividend distribution of one Right for each outstanding share of Common Stock,
par value $.0005 per share (a “Common Share”), of the Company to stockholders of
record at the close of business on July 2, 2007 (the “Record Date”). Except as
set forth below, each Right entitles the registered holder to purchase from
the
Company one one-hundredth of a share of Series A Preferred Stock, par value
$.0005 per share (“Series A Shares”), at a price of $6.00 (the “Purchase
Price”), subject to adjustment. The Purchase Price must be paid in cash. The
description and terms of the Rights are set forth in a Rights Agreement (the
“Rights Agreement”) between the Company and The Bank of New York, as Rights
Agent.
Initially,
no separate Right Certificates will be distributed. Until the earlier to occur
of (a) ten days following a public announcement that a person or group of
affiliated or associated persons (an “Acquiring Person”) has acquired, or
obtained the right to acquire, beneficial ownership of 20% or more of the
outstanding Common Shares or (b) ten business days following the commencement
of
a tender offer or exchange offer if, upon consummation thereof, such person
or
group would be the beneficial owner of 20% or more of such outstanding Common
Shares (the earlier of such dates being called the “Separation Date”), the
Rights will be evidenced, with respect to any Common Shares outstanding as
of
the Record Date, by the certificates representing such Common Shares. The Rights
Agreement provides that, until the Separation Date, the Rights will be
transferred with, and only with, the Common Shares. From as soon as practicable
after the Record Date and until the Separation Date (or earlier redemption
or
expiration of the Rights), new Common Share certificates issued after the Record
Date upon transfer or new issuance of Common Shares will contain a notation
incorporating the Rights Agreement by reference. Until the Separation Date
(or
earlier redemption or expiration of the Rights), the surrender for transfer
of
any certificates for Common Shares outstanding as of the Record Date will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificates. As soon as practicable following the
Separation Date, separate certificates evidencing the Rights (“Right
Certificates”) will be mailed to holders of record of the Common Shares as of
the close of business on the Separation Date and, thereafter, such separate
Right Certificates alone will evidence the Rights.
The
Rights are not exercisable until the Separation Date and will expire on June
19,
2010, unless earlier redeemed by the Company as described below.
In
the
event that a person (other than the Company and its affiliates) becomes the
beneficial owner of 20% or more of the then outstanding Common Shares, the
Rights Agreement provides that proper provision shall be made so that each
holder of a Right will thereafter be entitled to receive, upon exercise, Common
Shares (or, in certain circumstances, cash, property or other securities of
the
Company) having a value equal to two times the exercise price of the
Right.
In
the
event that, at any time following the first date of public announcement by
the
Company or an Acquiring Person indicating that an Acquiring Person has become
such (the “Shares Acquisition Date”), (a) the Company engages in a merger or
other business combination transaction in which the Company is not the surviving
corporation, (b) the Company engages in a merger or other business combination
transaction or share exchange with another person in which the Company is the
surviving corporation, but in which its Common Shares are changed or exchanged
or (c) 50% or more of the Company’s assets or earning power is sold or
transferred, the Rights Agreement provides that proper provision shall be made
so that each holder of a Right shall thereafter have the right to receive,
upon
the exercise thereof at the then current exercise price of the Right, common
shares of the acquiring company having a value equal to two times the exercise
price of the Right.
The
Board
may, at its option, at any time after the right of the Board to redeem the
Rights has expired or terminated (with certain exceptions), exchange all or
part
of the then outstanding and exercisable Rights (other than those held by the
Acquiring Person and Affiliates and Associates of the Acquiring Person) for
Common Shares at a ratio of one Common Share per Right, as adjusted; provided,
however, that such Right cannot be exercised once a Person, together with such
Person’s Affiliates and Associates, becomes the owner of 50% or more of the
outstanding Common Shares. If the Board authorizes such an exchange, the Rights
will immediately cease to be exercisable.
Notwithstanding
any of the foregoing, following the occurrence of any of the events set forth
in
the fourth and fifth paragraphs of this Summary, any Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person shall immediately become null and
void.
The
Purchase Price payable, and the number of Series A Shares or other securities
or
property issuable, upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (a) in the event of a dividend of Series A
Shares on, or a subdivision, combination or reclassification of, the Series
A
Shares, (b) upon the grant to holders of the Series A Shares of certain rights
or warrants to subscribe for Series A Shares or securities convertible into
Series A Shares at less than the current market price of the Series A Shares
or
(c) upon the distribution to holders of the Series A Shares of debt securities
or assets (excluding regular quarterly cash dividends and dividends payable
in
Series A Shares) or of subscription rights or warrants (other than those
referred to above).
At
any
time before a person becomes an Acquiring Person, the Board of Directors of
the
Company (the “Board”), may redeem the Rights in whole, but not in part, at a
price of $0.01 per Right, subject to adjustment (the “Redemption Price”).
Immediately upon the action of the Board ordering redemption of the Rights,
the
Rights will no longer be exercisable, except upon the occurrence of certain
events that have the effect of deferring the effective time of the redemption.
In general, thereafter the only right of the holders of Rights will be to
receive the Redemption Price.
Until
a
Right is exercised, the holder thereof, as such, will have no rights as a
shareholder of the Company, including, without limitation, the right to vote
or
to receive dividends. While the distribution of the Rights will not be taxable
to shareholders or to the Company, shareholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Shares (or other consideration) of the Company or for
common shares of the Acquiring Person as set forth above.
C-2
Prior
to
the Separation Date, any of the provisions of the Rights Agreement may be
amended by the Board other than the Redemption Price. Thereafter, certain other
provisions of the Rights Agreement may be amended by action of the Board if
such
amendment does not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person).
A
copy of
the Rights Agreement will be filed with the Securities and Exchange Commission
as an Exhibit to a Current Report on Form 8-K. A copy of the Rights Agreement
is
available free of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated herein by
reference.
C-3