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EXHIBIT 5
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GENZYME CORPORATION
CERTIFICATE OF ADJUSTMENT
This certificate is executed in connection with the Amended and
Restated Rights Agreement dated as of June 12, 1997 between Genzyme Corporation
(the "Company") and American Stock Transfer and Trust Company, as Rights Agent
(the "Restated Rights Agreement"), with terms defined in the Restated Rights
Agreement having the same meanings herein. The Company hereby certifies that as
a result of the two-for-one stock split of the Company's outstanding shares of
GGD stock effected as a 100% stock dividend payable on July 25, 1996, pursuant
to Section 11(p) of the Restated Rights Agreement as of such date:
(i) The number of one-hundredths of a Series A Preferred Share
purchasable upon proper exercise of each GGD Stock Right was adjusted from one
one-hundredth of a Series A Preferred Share to one two-hundredth of a Series A
Preferred Share;
(ii) The Purchase Price and the Redemption Price with respect to
each GGD Stock Right was adjusted from $52.00 and $.01 to $26.00 and $.005,
respectively; and
(iii) Each share of GGD Stock outstanding after such date had issued
with respect to it one GGD Stock Right.
(iv) The foregoing adjustments are reflected in the Restated Rights
Agreement and in the terms of the Series A, B and C Preferred Stock established
June 12, 1997 by providing that (a) the number of one-hundredths of a Series A
Share purchasable upon exercise of each GGD Stock Right is one one-hundredth,
(b) the Purchase Price and the Redemption Price with respect to each GGD Stock
Right is $26.00 and $.005, respectively, and (c) all adjustments in the rights
of the Series A, B and C Preferred Stock as a result of stock splits, dividends,
subdivisions, combinations and the like affecting the corresponding series of
common stock shall be made only as a result of such events occurring after June
12, 1997, the effective date of the designation of the terms of the Series C
Preferred Stock and the designation of the revised terms of the Series A and B
Preferred Sock.
(v) The "effective date" as defined in the preamble to the
Restated Rights Agreement occurred on June 18, 1997.
GENZYME CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇, Clerk
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GENZYME CORPORATION
and
American Stock Transfer and Trust Company,
Rights Agent
Amended and Restated Rights Agreement
Dated as of June 12, 1997
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TABLE OF CONTENTS
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Section 1. Certain Definitions.................... 1
Section 2. Appointment of Rights Agent............ 6
Section 3. Issue of Right Certificates............ 6
Section 4. Forms of Right Certificates............ 8
Section 5. Countersignature and Registration...... 8
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificates.............. 9
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.............. 10
Section 8. Cancellation and Destruction of
Right Certificates..................... 12
Section 9. Reservation and Availability of
Preferred Shares....................... 12
Section 10. Preferred Shares Record Date........... 13
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights............. 14
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares.................... 25
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power............. 26
Section 14. Fractional Rights and Fractional Shares. 28
Section 15. Rights of Action....................... 30
Section 16. Agreement of Right Holders............. 30
Section 17. Right Certificate Holder Not Deemed a
Shareholder............................ 31
Section 18. Concerning the Rights Agent............ 31
(i)
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Page
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Section 19. Merger or Consolidation or Change of
Name of Rights Agent................... 32
Section 20. Duties of Rights Agent................. 32
Section 21. Change of Rights Agent................. 35
Section 22. Issuance of New Right Certificates..... 36
Section 23. Redemption............................. 36
Section 24. Notice of Certain Events............... 37
Section 25. Notices................................ 38
Section 26. Supplements and Amendments............. 39
Section 27. Successors............................. 40
Section 28. Determinations and Actions by the
Board of Directors..................... 40
Section 29. Benefits of this Agreement............. 41
Section 30. Severability........................... 41
Section 31. Governing Law.......................... 42
Section 32. Counterparts........................... 42
Section 33. Descriptive Headings................... 43
Signatures.......................................... 43
Exhibit A - Form of Certificate of Vote of Directors
Establishing Series A, B and C Junior
Participating Preferred Stock
Exhibit B - Forms of Right Certificate
(ii)
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AMENDED AND RESTATED RIGHTS AGREEMENT
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Amended and Restated Rights Agreement, dated as of June 12, 1997,
between Genzyme Corporation, a Massachusetts corporation (the "Company"), and
American Stock Transfer and Trust Company, (the "Rights Agent").
On March 14, 1989, the Board of Directors of the Company adopted a
shareholder rights plan governed by the terms of the Rights Agreement dated as
of March 14, 1989 (the "Original Agreement") and distributed one preferred share
purchase right (an "Original Right") for each share of common stock, par value
$.01 per share, of the Company outstanding at the close of business on March 28,
1989 and authorized the issue of one Original Right for each share of common
stock issued after March 28, 1989.
On October 13, 1994, the Board of Directors of the Company approved an
amendment and restatement of the Original Agreement which became effective
December 16, 1994, the effective date of an Amendment to the Articles of
Organization of the Company, pursuant to which the Tissue Repair Division Common
Stock of the Company (the "TR Stock") was created. Pursuant to such amendment,
the Board (i) authorized and declared a dividend distribution of one TR Stock
Purchase Right (a "TR Stock Right") for each outstanding share of TR Stock (ii)
redesignated each Original Right outstanding as a General Stock Purchase Right
(a "GGD Stock Right"), and (iii) authorized and directed the issuance of one
Right with respect to each Common Share issued prior to the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date.
The Board of Directors of the Company approved this amendment and
restatement of the Original Agreement (as amended, the "Rights Agreement") by
unanimous written consent dated April 16, 1997 effective upon the creation and
issuance of the Genzyme Molecular Oncology Division Common Stock (the "Effective
Date"). In connection with this amendment, the Board (i) authorized and declared
a dividend distribution of one GMO Stock Purchase Right (a "GMO Stock Right")
for each share of Genzyme Molecular Oncology Division Common Stock ("GMO Stock")
outstanding on the Effective Date (ii) redesignated each General Stock Purchase
Right and TR Stock Purchase Right outstanding on the Effective Date as a GGD
Stock Right and a GTR Stock Purchase Right (a "GTR Stock Right"), respectively,
and (iii) authorized and directed the issuance of one Right with respect to each
Common Share that becomes outstanding between the Effective Date and the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date.
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Each GGD Stock Right, GTR Stock Right and GMO Stock Right initially
represents the right to purchase one one-hundredth of a share of the Company's
Series A Junior Participating Preferred Stock, par value $.01 per share ("Series
A Preferred Stock"), one one-hundredth of a share of Series B Junior
Participating Preferred Stock, par value $.01 per share ("Series B Preferred
Stock"), and one one-hundredth of a share of Series C Junior Participating
Preferred Stock, par value $.01 per share ("Series C Preferred Stock"),
respectively, such preferred shares having the rights and preferences set forth
in the form of Certificate of Vote Establishing Series A, Series B and Series C
Junior Participating Preferred Stock attached hereto as Exhibit A, upon the
terms and subject to the conditions herein set forth.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall become, after the
effective date of this Agreement, the Beneficial Owner (as such term is
hereinafter defined) of Common Shares representing 20% or more of the total
Voting Rights of all the Common Shares then outstanding, but shall not include
the Company, any Subsidiary (as such term is hereinafter defined) of the
Company, or any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity organized, appointed or established by the Company
holding Common Shares for or pursuant to the terms of any such plan; PROVIDED,
HOWEVER, that if a Person inadvertently becomes the Beneficial Owner of Common
Shares representing 20% or more of such Voting Rights solely due to an
adjustment in the number of votes to which GMO Stock or GTR Stock is entitled
pursuant to the Company's Articles of Organization, such Person shall not be an
Acquiring Person unless and until such Person acquires additional Common Shares.
(b) "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 (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
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(ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding, or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights at any time prior to the
occurrence of a Triggering Event, as hereinafter defined, but thereafter
including Rights acquired from and after the Distribution Date (as defined in
Section 3(a) below) other than Rights acquired pursuant to Section 3(a), Section
11(i) and Section 22 hereof), warrants or options, or otherwise; PROVIDED,
HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or exchange;
or (B) the right to vote or dispose of or "beneficial ownership" (as defined in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act) of
(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 if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (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 for the purpose of acquiring, holding, voting
(except to the extent contemplated by the proviso to subsection 1(c)(ii)(B)) or
disposing of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the Commonwealth of
Massachusetts are authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M.,
Massachusetts time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 P.M., Massachusetts time, on the next succeeding
Business Day.
(f) "Common Shares" when used with reference to the Company shall
mean the GGD Stock, the GTR Stock and/or the GMO Stock, as the context requires,
of the Company or any other shares of capital stock of the Company into which
GGD Stock, GTR Stock and/or GMO Stock may be reclassified or changed; PROVIDED,
HOWEVER, that "Common Shares" shall mean all of the GGD Stock,
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the GTR Stock and the GMO Stock (or any other shares of capital stock into which
GGD Stock, GTR Stock and/or GMO Stock may be reclassified) whenever a
determination of whether a Person shall have become the Beneficial Owner of, or
shall have made a tender or exchange offer for, Common Shares representing a
specified percentage of the total Voting Rights of all the Common Shares then
outstanding is required to be made herein. "Common Shares" when used with
reference to any Person other than the Company shall mean the capital stock with
the greatest voting power of such other Person or equity interest having power
to control or direct the management of such Person, or, if such other Person is
a Subsidiary of another Person, the Person or Persons which ultimately controls
such first-mentioned Person.
(g) "Continuing Director" means any member of the Board who was a
member of the Board of Directors of the Company on the date of this Agreement or
who is elected to the Board of Directors of the Company after the date of this
Agreement upon the affirmative recommendation of such number (but in no event
fewer than three) of Continuing Directors as shall constitute a majority of the
Continuing Directors then in office, voting separately and as a subclass of
directors on such recommendation and in each case, who is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a representative
of an Acquiring Person or of any such Affiliate or Associate. A person who is or
becomes a Continuing Director as defined or provided in the next preceding
sentence who thereafter ceases to be a member of the Board of Directors of the
Company shall not if thereafter elected to the Board of Directors of the Company
be deemed to be a Continuing Director by reason of his prior service as such and
shall be and become a Continuing Director in his later period of service only if
elected upon the affirmative recommendation of such number (but in no event
fewer than three) of Continuing Directors then in office, voting separately and
as a subclass of directors on such recommendation. A decision not to oppose the
election of any person or group of persons to the Board of Directors of the
Company shall not be deemed to be an "affirmative recommendation" within the
meaning of the two next preceding sentences.
(h) "GGD Stock" shall mean the Genzyme General Division Common Stock,
par value $.01 per share, of the Company.
(i) "GMO Stock" shall mean the Genzyme Molecular Oncology Division
Common Stock, par value $.01 per share, of the Company.
(j) "GTR Stock" shall mean the Genzyme Tissue Repair Division Common
Stock, par value $.01 per share, of the Company.
(k) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
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(l) "Preferred Shares" shall mean shares of Series A Preferred
Stock, Series B Preferred Stock and/or Series C Preferred Stock as the context
requires.
(m) "Rights" shall mean GGD Stock Rights, GTR Stock Rights and/or
GMO Stock Rights, as the context requires.
(n) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such.
(o) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interests is beneficially owned, directly or indirectly, by such
Person.
(p) "Triggering Event" shall mean any event described in Section
11(a)(ii) (A), (B) or (C) or Section 13(a).
(q) "Voting Rights" when used with reference to the capital stock
of, or units of equity interest in, any Person shall mean the right under
ordinary circumstances to vote in the election of directors of such Person (if
such Person is a corporation) or to participate in the management and control of
such Person (if such Person is not a corporation).
The following terms shall have the meanings indicated in the following
Sections of this Agreement:
(i) "Act" -- Section 9(b).
(ii) "Adjustment Shares" -- Section 11(a)(ii).
(iii) "Current Value" -- Section 11(a)(iii).
(iv) "Distribution Date" -- Section 3(a).
(v) "Effective Date" -- Preamble.
(vi) "equivalent preferred shares" -- Section 11(b).
(vii) "Extension Date" -- Section 26.
(viii) "Final Expiration Date" -- Section 7(a).
(ix) "GGD Stock Right" -- Preamble.
(x) "GMO Stock Right" -- Preamble.
(xi) "GTR Stock Right" -- Preamble.
(xii) "Principal Party" -- Section 13(b).
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(xiii) "Original Agreement" -- Preamble.
(xiv) "Original Right" -- Preamble.
(xv) "Purchase Price" -- Section 4, 11(a)(ii) and 13(a).
(xvi) "Redemption Date" -- Section 7(a).
(xvii) "Redemption Price" -- Section 23(a)(i).
(xviii) "Rights Agreement" -- Preamble.
(xix) "Series A Preferred Stock" -- Preamble.
(xx) "Series B Preferred Stock" -- Preamble.
(xxi) "Series C Preferred Stock" -- Preamble.
(xxii) "Spread" -- Section 11(a)(iii).
(xxiii) "Springing Right of Redemption" -- Section 23(a)(i).
(xxiv) "Substitution Period" -- Section 11(a)(iii).
(xxv) "Summary of Rights" - Section 3(b).
(xvi) "Trading Day" -- Section 11(d)(i).
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent 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 Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. Upon prior written
notice to the Rights Agent, the Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Right Certificates
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(a) Until the earlier of (i) the close of business on the tenth day (or
such later date as may be determined by action of a majority of Continuing
Directors then in office) after the Shares Acquisition Date or (ii) the close of
business on the tenth Business Day (or such later date as may be determined by
action of a majority of Continuing Directors then in office) after the date of
the commencement of, or of the first public announcement of the intention of any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any entity
organized, appointed or established by the Company holding Common
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Shares for or pursuant to the terms of any such plan) to commence, within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange
Act, a tender or exchange offer the consummation of which would result in
beneficial ownership by a Person of Common Shares representing 30% or more of
the total Voting Rights of all the outstanding Common Shares (the earliest of
such dates being herein referred to as the "Distribution Date"), (x) the GGD
Stock Rights, GTR Stock Rights and GMO Stock Rights will be evidenced by the
certificates for GGD Stock, GTR Stock and GMO Stock, respectively, registered in
the names of the holders thereof (which certificates for GGD Stock, GTR Stock
and GMO Stock shall also be deemed to be certificates for GGD Stock Rights, GTR
Stock Rights and GMO Stock Rights, respectively) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of GGD Stock, GTR Stock and GMO
Stock as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, a right certificate, in
substantially the form of Exhibit B hereto (a "GGD Stock Right Certificate,"
"GTR Stock Right Certificate" or "GMO Stock Right Certificate," as the case may
be), evidencing one GGD Stock Right for each share of GGD Stock so held, one GTR
Stock Right for each share of GTR Stock so held and one GMO Stock Right for each
share of GMO Stock so held. In the event that an adjustment in the number of
Rights per Common Share has been made pursuant to Section 11(p) hereof, at the
time of distribution of the Right Certificates, the Company shall make the
necessary and appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Right Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) Until the Distribution Date (or the earlier of the Redemption Date
or Final Expiration Date), the surrender for transfer of any certificate for
Common Shares shall also constitute the transfer of the Rights associated with
the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last sentence of
this paragraph (c)) after the Effective Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
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This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in an Amended and Restated
Rights Agreement between Genzyme Corporation and American
Stock Transfer and Trust Company dated as of June 12, 1997
(the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the principal executive offices of Genzyme
Corporation. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. Genzyme Corporation will mail to the holder of
this certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. Under certain
circumstances, Rights beneficially owned by Acquiring Persons
(as defined in the Rights Agreement) and any subsequent holder
of such Rights may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after the
Effective Date but prior to the Distribution Date, any Rights associated with
such Common Shares shall be deemed cancelled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common Shares
which are no longer outstanding.
Section 4. FORMS OF RIGHT CERTIFICATES. The GGD Stock Right
Certificates, the GTR Stock Right Certificates and the GMO Stock Right
Certificates (and the forms of election to purchase Preferred Shares and of
assignment to be printed on the reverse thereof) shall be in substantially the
forms set forth as Exhibit B hereto, and may have such marks of identification
or designation and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Sections 11 and 22 hereof, the
Right Certificates shall entitle the holders thereof to purchase such number of
one one-hundredths of a Preferred Share as shall be set forth therein at the
price per one one-hundredth of a Preferred Share set forth therein (the
"Purchase Price"), but the number of such one one-hundredths of a Preferred
Share and the Purchase Price shall be subject to adjustment as provided herein.
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Section 5. Countersignature and Registration.
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(a) The Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President or any Vice President, either
manually or by facsimile signature, shall have affixed thereto the Company's
seal or a facsimile thereof, and shall be attested by the Clerk or an Assistant
Clerk of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for such purposes, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
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Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
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(a) Subject to the provisions of Sections 7(e) and 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 earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates may be transferred,
split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of one
one-hundredths of a Preferred Share (or, following a Triggering Event, Common
Shares, other securities or property, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled 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 Right Certificate or
Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
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designated for such purposes. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Right Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall request. Thereupon the
Rights Agent shall (subject to Section 7(e) hereof) countersign and deliver to
the person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
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Rights.
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(a) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
and the certificate contained in the form of election to purchase on the reverse
side of the Right Certificate duly executed, to the Rights Agent at the
principal offices of the Rights Agent, together with payment of the Purchase
Price for each one one-hundredth of a Preferred Share (or other shares,
securities or property, as the case may be) as to which the Rights are
exercised, at or prior to the earlier of (i) the close of business on March 28,
1999 (the "Final Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date").
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(b) The Purchase Price with respect to each GGD Stock Right shall
initially be $26.00 for each one one-hundredth of a Series A Preferred Share;
with respect to each GTR Stock Right shall initially be $25.00 for each one
one-hundredth of a Series B Preferred Share; and with respect to each GMO Stock
Right shall initially be $21.00 for each one one-hundredth of a Series C
Preferred Share; shall be subject in each case to adjustment from time to time
as provided in Sections 11 and 13 hereof and shall be payable in lawful money of
the United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate contained in
the form of election to purchase and the Right Certificate duly executed,
accompanied by payment of the Purchase Price for the Preferred Shares (or other
shares, securities or property, as the case may be) to be purchased and an
amount equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof in cash, or by
certified check or cashier's check payable to the order of the Company, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares certificates for the
number of Preferred Shares 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 Preferred Shares issuable upon
exercise of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14 hereof, (iii)
promptly after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, promptly deliver such cash to
or upon the order of the registered holder of such Right Certificate. In the
event that the Company is obligated to issue other securities (including Common
Shares), pay cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the
- 11 -
16
registered holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the occurrence of a Triggering Event, any Rights beneficially owned by
(i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person (ii)
a transferee from an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes such (and any
subsequent transferees of such transferee), or (iii) a transferee of an
Acquiring Person (or such Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board has 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 void without any further action, and any holder (including
any subsequent holder) of such Rights shall thereupon have no rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) hereof are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a result of its
failure or inability to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent
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17
for cancellation and retirement, and the Rights Agent shall so cancel and retire
any other Right Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Shares.
-------------------------------------------------
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Preferred Shares (and,
following the occurrence of a Triggering Event, Common Shares and/or other
securities) or any Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) held in its treasury,
the number of Preferred Shares (and, following the occurrence of a Triggering
Event, Common Shares and/or other securities) that will be sufficient (in
accordance with the terms of this Agreement, including Section 11(a)(iii)
hereof) to permit the exercise in full of all outstanding Rights. Prior to the
occurrence of a Triggering Event, the Company shall not be obliged to cause to
be reserved and kept available out of its authorized and unissued Common Shares
or shares of preferred stock (other than Preferred Shares), any such Common
Shares or any shares of preferred stock (other than Preferred Shares) to permit
exercise of outstanding Rights.
(b) If then required by applicable law, the Company shall use its best
efforts to (i) file, as soon as practicable following the earliest date after
the occurrence of a Triggering Event as to which the consideration to be
delivered by the Company upon exercise of the Rights has been determined
pursuant to this Agreement, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933 (the "Act"), with respect to the securities purchasable
upon exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities, and
(B) the date of the expiration of the Rights. If then required by applicable
law, the Company will also take such action as may be appropriate under the
securities or "blue sky" laws of the various states. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days after the date set
forth in clause (i) of this Section 9(b), the exercisability of the Rights in
order to prepare and file such registration statement or to comply with such
blue sky laws. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended. Notwithstanding any
- 13 -
18
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction unless the requisite qualification in such jurisdiction
shall have been obtained.
(c) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares delivered upon exercise
of Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and non-assessable shares.
(d) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any Preferred Shares 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 Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Preferred Shares upon the exercise
of any Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no such tax is
due.
Section 10. PREFERRED SHARES RECORD DATE. Each Person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares (or Common Shares and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes) was made; PROVIDED,
HOWEVER, that if the date of such surrender and payment is a date upon which the
Preferred Shares (or Common Shares and/or other securities, as the case may be)
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the Preferred Shares (or Common Shares
and/or other securities, as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled (in such holder's capacity as such) to
any rights of a shareholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
- 14 -
19
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number of Preferred Shares (or number and kind
of other shares of capital stock, as the case may be) covered by each Right and
the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of Preferred Shares or shares of capital stock, as the case may
be, issuable on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of Preferred Shares or shares of capital stock, as the
case may be, which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Shares transfer books of the Company were
open, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date
of this Agreement, directly or indirectly, (1) shall merge
into the Company or otherwise combine with the Company and the
Company shall be the continuing or surviving corporation of
such merger or combination and the Common Shares of the
Company shall remain outstanding and not changed into or
exchanged for stock or other securities of any other Person or
the Company or cash or any other property, (2) shall, in one
or more transactions, transfer any assets to the Company or
any of its Subsidiaries in exchange (in whole or in part) for
shares of any class of capital stock of the Company or any of
its Subsidiaries or for securities exercisable for or
convertible into shares of any class of capital stock of the
Company or any of its Subsidiaries or otherwise obtain from
the Company or
- 15 -
20
any of its Subsidiaries, with or without consideration, any
additional shares of any class of capital stock of the Company
or any of its Subsidiaries or securities exercisable for or
convertible into shares of any class of capital stock of the
Company or any of its Subsidiaries (other than as part of a
pro rata distribution to all holders of such shares of any
class of capital stock of the Company or any of its
Subsidiaries), (3) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise dispose (in one or
more transactions), to, from, with or of, as the case may be,
the Company or any of its Subsidiaries, assets (including
securities) 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, (4)
shall sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise acquire or dispose of, in one
transaction or a series of transactions, to, from or with (as
the case may be) the Company or any of the Company's
Subsidiaries (other than incidental to the lines of business
currently engaged in as of the date hereof between the Company
and such Acquiring Person or Associate or Affiliate) assets
having an aggregate fair market value of more than $500,000,
other than pursuant to a transaction set forth in Section
13(a) hereof, (5) shall 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 its Subsidiaries')
past practices, or (6) shall receive the benefit, directly or
indirectly (except proportionately as a shareholder), 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, or
(B) 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, shall
become the Beneficial Owner of Common Shares representing 30% or more
of the total Voting Rights of all of the Common Shares then
outstanding, other than pursuant to any transaction set forth in
Section 13(a) hereof, except pursuant to a tender or exchange offer for
all outstanding Common Shares at a price and on terms determined by a
majority of the Continuing Directors then in office to be in the best
interest of the Company and its stockholders (other than the Person or
any Affiliate or Associate thereof on whose behalf the offer is being
made); PROVIDED, HOWEVER, that if a Person inadvertently becomes the
Beneficial Owner of Common
- 16 -
21
Shares representing 30% or more of such Voting Rights solely due to an
adjustment in the number of votes to which GTR Stock and/or GMO Stock
is entitled pursuant to the Company's Articles of Organization, such
Person shall not be deemed such a Beneficial Owner unless and until
such Person acquires additional Common Shares, or
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or any
Subsidiaries of the Company (whether or not with or into or otherwise
involving an Acquiring Person) which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities or of
securities exercisable for or convertible into securities of the
Company or any of its Subsidiaries which is directly or indirectly
owned by any Acquiring Person or any Associate or Affiliate of any
Acquiring Person,
then, and in each such case, 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 a right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, in lieu of
Preferred Shares and subject to the provisions of Section 11(a)(iii) below, such
number of shares of GGD Stock in the case of a GGD Stock Right, GTR Stock in the
case of a GTR Stock Right, and GMO Stock in the case a GMO Stock Right as shall
equal the result obtained by (x) multiplying the then current Purchase Price by
the number of one one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to the first occurrence of an event set forth in
Section 11(a)(ii) (A), (B) or (C) above, and dividing that product (which,
following such first occurrence, shall be referred to as the "Purchase Price"
for all purposes of this Agreement) by (y) 50% of the then current per share
market price of the GGD Stock, GTR Stock or GMO Stock in the case of a GGD Stock
Right, GTR Stock Right or GMO Stock Right, respectively (determined pursuant to
Section 11(d)) on the earlier of the date of the occurrence, or the date of the
first public announcement, of any one of the events listed above in this
subparagraph (ii) (such number of shares being referred to herein as the
"Adjustment Shares"); PROVIDED, HOWEVER, that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only the provisions of Section 13 hereof
shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii).
Notwithstanding the foregoing, upon the occurrence of any of the events listed
above in this subparagraph (ii), any Rights that are or were on or after the
earlier of the Distribution Date or the Shares Acquisition Date beneficially
owned by an Acquiring
- 17 -
22
Person (or any Associate or Affiliate of such Acquiring Person) or by certain
transferees of such Persons as specified in Section 7(e), shall become void and
any holder (including subsequent holders) of such Rights shall thereafter have
no right to exercise such Rights under any provision of this Agreement. The
Company shall not enter into any transaction of the kind listed in this
subparagraph (ii) if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights. Any Right Certificate issued pursuant to Section 3 or
Section 22 hereof that represents Rights beneficially owned by an Acquiring
Person or any Associate or Affiliate thereof and any Right Certificate issued at
any time upon the transfer of any Rights to an Acquiring Person or any Associate
or Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate, and any Right Certificate issued pursuant to Section 6, 7(d), 7(e) or
22 hereof or this Section 11 upon transfer, exchange, replacement or adjustment
of any other Right Certificate referred to in this sentence, shall contain the
following legend:
The Rights represented by this Right Certificate were issued
to a Person who was an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement). This Right Certificate and the Rights
represented hereby may become void in the circumstances
specified in the Rights Agreement, including Sections 7(e) and
11(a)(ii) thereof;
PROVIDED THAT the Rights Agent shall not be under any responsibility to
ascertain the existence of facts that would require the imposition of such
legend but shall be required to impose such legend only if instructed to do so
by the Company or if a holder fails to certify upon transfer or exchange in the
space provided on the Right Certificate that such holder is not an Acquiring
Person or an Affiliate or Associate thereof.
(iii) In the event that (x) the total of the Common Shares
that are issued but not outstanding and authorized but unissued (excluding
Common Shares reserved for issuance pursuant to the specific terms of any
indenture, option plan or other agreement) is not sufficient to permit the
exercise in full of the Rights in accordance with Section 11(a)(ii) hereof, or
(y) the total number of Common Shares available for exercise of the Rights in
accordance with Section 11(a)(ii) hereof is sufficient to permit the exercise in
full of the Rights in accordance with Section 11(a)(ii) but a majority of
Continuing Directors then in office determines that the exercise of the Rights
in accordance with Section 11(a)(ii) above will not afford adequate protection
to the shareholders of the Company and that shareholders should be given an
option to acquire a substitute for the Adjustment
- 18 -
23
Shares, and subject to such limitations as are necessary to prevent a default
under any agreement for money borrowed as presently constituted to which the
Company is a party, then a majority of Continuing Directors then in office
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, the "Spread"), and (B) with respect to each Right,
make adequate provision to substitute for, or provide an election to acquire in
lieu of, the Adjustment Shares, upon payment of the applicable Purchase Price
(which term shall include any reduced Purchase Price) any combination of the
following having an aggregate value equal to the Current Value (such aggregate
value to be determined by a majority of Continuing Directors then in office
based upon the advice of a nationally recognized investment banking firm
selected by a majority of Continuing Directors then in office): (1) voting and
other securities of one or more subsidiaries of the Company, (2) a reduction in
the Purchase Price, (3) Common Shares and/or other equity securities of the
Company and/or (4) debt securities of the Company and/or cash and other assets;
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
first occurrence of a Triggering Event, then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, Common Shares (to the extent available) and then,
if necessary, cash, which securities and/or cash in the aggregate are equal to
the Spread. If a majority of Continuing Directors then in office shall determine
in good faith that it is likely that sufficient additional Common Shares could
be authorized for issuance upon exercise in full of the Rights, the thirty (30)
day period set forth above may be extended to the extent necessary, but not more
than ninety (90) days following the first occurrence of a Triggering Event, in
order that the Company may seek shareholder approval for the authorization of
such additional shares (such period, as it may be extended, the "Substitution
Period"). To the extent that a majority of Continuing Directors then in office
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 Shares
shall be the current per share market price (as determined pursuant to Section
11(d) hereof) of the Common Shares on the date of the first occurrence of a
Triggering Event.
- 19 -
24
The provisions of this Section 11(a)(iii) shall apply only to
Common Shares of the Company and shall not apply to the securities of any other
Person.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred share
(or having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the then current per
share market price of the Preferred Shares (as defined in Section 11(d)) on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be the
number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
in a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Preferred Shares 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 the making of
a distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect
- 20 -
25
immediately prior to such record date by a fraction, the numerator of which
shall be the then current per share market price of the Preferred Shares (as
defined in Section 11(d)) on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to one Preferred Share and
the denominator of which shall be such current per share market price of the
Preferred Shares (as determined pursuant to Section 11(d) hereof). Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to 11(a)(iii) hereof, the "current per share market
price" of the Common Shares on any date shall be deemed to be the average of the
daily closing prices per share of such Common Shares for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date and for purposes of computations made pursuant to Section 11(a)(iii)
hereof, the "current per share market price" of the Common Shares on any date
shall be deemed to be the average of the daily closing prices per Common Share
for the 10 consecutive Trading Days immediately following such date; PROVIDED,
HOWEVER, that in the event that the current per share market price of the Common
Shares is determined during a period following the announcement by the issuer of
such Common Shares of (A) a dividend or distribution on such Common Shares
payable in such Common Shares or securities convertible into such Common Shares,
or (B) any subdivision, combination or reclassification of such Common Shares,
and prior to the expiration of the requisite 30 or 10 Trading Day period, as the
case may be, after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification, then, and
in each such case, the current market price shall be appropriately adjusted to
reflect the current market price per Common Share equivalent. The closing price
for each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Common Shares are not listed
or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Common Shares
are listed or admitted to trading or, if the Common Shares are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low
- 21 -
26
asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ")
or such other system then in use, or, if on any such date the Common Shares are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Common
Shares selected by the Board of Directors of the Company. If on any such date no
market maker is making a market in the GGD Stock, the GTR Stock or the GMO
Stock, the fair value of such shares on such date as determined in good faith by
a majority of the Continuing Directors then in office shall be used. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Common Shares are listed or admitted to trading is open
for the transaction of business or, if the Common Shares are not listed or
admitted to trading on any national securities exchange, a Business Day. If the
Common Shares are 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 a majority of the Continuing Directors then in office, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be determined in
the same manner as set forth above for Common Shares in Section 11(d)(i) (other
than the last sentence thereof). If the current per share market price of the
Preferred Shares of any series cannot be determined in the manner provided
above, the "current per share market price" of the shares of Series A Preferred
Stock, Series B Preferred Stock and Series C Preferred Stock shall be
conclusively deemed to be the current per share market price of the shares of
GGD Stock, GTR Stock and GMO Stock, respectively (appropriately adjusted to
reflect any stock splits, stock dividends, recapitalizations or similar
transactions occurring after the date hereof), multiplied by one hundred. If
neither the applicable Common Shares nor the applicable Preferred Shares are
publicly held or so listed or traded, "current per share market price" shall
mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 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
Common Share or other share or one-millionth of a Preferred Share as the case
may be. Notwithstanding the first sentence of this Section 11(e), any
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adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to exercise any
Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
13(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any property, other securities (other than shares of capital stock of
the Company) or shares of capital stock of the Company other than Preferred
Shares, thereafter the amount of such property, other securities (other than
shares of capital stock of the Company) and the number of such other shares so
receivable upon exercise of any Right (as well as any consideration to be paid
therefor) shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares (and the Purchase Price) contained in this Section 11 and the
provisions of Sections 7, 9, 10 and 13 with respect to the Preferred Shares
shall apply on like terms to any such property, other securities or other shares
of capital stock.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in 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 one one-hundredths of a
Preferred Share (calculated to the nearest one one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one one-hundredths of a
share covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect
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immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a Preferred Share issuable upon the exercise
of the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-hundredths of a
Preferred Share which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred Shares 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
non-assessable Preferred Shares at such adjusted Purchase Price.
(1) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; PROVIDED,
HOWEVER, that the Company shall deliver to such holder a due bill or other
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appropriate instrument evidencing such holder's right to receive such additional
shares 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 it in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Shares, (ii)
issuance wholly for cash of any Preferred Shares at less than the current market
price, (iii) issuance wholly for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Preferred Shares, (iv)
dividends on Preferred Shares payable in Preferred Shares or (v) issuance of
rights, options or warrants referred to hereinabove in Section 11(b), hereafter
made by the Company to holders of its Preferred Shares shall not be taxable to
such shareholders.
(n) The Company covenants and agrees that it shall not, and shall not
permit any Subsidiary, at any time after the Distribution Date, to (i)
consolidate with, (ii) merge with or into, or (iii) sell or transfer, in one or
more transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person if at the time of or immediately after such consolidation,
merger or sale there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(o) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23 or Section 26 hereof, take (or
permit any Subsidiary to take) any action which at the time it is reasonably
foreseeable will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights, PROVIDED, HOWEVER, that the issuance of
additional Rights pursuant hereto, including by action of the Board under
Section 22 hereof, shall not be deemed to violate this Section 11(o).
(p) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on any series of Common Shares payable in Common Shares of the same
series or (ii) effect a subdivision, combination or consolidation of the Common
Shares (by reclassification or otherwise than by payment of dividends in Common
Shares of the same series) into a greater or lesser number of Common Shares of
the same series, then in any such case (i) the number of one one-hundredths of a
Preferred Share purchasable after such event upon proper exercise of each Right
issued in respect of the series of Common Shares affected shall be
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30
determined by multiplying the number of one one-hundredths of a Preferred Share
so purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares of the affected series outstanding
immediately before such event and the denominator of which is the number of
Common Shares of the affected series outstanding immediately after such event,
(ii) an appropriate adjustment shall be made in the Purchase Price, and (iii)
each Common Share of the affected series outstanding immediately after such
event shall have issued with respect to it that number of Rights which each
Common Share of such series outstanding immediately prior to such event had
issued with respect to it. The adjustments provided for in this Section 11(p)
shall be made successively whenever such a dividend is declared or paid or such
a subdivision, combination or consolidation is effected. If an event occurs
which would require an adjustment under Section 11(a)(ii) and this Section
11(p), the adjustments provided for in this Section 11(p) shall be in addition
and prior to any adjustment required pursuant to Section 11(a)(ii).
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Shares or
the Preferred Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25
hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained 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 the Distribution Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person and the Company shall not be the continuing or surviving
corporation of any such consolidation or merger (other than in a transaction
following a tender offer or exchange offer which satisfies the requirements set
forth in the exception contained in Section 11(a)(ii)(B)), (y) any Person shall
consolidate with the Company, or merge with and into the Company and the Company
shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Shares shall be changed
into or exchanged for stock or other securities of any other Person (or the
Company) or cash or any other property (other than in a transaction following a
tender offer or exchange offer which satisfies the requirements set forth in the
exception contained in Section 11(a)(ii)(B)), or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell
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31
or otherwise transfer), in one or more transactions, assets or earning power
aggregating 50% or more 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 or any Subsidiary of the Company, then, and in each such case, proper
provision shall be made so that (i) each holder of a Right (except as otherwise
provided herein) shall thereafter have the right to receive, upon the exercise
thereof in accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and freely tradeable Common
Shares of the Principal Party (as hereinafter defined), not subject to any
rights of first refusal, redemption or repurchase, as shall be equal to the
result obtained by (1) multiplying the then current Purchase Price by the number
of one one-hundredths of a Preferred Share for which a Right is then exercisable
immediately prior to the first occurrence of any of the events described in
clauses (x), (y) or (z) of this Section 13(a) (a "Section 13(a) Event"), or, if
any event set forth in Section 11(a)(ii)(A), (B) or (C) has occurred prior to
the Section 13(a) Event, multiplying the number of such fractional shares for
which a Right was exercisable immediately prior to the first occurrence of an
event set forth in Section 11(a)(ii)(A), (B) or (C) hereof by the Purchase Price
immediately prior to such first occurrence), and dividing that product (which,
following the Section 13(a) Event, shall thereafter be referred to as the
"Purchase Price" for all purposes of this Agreement) by (2) 50% of the then
current per share market price of the Common Shares of such other Person
(determined pursuant to Section 11(d)) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such issuer, it being specifically intended that the provisions of Section 11
hereof shall apply only to such Principal Party following the first occurrence
of a Section 13(a) Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
Common Shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the Rights; and (v)
the provisions of Subsections 11(a)(ii) and 11(a)(iii) hereof shall thereafter
be of no effect following the first occurrence of a Section 13(a) Event. The
Company shall not enter into any transaction of the kind referred to in this
Section 13(a) if at the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or arrangements which,
as a result of the consummation of such transaction, would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
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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 Common Shares of the Company are converted in such merger
or consolidation, and if no securities are so issued, the Person that is the
other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions;
PROVIDED, HOWEVER, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal Party" shall refer
to such other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the greatest aggregate
market value.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized Common Shares, which have not been issued or reserved for
issuance, to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will:
(i) prepare and file a registration statement under the Act,
with respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after such
filing and (B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Final Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under the
Exchange Act.
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The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that one of
the transactions described in Section 13(a) hereof shall occur at any time after
the occurrence of a transaction described in Section 11(a)(ii) hereof, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of Rights
except prior to the Distribution Date as provided in Section 11(p) hereof, or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a
market in the Rights the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share
may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an
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34
appropriate agreement between the Company and a depositary selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one one-hundredth of a Preferred Share, the Company shall
pay to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For purposes of this Section 14(b),
the current market value of a Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to the second sentence of Section
11(d)(ii) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of Common Shares upon exercise of the Rights
or to distribute certificates that evidence fractional Common Shares. In lieu of
fractional Common Shares, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one Common
Share. For purposes of this Section 14(c), the current market value of one
Common Share shall be the closing price of one Common Share (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Sections 18 and 20 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares), without
the consent of the Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Shares), may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
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35
threatened violations of, the obligations of any Person subject to this
Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares 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 Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights
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36
evidenced by such Right Certificate shall have been exercised in accordance with
the provisions hereof.
Section 18. Concerning the Rights Agent.
---------------------------
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability which may arise under this Agreement. The indemnity provided herein
shall survive the expiration of the Rights and the termination of this Rights
Agreement.
(b) The Rights Agent shall be fully indemnified against, shall be
protected from and shall incur no liability or expense for, or in respect of any
action taken, suffered or omitted by it in connection with, its administration
of this Agreement in reliance upon any Right Certificate or certificate for the
Preferred Shares or Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof. Such
indemnity shall specifically include any loss, liability or expense which the
Rights Agent may suffer in administering this Agreement against a Person who was
an Acquiring Person or an Affiliate or an Associate of an Acquiring Person and
any costs and expenses of defending against any claim of liability from such
Person, Acquiring Person or Affiliate or Associate of such Acquiring Person.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
---------------------------------------------------------
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto,
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37
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Clerk of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
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38
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Sections 3, 11, 13 or 23, or the ascertaining of the existence
of facts that would require any such change or adjustment (except with respect
to the exercise of Rights evidenced by Right Certificates after receipt of a
certificate furnished pursuant to Section 13 describing such change or
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares will, when issued, be validly
authorized and issued, fully paid and non-assessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the Clerk
or the Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under this Rights
Agreement and the date on or after which such action
- 34 -
39
shall be taken or such omission shall be effective. The Rights Agent shall not
be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the specified
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become peculiarly interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2 on such
certificate attached to the form of assignment or form of election to purchase,
the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common
- 35 -
40
Shares or Preferred Shares by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered holder of
any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of any other state of the United
States in good standing, which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares or Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors 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 Right Certificates made in
accordance with the provisions of this Agreement. In addition, the Company may,
if deemed necessary or appropriate by the Board of Directors of the Company,
issue Right
- 36 -
41
Certificates in connection with the issuance or sale of Common Shares following
the Distribution Date.
Section 23. Redemption.
----------
(a) (i) The Board of Directors of the Company may, at its option,
at any time prior to 5:00 p.m., Massachusetts time, on the earlier of (A) the
tenth day following the Shares Acquisition Date (or such later date as may be
determined by a majority of Continuing Directors then in office), or (B) the
Final Expiration Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $.005 per Right in the case of the GGD Stock
Rights and $.01 per Right in the case of the GTR Stock Rights and GMO Stock
Rights, 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"); PROVIDED, HOWEVER, that if,
following the occurrence of a Shares Acquisition Date and following the
expiration of the right of redemption hereunder (other than a Springing Right of
Redemption, as defined below) but prior to any Triggering Event, each of the
following shall have occurred and remain in effect: (x) a Person who is an
Acquiring Person shall have transferred or otherwise disposed of a number of
Common Shares in a transaction, or series of transactions, which did not result
in the occurrence of a Triggering Event, such that such Person is thereafter a
Beneficial Owner of 10 percent or less of the outstanding Common Shares, (y)
there are no other Persons, immediately following the occurrence of the event
described in clause (x) above, who are Acquiring Persons, and (z) the transfer
or other disposition described in clause (x) above was other than pursuant to a
transaction, or series of transactions, which directly or indirectly involved
the Company or any of its Subsidiaries, then the right of redemption shall be
reinstated and thereafter be subject to the provisions of this Section 23. The
reinstated right of redemption referred to in the preceding sentence and the
reinstated right of redemption referred to in Section 30 hereof is herein called
the "Springing Right of Redemption." Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable pursuant to
Section 11(a)(ii) or 11(a)(iii) at a time when the Rights are then redeemable
hereunder.
(ii) Following the occurrence of a Shares Acquisition Date but
prior to any event described in Section 13(a), the Board of Directors of the
Company may, with the concurrence of a majority of the Continuing Directors then
in office, also redeem all but not less than all of the then outstanding Rights
at the Redemption Price in connection with any event of the type specified in
Sections 11(a)(ii)(A)(1) or 13(a) not involving an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
- 37 -
42
(b) In the case of a redemption permitted under Section 23(a)(i),
immediately upon the action of the Board of Directors of the Company (and the
Continuing Directors if required) ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent and without any
further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. In the case of a redemption permitted only under
Section 23(a)(ii), evidence of which shall have been filed with the Rights
Agent, the right to exercise the Rights will terminate and represent only the
right to receive the Redemption Price only after ten Business Days following the
giving of notice of such redemption to the holders of such Rights if no event
set forth in Section 11(a)(ii) shall have occurred, and, if such event shall
have occurred, upon the later of ten Business Days following the giving of such
notice or the expiration of any period during which the Rights under Section
11(a)(ii) may be exercised. Within ten days after the action of the Company
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 their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the Common Shares. 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 shall state the method by
which the payment of the Redemption Price will be made.
Section 24. NOTICE OF CERTAIN EVENTS. In case the Company shall
propose, at any time after the Distribution Date, (a) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to make
any other distribution to the holders of its Preferred Shares (other than a
regular quarterly cash dividend) or (b) to offer to the holders of its Preferred
Shares rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other securities, rights
or options, or (c) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), or (d) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, or (e) to effect the liquidation, dissolution or
winding up of the Company, or (f) to declare or pay any dividend on any series
of Common Shares payable in Common Shares of the same series or to effect a
subdivision, combination or consolidation of any series of Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares on
the Common Shares of the same series), then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance with Section 25
- 38 -
43
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, or distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (a) or (b) above at least 20 days prior
to the record date for determining holders of the Preferred Shares for purposes
of such action, and in the case of any such other action, at least 20 days prior
to the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, whichever
shall be the earlier.
In case any of the events set forth in Section 11(a)(ii) of this
Agreement shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Right Certificate, in accordance
with Section 25 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof, and (ii) all references in the preceding paragraph to
Preferred Shares shall be deemed thereafter to refer to Common Shares and/or, if
appropriate, other securities.
Section 25. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Genzyme Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Legal Officer
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ & Dodge LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
▇▇. ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇
American Stock Transfer and Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
- 39 -
44
Brooklyn, New York 11219
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 26. Supplements and Amendments.
--------------------------
(a) Prior to the Distribution Date (and at any time after the
occurrence of a Springing Right of Redemption, so long as there has not been a
subsequent recurrence of a Shares Acquisition Date), the Company and the Rights
Agent shall, if the Company so directs, supplement or amend any provision of
this Agreement without the approval of any holders of certificates representing
Common Shares unless such approval is required by Section 28(b), except for a
supplement or amendment which would change the Redemption Price, Final
Expiration Date, Purchase Price, or number of fractional Preferred Shares for
which a Right is then exercisable. From and after the Distribution Date (and at
any time after the occurrence of a Shares Acquisition Date subsequent to the
occurrence of a Springing Right of Redemption), the Company and the Rights Agent
shall, if the Company shall so direct, supplement or amend this Agreement
without the approval of any holders of Right Certificates in order (i) to cure
any ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, (iii)
to extend the period of redemption provided in Section 23 hereof (which
amendment shall set forth a date after which the Rights are no longer redeemable
("Extension Date") unless the Rights are further amended prior to the Extension
Date to further extend the time during which the Rights are redeemable, and
which amendment may provide for the termination of the right of redemption prior
to any Extension Date), or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Right Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person),
PROVIDED, this Agreement may not be supplemented or amended in any way after the
period for redemption of the Rights pursuant to Section 23 hereof shall have
expired unless there shall thereafter arise and be in effect a Springing Right
of Redemption. Upon the delivery of a certificate from an appropriate officer of
the Company, which states that the proposed supplement or amendment is in
compliance with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment. Prior to the Distribution Date, the interests of
the holders of GGD Stock Rights, GTR Stock Rights and GMO Stock shall be deemed
coincident with the interests of the holders of GGD Stock, GTR Stock and GMO
Stock, respectively.
- 40 -
45
(b) Notwithstanding anything contained in this Rights Agreement to the
contrary, at any time when there shall be an Acquiring Person, this Rights
Agreement may be supplemented or amended only if (a) there are Continuing
Directors then in office and (b) the Board of Directors of the Company, with the
concurrence of a majority of the Continuing Directors then in office, determines
that such supplement or amendment is in their judgment in the best interests of
the Company and its stockholders.
Section 27. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of Directors.
----------------------------------------------------
(a) Subject to the provisions of paragraph (b) of this Section 28, the
Board of Directors of the Company (and, where specifically provided for, the
Continuing Directors) shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically granted to the
Board of Directors of the Company or the Company (or, where specifically
provided for, the Continuing Directors), or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (ii) below, all omissions with
respect to the foregoing) which are done or made by the Board of Directors of
the Company (or, where specifically provided for, the Continuing Directors), in
good faith, shall (i) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Right Certificates and all other parties, and
(ii) not subject the Board of Directors of the Company or the Continuing
Directors to any liability to the holders of the Right Certificates.
(b) Notwithstanding anything in this Agreement to the contrary, any
actions by the Board of Directors of the Company pursuant to Section 3, Section
11(a)(iii), Section 23(a), Section 26 or Section 30, determinations for which
action by a majority of Continuing Directors is expressly required, and any
determinations concerning the occurrence of any Triggering Event, shall require
the concurrence of such number (but in no event fewer than three) of Continuing
Directors as shall constitute a majority of the Continuing Directors then in
office; PROVIDED, HOWEVER, that any such action approved by the Board of
Directors of the Company without such required concurrence of Continuing
Directors (whether or not there shall then be Continuing
- 41 -
46
Directors in office) shall nevertheless be, and be deemed to be, duly approved
if such action is approved (at a meeting of stockholders duly called and held
upon at least thirty days prior written notice to the stockholders) by the
affirmative votes of two-thirds of the outstanding Common Shares of the Company
including the affirmative votes of the holders of at least two-thirds of all
outstanding Common Shares of the Company held as of the record date for such
meeting by persons other than an Acquiring Person.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares).
Section 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, notwithstanding anything in this Agreement to the contrary,
if any such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of Directors of the
Company, with the concurrence of a majority of the Continuing Directors then in
office, determines in its good faith judgment that severing the invalid language
from this Agreement would adversely affect the purpose or effect of this
Agreement, the right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the close of business on the tenth day
following the date of such determination by the Board of Directors of the
Company with the concurrence of a majority of the Continuing Directors then in
office.
Section 31. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
Commonwealth of Massachusetts and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 32. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
- 42 -
47
Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
[CORPORATE SEAL] GENZYME CORPORATION
Attest
By /s/ ▇▇▇▇▇ ▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------- ---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Clerk Title: Executive Vice
President, Finance
[CORPORATE SEAL] AMERICAN STOCK TRANSFER AND TRUST
COMPANY
Attest
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- ---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Secretary Title: Vice President
- 43 -
48
Exhibit A
---------
TERMS OF THE
SERIES A, SERIES B AND SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
OF
GENZYME CORPORATION
VOTED, that pursuant to paragraph IV.F.1 of this Corporation's Articles
of Organization, the Board of Directors hereby establishes three series of
Preferred Stock of the Corporation with the following designations, powers,
preferences and rights:
A. AUTHORIZED AMOUNTS AND DESIGNATIONS. Two million shares of Preferred
Stock of the Corporation are designated as Series A Junior Participating
Preferred Stock (the "Series A Preferred Stock"), 400,000 shares of Preferred
Stock are designated as Series B Junior Participating Preferred Stock (the
"Series B Preferred Stock"), and 400,000 shares of Preferred Stock are
designated as Series C Junior Participating Preferred Stock (the "Series C
Preferred Stock," and together with the Series A Preferred Stock, the Series B
Preferred Stock, and any other series of Preferred Stock so designated by the
Corporation's Board of Directors, the "Junior Preferred Stock"). To the extent
legally permitted, such numbers of shares may be increased or decreased by vote
of the Board of Directors, provided that no decrease shall reduce the number of
shares of Junior Preferred Stock of any series to a number less than the number
of shares of such series then outstanding plus the number of shares of such
series reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into such series of Junior Preferred Stock.
B. SERIES A PREFERRED STOCK. A description of the Series A Preferred
Stock and a statement of its preferences, voting powers, qualifications and
special or relative rights or privileges is as follows:
1. Dividends and Distributions.
---------------------------
a. Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series A Preferred Stock with respect to dividends, the holders
of shares of Series A Preferred Stock, in preference to the holders of all
shares of common stock of the Corporation (the "Common Shares"), and of any
other junior stock, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per
- 44 -
49
share amount (payable in kind) of all non-cash dividends or other distributions,
other than a dividend on shares of Genzyme General Division Common Stock (the
"GGD Stock") payable in shares of GGD Stock or a subdivision of the outstanding
shares of GGD Stock (by reclassification or otherwise), declared on the GGD
Stock since the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Preferred Stock. In the event
the Corporation shall at any time after June 12, 1997 declare or pay any
dividend on shares of GGD Stock payable in shares of GGD Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of GGD
Stock (by reclassification or otherwise than by payment of a dividend in shares
of GGD Stock) into a greater or lesser number of shares of GGD Stock, then in
each such case the amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of GGD Stock outstanding immediately
after such event and the denominator of which is the number of shares of GGD
Stock that were outstanding immediately prior to such event.
b. The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in paragraph a. of this
Section B.1 immediately after it declares a dividend or distribution on any
shares of GGD Stock (other than a dividend payable in shares of GGD Stock),
provided that, in the event no dividend or distribution shall have been declared
on the GGD Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
c. Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
2. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
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50
a. Subject to the provision for adjustment
hereinafter set forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
after June 12, 1997 declare or pay any dividend on any shares of GGD Stock
payable in shares of GGD Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GGD Stock (by reclassification or
otherwise than by payment of a dividend in shares of GGD Stock) into a greater
or lesser number of shares of GGD Stock, then in each such case the number of
votes per share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of GGD
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GGD Stock that were outstanding immediately prior to
such event.
b. Except as otherwise provided herein, in the
Articles of Organization, in any other vote of the Board of Directors of the
Corporation creating a series of Preferred Stock, or by law, the holders of
shares of Series A Preferred Stock and the holders of Common Shares and any
other capital stock of the Corporation having general voting rights shall vote
together as one series on all matters submitted to a vote of stockholders of the
Corporation.
c. Except as set forth herein or as otherwise
provided by law, holders of Series A Preferred Stock shall have no voting
rights.
3. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GGD Stock, or (2) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
A Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
June 12, 1997 declare or pay any dividend on shares of GGD Stock payable in
shares of GGD Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GGD Stock (by reclassification or otherwise than by
payment of a dividend in shares of GGD Stock) into a greater or lesser number of
shares of GGD Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GGD Stock outstanding immediately after such event and
- 46 -
51
the denominator of which is the number of shares of GGD Stock that were
outstanding immediately prior to such event.
4. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
Common Shares are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series A
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of GGD Stock is changed or exchanged. In the event the Corporation
shall at any time after June 12, 1997 declare or pay any dividend on any shares
of GGD Stock payable in shares of GGD Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of GGD Stock (by
reclassification or otherwise than by payment of a dividend in shares of GGD
Stock) into a greater or lesser number of shares of GGD Stock, then in each such
case the amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of GGD
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GGD Stock that were outstanding immediately prior to
such event.
C. SERIES B PREFERRED STOCK. A description of the Series B Preferred
Stock and a statement of its preferences, voting powers, qualifications and
special or relative rights or privileges is as follows:
1. Dividends and Distributions.
---------------------------
a. Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series B Preferred Stock with respect to dividends, the holders
of shares of Series B Preferred Stock, in preference to the holders of all
Common Shares, and of any other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first day
of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series B Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions, other than a
dividend on shares of Genzyme Tissue Repair Division Common Stock (the "GTR
Stock") payable in shares of GTR Stock or a subdivision of the outstanding
shares of GTR Stock (by reclassification or otherwise), declared on the GTR
Stock since the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series B Preferred Stock. In the event
the Corporation shall at any time after June 12, 1997 declare or pay any
dividend on any shares of GTR Stock payable in
- 47 -
52
shares of GTR Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GTR Stock (by reclassification or otherwise than by
payment of a dividend in shares of GTR Stock) into a greater or lesser number of
shares of GTR Stock, then in each such case the amount to which holders of
shares of Series B Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of GTR
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GTR Stock that were outstanding immediately prior to
such event.
b. The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in paragraph a. of this
Section C.1 immediately after it declares a dividend or distribution on any
shares of GTR Stock (other than a dividend payable in shares of GTR Stock),
provided that, in the event no dividend or distribution shall have been declared
on the GTR Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series B Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
c. Dividends shall begin to accrue and be cumulative
on outstanding shares of Series B Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series B Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series B Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series B Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
2. VOTING RIGHTS. The holders of shares of Series B Preferred
Stock shall have the following voting rights:
a. Subject to the provision for adjustment
hereinafter set forth, each share of Series B Preferred Stock shall entitle the
holder thereof to 100 times the number of votes to which the holder of each
outstanding share of GTR Stock is then entitled on all matters submitted to a
vote of the stockholders of the Corporation. In the event the Corporation shall
at any time after June 12, 1997 declare or pay any dividend on shares of GTR
Stock payable in shares of GTR Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GTR Stock (by reclassification or
otherwise than
- 48 -
53
by payment of a dividend in shares of GTR Stock) into a greater or lesser number
of shares of GTR Stock, then in each such case the number of votes per share to
which holders of shares of Series B Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a fraction,
the numerator of which is the number of shares of GTR Stock outstanding
immediately after such event and the denominator of which is the number of
shares of GTR Stock that were outstanding immediately prior to such event.
b. Except as otherwise provided herein, in the
Articles of Organization, in any other vote of the Board of Directors of the
Corporation creating a series of Preferred Stock, or by law, the holders of
shares of Series B Preferred Stock and the holders of Common Shares and any
other capital stock of the Corporation having general voting rights shall vote
together as one series on all matters submitted to a vote of stockholders of the
Corporation.
c. Except as set forth herein or as otherwise
provided by law, holders of Series B Preferred Stock shall have no voting
rights.
3. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series B
Preferred Stock unless, prior thereto, the holders of shares of Series B
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series B
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GTR Stock, or (2) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
B Preferred Stock, except distributions made ratably on the Series B Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
June 12, 1997 declare or pay any dividend on any shares of GTR Stock payable in
shares of GTR Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GTR Stock (by reclassification or otherwise than by
payment of a dividend in shares of GTR Stock) into a greater or lesser number of
shares of GTR Stock, then in each such case the aggregate amount to which
holders of shares of Series B Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GTR Stock outstanding immediately after such event and the
denominator of which is the number of shares of GTR Stock that were outstanding
immediately prior to such event.
4. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
Common Shares are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series B
Preferred Stock shall at the same time be similarly
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54
exchanged or changed into an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of GTR Stock is changed or exchanged.
In the event the Corporation shall at any time after June 12, 1997 declare or
pay any dividend on any shares of GTR Stock payable in shares of GTR Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of GTR Stock (by reclassification or otherwise than by payment of a dividend in
shares of GTR Stock) into a greater or lesser number of shares of GTR Stock,
then in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series B Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GTR Stock outstanding immediately after such event and the
denominator of which is the number of shares of GTR Stock that were outstanding
immediately prior to such event.
D. SERIES C PREFERRED STOCK. A description of the Series C Preferred
Stock and a statement of its preferences, voting powers, qualifications and
special or relative rights or privileges is as follows:
1. Dividends and Distributions.
---------------------------
a. Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series C Preferred Stock with respect to dividends, the holders
of shares of Series C Preferred Stock, in preference to the holders of Common
Shares, and of any other junior stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series C Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend on shares of
Genzyme Molecular Oncology Division Common Stock (the "GMO Stock") payable in
shares of GMO Stock or a subdivision of the outstanding shares of GMO Stock (by
reclassification or otherwise), declared on the GMO Stock since the immediately
preceding Quarterly Dividend Payment Date or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series C Preferred Stock. In the event the Corporation
shall at any time after June 12, 1997 declare or pay any dividend on any shares
of GMO Stock payable in shares of GMO Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of GMO Stock (by
reclassification or otherwise than by payment of a dividend in shares of GMO
Stock) into a greater or lesser number of shares of GMO Stock, then in each such
case the amount to which holders of shares of Series C Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of GMO Stock outstanding immediately
after such event
- 50 -
55
and the denominator of which is the number of shares of GMO Stock that were
outstanding immediately prior to such event.
b. The Corporation shall declare a dividend or
distribution on the Series C Preferred Stock as provided in paragraph a. of this
Section C.1 immediately after it declares a dividend or distribution on any
shares of GMO Stock (other than a dividend payable in shares of GMO Stock),
provided that, in the event no dividend or distribution shall have been declared
on the GMO Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series C Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
c. Dividends shall begin to accrue and be cumulative
on outstanding shares of Series C Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series C Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series C Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series C Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
2. VOTING RIGHTS. The holders of shares of Series C
Preferred Stock shall have the following voting rights:
a. Subject to the provision for adjustment
hereinafter set forth, each share of Series C Preferred Stock shall entitle the
holder thereof to 100 times the number of votes to which the holder of each
outstanding share of GMO Stock is then entitled on all matters submitted to a
vote of the stockholders of the Corporation. In the event the Corporation shall
at any time after June 12, 1997 declare or pay any dividend on any shares of GMO
Stock payable in shares of GMO Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GMO Stock (by reclassification or
otherwise than by payment of a dividend in shares of GMO Stock) into a greater
or lesser number of shares of GMO Stock, then in each such case the number of
votes per share to which holders of shares of Series C Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of GMO
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GMO Stock that were outstanding immediately prior to
such event.
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56
b. Except as otherwise provided herein, in the
Articles of Organization, in any other vote of the Board of Directors of the
Corporation creating a series of Preferred Stock, or by law, the holders of
shares of Series C Preferred Stock and the holders of Common Shares and any
other capital stock of the Corporation having general voting rights shall vote
together as one series on all matters submitted to a vote of stockholders of the
Corporation.
c. Except as set forth herein or as otherwise
provided by law, holders of Series C Preferred Stock shall have no voting
rights.
3. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series C
Preferred Stock unless, prior thereto, the holders of shares of Series C
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series C
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GMO Stock, or (2) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
C Preferred Stock, except distributions made ratably on the Series C Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
June 12, 1997 declare or pay any dividend on any shares of GMO Stock payable in
shares of GMO Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GMO Stock (by reclassification or otherwise than by
payment of a dividend in shares of GMO Stock) into a greater or lesser number of
shares of GMO Stock, then in each such case the aggregate amount to which
holders of shares of Series C Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GMO Stock outstanding immediately after such event and the
denominator of which is the number of shares of GMO Stock that were outstanding
immediately prior to such event.
4. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
Common Shares are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series C
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of GMO Stock is changed or exchanged. In the event the Corporation
shall at any time after June 12, 1997 declare or pay any dividend on shares of
GMO Stock payable in shares of GMO Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of GMO Stock (by reclassification or
otherwise than by payment of a
- 52 -
57
dividend in shares of GMO Stock) into a greater or lesser number of shares of
GMO Stock, then in each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series C Preferred Stock
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of GMO Stock outstanding immediately after such
event and the denominator of which is the number of shares of GMO Stock that
were outstanding immediately prior to such event.
E. GENERAL PROVISIONS. Except as otherwise specifically provided in a
particular series of Junior Preferred Stock, the following provisions shall
apply to all series of Junior Preferred Stock:
1. Certain Restrictions.
--------------------
a. Whenever quarterly dividends or other dividends or
distributions payable on the Junior Preferred Stock are in arrears, thereafter
and until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Junior Preferred Stock outstanding shall have been paid
in full, the Corporation shall not:
(1) declare or pay dividends, or make any
other distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Junior
Preferred Stock;
(2) declare or pay dividends, or make any
other distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Junior
Preferred Stock, except dividends paid ratably on the Junior Preferred Stock and
all such parity stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are then entitled;
(3) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Junior Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Junior Preferred Stock; or
(4) redeem, purchase or otherwise acquire
for consideration any shares of Junior Preferred Stock, or any shares of stock
ranking on a parity with the Junior Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among the
respective series or classes.
b. The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation
- 53 -
58
unless the Corporation could, under paragraph a. of this paragraph E.1. purchase
or otherwise acquire such shares at such time and in such manner.
▇. ▇▇▇▇▇▇▇▇▇▇ SHARES. Any shares of Junior Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired
and cancelled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as shares of the same series of Preferred Stock or as part of a
new series of Preferred Stock, subject to the conditions and restrictions on
issuance set forth herein, in the Articles of Organization, in any other vote of
the Board of Directors of the Corporation creating a series of Preferred Stock,
or as otherwise required by law.
G. REDEMPTION. The shares of Junior Preferred Stock shall not be
redeemable.
H. RANK. The Series A Preferred Stock, the Series B Preferred Stock and
the Series C Preferred Stock shall rank equally with respect to the payment of
dividends and the distribution of assets together with any other series of the
Corporation's Preferred Stock that specifically provide that they shall rank
equally with Junior Preferred Stock. The Junior Preferred Stock shall rank
junior with respect to the payment of dividends and the distribution of assets
to all series of the Corporation's Preferred Stock that specifically provide
that they shall rank prior to the Junior Preferred Stock. Nothing herein shall
preclude the Board from creating any series of Preferred Stock ranking on a
parity with or prior to the Junior Preferred Stock as to the payment of
dividends or the distribution of assets.
I. AMENDMENT. The Articles of Organization of the Corporation shall not
be amended in any manner which would materially alter or change the powers,
preferences or special rights of the holders of Junior Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at least
two-thirds of each outstanding series of Junior Preferred Stock, voting together
as a single series, provided that, any two or more series of Junior Preferred
Stock that are adversely affected in the same manner shall vote together as a
single class.
J. FRACTIONAL SHARES. The Junior Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of the Junior Preferred Stock.
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59
Exhibit B
---------
Form of Right Certificate
-------------------------
Certificate No [GGD/GTR/GMO]R- _________ Rights
NOT EXERCISABLE AFTER MARCH 28, 1999 OR EARLIER IF REDEMPTION
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.005 PER
RIGHT IN THE CASE OF THE GGD STOCK RIGHTS AND $.01 PER RIGHT
IN THE CASE OF THE GTR STOCK RIGHTS AND GMO STOCK RIGHTS, ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES (SPECIFIED IN SECTION 7(e) AND 11(a)(ii) OF THE
RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) OR
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE WERE ISSUED
TO A PERSON WHO WAS AN ACQUIRING PERSON OR AN AFFILIATE OR AN
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES
SPECIFIED IN THE RIGHTS AGREEMENT, INCLUDING SECTION 7(e) AND
SECTION 11(a)(ii) THEREOF.]1
Right Certificate
GENZYME CORPORATION
This certifies that __________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Amended and Restated Rights Agreement, dated as of June 12, 1997 (the "Rights
Agreement"), between Genzyme Corporation, a Massachusetts corporation (the
"Company"), and [ ] (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M., Massachusetts time, on
March 28, 1999 at the office of the Rights Agent designated for such purposes,
or at the office of its successor as Rights Agent, one one-hundredth of a fully
paid non-assessable share of Series
--------
1The portion of the legend in brackets shall be inserted only if applicable.
- 55 -
60
[A/B/C] Junior Participating Preferred Stock (the "Preferred Shares") of the
Company, at a purchase price of $[26.00/25.00/21.00] per one one-hundredth of a
Preferred Share (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase and related Certificate
duly executed. The number of Rights evidenced by this Right Certificate (and the
number of one one-hundredths of a Preferred Share which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of June 12, 1997, based on the Preferred Shares
as constituted at such date.
Upon the occurrence of a Triggering Event (as such term is defined in
the Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of any such Triggering
Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of Preferred Shares or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purposes, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
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61
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may, but are not required to, be redeemed by the Company at
a redemption price of $.01 per Right.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ____________,19__.
[CORPORATE SEAL]
GENZYME CORPORATION
ATTEST
_________________________________ By_________________________________
Clerk
Countersigned:
[ ]
By_______________________________
Authorized Signature
- 57 -
62
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ___________________________________________
_______________________________________hereby sells, assigns and transfers
unto ___________________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________________Attorney,
to transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _____________________, 19__
__________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor Institution, as
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934.
--------------------------------------------------------------------------------
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
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63
Form of Reverse Side of Right Certificate -- continued
--------------------------------------------------------------------------------
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ___________________, 19__ _________________________________
Signature
NOTICE
------
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
--------------------------------------------------------------------------------
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate.)
To: GENZYME CORPORATION
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance
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64
Form of Reverse Side of Right Certificate -- continued
--------------------------------------------------------------------------------
remaining 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 must conform in all respects to
name of holder as specified on the face of
this Right Certificate in every particular,
without alteration or enlargement or any
change whatsoever)
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
--------------------------------------------------------------------------------
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any
3
65
Form of Reverse Side of Right Certificate -- continued
--------------------------------------------------------------------------------
such Acquiring Person (as such terms are defined pursuant to the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: _________________, 19__ ____________________________________________
Signature
--------------------------------------------------------------------------------
NOTICE
------
The signatures in the foregoing Forms of Assignment and Election must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the Certificates set forth above in the Forms of
Assignment and Election are not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
and in the case of an Assignment, will affix a legend to that effect on any
Right Certificates issued in exchange for this Right Certificate.
4