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GAMMA BIOLOGICALS, INC.
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Shareholder Rights Plan
Dated as of September 5, 1989
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Table of Contents
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Section Page
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1. Certain Definitions 1
2. Authority to Appoint Rights Agent 6
3. Issue of Rights Certificates 6
4. Form of the Rights Certificates 8
5. Registration 9
6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates 10
7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 11
8. Cancellation and Destruction of Rights
Certificates 14
9. Reservation and Availability of Capital Stock 14
10. Record Date for Securities Issued Upon
Exercise 16
11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights 17
12. Certificate of Adjusted Purchase Price
or Number of Shares 28
13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power 28
14. Fractional Rights and Fractional Shares 32
15. Rights of Action 33
16. Agreement of Rights Holders 33
17. Rights Certificate Holder Not Deemed
a Shareholder 34
Table of Contents, continued
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Section Page
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18. Indemnification of Corporate Officers 34
19. Issuance of New Rights Certificates 35
20. Redemption and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇. Notice of Certain Events 36
22. Notices 38
23. Supplements and Amendment; Substituted Plan 38
24. Successors 39
25. Determination and Actions by the
Board of Directors, etc. 39
26. Benefits of this Plan 40
27. Severability 40
28. Governing Law 40
29. Descriptive Headings 41
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
SHAREHOLDER RIGHTS PLAN
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Plan, the following
terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person or group of Persons
acting together, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, who or which, together with all
Affiliates and Associates of such Person(s), shall be the Beneficial Owner of
20% or more of the shares of Common Stock then outstanding, but shall not
include (i) the Company, (ii) any Subsidiary of the Company, or (iii) any
employee benefit plan of the Company or any Subsidiary of the Company, or any
Person or entity organized, appointed or established by the Company acting in
accordance with and for or pursuant to the terms of any such plan.
(b) "ACT" shall mean the Securities Act of 1933, as amended.
(c) "ADJUSTMENT SHARES" shall have the meaning set forth in Section
11(a)(ii) hereof.
(d) "AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended and in effect on the
date of this Plan (the "Exchange Act").
(e) 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, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not
in writing) or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; PROVIDED, HOWEVER, that a
Person shall not be deemed the "Beneficial Owner" of, or to "beneficially
own," (A) securities tendered pursuant to a tender or exchange offer made
by such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, (B) securities
issuable upon exercise of Rights at any time prior to the occurrence of a
Triggering Event, or (C) securities issuable upon exercise of Rights from
and after the occurrence of a Triggering Event which Rights were acquired
by such Person or any of such Person's Affiliates or Associates prior to
the Distribution Date or pursuant to Section 3(a) or Section 19 hereof
(the "Original Rights") or pursuant to Section 11(a)(i) hereof in
connection with an adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of
or has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of
the General Rules and Regulations under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing; PROVIDED, HOWEVER, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security under this
subparagraph (ii) as a result of an agreement, arrangement or understanding
to vote such security if such agreement, arrangement or understanding:
(A) arises solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act, and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing), for
the purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in the provision to subparagraph (ii) of this paragraph
(e)) or disposing of any voting securities of the Company;
PROVIDED, HOWEVER, that nothing in this paragraph (e) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities acquired through such
Person's participation in good faith in a firm commitment underwriting until
the expiration of forty days after the date of such acquisition.
(f) "BOARD" shall mean the Board of Directors of the Company.
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(g) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in the State of Texas are authorized
or obligated by law or executive order to close.
(h) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M.
Central Time on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 P.M. Central time on the next succeeding
Business Day.
(i) "COMMON STOCK" shall mean the common stock, $.10 per share par
value, of the Company, except that "Common Stock" or "common stock", when
used with reference to any Person other than the Company, shall mean the
capital stock of such Person with the greatest voting power, or the equity
securities or other equity interest having power to control or direct the
management, of such Person.
(j) "COMMON STOCK EQUIVALENTS" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(k) "COMPANY" shall mean Gamma Biologicals, Inc., a Texas
corporation, until a successor corporation shall have become such or until a
Principal Party shall assume, and thereafter be liable for, all obligations
and duties of the Company hereunder, pursuant to the applicable provisions of
this Plan, and thereafter "Company" shall mean such successor corporation or
Principal Party.
(l) "CURRENT MARKET PRICE" shall have the meaning set forth in
Section 11(d) hereof.
(m) "CURRENT VALUE" shall have the meaning set forth in Section 11
(a)(iii) hereof.
(n) "DISINTERESTED DIRECTOR" shall mean any member of the Board,
while such Person is a member of the Board, who (i) is not an Acquiring
Person or an Affiliate or Associate of an Acquiring Person, (ii) was not
nominated by or is not in any other manner representative of an Acquiring
Person or of an Affiliate or Associate of an Acquiring Person, (iii) does not
control and is not controlled by an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, and (iv) does not have a substantial
interest (whether by beneficial ownership of securities or otherwise) in an
Acquiring Person or an Affiliate or Associate of an Acquiring Person. An
interest of less than 5% shall not be considered "substantial" for purposes
of this definition.
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(o) "DISTRIBUTION DATE" shall have the meaning set forth in Section
3(a) hereof.
(p) "EQUIVALENT COMMON STOCK" shall have the meaning set forth in
Section 11(b) hereof.
(q) "EXCHANGE ACT" shall have the meaning set forth in Section 1(d)
hereof.
(r) "EXPIRATION DATE" shall have the meaning set forth in Section
7(a) hereof.
(s) "FAIR VALUE OFFER" shall have the meaning set forth in Section
11(a)(ii)(A) hereof.
(t) "FINAL EXPIRATION DATE" shall mean the Close of Business on
September 5, 1999.
(u) "ORIGINAL RIGHTS" shall have the meaning set forth in Section
1(e)(i) hereof.
(v) "PERSON" shall mean any individual, firm, corporation,
partnership, unincorporated association, syndicate or other entity.
(w) "PLAN" shall mean this Shareholder Rights Plan as originally
adopted or as it may from time to time be supplemented or amended pursuant to
the applicable provisions hereof.
(x) "PRINCIPAL PARTY" shall have the meaning set forth in Section
13(b) hereof.
(y) "PURCHASE PRICE" shall have the meaning set forth in Section
4(a) hereof.
(z) "RECORD DATE" shall mean October 2, 1989.
(aa) "REDEMPTION PRICE" shall have the meaning set forth in Section
20(a).
(ab) "RIGHT" shall mean the right to purchase one share of Common
Stock (subject to adjustment) as provided herein.
(ac) "RIGHTS AGENT" shall have the meaning set forth in Section 2
hereof.
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(ad) "RIGHTS CERTIFICATES" shall have the meaning set forth in
Section 3(a) hereof.
(ae) "RIGHTS DIVIDEND DECLARATION DATE" shall mean September 5,
1989, the date that the Board declared a dividend distribution of one Right
for each outstanding share of Common Stock to holders of record of Common
Stock at the Close of Business on the Record Date.
(af) "SECTION 11(a)(ii) EVENT" shall mean any event described in
Section 11(a)(ii) hereof.
(ag) "SECTION 11(a)(ii) TRIGGER DATE" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(ah) "SECTION 13 EVENT" shall mean any event described in clauses
(x), (y) or (z) of Section 13(a) hereof.
(ai) "SPREAD" shall have the meaning set forth in Section
11(a)(iii) hereof.
(aj) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act)
by the Company or an Acquiring Person that an Acquiring Person has become
such without the consent of a majority of the Disinterested Directors.
(ak) "SUBSIDIARY" shall mean, with reference to any Person, any
corporation of which an amount of voting securities sufficient to elect at
least a majority of the directors of such corporation is beneficially owned,
directly (or indirectly, by such Person, or otherwise controlled by such
Person.
(al) "SUBSTITUTE CONSIDERATION" shall have the meaning set forth in
Section 11(a)(iii) hereof.
1. "SUBSTITUTION PERIOD" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(a) "SUMMARY OF RIGHTS" shall have the meaning set forth in Section
3(b) hereof.
(b) "TRADING DAY" shall have the meaning set forth in Section 11(d)
hereof.
(c) "TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
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SECTION 2. AUTHORITY TO APPOINT RIGHTS AGENT. The Company may appoint a
rights agent (or one or more co-rights agents) to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also be the holders of the
Common Stock) in accordance with the terms and conditions hereof (the "Rights
Agent"), and may amend or supplement this Plan in accordance with Section 23
hereof in any manner necessary or desirable to induce such Rights Agent to
accept its appointment hereunder.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earliest of (i) the Close of Business on the tenth
day after the Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the Close of Business on the
Record Date), (ii) the Close of Business on the tenth day after the date that
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 acting in accordance with and for or pursuant to
the terms of any such plan) is first published or sent or given within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act (or, if the tenth day after such date occurs before the Record
Date, the Close of Business on the Record Date), if, upon consummation
thereof, such Person would be the Beneficial Owner of 20% or more of the
shares of Common Stock then outstanding, (iii) the Close of Business on the
tenth day after the occurrence of any of the events described in Section
11(a)(ii)(B) (or, if the tenth day after such date occurs before the Record
Date, the Close of Business on the Record Date), or (iv) the Close of
Business on the tenth day after the date that an offer to effect any of the
transactions described in Section 13(a) made, encouraged or supported by
Acquiring Person is first announced, published, sent or given (or, if the
tenth day after such date occurs before the Record Date, the Close of
Business on the Record Date) (the earliest of (i), (ii), (iii) and (iv) being
herein referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section 3) by
the certificates for the Common Stock registered in the names of the holders
of the Common Stock (which certificates for Common Stock shall be deemed also
to be certificates for Rights) and not by separate certificates, and (y) the
Rights will be transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the Company). As
soon as practicable after the
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Distribution Date, the Company will send by first class, insured, postage
prepaid mail, to each record holder of the Common Stock as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more Rights Certificates, in substantially the
form of Exhibit A hereto (the "Rights Certificates"), evidencing one Right
for each share of Common Stock so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p) hereof, at the time of
distribution of the Rights Certificates, the Company shall make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Rights Certificates representing only whole numbers of Rights
are distributed and cash is paid in lieu of any fractional Rights. As of and
after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(b) Promptly after the Record Date, the Company will send a copy of
a Summary of Rights, in substantially the form attached hereto as Exhibit B
(the "Summary of Rights"), by first class, postage prepaid mail, to each
record holder of the Common Stock 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 the Common Stock outstanding as of the Record
Date, until the Distribution Date the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the Common
Stock shall also be the registered holders of the associated Rights. Until
the earlier of the Distribution Date or the Expiration Date, the transfer of
any certificates representing shares of Common Stock in respect of which
Rights have been issued shall also constitute the transfer of the Rights
associated with such shares of Common Stock.
(c) Except as may otherwise be determined by the Board, Rights
shall be issued in respect of all shares of Common Stock which are issued
(whether originally issued or from the Company's treasury) after the Record
Date but prior to the earlier of the Distribution Date or the Expiration
Date, and in the event of such a determination by the Board, no other
provisions of this Plan shall apply to any shares of Common Stock which the
Board has determined to be issued without Rights. Certificates representing
such shares of Common Stock shall also be deemed to be certificates for
Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in
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the Shareholder Rights Plan of Gamma Biologicals, Inc. (the "Company")
dated as of September 5, 1989, as it may be from time to time amended (the
"Plan"), the terms of which are hereby incorporated herein by reference and
a copy of which is on file at the principal offices of the Company. Under
certain circumstances, as set forth in the Plan, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this certificate a
copy of the Plan, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Plan, 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 Plan), whether
currently held by or on behalf of such Person or by any subsequent
holder, may become null and void.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of the Common
Stock shall also be the registered holders of the associated Rights, and the
transfer of any such certificates shall also constitute the transfer of the
Rights associated with the Common Stock represented by such certificates.
SECTION 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit A 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 Plan, 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 19 hereof, the Rights 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 shares of Common
Stock as shall be set
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forth therein at the price set forth therein (such exercise price per share,
the "Purchase Price"), but the amount and type of securities purchasable upon
the exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificates issued pursuant to Section 3(a) or
Section 19 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which a majority of the
Disinterested Directors have determined is a part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance of Section
7(e) hereof, and any Rights Certificate issued pursuant to Section 6 or
Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend, modified as applicable to such Person:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Plan). Accordingly, this Rights Certificate and the
Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Plan.
SECTION 5. REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, the Chief Executive Officer, the
President, any Vice President or the Treasurer, either manually or by
facsimile signature, and shall have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile
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signature. In case any officer of the Company who shall have signed any of
the Rights Certificates shall cease to be such officer of the Company before
issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be issued and delivered by the Company with the same force
and effect as though the person who signed such Rights Certificates had not
ceased to be such officer of the Company; and any Rights Certificates may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of the
Company to sign such Rights Certificate, although at the date of the
execution of this Plan any such person was not such an officer.
(b) Following the Distribution Date, the Company or the Rights
Agent, if any, will keep or cause to be kept, at the principal executive
office of the Company or at the principal shareholder services office or
offices of the Rights Agent designated for such purposes, as the case may be,
books for registration and transfer of the Rights Certificates issued for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face by each of
the Rights Certificates and the date of each of the Rights Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the Expiration
Date, any Rights Certificate or Certificates may be transferred, split up,
combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of shares of Common
Stock (or, following a Triggering Event, other securities, cash or other
assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitle such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Certificates shall make such
request in writing delivered to the Company or the Rights Agent, if any, and
shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged, with the form of assignment and certificate
duly executed, at the principal executive office of the Company, or the
principal shareholder services office or offices of the
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Rights Agent designated for such purposes, as the case may be. Neither the
Company nor the Rights Agent, if any, as the case may be, shall be obligated
to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment set
forth on the reverse side of each such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Secretary
of the Company or the Rights Agent, as the case may be, shall reasonably
request. Thereupon the Secretary of the Company or the Rights Agent, as the
case may be, shall, subject to Section 4(b), Section 7(e) and Section 14
hereof, deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require
payment 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
or Rights Certificates.
(b) Upon receipt by the Company or the Rights Agent, if any, of
evidence reasonably satisfactory to either of them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to
either of them, and reimbursement to the Company or the Rights Agent, as the
case may be, of all reasonable expenses incidental thereto, and upon
surrender to the Company or the Rights Agent, as the case may be, and
cancellation of the Rights Certificate if mutilated, the Company or the
Rights Agent, as the case may be, will execute and deliver a new Rights
Certificate of like tenor to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein, including without limitation the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section
20(a) hereof) in whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly executed, to
the Company or the Rights Agent, if any, at the principal executive office of
the Company or the principal shareholder services office or offices of the
Rights Agent
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designated for such purposes, as the case may be, together with payment of the
aggregate Purchase Price with respect to the total number of shares of Common
Stock (or other securities, cash or other assets, as the case may be) as to
which such surrendered Rights are then exercisable, at or prior to the
earlier of (i) the Final Expiration Date or (ii) the time at which the Rights
are redeemed as provided in Section 20 hereof (the earlier of (i) or (ii)
being herein referred to as the "Expiration Date").
(b) The Purchase Price for each share of Common Stock issued pursuant
to the exercise of a Right shall initially be $15.00, and shall be subject to
adjustment from time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment, with respect to each Right so exercised,
of the Purchase Price per share of Common Stock (or, following a Triggering
Event, other securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any applicable transfer
tax, the Company shall promptly (i)(A) requisition from any transfer or
rights agent of the shares of Common Stock, if any (but only to the extent
such transfer agent expressly assumes such duty), or, if none, from the
Company's Secretary, as the case may be, certificates for the total number of
shares of Common Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of shares of Common
Stock issuable upon exercise of the Rights hereunder with a depository agent,
requisition from the depository agent of depository receipts representing
such number of shares of Common Stock as are to be purchased (in which case
certificates for the shares of Common Stock represented by such receipts
shall be deposited by the transfer agent (but only to the extent such
transfer agent expressly assumes such duty), or, if none, from the Company's
Secretary, as the case may be, with the depository agent) and the Company will
direct the depository agent to comply with such request, (ii) when
appropriate, requisition the amount of cash, if any, to be paid in lieu of
fractional shares of Common Stock in accordance with Section 14 hereof, (iii)
after receipt of such certificates of depository receipts for shares of
Common Stock, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt thereof,
deliver such cash, if any, to or upon the order of the registered
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holder of such Rights Certificate. The payment of the Purchase Price (as such
amount may be reduced pursuant to Section 11(a)(iii) hereof) may be made (x)
in cash or by certified check, cashier's check or bank draft payable to the
order of the Company or (y) if the Board so determines, by delivery of a
certificate or certificates (with appropriate stock powers executed in blank
attached thereto) evidencing a number of shares of Common Stock equal to the
then Purchase Price divided by the closing price (as determined pursuant to
Section 11(d) hereof) per share of Common Stock on the Trading Day
immediately preceding the date of such exercise. In the event that the
Company is obligated to issue other securities of the Company, pay cash
and/or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution, if and when
appropriate. The Company reserves the right to require, prior to the
occurrence of a Section 11(a)(ii) Event or at Section 13 Event, that upon the
exercise of any Rights, an appropriate number of Rights be exercised so that
any Common Stock issuable hereunder shall only be issued as whole shares.
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Company and delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Plan to the contrary, from and after
the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned
by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person,
(ii) a transferee of any such Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after such Acquiring Person becomes such, or
(iii) a transferee of any such Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrent with such Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from such Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which a majority of the
Disinterested Directors have determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and
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void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Plan or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or any Affiliates,
Associates or transferees of an Acquiring Person hereunder.
(f) Notwithstanding anything in this Plan to the contrary, the
Company shall not 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 following the form of election to purchase set forth on the
reverse side of the Rights Certificate surrendered for such exercise, and (ii)
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, upon surrender to the Company or any of
its agents, be cancelled by it, and no Rights Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Plan. The Company shall cancel and retire any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company shall use reasonable efforts to cause to be reserved and
kept available out of its authorized and unissued shares of Common Stock (and,
following the occurrence of a Triggering Event, other securities) or out of its
authorized and issued Common Stock held in its treasury, the number of shares of
Common Stock (and, following the occurrence of a Triggering Event, other
securities) that, as provided in this Plan, including Section 11(a)(iii) hereof,
will be sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the share of Common Stock (and, following the occurrence
of a Triggering Event, other securities) issuable and deliverable upon the
exercise of the Rights are
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listed on any national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)(iii)
hereof, or as soon as is required by law following the Distribution Date, as the
case may be, a registration statement under the Act with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the date of the expiration of the
Rights. The Company will also take such action as may be appropriate under, or
to ensure compliance with, the securities or "blue sky" laws of the various
states in connection with the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed ninety (90) days after
the date set forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement 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. In addition, if the Company shall
determine that a registration statement is required following the Distribution
Date, the Company may temporarily suspend the exercisability of the Rights until
such time as a registration statement has been declared effective.
Notwithstanding any provision of this Plan to the contrary, the Rights shall not
be exercisable in any jurisdiction if the requisite qualification in such
jurisdiction shall not have been obtained, the exercise thereof shall not be
permitted under applicable law or any necessary registration statement the
effectiveness of which in such jurisdiction is required to make the offering not
illegal, shall not have been declared effective.
(d) The Company shall take all such action as may be necessary to
ensure that all shares of Common Stock (and, following the occurrence of a
Triggering Event, other securities)
-15-
delivered upon exercise of Rights shall at the time of delivery of the
certificates for such shares and of such other securities (subject to payment of
the Purchase Price) be duly and validly authorized and issued and that all
shares shall be fully paid and non-assessable.
(e) The Company shall pay when due and payable any and all federal
and state transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Rights Certificates, any certificates for shares
of Common Stock (or other securities, as the case may be) issued upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of a
Rights Certificate to a Person other than, or the issuance or delivery of a
number of shares of Common Stock (or other securities, as the case may be) in
respect of a name other than that of the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise or to issue or deliver
any certificates for a number of shares of Common Stock (or other securities,
as the case may be) in a name other than that of the registered holder upon
the exercise of any Rights until such tax shall have been paid (any such tax
being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction
that no such tax is due.
SECTION 10. RECORD DATE FOR SECURITIES ISSUED UPON EXERCISE. Each Person
in whose name any certificate for a number of shares of Common Stock (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 such
shares of Common Stock (or other securities, as the case may be) represented
thereby, and such certificate shall be dated the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and all applicable transfer taxes) was made; PROVIDED,
HOWEVER, that if the date of such surrender and payment is a date upon which
the Common Stock (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 (or other securities, an the case may be) on, and such
certificate shall be dated, the next succeeding Business Day on which the
Common Stock (or other securities, as the case may be) transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a
shareholder of the Company with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote, to receive
dividends or other
-16-
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kind of securities
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date this
Plan is adopted (A) declare a dividend on the Common Stock payable in
shares of Common Stock, (B) subdivide the outstanding Common Stock, (C)
combine the outstanding Common Stock into a smaller number of shares, or
(D) issue any shares of its capital stock in a reclassification of the
Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and
Section 7(e) hereof, the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number of shares of Common Stock
(or the number and kind of other securities, as the case may be), shall be
proportionately adjusted so that if a holder of Rights after such time were
to exercise that number of Rights which would result in the aggregate
amount of the Purchase Price payable upon such exercise (at the Purchase
Price then in effect) being equal to the amount of the Purchase Price that
was payable prior to such time upon exercise of a Right, the holder would
be entitled to receive the aggregate number of shares of Common Stock (or
the number and kind of other securities, as the case may be) which, if a
Right had been exercised immediately prior to such time and at a time when
the Common Stock (or other securities, as the case may be) transfer books
of the Company were open, the holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof,
the adjustment provided for in this Section 11(a)(i) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii) hereof.
(ii) In the event:
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(A) 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), alone or together with its Affiliates and Associates, at any
time after the Rights Dividend Declaration Date, without the consent
of a majority of the Disinterested Directors, shall become the
Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding, unless the event causing the 20% threshold to be crossed
is a transaction set forth in Section 13(a) hereof, or is an
acquisition of shares of Common Stock pursuant to a tender offer or an
exchange offer for all outstanding shares of Common Stock at a price
and on terms determined by at least a majority of the Disinterested
Directors after receiving advice from one or more investment banking
firms, to be (a) at a price which is fair to shareholders (taking into
account all factors which such members of the Board deem relevant
including, without limitation, prices which could reasonably be
achieved if the Company or its assets were sold on an orderly basis
designed to realize maximum value) and (b) otherwise in the best
interests of the Company and its shareholders (such offer herein
referred to as a "Fair Value Offer"), or
(B) any Acquiring Person whose acquisition of 20% or more of the
Company's Common Stock has been consented to by a majority of the
Disinterested Directors, or any Associate or Affiliate of any such
Acquiring Person, shall, without the consent of a majority of the
Disinterested Directors, (1) acquire, directly or indirectly, in one
or a series of transactions, an additional 2% or more of the Company's
Common Stock, (2) sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise acquire or dispose of, in one or a series of
transactions, to, from or with the Company or any of its Subsidiaries,
assets on terms and conditions less favorable to the Company than the
Company would be able to obtain in arm's length negotiation with an
unaffiliated third party, other than pursuant to a transaction set
forth in Section 13(a) hereof, (3) sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of, in one
or a series of transactions, to, from or with the Company
-18-
or any of its Subsidiaries (other than incidental to the lines of
business, if any, engaged in as of the date of this Plan between the
Company and such Acquiring Person or Associate or Affiliate thereof)
assets having an aggregate fair market value of more than $5,000,000,
other than pursuant to a transaction set forth in Section 13(a)
hereof, (4) receive any compensation from the Company or any of the
Company's Subsidiaries other than compensation for full-time
employment as a regular employee at rates in accordance with the
Company's or such Subsidiary's normal practices, or (5) receive the
benefit, directly or indirectly (except resulting from a requirement
of law or governmental regulation), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credits
or other tax advantage provided by the Company or any of its
Subsidiaries,
then, ten days following the first occurrence of a Section 11(a)(ii) Event
(or such shorter or longer period as a majority of the Disinterested
Directors shall from time to time determine), proper provision shall be
made so that each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price in accordance with the
terms of this Plan such number of shares of Common Stock of the Company as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of shares of Common Stock for which a
Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, and (y) dividing that product (which, following
such first occurrence, shall thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of this Plan) by 50% of the
Current Market Price per share of Common Stock on the date of such first
occurrence (such number of shares, the "Adjustment Shares"); PROVIDED that,
in no event shall the Company issue or be obligated to issue Common Stock
at a Purchase Price per share of Common Stock that is less than the per
share par value of the Common Stock, as the same may be adjusted from time
to time; and PROVIDED FURTHER that after the occurrence of any Section
11(a)(ii) Event, the Company, by action of a majority of the Disinterested
Directors in office at the time, may permit the Rights to be exercised, or
may require and specify that the Rights may only be exercised, for 50% of
the shares of Common Stock (or cash or other securities or assets to be
substituted for the Adjustment Shares pursuant to Section 11(a)(iii) below)
that
-19-
would otherwise be purchasable pursuant to the preceding clauses of this
Section 11(a)(ii) in consideration of the surrender to the Company of the
Rights so exercised and without payment of the Purchase Price, and all
Rights so exercised under this proviso without payment of the Purchase
Price shall be deemed to have been exercised in full and shall be
cancelled; and PROVIDED FURTHER that during the ten days following the
first occurrence of a Section 11(a)(ii) Event (or such shorter or longer
period as a majority of the Disinterested Directors shall from time to time
determine), the Rights may be redeemed only by the vote of a majority of
the Disinterested Directors who are Directors of the Company on the day
before the occurrence of such Section 11(a)(ii) Event.
(iii) In the event that the number of shares of Common Stock which are
authorized by the Company's articles of incorporation but not outstanding
or reserved for issuance for purposes other than upon exercise of the
Rights is not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section 11(a), the
Company shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value") over (2)
the Purchase Price (such excess being referred to as the "Spread"), and (B)
with respect to each Right, make adequate provision to substitute for the
Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash,
(2) a reduction in the Purchase Price, (3) other equity securities of the
Company (including, without limitation, shares, or units of shares of
preferred stock, if any exists at such time), which the Board has deemed to
have the same value as shares of Common Stock (such shares of preferred
stock being referred to as "Common Stock Equivalents"), (4) debt securities
of the Company, (5) other assets, or (6) any combination of the foregoing
(whichever substituted, the "Substitute Consideration"), 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, if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days
following the date of the first occurrence of a Section 11(a)(ii) Event
(such date being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then, subject to subsection (k) hereof, the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the
-20-
Purchase Price, shares of Common Stock (to the extent available) and then,
if necessary, cash, which shares and/or cash have an aggregate value equal
to the Spread. If the Board shall determine in good faith that it is likely
that sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty- (30) day period
set forth above may be extended to the extent necessary, but not more than
ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek shareholder approval for the authorization of such
additional shares (such period, as it may be extended, being referred to
herein as the "Substitution Period"). To the extent that the Company
determines that some action need 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 Stock shall be the Current Market Price
per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the
value of any Common Stock Equivalent shall be deemed to have the same value
as the Common Stock on such date.
(b) In case the Company shall fix a record date for issuance of
rights, options or warrants to all holders of Common Stock, entitling them to
subscribe for or purchase (for a period expiring within forty-five (45)
calendar days after such record date) Common Stock (or shares having the same
rights, privileges and preferences as the shares of Common Stock ("Equivalent
Common Stock")) or securities convertible into Common Stock or Equivalent
Common Stock at a price per share of Common Stock or per share of Equivalent
Common Stock (or having a conversion price per share, if a security
convertible into Common Stock or Equivalent Common Stock) less than the
Current Market Price per share of Common Stock on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be
-21-
the number of shares of Common Stock outstanding on such record date, plus the
number of shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock and/or Equivalent Common Stock to be so offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such Current Market Price, and the denominator
of which shall be the number of shares of Common Stock outstanding on such
record date, plus the number of additional shares of Common Stock and/or
Equivalent Common Stock to be offered for subscription or purchase (or into
which the convertible securities to be so offered are initially convertible).
In case such subscription price may be paid by delivery of consideration part
or all of which may be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board whose
determination shall be conclusive for all purposes. Shares of Common Stock owned
by or held for the account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Common Stock, but including any dividend
payable in stock other than Common Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price per share of Common Stock
on such record date, less the fair market value (as determined in good faith by
the Board whose determination shall be conclusive for all purposes) of the
portion of the cash, assets or evidences of indebtedness to be so distributed or
of such subscription rights or warrants applicable to a share of Common Stock
and the denominator of which shall be such Current Market Price per share of
Common Stock. Such adjustments shall be made successively whenever such a record
date is fixed, and in the event that such distribution is not so made, the
Purchase Price shall be adjusted to be the Purchase Price which would have been
in effect if such record date had not been fixed.
-22-
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "Current Market
Price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the "Current Market
Price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date; PROVIDED, HOWEVER,
that in the event the Current Market Price per share of the Common Stock is
determined during a period following the announcement by the issuer of such
Common Stock of (i) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of such Common
Stock (other than the Rights), or (ii) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of the
requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth
above, after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then, and in
each such case, the Current Market Price shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System or
such other system then in use, or, if on any such date the shares of Common
Stock are not quoted by any such organization, the professional market maker
making a market in the Common Stock selected by the Board. If on any such date
no market maker is making a market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the Board shall be used. The
term "Trading Day" shall mean a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares of Common Stock are
not listed or admitted to trading on any national securities
-23-
exchange, a Business Day. If the Common Stock is not publicly held or not so
listed or traded, Current Market Price per share shall mean the fair value per
share as determined in good faith by the Board whose determination shall be
conclusive for all purposes. The Current Market Price of any fraction of a share
of Common Stock hereunder shall be determined by multiplying the Current Market
Price per share of Common Stock, determined in accordance with this paragraph,
by such fraction.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least one percent (1%) in the Purchase Price;
PROVIDED, HOWEVER, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section 11 shall be
made to the nearest cent or to the nearest ten-thousandth of a share, as the
case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the
earlier of (i) three (3) years from the date of the transaction which
mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than Common
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9,
10, 13 and 14 hereof with respect to the Common Stock shall apply on like terms
to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, that number of shares of Common Stock
purchasable from time to time hereunder (or, if applicable, preferred stock)
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
-24-
Section 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 shares of Common Stock (calculated to the nearest
ten-thousandth) obtained by (i) multiplying (x) the number of shares covered by
a Right immediately prior to this adjustment, by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price, and (ii)
dividing the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in lieu of any adjustment in
the number of shares of Common Stock purchasable upon the exercise of a Right.
In that event, each of the Rights outstanding after the adjustment in the number
of Rights shall be exercisable for that number of shares of Common Stock for
which a Right was exercisable immediately prior to such adjustment; and 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 the adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. All costs associated with such adjustment, including without
limitation any taxes required to be paid on account of such adjustment, shall be
borne by the Company. Rights Certificates to be so distributed shall be issued
and executed in the manner provided for herein (and may
-25-
bear, at the option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates on the
record dates specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the shares issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase Price per
share of Common Stock and the shares of Common Stock which were expressed in the
initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the shares of Common
Stock issuable upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the shares of Common Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the shares of Common Stock
and other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
PROVIDED, HOWEVER, that the Company shall deliver to such holder a due ▇▇▇▇ or
other appropriate instrument evidencing such holder's right to receive such
additional shares (fractional or otherwise) or securities upon the occurrence
of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in its good faith judgment the Board shall determine to be
advisable in order that any (i) consolidation or subdivision of the Common
Stock, (ii) issuance wholly for cash of any shares of Common Stock at less than
the Current Market Price, (iii) issuance of rights, options or warrants referred
to in this Section 11, hereafter made by the Company to holders of its Common
Stock shall not be taxable to such shareholders.
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(n) The Company shall not, at any time after the Distribution Date,
(i) consolidate with any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11 hereof), (ii) merge with or into
any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11 hereof), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction or a series of related
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 or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11 hereof), if
(x) at the time of or immediately after such consolidation, merger or sale there
are rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights to the holders of the Rights
or (y) prior to, simultaneously with or immediately after such consolidation,
merger or sale, the shareholders of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) hereof shall
have received a distribution of Rights previously owned by such Person or any of
its Affiliates or Associates.
(o) After the Distribution Date, the Company shall not, except as
permitted by Section 20 or Section 23 hereof, take (or permit any Subsidiary to
take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
(p) Anything in this Plan to the contrary notwithstanding, in the
event that the Company shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a dividend on the
outstanding shares of Common Stock, (ii) subdivide the outstanding shares of
Common Stock, or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but prior to
the Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by a
fraction; the numerator of which shall be the total number of shares of Common
-27-
Stock outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event.
(q) Upon the occurrence of a Section 11(a)(ii) Event, regardless of
whether an event described in Section 13(a) shall have yet occurred or not, the
Purchase Price for each share of Common Stock issued pursuant to the exercise of
a Right shall be determined in accordance with Section 11(a)(ii) hereof.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, if any, or if no Rights Agent has
been appointed, with the Company's Secretary, and with each transfer agent
for the Common Stock, a copy of such certificate, and (c) mail a brief
summary thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 22 hereof. The Rights Agent, if any,
shall be fully protected in relying on such certificate and on any adjustment
therein contained and shall not be deemed to have knowledge of any such
adjustment unless and until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) In the event that, following or simultaneously with the
Distribution Date, directly or indirectly, without the consent of a majority of
the Disinterested Directors, (x) the Company shall consolidate with, or merge
with and into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11 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 which complies
with Section 11 hereof) shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger, and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be changed
into or exchanged for stock or other securities of any other Person or cash or
any other property, or (z) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise
-28-
transfer), in one transaction or a series of related 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 Person or Persons (other
than the Company or any Subsidiary of the Company in one or more transactions,
each of which complies with Section 11 hereof) (each of the events described in
(x), (y), and (z) above being hereinafter referred to as a "Section 13 Event"),
then, and in each such case (except as may be contemplated by Section 13(d)
hereof), 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 Plan, such number of validly authorized and
issued, fully paid, non-assessable and freely tradeable shares of Common Stock
of the Principal Party, not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the number of shares of
Common Stock (or, if applicable, preferred stock) for which a Right is
exercisable immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11(a)(ii) Event has occurred prior to the first occurrence
of a Section 13 Event, multiplying the number of shares of Common Stock (or,
if applicable, preferred stock) for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase
Price in effect immediately prior to such first occurrence), and dividing
that product (which, following the first occurrence of a Section 13 Event,
shall be referred to as the "Purchase Price" for each Right and for all
purposes of this Plan) by (2) 50% of the Current Market Price per share of
the Common Stock of such Principal Party on the date of consummation of such
Section 13 Event; (ii) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Plan; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically,
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event; (iv)
such Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of shares of its Common Stock) in
connection with the consummation of any such transaction as may be necessary
to assure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect following the
first occurrence of any Section 13 Event.
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(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 shares of Common Stock of the Company are converted
in such merger or consolidation, and if no securities are so issued, the
Person that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), 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 Stock of such Person
is not at such time and has not been continuously over the preceding twelve-
(12) month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person the Common Stock of
which is and has been so registered, "Principal Party" shall refer to such other
Person; and (2) in case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stocks of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or reserved for
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, if any, or if no Rights Agent
shall have been appointed, to the Company's Secretary, a supplemental agreement,
satisfactory in form and substance to a majority of the Disinterested Directors,
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:
(i) will prepare and file a registration statement under the Act with
respect to the Rights and the securities
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purchasable upon exercise of the Rights on an appropriate form, and will
use its best efforts to cause such registration statement to (A) become
effective as soon as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of the Act) until
the Expiration Date; and
(ii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply
in all respects with the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13
Event shall occur at any time after the occurrence of a Section 11(a)(ii) Event,
the Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Plan to the contrary, Section 13
shall not be applicable to a transaction described in subparagraphs (x) and (y)
of Section 13(a) if (i) such transaction is consummated with a Person or Persons
(or a wholly-owned subsidiary of any such Person or Persons) who acquired shares
of Common Stock pursuant to a Fair Value Offer, (ii) the price per share of
Common Stock offered in such transaction is not less than the price per share of
Common Stock paid to all holders of shares of Common Stock whose shares were
purchased pursuant to such Fair Value offer, and (iii) the form of consideration
being offered to the remaining holders of shares of Common Stock pursuant to
such transaction is cash. Upon consummation of any such transaction contemplated
by this Section 13(d), all Rights hereunder shall expire.
(e) The provisions of this Section 13 shall be applicable to a
transaction described in subparagraphs (x), (y), and (z) of Section 13(a)
regardless of the business form of the Principal Party (e.g., corporation,
partnership or other form). In the event that the Principal Party is an entity
other than a corporation, the term "Common Stock," as used in reference to the
Principal Party in this Section 13 or otherwise, shall be construed to refer to
the equity securities or other equity interest having power to control or direct
the management of, or representing the fundamental economic interest in, such
Principal Party.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
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(a) The Company shall not be required to issue fractions or Rights
or to distribute Rights Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there may be paid to the registered holders
of the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price of
the Rights for any day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
on the principal national securities exchanges on which the Rights are listed
or admitted to trading, or if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System 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 selected by the Board making a market in the
Rights. If on any such date no such market maker is making a market in the
Rights, then the fair value of the Rights on such date as determined in good
faith by the Board shall be used.
(b) The Company shall not be required to issue fractions of shares
of Common Stock (or other securities) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Common Stock
(or other securities). In lieu of fractional shares of Common Stock (or other
securities), the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of a
share of Common Stock (or other securities). For purposes of this Section
14(b), the current market value of one share of Common Stock shall be the
closing price per share of Common Stock (as determined pursuant to Section
11(d) hereof) for the Trading Day immediately prior to the date of such
exercise, and the current market value of any other securities shall be
determined utilizing the principles of Section 11(d) hereof as applied by the
Board in its sole discretion.
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(c) The holders of Rights by the acceptance of the Rights
expressly waive any right to receive any fractional Rights and/or any
fractional shares upon exercise of a Right.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Plan are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Stock); and any registered holder of any Rights Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of
the holder of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in such holder's own behalf and for such
holder's own benefit, enforce, and may institute and maintain any suit,
action or, proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise the Rights evidenced by such
Rights Certificate in the manner provided in such Rights Certificates and in
this Plan. 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 Plan and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Plan.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and with every other
holder of a Right that:
(a) Prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) After the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Company, if surrendered at the
principal executive office of the Company, or, if a Rights Agent is appointed
by the Company hereunder, only on the registry books of said Rights Agent, if
surrendered at the principal shareholder services office or offices of the
Rights Agent designated for such purposes, in either case duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully executed;
(c) Subject to Section 6(a) and Section 7(f) hereof, the Company
and the Rights Agent, if any, may deem and treat the person in whose name a
Rights Certificate (or, prior to the
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Distribution Date, the associated Common Stock certificates) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone other
than the Company or any Rights Agent) for all purposes whatsoever, and
neither the Company nor any Rights Agent appointed by the Company, subject to
the last sentence of Section 7(e) hereof, shall be required to be affected by
any notice to the contrary; and
(d) Notwithstanding anything in this Plan to the contrary, neither
the Company nor any Rights Agent appointed by the Company 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 Plan by reason of any
preliminary or permanent injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
PROVIDED, HOWEVER, the Company must use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as possible.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends (or be deemed for any purpose the holder of the number of shares of
Common Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
shareholder 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 21
hereof), or to receive dividends or subscription rights or otherwise, until
the Right or Rights evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions hereof.
SECTION 18. INDEMNIFICATION OF CORPORATE OFFICERS.
(a) The Company shall indemnify its officers for and hold them
harmless against any loss, liability, or expense incurred without negligence,
bad faith or willful misconduct on the part of such officers for anything
done or omitted by such
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officers in connection with the acceptance and administration of this Plan,
including the costs and expenses of defending against any claim of liability
arising therefrom, directly or indirectly, and will promptly reimburse such
officers for any legal or other expenses reasonably incurred in investigating
or defending any such loss, expense, claim, damage or liability.
(b) The Company's officers shall be protected by the indemnity
provided in this Section 18 and shall incur no liability for or in respect of
any action taken, suffered or omitted by any of them in connection with
their administration of this Plan in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company,
instrument or assignment of transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or
other paper or document believed by such officer to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the
proper Person or Persons.
SECTION 19. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any
of the provisions of this Plan or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such
form as may be approved by the Board to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Plan. In addition, in connection with
the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to
the exercise of stock options, or under any employee benefit plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary by the Company, and by the board, issue Rights Certificates
representing the appropriate number of Rights in connection with such
issuance or sale; PROVIDED, HOWEVER, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom such Rights
Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
-35-
SECTION 20. REDEMPTION AND TERMINATION.
(a) The Disinterested Directors then in office may, at any time
prior to the Final Expiration Date, at their option, upon the affirmative
vote or written consent of not less than a majority of such Disinterested
Directors, redeem all but not less than all of the then outstanding Rights at
a redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). The Company may, at its option, pay
the Redemption Price in cash, shares of Common Stock (based on the Current
Market Price of the Common Stock at the time of redemption) or any other form
of consideration deemed appropriate by a majority of the Disinterested
Directors.
(b) Immediately upon the taking of action by a majority of the
Disinterested Directors 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 (without the payment of any interest
thereon) for each Right so held. Promptly after the taking of action by a
majority of the Disinterested Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the holders of
the then outstanding Rights by mailing such notice to all such holders at
each holder's last address as it appears upon the registry books of the
Company. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of redemption will state the method by which the payment of the Redemption
Price will be made.
SECTION 21. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of Common Stock or to make any other distribution to the holders
of Common Stock (other than a regular quarterly cash dividend out of earnings
or retained earnings of the Company), or (ii) to offer to the holders of
Common Stock rights or warrants to subscribe for or to purchase any
additional shares of Common Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any reclassification
of its Common Stock (other than a reclassification involving only the
subdivision of outstanding shares of Common Stock), or (iv) to effect any
consolidation or
-36-
merger into or with any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o) hereof), or to effect any
sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one transaction or a series of related
transactions, of more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more transactions
each of which complies with Section 11(o) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights Certificate, to the
extent feasible and, in accordance with Section 22 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Common Stock, if any such date is to
be fixed, and such notice shall be so given in the case of any action covered
by clause (i) or (ii) above at least twenty (20) days prior to the record
date for determining holders of the shares of Common Stock for purposes of
such action, and, in the case of any such other action, at least twenty (20)
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Common Stock, whichever
shall be the earlier.
(b) If any event set forth in Section 11(a)(ii) hereof shall
occur, then, (i) the Company shall as soon as practicable thereafter give to
each holder of a Rights Certificate, to the extent feasible and in accordance
with Section 22 hereof, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Common Stock shall, to the extent appropriate, also be
deemed thereafter to refer to other securities.
SECTION 22. NOTICES. Notices or demands authorized by this Plan to be
given or made to or on the Company shall be sufficiently given or made if
sent by first class mail, postage prepaid, addressed (until another address
is sent as provided below to the holders of the Rights) as follows:
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Gamma Biologicals, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Notices or demands authorized by this Plan to be given or made to the
holder of any Rights Certificate (or, if prior to the Distribution Date, to
the holder of certificates representing shares of Common Stock) shall be
sufficiently given or made if sent by first class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the record
books of the Company.
SECTION 23. SUPPLEMENTS AND AMENDMENT; SUBSTITUTED PLAN. Prior to the
Distribution Date, the Company may supplement or amend any provision of this
Plan, terminate this Plan or adopt a new rights plan in substitution for this
Plan and all Rights outstanding hereunder (in which case this Plan and all
such Rights shall thereafter become null and void), without the approval of
any holders of certificates representing shares of Common Stock. From and
after the Distribution Date, the Disinterested Directors may supplement or
amend this Plan, or adopt a new rights plan in substitution for this Plan and
all Rights outstanding hereunder (in which case this Plan and all such Rights
shall thereafter become null and void), without the approval of any holders
of Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen
any time period hereunder, (iv) to effect compliance with, or take advantage
of, any changes in law affecting the legality or enforceability of plans or
arrangements such as this Plan, or (v) to change or supplement the provisions
hereunder in any other manner which the Disinterested Directors may deem
necessary or desirable, including without limitation the addition or other
events requiring adjustment to the Rights under Sections 11(a)(ii) or 13 or
procedures relating to the redemption of the Rights, which supplement or
amendment shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person); PROVIDED, this Plan may not be supplemented or amended,
and a new rights plan may not be adopted in substitution for this Plan, to
lengthen, pursuant to clause (iii) of this sentence, any 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 (other than an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person).
Notwithstanding anything contained in this Plan to the contrary,
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no supplement or amendment or substituted plan shall be made or adopted which
changes the Redemption Price, the Final Expiration Date, the Purchase Price
or the number of shares of Common Stock for which Right is exercisable,
except that any such amendment may substitute preferred stock for the Common
Stock issuable upon exercise of the Right if the value of the preferred stock
so substituted with respect to each Right shall equal, in the sole discretion
of a majority of the Disinterested Directors, the then Current Market Value
of the Common Stock then issuable upon exercise of each Right, and any such
amendment or substituted plan effecting such substitution may amend any such
provision of this Plan, including without limitation the adjustment
provisions of Section 11, to reflect appropriately such substitution, or to
restate this Plan in its entirety to reflect appropriately such substitution.
Prior to the Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common Stock.
SECTION 24. SUCCESSORS. All the covenants and provisions of this Plan
by or for the benefit of the Company shall bind and inure to the benefit of
its successors and assigns hereunder.
SECTION 25. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Plan, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(l)(i) of the General
Rules and Regulations under the Exchange Act, subject in all events to the
provisions of Section l(e) hereof including specifically, the last proviso
thereof. The Board (or, as set forth herein, certain specified members
thereof shall have the exclusive power and authority to administer this
Plan and to exercise all rights and powers specifically granted to the Board
(or, as set forth herein, certain specified members thereof) or to the
Company, or as may be necessary or advisable in the administration of this
Plan, including, without limitation, the right and power to (i) interpret the
provisions of this Plan, and (ii) make all determinations deemed necessary or
advisable for the administration of this Plan (including but not limited to a
determination to redeem or not redeem the Rights, to consent to a transaction
in which a Person becomes an Acquiring Person, to amend the Plan or to remit
the Substitute Consideration or Spread payable). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done
or made by the Board (or, as set forth herein, certain specified members
-39-
thereof) in good faith, shall (x) be final, conclusive and binding on the
Company, the holders of the Rights and all other parties, and (y) not subject
the Board (or, as set forth herein, certain specified members thereof) to any
liability to the holders of the Rights.
SECTION 26. BENEFITS OF THIS PLAN. Nothing in this Plan shall be
construed to give to any Person other than the Company and the registered
holders of the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock) any legal or equitable right, remedy
or claim under this Plan; but this Plan shall be for the sole and exclusive
benefit of the Company and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, registered holders of the Common
Stock).
SECTION 27. SEVERABILITY. If any term, provision, covenant or
restriction of this Plan is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable (including without limitation
the last proviso to Section l(e)), the remainder of the terms, provisions,
covenants and restrictions of this Plan shall remain in full force and effect
and shall in no way be affected, impaired or invalidated; PROVIDED,
HOWEVER, that in the event of such a holding by such court or authority, this
Plan may be amended to take into account such holding including by way of
illustration but not limitation an amendment raising the percentage of
beneficial ownership specified in Section 1(a) or Section 11(a)(ii). Without
limiting the foregoing provisions of this Section 27, if any provisions of
this Plan requiring that a determination be made by less than the entire
Board (or at a time or with the concurrence of a group of directors
consisting less than the entire Board) is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, such
determination shall no longer be subject to determination by such directors
constituting less than the entire Board, but shall instead be made in the
best interests of the holders of the Rights and with a view to effecting the
purposes and intent of the Plan by a court of competent jurisdiction, or, if
such court determines it is impermissible or inappropriate to discharge such
function, then such determination shall be made by the entire Board in good
faith, in accordance with applicable law and the Company's articles of
incorporation and by-laws, in the best interests of the holders of the
Rights, and with a view to effecting the purposes and intent of this Plan.
SECTION 28. GOVERNING LAW. THIS PLAN, EACH RIGHT AND EACH RIGHTS
CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A
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CONTRACT MADE UNDER THE LAWS OF THE STATE OF TEXAS 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.
SECTION 29. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Plan are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof.
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EXHIBIT A
[Form of Face Side of Rights Certificate]
Certificate No. R- __________________ Rights
NOT EXERCISABLE AFTER September 5, 1999, OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY,
AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS PLAN.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
(AS SUCH TERM IS DEFINED IN THE SHAREHOLDER RIGHTS PLAN) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. []THE RIGHTS REPRESENTED BY
THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERM IS DEFINED IN THE SHAREHOLDER RIGHTS PLAN). ACCORDINGLY,
THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND
VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH SHAREHOLDER
RIGHTS PLAN.]*
Rights Certificate
GAMMA BIOLOGICALS, INC.
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 Shareholder Rights Plan, dated as of September 5, 1989 (the "Rights
Plan"), of Gamma Biologicals, Inc., a Texas corporation (the "Company"), to
purchase from the Company at any time prior to 5:00 P.M. Central Time on
September 5, 1999, at the principal executive office of the Company or the
offices of the Rights Agent, if any, designated for such purpose, one fully
paid and non-assessable share of common stock, par value $.10 per share (the
"Common
-------------
* The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
A-1
Stock"), of the Company at a purchase price of $15.00 per share (the
"Purchase Price"), upon presentation and surrender of this Rights Certificate
with a Form of Election to Purchase and related Certificate duly executed.
The number of Rights evidenced by this Rights Certificate (and the amount of
securities constituting a Right which may be purchased upon exercise thereof)
set forth above, and the Purchase Price set forth above, are the amount of
securities constituting a Right and Purchase Price as of September 5, 1989,
based on the Common Stock as constituted as of such date.
As specified in the Rights Plan, the Company reserves the right, at the
sole discretion of its Board of Directors, to substitute for a share of
Common Stock, a share or fraction of a share of preferred stock of the
Company, in the event that the shareholders of the Company authorize the
creation of a class of Company preferred stock and so long as the value of
each such share or fraction of a share of such preferred stock is equal, in
the sole discretion of the Company's Board of Directors, to the then current
market value of a share of Common Stock.
Upon the occurrence of a Section 11(a)(ii) Event (as defined in the
Rights Plan), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate
thereof (as such terms are defined in the Rights Plan), (ii) a transferee of
any such Acquiring Person (or Associate or Affiliate thereof) who becomes a
transferee after such Acquiring Person becomes such, or (iii) under certain
circumstances specified in the Rights Plan, a transferee of any such
Acquiring Person (or Associate or Affiliate thereof), who becomes a
transferee prior to or concurrent with such Acquiring Person becoming such,
such Rights shall become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence of such
Section 11(a)(ii) Event.
As provided in the Rights Plan, the Purchase Price and the number and
kind of shares of Common Stock, securities or other property, which may be
purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events (as defined in the Rights Plan).
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Plan, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Plan reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
A-2
hereunder of the Rights Agent, if any, the Company and the holders of the
Rights Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Plan. Copies of the Rights Plan are on
file at the principal executive office of the Company and are also available
upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal executive offices of the Company or the
shareholder services office or offices of any Rights Agent designated for
such purpose, as the case may be, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of shares of Common
Stock as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Plan, the Rights evidenced by
this Certificate may be redeemed at any time prior to the Final Expiration
Date by the Company at its option at a redemption price of $.01 per Right
(payable in cash, Common Stock or other consideration deemed appropriate by a
majority of the Disinterested Directors of the Company).
The Company is not required to issue fractional shares of Common Stock
upon the exercise of any Right or Rights evidenced thereby, but in lieu
thereof a cash payment will be made, as provided in the Rights Plan.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Common
Stock or any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Plan or herein be construed to confer upon the holder hereof, 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 receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Plan), or to receive dividends
or subscription rights until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Plan.
A-3
The Rights Certificate shall not be valid or effective for any purpose
until it shall have been executed by the Company.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of ____________________ ____, 19__.
ATTEST: GAMMA BIOLOGICALS, INC.
By:
-------------------------------- --------------------------------
Title: Title:
CORPORATE SEAL
A-4
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
------------------------------------------------------------
hereby sells, assigns and transfers unto
-------------------------------------------------------------------------------
(Please print name and address of transferee)
-------------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________________
Attorney, to transfer the within Rights Certificate on the books of the within-
named Company, with full power of substitution.
Dated:____________________ _____, 19____,
----------------------------------------
Signature
Signature Guaranteed:
A-5
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) 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 Person (as such
terms are defined in the Rights Plan);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of any such Person.
Dated:_______________ ______ 19___.
-----------------------------------
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
A-6
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate).
To: GAMMA BIOLOGICALS, INC.:
The undersigned hereby irrevocably elects to exercise ___________ Rights
represented by this Rights Certificates to purchase the number of shares of
Common Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon
the exercise of the Rights) and requests that the certificates for shares of
Common Stock (or such other securities) constituting such Rights be issued in
the name of and delivered to:
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
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:
--------------------------------------------------
-------------------------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Dated:________________ ____, 19__
----------------------------------------
Signature
Signature Guaranteed:
A-7
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Person (as such terms are defined in
the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of any such Person.
Dated:______________ _____, 19___.
---------------------------------
Signature
NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
A-8