EXHIBIT 10.12
FORM OF
STOCKHOLDER PROTECTION AGREEMENT
dated as of
February __, 1998
between
AMERICAN MEDICAL PROVIDERS, INC.
and
as Rights Agent
FORM OF
STOCKHOLDER PROTECTION AGREEMENT
TABLE OF CONTENTS
PAGE
ARTICLE I - CERTAIN DEFINITIONS............................................ 1
1.1 Certain Definitions............................................ 1
ARTICLE II - THE RIGHTS.................................................... 6
2.1 Summary of Rights.............................................. 6
2.2 Legend on Stock Certificates................................... 6
2.3 Exercise Price; Exercise of Rights; Detachment of Rights....... 7
2.4 Adjustments to Exercise Price; Number of Rights; Securities
Purchasable.................................................... 9
2.5 Date On Which Exercise Is Effective............................ 12
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates................................................... 12
2.7 Registration, Registration of Transfer and Exchange............ 12
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates...... 13
2.9 Persons Deemed Owners.......................................... 14
2.10 Delivery and Cancellation of Certificates...................... 14
2.11 Agreements of Rights Holders................................... 14
2.12 Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.................................................. 15
2.13 Certificate of Adjusted Exercise Price or Number of Shares..... 16
ARTICLE III - THE RIGHTS AGENT............................................. 17
3.1 General........................................................ 17
3.2 Merger or Consolidation or Change of Name of Rights Agent...... 17
3.3 Duties of Rights Agent......................................... 18
ARTICLE IV - MISCELLANEOUS................................................. 21
4.1 Redemption, Termination and Exchange........................... 21
4.2 Provision in Event of Insufficient Shares of Series A
Preferred Stock................................................ 22
4.3 Issuance of New Rights Certificates............................ 22
4.4 Supplements and Amendments..................................... 23
4.5 Fractional Shares.............................................. 23
4.6 Transactions After the Separation Time......................... 23
4.7 Rights of Action............................................... 23
4.8 Holder of Rights Not Deemed a Stockholder...................... 24
4.9 Notice of Proposed Actions..................................... 24
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4.10 Notices........................................................ 24
4.11 Costs of Enforcement........................................... 25
4.12 Successors..................................................... 25
4.13 Benefits of this Agreement..................................... 25
4.14 Descriptive Headings........................................... 25
4.15 Governing Law.................................................. 25
4.16 Counterparts................................................... 25
4.17 Severability................................................... 26
EXHIBITS
Exhibit A Form of Certificate of Designation, Preferences and Rights
of Series A Junior Participating Preferred Stock
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FORM OF
STOCKHOLDER PROTECTION AGREEMENT
This Stockholder Protection Agreement (the "Agreement"), is entered into
as of February __, 1998, between AMERICAN MEDICAL PROVIDERS, INC., a Delaware
corporation (the "Company") , and ___________________________________, as Rights
Agent (the "Rights Agent", which term shall include any successor Rights Agent
hereunder).
WHEREAS, on February __, 1998, the Board of Directors of the Company
adopted a stockholder protection plan designed to provide protection to the
Company's stockholders in the event any person should attempt to acquire a 15%
or greater equity interest in the Company at a price, under circumstances or on
terms that are not in the best interests of the Company and its stockholders;
WHEREAS, the Board of Directors of the Company has (a) authorized and
declared a dividend of one contingent preferred stock purchase right ("Right")
in respect of each share of Common Stock (as hereinafter defined) held of record
as of the close of business on _________________________ (the "Record Time") and
(b) authorized the issuance of one Right in respect of each share of Common
Stock that shall become outstanding after the Record Time and prior to the
Separation Time (as hereinafter defined);
WHEREAS, each Right entitles the holder thereof, after the Separation
Time, to purchase that number of Units (as hereinafter defined) of a share of
the Company's Series A Preferred Stock (as hereinafter defined) which equals the
quotient obtained by dividing the Exercise Price (as hereinafter defined) by
fifty percent (50%) of the Market Price (as hereinafter defined) per share of
Common Stock, pursuant to the terms and subject to the conditions set forth
herein; and
WHEREAS, the Company desires to appoint the Rights Agent to act on behalf
of the Company, and the Rights Agent is willing to so act, in connection with
the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
the parties hereto agree as follows:
ARTICLE I - CERTAIN DEFINITIONS
I.1 CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who has (i) acquired or
obtained the right to acquire Beneficial Ownership of 15% or more of the
outstanding shares of Common Stock or (ii) has commenced or announced an
intention to commence a tender or exchange offer which would result in that
Person obtaining Beneficial Ownership of 15% or more of the outstanding shares
of Common Stock; PROVIDED, HOWEVER, that the term "Acquiring Person" shall not
include the Company, any wholly-owned Subsidiary of the Company, any employee
stock
ownership or other employee benefit plan of the Company or of a Subsidiary of
the Company (a "Plan"), any Person holding Common Stock for or pursuant to the
terms of any such Plan or any Exempted Person. Notwithstanding the foregoing,
any Person who acquires the Beneficial Ownership of 15% or more of the shares of
Common Stock of the Company either (i) by reason of share purchases by the
Company reducing the number of shares of Common Stock outstanding (provided such
Person does not acquire additional shares of Common Stock), or (ii)
inadvertently, if such Person notifies the Board of Directors of such
inadvertent purchase within five business days and within two business days
after such notice divests itself of enough shares of Common Stock so as to no
longer have the Beneficial Ownership of 15% of the outstanding Common Stock,
will not be an Acquiring Person.
(b) "Affiliate," when used to indicate a relationship with a
specified Person, shall mean a Person that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, such specified Person.
(c) "Associate" of a specified Person shall mean (i) any
corporation, partnership or other organization of which such specified Person is
an officer or partner or is, directly or indirectly, the Beneficial Owner of 10%
or more of any class of equity securities, (ii) any trust or other estate in
which such specified Person has a substantial beneficial interest or as to which
such specified Person serves as trustee or in a similar fiduciary capacity,
(iii) any relative or spouse of such specified Person, or any relative of such
spouse, who has the same home as such specified Person or who is a director or
officer of the Company or an Affiliate of the Company and (iv) any Person who is
a director, officer, partner or trustee of such specified Person or of any
corporation, partnership or other organization (other than the Company or any
wholly-owned Subsidiary of the Company) that is an Affiliate or Associate of
such specified Person.
(d) A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership", of, and to "Beneficially Own", any securities as to
which such Person or any of such Person's Affiliates or Associates is or may be
deemed to be the Beneficial Owner pursuant to Rule 13d-3 or Rule 13d-5 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (or pursuant to
any comparable or successor laws or regulations or, if such Rules shall be
rescinded and there shall be no comparable or successor laws or regulations,
pursuant to Rule 13d-3 or Rule 13d-5 as in effect on the date of this
Agreement), as well as any securities as to which such Person or any of such
Person's Affiliates or Associates has the right to become a Beneficial Owner
(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),
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" or to have "Beneficial Ownership", of or to
"Beneficially Own" any security (i) solely because such Person or any of such
Person's Affiliates or Associates has or shares the power to vote or direct the
voting of such security pursuant to a revocable proxy given in response to a
public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations under the Exchange Act, except if such
power (or the arrangements relating thereto) is then reportable under Item 6 of
Schedule 13D under the Exchange Act (or any similar provision of a comparable or
successor report) or (ii) held for or
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pursuant to the terms of any Plan; and provided, however, that nothing in this
paragraph 1.1(d) shall cause a Person engaged in business as an underwriter of
securities to be the Beneficial Owner of, to have Beneficial Ownership of, or to
Beneficially Own, any securities acquired through such Person's participation in
good faith in a firm commitment underwriting until the expiration of 40 days
after the date of such acquisition. For purposes of this Agreement, in
determining the percentage of the outstanding shares of Common Stock with
respect to which a Person is the Beneficial Owner, all shares as to which such
Person is deemed the Beneficial Owner shall be deemed outstanding.
(e) "Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in the City of New York are generally
authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given day shall mean the time on such
date (or, if such date is not a Business Day, the time on the next succeeding
Business Day) at which the offices of the transfer agent for the Common Stock
(or, after the Separation Time, the offices of the Rights Agent) are closed to
the public.
(g) "Common Stock" shall mean the Class A Common Stock, par value
$0.001 per share, of the Company and the Class B Common Stock, par value $0.001
per share, of the Company.
(h) "Exempted Person" shall mean any Institutional Investor, any
Minority Investor and the Strategic Investor. Notwithstanding the foregoing, if
(i) any Institutional Investor or Minority Investor acquires Beneficial
Ownership of the outstanding Common Stock in excess of that percentage expressly
approved in writing by the Board of Directors of the Company or (ii) the
Strategic Investor acquires Beneficial Ownership of the outstanding Common Stock
in excess of the greater of 25% or the Minority Percentage, either (y) by reason
of share purchases by the Company reducing the number of shares of Common Stock
outstanding (provided such Exempted Person does not acquire additional shares of
Common Stock) or (z) inadvertently, if such Exempted Person notifies the Board
of Directors of such inadvertent purchase within five business days and within
two business days after such notice divests itself of enough shares of Common
Stock so as to no longer have the Beneficial Ownership of the outstanding Common
Stock in excess of the specified percentages, such Institutional Investor,
Minority Investor or Strategic Investor will not cease to be an Exempted Person.
(i) "Exercise Price" shall initially be $ , subject to adjustment
from time to time as provided in Section 2.4 hereof.
(j) "Expiration Time" shall be (i) the Close of Business on .
(k) "Institutional Investor" shall mean any Person (together with
such Institutional Investor's Affiliates and Associates) (i) who, with the
express written approval of the Board of Directors of the Company, acquires
aggregate Beneficial Ownership of 15% or more but
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not more than 20% of the outstanding Common Stock of the Company, PROVIDED,
HOWEVER, that the Institutional Investor acquires such Beneficial Ownership in
the ordinary course of business and not with the purpose nor with the effect of
changing or influencing the control of the Company, nor in connection with or as
a participant in any transaction having such purpose or effect, including any
transaction subject to Rule 13d-3(b) of the Exchange Act, and (ii) who is: (A) a
broker or dealer registered under Section 15 of the Exchange Act; (B) a bank as
defined in Section 3(a)(6) of the Exchange Act; (C) an insurance company as
defined in Section 3(a)(19) of the Exchange Act; (D) an investment company
registered under Section 8 of the Investment Company Act of 1940; (E) an
investment adviser registered under Section 203 of the Investment Advisers Act
of 1940; (F) an employee benefit plan or pension fund which is subject to the
provisions of the Employee Retirement Income Security Act of 1974 or an
endowment fund; (G) a parent holding company, provided the aggregate amount held
directly by the parent, and directly and indirectly by its subsidiaries which
are not persons specified in Rule 13d-1(b)(ii)(A) through (F) of the Exchange
Act, does not exceed one percent of the securities of the subject class; or (H)
a group, provided that all the members are persons specified in Rule
13d-1(b)(ii)(A) through (G) of the Exchange Act.
(l) "Market Price" per share of Common Stock on any date of
determination shall mean the average of the daily closing prices per share of
Common Stock (determined as described below) on each of the 20 consecutive
Trading Days through and including the fifth Trading Day immediately preceding
such determination date; provided, however, that if the first public
announcement of an event described in Section 2.4 hereof occurs within such 20
Trading Day period, Market Price per share of Common Stock on such determination
date shall mean the average of the daily closing prices per share of Common
Stock on each Trading Day from and including the day after the date of such
announcement through and including the fifth Trading Day immediately preceding
such determination date. The closing price per share of Common Stock on any date
shall be the last sale price, regular way, or, in case no such sale takes place
on such date, the average of the closing bid and asked prices, regular way, for
each share of Common Stock, 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 Stock is
not then 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 Stock is listed or admitted to trading or, if the Common Stock is not
then listed or admitted to trading on any national securities exchange, the
average of the high bid and low asked prices for each share of Common Stock in
the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
system then in use, or, if on any such date the Common Stock is not then quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common Stock
selected by the Board of Directors of the Company; provided, however, that if on
any such date the Common Stock is not listed or admitted for trading on a
national securities exchange or traded in the over-the-counter market, the
closing price per share of Common Stock on such date shall mean the fair value
per share of Common Stock on such date as determined in good faith by the Board
of Directors of the Company, after consultation with a nationally recognized
investment banking firm with respect to the fair value per share of Common
Stock. Market Price per share of Series A Preferred Stock on any date of
determination shall be determined in the same manner set forth above for Common
Stock, other than as provided in the second proviso thereto. If the Market Price
per share of Series A
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Preferred Stock cannot be determined in the manner provided above, or if the
Series A Preferred Stock is not publicly held or listed or traded in a manner
described above, the Market Price per share of Series A Preferred Stock shall be
conclusively deemed to be an amount equal to 100 (as such number may be
appropriately adjusted for such events as subdivisions or combinations of stock,
stock dividends and recapitalizations with respect to the Common Stock occurring
after the date of this Agreement) multiplied by the Market Price per share of
Common Stock. If neither the Common Stock nor the Series A Preferred Stock is
publicly held or listed or traded, Market Price per share shall mean the fair
value per share as determined in good faith by the Board of Directors of the
Company, after consultation with a nationally recognized investment banking firm
with respect to the fair value per share of Series A Preferred Stock. Market
Price of a Unit shall be equal to the Market Price of one share of Series A
Preferred Stock divided by 100.
(m) "Minority Investor" shall mean any Person (together with such
Minority Investor's Affiliates and Associates) who, with the express, written
approval of the Board of Directors of the Company, acquires aggregate Beneficial
Ownership of 15% or more but less than 50% of the outstanding Common Stock of
the Company.
(n) "Minority Percentage" shall mean the greatest percentage of the
outstanding Common Stock Beneficially Owned by any single Minority Investor or
the greatest percentage which the Board has authorized any Minority Investor to
Beneficially Own without becoming an Acquiring Person.
(o) "Person" shall mean any individual, firm, partnership,
association, group (as such term is used in Rule 13d-5 under the Exchange Act,
as in effect on the date of this Agreement), corporation or other entity.
(p) "Series A Preferred Stock" shall mean the Series A Junior
Participating Preferred Stock, par value $0.001 per share, of the Company having
the rights, powers, privileges and restrictions, qualifications and limitations
set forth in the Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock in the form attached as EXHIBIT A.
[(q) "Series B Preferred Stock" shall mean the Series B Convertible
Preferred Stock, par value $0.10 per share, of the Company.]
(r) "Separation Time" shall mean the Close of Business on the tenth
Business Day after (i) a public announcement establishing that an Acquiring
Person has become such or (ii) a resolution by the Board of Directors stating
that the majority of the Board of Directors is aware that a Person has become an
Acquiring Person, provided that if the foregoing results in the Separation Time
being prior to the Record Time, the Separation Time shall be extended to the
Record Time.
(s) "Subsidiary" of any specified Person shall mean any corporation
or other
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entity of which a majority of the voting power of the equity securities or a
majority of the equity interest is Beneficially owned, directly or indirectly,
or otherwise controlled by such Person.
(t) "Trading Day" shall mean a day on which the principal national
securities exchange or over-the-counter market on which the Common Stock is
listed or admitted to trading is open for the transaction of business or, if the
Common Stock is not then listed or admitted to trading on any national
securities exchange or over-the-counter market, a Business Day.
(u) "Voting Stock" shall mean (i) a Unit of Series A Preferred
Stock, (ii) a share of Common Stock and (iii) any other share of capital stock
of the Company entitled to vote generally in the election of directors or
entitled to vote together with the Common Stock in respect of any merger,
consolidation, sale of all or substantially all of the Company's assets,
liquidation, dissolution or winding up.
(v) A "Unit" of Series A Preferred Stock shall mean one
one-hundredth of a share of Series A Preferred Stock.
ARTICLE II - THE RIGHTS
II.1 SUMMARY OF RIGHTS. As soon as practicable after the date hereof, the
Company will mail to each holder of record of Common Stock as of the Record
Time, at such holder's address as shown by the records of the Company, a copy of
a Summary of Stockholder Protection Agreement in substantially the form attached
as EXHIBIT D.
II.2 LEGEND ON STOCK CERTIFICATES. Certificates for the Common Stock
issued after the Record Time but prior to the close of business on the
Separation Time shall evidence one Right for each share of Common Stock
represented thereby and shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
Until the earlier of the Separation Time or the Expiration Time (as such
terms are defined in the Stockholder Protection Agreement referred to
below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Stockholder Protection Agreement, dated
as of October __, 1997 as amended, supplemented or otherwise modified from
time to time, (the "Stockholder Protection Agreement"), between American
Medical Providers, Inc. (the "Company") and __________________________ ,
the terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of the Company.
Under certain circumstances, as set forth in the Stockholder Protection
Agreement, such Rights may expire, may become void (if they are
"Beneficially Owned" by an "Acquiring Person" or an "Affiliate" or
"Associate" thereof, as such terms are defined in the Stockholder
Protection Agreement, or a transferee of any of the foregoing) or may be
evidenced by separate certificates and may no longer be evidenced by this
certificate. The Company will mail or arrange for the mailing of a copy of
the Stockholder Protection Agreement to the holder of this certificate
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without charge within five days after the receipt of a written request
therefor.
Notwithstanding the absence of the foregoing legend, certificates representing
shares of Common Stock that are issued and outstanding at the Record Time shall
evidence one Right for each share of the Common Stock evidenced thereby.
II.3 EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS.
(a) Subject to the terms and conditions of this Agreement, after the
Separation Time, each Right will entitle the holder thereof to receive, upon the
exercise thereof and payment of the Exercise Price, that number of Units of
Series A Preferred Stock which equals the quotient obtained by dividing the
Exercise Price by fifty percent (50%) of the Market Price per share of Common
Stock at the Separation Time, which number and type of securities are subject to
adjustment as provided in Section 2.12 hereof and in Section 2.4 hereof. The
Company shall calculate the Exercise Price and provide the Rights Agent with
notice of such Exercise Price immediately after the Separation Time.
(b) Until the Separation Time, (i) no Right may be exercised and
(ii) each Right will be evidenced by the certificate for the associated share of
Common Stock (together, in the case of certificates issued prior to the Record
Time, with the letter or other communication mailed to each holder of record of
Common Stock pursuant to Section 2.1 hereof) and will be transferable and/or
convertible only together with, and will be transferred by a transfer or a
conversion of, such associated share (whether with or without such letter or
other communication)
(c) After the Separation Time and prior to the Expiration Time, and
subject to the provisions of clause (g) and the second paragraph of clause (h)
of this Section 2.3, the Rights (i) may be exercised and (ii) will be
transferable independently of the Common Stock. As soon as practicable following
the Separation Time, the Rights Agent will mail to each holder of record of
Common Stock as of the Separation Time (other than a holder known by the Rights
Agent to be an Acquiring Person or an Affiliate or Associate thereof), at such
holder's address as shown by the records of the Company (the Company hereby
agreeing to furnish copies of such records to the Rights Agent for this
purpose), (x) a certificate (a "Rights Certificate") in substantially the form
of EXHIBIT C hereto appropriately completed, representing the number of Rights
held by such holder at the Separation Time and having 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
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or quotation system on which the Rights may
from time to time be listed or traded, or to conform to usage, and (y) a
disclosure statement describing the Rights.
(d) Subject to the provisions of clause (g) and the second paragraph
of clause (h) of this Section 2.3, Rights may be exercised on any Business Day
after the Separation Time and prior to the Expiration Time by submitting to the
Rights Agent the Rights Certificate evidencing such Rights with an Election to
Purchase (an "Election to Purchase") and certificate substantially in
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the form attached to the Rights Certificate duly completed, accompanied by
payment of the Exercise Price multiplied by the number of Rights being exercised
and a sum sufficient to cover any transfer tax or charge that may be payable in
respect of any transfer involved in the transfer or delivery of Rights
Certificates or the issuance or delivery of certificates for Series A Preferred
Stock or depositary receipts (or both) in a name other than that of the holder
of the Rights being exercised. Payment of the Exercise Price for the Units
purchased upon the exercise of the Rights hereunder shall be made by delivery to
the Company of (i) money order or check to the order of the Company, (ii) Common
Stock, (iii) Rights to purchase Units of the Company's Series A Preferred Stock
or (iv) in such other form as the determined by the Board of Directors of the
Company, in each case in an amount equal to the aggregate Exercise Price of such
Rights. For the purposes of the preceding sentence, (x) Common Stock shall be
valued at its Market Price and (y) Rights to purchase Units of the Company's
Series A Preferred Stock shall be valued at an amount equal to the fair market
value of the Units subject to the Rights (as determined by the Company's Board
of Directors) less the Exercise Price.
(e) Upon receipt of a Rights Certificate, with an Election to
Purchase and certificate duly executed accompanied by payment as set forth in
Section 2.3(d) above, and subject to the provisions of clause (g) and the second
paragraph of clause (h) of this Section 2.3, the Rights Agent will thereupon
promptly (i)(A) requisition from the Company's transfer agents certificates for
the number of shares of stock to be purchased (the Company hereby irrevocably
authorizing its transfer agents to comply with all such requisitions) and (B) if
the Company elects pursuant to Section 4.5 hereof not to issue certificates
representing fractional shares of stock, requisition from the depositary
selected by the Company cash or depositary receipts, as the case may be,
representing the fractional shares of stock to be purchased and (ii) after
receipt of such certificates or depositary receipts, deliver such certificates
or depositary receipts to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder.
(f) If the holder of any Rights shall exercise fewer than all the
Rights evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing the Rights remaining unexercised will be issued by the Rights Agent
to such holder or to such holder's duly authorized assigns, subject to the
provisions of Section 4.5 hereof.
(g) Anything in this Agreement or in the Rights Certificates to the
contrary notwithstanding, Rights Beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof or any transferee of any of the foregoing cannot
validly be transferred or exercised and shall be for all purposes void.
(h) The Company covenants and agrees that it will (i) cause to be
reserved and kept available until the Expiration Time out of its authorized and
unissued shares of capital stock a number of shares of Series A Preferred Stock
and/or Common Stock or other preferred stock or equity securities of the Company
satisfactory for delivery pursuant to Section 4.2 hereof, sufficient to permit
the exercise in full of all outstanding Rights; (ii) take all such action as may
be necessary to ensure that all shares delivered upon exercise of Rights shall,
at the time of delivery of the
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certificates for such shares (subject to payment of the Exercise Price) , be
duly and validly authorized, executed, issued and delivered and fully paid and
nonassessable; (iii) take all such action as may be necessary to comply with any
applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act") , and the Exchange Act, and the rules and regulations
thereunder, and any other applicable law, rule or regulation, in connection with
the issuance of any shares upon exercise of Rights; (iv) use its best efforts to
cause all shares issued upon exercise of Rights to be listed on a national
securities exchange or traded in the over-the-counter market and quoted on
NASDAQ upon issuance; and (v) pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of Rights, provided that the Company shall not be required to pay any
transfer tax or charge that may be payable in respect of any transfer involved
in the transfer or delivery of Rights Certificates or the issuance or delivery
of certificates for shares in a name other than that of the holder of the Rights
being transferred or exercised.
The Company may temporarily suspend, at any time, the exercisability of
the Rights for such period of time as may be reasonably necessary to prepare and
file such documents and to perform such acts as are required to ensure
compliance with the Securities Act, the Exchange Act, the rules and regulations
thereunder, the "blue sky" laws of the various states and any other applicable
law, rule or regulation, as provided in clause (iii) above. The Company may also
suspend such exercisability for such period of time as may be reasonably
necessary to permit any registration statement or statements required by the
Securities Act or the Exchange Act or any registration or qualification required
by any other applicable law, rule or regulation, to be effective with respect to
any securities to be issued upon exercise of Rights. Upon any suspension of
exercisability, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained or the exercise thereof shall not be permitted under
applicable law.
II.4 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS; SECURITIES
PURCHASABLE.
(a) If the Company shall at any time after the Record Time and prior
to the Expiration Time (i) declare or pay a dividend on Common Stock payable in
Common Stock (or other capital stock), (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller number of
shares of Common Stock, the Exercise Price and number of Rights outstanding, or,
if the payment or effective date therefor shall occur after the Separation Time,
the securities purchasable upon exercise of Rights shall be adjusted in the
manner set forth below. If the Exercise Price and number of Rights are to be
adjusted, (x) the Exercise Price in effect after such adjustment will be equal
to the Exercise Price in effect immediately prior to such adjustment divided by
the number of shares of Common Stock (or other capital stock) (the "Expansion
Factor") that a holder of one share of Common Stock immediately prior to such
dividend, subdivision or combination would hold thereafter as a result thereof
and (y) each Right held prior to such adjustment will become that number of
Rights equal to the Expansion Factor, and the adjusted number of Rights will be
deemed to be distributed among the shares of Common Stock
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with respect to which the original Rights were associated (if they remain
outstanding) and the shares issued in respect of such dividend, subdivision or
combination, so that each such share of Common Stock will have exactly one Right
associated with it. If the securities purchasable upon exercise of Rights are to
be adjusted, the securities purchasable upon exercise of each Right after such
adjustment will be the securities that a holder of the securities purchasable
upon exercise of one Right immediately prior to such dividend, subdivision or
combination would hold immediately thereafter. If after the Record Time and
prior to the Expiration Time the Company shall issue any shares of capital stock
other than Common Stock in a transaction of a type described in the first
sentence of this Section 2.4 (a) or shall issue any Voting Stock in a
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), shares of such capital stock shall be treated herein
as nearly equivalent to shares of Common Stock as may be practicable and
appropriate under the circumstances and the Company and the Rights Agent agree
to amend this Agreement to effect such treatment.
If the Company shall at any time after the Record Time and prior to the
Separation Time issue any shares of Common Stock otherwise than in a transaction
referred to in the preceding paragraph or in Section 2.4 (b) hereof, each such
share of Common Stock so issued shall automatically have one new Right
associated with it, which Right shall be evidenced by the certificate
representing such share.
(b)(i) If the Company shall at any time after the Record Time and
prior to the Expiration Time (A) declare or pay any dividend on the Series A
Preferred Stock payable in Voting Stock, (B) subdivide the outstanding Series A
Preferred Stock, (C) combine the outstanding Series A Preferred Stock into a
smaller number of shares of Series A Preferred Stock or (D) issue Voting Stock
in a reclassification of the Series A Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, and in each such
event, the number and kind of Units of Series A Preferred Stock or other
securities issuable upon the exercise of a Right on such date shall be
proportionately adjusted so that the holder of any Right exercised on or after
such date shall be entitled to receive, upon the exercise thereof and payment of
the Exercise Price, the aggregate number and kind of Units of Series A Preferred
Stock or other securities or other property, as the case may be, that, if such
Right had been exercised immediately prior to such date and at a time when such
Right was exercisable and the transfer books of the Company were open, such
holder would have owned upon such exercise and would have been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs on or prior to the Separation Time that
would require an adjustment under this Section 2.4(b)(i), the adjustment
provided for in this Section 2.4(b)(i) shall be made prior to giving effect to
Section 2.3(a) or Section 2.12 hereof.
(ii) If the Company shall at any time after the Record Time and
prior to the Expiration Time fix a record date for the making of a distribution
to all holders of Series A Preferred Stock (including any such distribution made
in connection with a consolidation or merger in which the Company is the
surviving corporation) of securities or assets (other than a distribution solely
of Voting Stock for which an adjustment is required under Section 2.4 (b)(i)
hereof or a
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regular quarterly cash dividend), the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be equal to the difference of the Market Price per share of Series A
Preferred Stock on such record date minus the fair market value of the portion
of the securities or assets to be so distributed applicable to one share of
Series A Preferred Stock, and the denominator of which shall be equal to such
Market Price per share of Series A Preferred Stock. Such adjustments shall be
made successively whenever such a record date is fixed, and if such a
distribution is not so made, the Exercise Price shall be adjusted to be the
Exercise Price that would then be in effect if such record date had not been
fixed. If the Company fixes a record date for the making of a distribution of
both Voting Stock and other securities or assets (other than a regular quarterly
cash dividend), such that the provisions of Section 2.4(b)(i) and Section
2.4(b)(ii) hereof would otherwise be applicable, then the provisions of each
such section shall be applicable to each such distribution, respectively,
according to the terms of each such section. If an event occurs on or prior to
the Separation Time that would require an adjustment under this Section
2.4(b)(ii), the adjustment provided for in this Section 2.4(b)(ii) shall be made
prior to giving effect to Section 2.3(a) or Section 2.12 hereof.
(c) Each adjustment made pursuant to this Section 2.4 shall be made
as of (i) the record date for the applicable issuance and distribution, in the
case of an adjustment made pursuant to Section 2.4(b) above, and (ii) the
payment or effective date for the applicable dividend, subdivision or
combination, in the case of an adjustment made pursuant to Section 2.4(a) above.
(d) Each adjustment to the Exercise Price made pursuant to this
Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment to
the Exercise Price is made pursuant to this Section 2.4, the Company shall (i)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (ii) promptly file with
the Rights Agent and with the transfer agent for the Series A Preferred Stock,
if any, and the transfer agent for the Common Stock, a copy of such certificate
and (iii) mail a brief summary thereof to each holder of Rights.
(e) Irrespective of any adjustment or change in the securities
purchasable upon exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the securities so purchasable that
were expressed in the initial Rights Certificates issued hereunder.
II.5 DATE ON WHICH EXERCISE IS EFFECTIVE. Each person in whose name any
certificates for shares are issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Exercise Price for such Rights (and any applicable taxes and other governmental
charges payable by the exercising holder hereunder) was made; provided, however,
that if the date of such surrender and payment is a date upon which the stock
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 stock transfer books of
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the Company are open.
II.6 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS
CERTIFICATES.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or one of its Vice Presidents,
under its corporate seal reproduced thereon attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the Rights
certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature and delivery of such Rights
Certificates.
Promptly after the Company learns of the Separation Time, the Company will
notify the Rights Agent of such Separation Time and will deliver Rights
Certificates executed by the Company to the Rights Agent for countersignature,
and the Rights Agent shall manually countersign and deliver such Rights
Certificates to the holders of the Rights pursuant to Section 2.3(c) hereof. No
Rights Certificate shall be valid for any purpose until manually countersigned
by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
II.7 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Company will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company will provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of maintaining the
Rights Register for the Company and registering Rights and transfers of Rights
as herein provided. If the Rights Agent shall cease to be the Rights Registrar,
the Rights Agent will have the right to examine the Rights Register at all
reasonable times.
After the Separation Time and prior to the Expiration Time, upon surrender
for registration of transfer or exchange of any Rights Certificate, and subject
to the provisions of Sections 2.3(g) and 2.7(c) hereof, the Company will
execute, and the Rights Agent will countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required pursuant to the
holder's instructions, one or more new Rights Certificates evidencing the same
aggregate number of Rights as did the Rights Certificate so surrendered.
(b) Subject to the provisions of Section 2.3(g) hereof, all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be entitled
to the same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
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(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent,
as the case may be, duly executed by the holder thereof or such holder's
attorney-in-fact duly authorized in writing. As a condition to the issuance of
any new Rights Certificate under this Section 2.7, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto.
II.8 MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES.
(a) If any mutilated Rights Certificate is surrendered to the Rights
Agent prior to the Expiration Time, the Company shall execute and the Rights
Agent shall countersign and deliver in exchange therefor a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so surrendered.
(b) If there shall be delivered to the Company and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, in the absence of notice to the Company or the Rights
Agent that such Rights Certificate has been acquired by a bona fide purchaser,
the Company shall execute and upon its request the Rights Agent shall
countersign and deliver, in lieu of any such destroyed, lost or stolen Rights
Certificate, a new Rights Certificate evidencing the same number of Rights as
did the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate
under this Section 2.8, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Rights
Agent) connected therewith.
(d) Subject to the provisions of section 2.3(g) hereof, every new
Rights Certificate issued pursuant to this Section 2.8 in lieu of any destroyed,
lost or stolen Rights Certificate shall evidence an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Rights Certificate shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Agreement equally and proportionately
with any and all other Rights duly issued hereunder.
II.9 PERSONS DEEMED OWNERS. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights Agent may deem and treat the person in whose
name such Rights Certificate (or, prior to the Separation Time, such Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever. As used in this Agreement, unless
the context otherwise requires, the term "holder" of any Right shall mean the
registered holder of such Rights (or, prior to the Separation Time, the
associated shares of Common Stock).
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II.10 DELIVERY AND CANCELLATION OF CERTIFICATES. All Rights Certificates
surrendered upon exercise or for redemption, registration or transfer or
exchange shall, if surrendered to any person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly cancelled by
the Rights Agent. The Company may at any time deliver to the Rights Agent for
cancellation any Rights Certificates previously countersigned and delivered
hereunder that the Company may have acquired in any manner whatsoever, and all
Rights Certificates so delivered shall be promptly cancelled by the Rights
Agent. No Rights Certificates shall be countersigned in lieu of or in exchange
for any Rights Certificates cancelled as provided in this Section 2. 10, except
as expressly permitted by this Agreement. The Rights Agent shall destroy all
cancelled Rights Certificates and deliver a certificate of destruction to the
Company.
II.11 AGREEMENTS OF RIGHTS HOLDERS. Every holder of Rights by accepting
such Rights consents and agrees with the Company and the Rights Agent and with
every other holder of Rights that:
(a) prior to the Separation Time, each Right will be transferable
only together with, and will be transferred by a transfer, conversion or
exchange of, the associated share of Common Stock;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) each Right Beneficially Owned by an Acquiring Person or an
Affiliate or Associate thereof or any transferee of any of the foregoing cannot
validly be transferred or exercised and shall for all purposes be void; to
effectuate the foregoing, each Rights Certificate shall be transferable or
exercisable only if the holder so transferring or exercising shall certify, for
the benefit of all holders of Rights, that such holder is not an Acquiring
Person or an Affiliate or Associate of an Acquiring Person and that, to the best
of such holder's knowledge, no Rights evidenced by such Rights Certificates have
ever been Beneficially Owned by an Acquiring Person or an Affiliate or Associate
of an Acquiring Person;
(d) prior to due presentment of a Rights Certificate (or, prior to
the Separation Time, the associated Common Stock certificate) for registration
of transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Separation Time, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on such Rights
Certificate or the associated Common Stock certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary;
and
(e) any shares of Series B Common Stock presented for conversion
into Class A Common Stock (in accordance with the terms and specifications
governing such a conversion) (i) after the Record Time and prior to the earlier
of the Separation Time or the Expiration Time, shall
-14-
automatically be deemed to include the Rights associated with such shares of
Series B Common Stock or (ii) after the earlier of the Separation Time or the
Expiration Time, shall not include the Rights that were, prior to the Separation
Time, associated with such shares of Series B Common Stock; and
(f) any shares of Class A Common Stock issued upon the conversion of
Series B Common Stock (in accordance with the terms and specifications governing
such a conversion) (i) after the Record Time and prior to the earlier of the
Separation Time or the Expiration Time, shall be issued with one associated
Right for each share of Class A Common Stock so issued or (ii) after the earlier
of the Separation Time or the Expiration Time, shall be issued without any
Rights associated with the shares of Class A Common Stock so issued; and
(g) after the Record Time and prior to the earlier of the Separation
Time and the Expiration Time, the Rights associated with any share of Series B
Common Stock surrendered for the purposes of conversion into Class A Common
Stock (in accordance with the terms and specifications governing such a
conversion) shall automatically terminate, on the date of such a conversion; and
(h) this Agreement may be supplemented or amended from time to time
pursuant to Section 4.4 or the last sentence of the first paragraph of Section
2.4(a) hereof.
II.12 CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER. Subject to the terms and conditions of this Agreement, if after the
Separation Time, directly or indirectly, (a) the Company shall consolidate with,
or merge with and into, any other Person, (b) 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 Stock shall be changed into or exchanged for
stock or other securities of any Person (including the Company) or cash or any
other property, or (c) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating fifty percent (50%) or more of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person other than the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof at any time
prior to the Expiration Time and payment of the then current Exercise Price, in
accordance with the terms of this Agreement, such number of validly authorized
and issued, fully paid and nonassessable shares of common stock of such Person
or of that Affiliate or Associate of such Person which has the greatest
aggregate market value, determined in the same manner as the Market Price per
share of Common Stock is determined pursuant to Section 1.1(1) hereof, of
outstanding shares of publicly traded common stock (other than common stock held
by its Affiliates, officers, directors or employee benefit plans, or Associates
of the foregoing) as shall be equal to the result obtained by dividing the then
current Exercise Price by fifty percent (50%) of the Market Price per share of
Common Stock on the date of consummation of such consolidation, merger, sale or
transfer of a share of the common stock that the holder of a Right shall have
the right to receive; (ii) the issuer of
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such common stock 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; and (iv) such issuer shall take
such steps (including, but not limited to, the reservation of a sufficient
number of shares of its common stock) in connection with such consummation as
may be necessary to ensure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the shares of common
stock thereafter deliverable upon the exercise of the Rights. The Company shall
not enter into any transaction of the kind referred to in this Section 2.12 if
at the time of such transaction there are any rights, warrants, instruments or
securities outstanding or any agreements or arrangements that, as a result of
the consummation of such transaction, would eliminate or substantially diminish
the benefits intended to be afforded by the Rights. The Company shall not
consummate any such consolidation, merger, sale or transfer unless such issuer
shall have a sufficient number of authorized shares of its common stock that
have not been issued or reserved for issuance to permit the exercise in full of
the Rights in accordance with this Section 2.12 and unless prior thereto the
Company and such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in this Section 2.12
and further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in this Section 2.12, such
issuer will (i) prepare and file a registration statement under the Securities
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 Securities Act) until the Expiration Time; and (ii) will
deliver to holders of the Rights historical financial statements for such issuer
and each of its Affiliates that comply in all respects with the requirements for
registration on Form 10 under the Exchange Act. The provisions of this Section
2.12 shall similarly apply to successive mergers or consolidations or sales or
other transfers.
II.13 CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES. Whenever
an adjustment is made as provided in Sections 2.4 and 2.12 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) file with the
Rights Agent and with the transfer agent for the Series A Preferred Stock, if
any, and the transfer agent for the Common Stock a copy of such certificate and
(c) mail a brief summary thereof to each holder of a Rights Certificate (or, if
prior to the Separation Time, to each holder of a certificate representing
shares of Common Stock) in accordance with Section 4.10 hereof. Notwithstanding
the foregoing sentence, the failure of the Company to make such certification or
to give such notice shall not affect the validity or the force and effect of
such adjustment. Any adjustment to be made pursuant to Sections 2.4 and 2.12
hereof shall be effective as of the date of the event giving rise to such
adjustment. 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 adjustment unless and until it shall have received such
certificate.
ARTICLE III - THE RIGHTS AGENT
III.1 GENERAL.
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(a) The Company hereby appoints the Rights Agent to act as agent for
the Company in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company 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.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any certificate for
Series A Preferred Stock, Rights Certificate, certificate for or 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 3.3 hereof.
III.2 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 is a party, or any corporation succeeding to the
stockholder services business of the Rights Agent or any successor Rights Agent,
will be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 3.4 hereof. In case
at the time such successor Rights Agent succeeds to the agency created by this
Agreement any of the Rights Certificates have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates have not been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Rights Certificates
will have the full force provided in the Rights Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent is changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been
-17-
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
III.3 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 Rights 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 will 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 deems 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 a person believed by the Rights Agent to
be the Chairman of the Board, the President or any Vice President and by the
Chief Financial Officer or the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken or omitted by it in good
faith under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
certificates for Series A Preferred Stock or the Rights Certificates (except its
countersignature thereof) and will not be required to verify any of the
foregoing, and all such statements and recitals are and will be deemed to have
been made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due authorization, execution and delivery hereof by the Rights Agent) or in
respect of the validity or execution of any certificate for Series A Preferred
Stock or Rights Certificate (except its countersignature thereof); nor will it
be responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor will it be
responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 2.3(g) hereof) or any adjustment
required under the provisions of Section 2.4 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights after receipt of the certificate contemplated by
Section 2.4 describing any such adjustment); nor will it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation
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of any shares of Series A Preferred Stock to be issued pursuant to this
Agreement or any Rights or as to whether any shares of Series A Preferred Stock
will, when issued, be duly and validly authorized, executed, issued and
delivered and fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President or the Chief Financial Officer or the Secretary,
any Assistant Secretary of the Company or any other person designated in writing
by such persons, and to apply to such persons for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
omitted by it in good faith in accordance with instructions of any such person.
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 with respect to its duties or
obligations under this Agreement and the date on and/or after which such action
shall be taken or omitted and the Rights Agent shall not be liable for any
action taken or omitted in accordance with a proposal included in any such
application on or after the date specified therein (which date shall not be less
than ten business days after the date any such officer actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless, prior to taking or omitting any such action, the Rights
Agent has received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Series A Preferred Stock,
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act 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 will 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) CHANGE OF RIGHTS AGENT. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days,' prior notice (or
such lesser notice as is acceptable to the Company) in writing mailed to the
Company and to each transfer agent of the Series A Preferred Stock and the
Common Stock, if any, by registered or certified mail, and at the
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expense of the Company to the holders of the Rights in accordance with Section
4.10. The Company may remove the Rights Agent upon 30 days' prior notice in
writing, mailed to the Rights Agent and to each transfer agent of the Series A
Preferred Stock and the Common Stock, if any, by registered or certified mail,
and to the holders of the Rights in accordance with Section 4.10. If the Rights
Agent should resign or be removed or otherwise become incapable of acting, the
Company will appoint a successor to the Rights Agent. If the Company fails to
make such appointment within a period of 30 days after 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 any Rights (which holder
shall, with such notice, submit such holder's Rights Certificate for inspection
by the Company), then the holder of any Rights may apply to any court of
competent jurisdiction for the appointment of a now 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
the State of California, New Jersey or New York, in good standing, having its
principal office in the State of California, New Jersey or New York, that is
authorized under such laws to exercise the powers of the Rights Agent
contemplated by this Agreement and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000. After
appointment, the successor Rights Agent will 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 will file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Series A Preferred Stock
and the Common Stock, if any, and mail a notice thereof in writing to the
holders of the Rights in accordance with Section 4.10. Failure to give any
notice provided for in this Section 3.4, 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.
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ARTICLE IV - MISCELLANEOUS
IV.1 REDEMPTION, TERMINATION AND EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of the Separation Time or the Expiration Time redeem
all but not less than all of the then outstanding Rights at a redemption price
of $.01 per Right, as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (the "Redemption Price"). The Company may, at its option, pay the
Redemption Price in cash, shares of Common Stock (based on the Market Price at
the time of redemption) or any other form of consideration deemed appropriate by
the Board of Directors.
(b) Immediately upon the action of the Board of Directors of the
Company 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 Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price for each Right so held.
Promptly after the action of the Board of Directors ordering the redemption of
the Rights, the Company shall give notice of such redemption to the Rights Agent
and the holders of the then outstanding Rights. Any notice that is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
such notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
(c)(i) The Board of Directors of the Company may, at its option, at
any time after any Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 2.3(g) and the second
paragraph of Section 2.3(h) hereof) for shares of Common Stock at an exchange
ratio of which equals the quotient obtained by dividing the Exercise Price by
the Market Price per share of Common Stock per Right, appropriately adjusted
pursuant to Section 2.4 hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding Common
Stock for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Stock then outstanding.
(ii) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph (c)(i) of
this Section 4.1 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; PROVIDED, HOWEVER, that (i) the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the holders of
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such Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of Common Stock for
Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant
to the provisions of Section 2.3(g) and the second paragraph of Section 2.3(h)
hereof) hold by each holder of Rights.
(iii) In the event that there shall not be sufficient Common
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 4.1(c), the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights. In the event
the Company shall, after good faith effort, be unable to take all such action as
may be necessary to authorize such additional Common Stock, the Company shall
substitute, for each share of Common Stock that would otherwise be issuable upon
exchange of a Right, a number of shares of Series A Preferred Stock or fraction
thereof having a current market price per share equal to the Market Price per
share of one share of Common Stock as of the date of issuance of such shares of
Preferred Stock or fraction thereof.
(iv) The Company shall not be required to issue fractions of a
share of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional shares, there shall be paid
to the registered holders of the Rights with regard to which such fractional
shares of Common Stock would otherwise be issuable, either (i) evidence of such
fractional shares by depository receipts, in accordance with the terms of
Section 4.5 hereof or (ii) an amount in cash equal to the same fraction of the
Market Price of a whole share of Common Stock based upon the date of exchange
pursuant to this Section 4.1(c), subject to the terms of Section 4.6 hereof.
IV.2 PROVISION IN EVENT OF INSUFFICIENT SHARES OF SERIES A PREFERRED
STOCK. If there shall not be sufficient authorized but unissued shares or
reserved shares of Series A Preferred Stock of the Company to permit the
exercise in full of the Rights in accordance with the terms hereof, the Company,
with respect to each Right being exercised and to the extent necessary, may make
adequate provision to substitute for the delivery of Units or shares or
fractions of shares of Series A Preferred Stock (i) cash, (ii) Common Stock, or
other preferred stock or equity securities of the Company, (iii) debt securities
of the Company, (iv) other assets or (v) any combination of the foregoing,
having an aggregate value equal to the Market Price of the Units of Series A
Preferred Stock that would have been purchasable upon exercise of such Right in
the absence of this Section 4.2, or may reduce the Exercise Price.
IV.3 ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the number or kind or class of shares of stock purchasable upon
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exercise of Rights made in accordance with the provisions of this Agreement.
IV.4 SUPPLEMENTS AND AMENDMENTS. Prior to the Separation Time, the Company
and the Rights Agent, upon receipt of the certificate described hereinbelow,
shall, if the Company so directs, supplement or amend any provision of this
Agreement in any respect without the approval of any holders of Rights. From and
after the Separation Time, the Company and Rights Agent, upon receipt of the
certificate described hereinbelow, shall, if the Company so directs, supplement
or amend this Agreement without the approval of any holders of Rights (i) to
cure any ambiguity, (ii) to correct or supplement any provision contained herein
that may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder, other than the time period during
which the Rights may be exercised, or (iv) to change or supplement the
provisions hereunder in any manner that the Company may deem necessary or
desirable and which shall not materially and adversely affect the interests of
the holders of Rights (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). Upon delivery of a certificate from an
appropriate officer of the Company stating that the proposed supplement or
amendment is in compliance with the terms of this Section 4.4, the Rights Agent
shall execute such supplement or amendment. Prior to the Separation Time, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock.
IV.5 FRACTIONAL SHARES. If the Company elects not to issue certificates
representing fractional shares of Series A Preferred Stock or other securities
(pursuant to Section 4.2 hereof) upon exercise of Rights, the Company may, in
lieu thereof, either (i) evidence such fractional shares by depositary receipts
issued pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that such agreement shall provide that the holders of
the depositary receipts shall have all of the rights, privileges and preferences
to which they are entitled as Beneficial Owners of such stock, or (ii) subject
to Section 4.6 hereof, pay an amount in cash equal to the same fraction of the
Market Price of a Unit of Series A Preferred Stock.
IV.6 TRANSACTIONS AFTER THE SEPARATION TIME. After the Separation Time and
prior to the Expiration Time, the Company shall not engage in any transaction
not in the ordinary course of business that would eliminate or otherwise
diminish in any material respect the benefits intended to be afforded by this
Agreement to the holders of Rights (other than Acquiring Persons or Affiliates
or Associates thereof, or Persons who may become any of the foregoing). Without
limiting the foregoing, after the Separation Time and prior to the Expiration
Time, the Company shall not (i) sell or issue to an Acquiring Person or any
Affiliate or Associate thereof, any rights, options, warrants or convertible
securities on terms similar to, or that materially adversely affect the value
of, the Rights, or (ii) sell or issue to an Acquiring Person or any Affiliate or
Associate thereof, Series A Preferred Stock, Common Stock or shares of any other
class of capital stock if such sale or issue is intended to or would materially
adversely affect the value of the Rights.
IV.7 RIGHTS OF ACTION. Subject to the terms of this Agreement, rights of
action in respect of this Agreement, other than rights of action vested solely
in the Rights Agent, are vested in the respective holders of the Rights (other
than Acquiring Persons or Affiliates or Associates thereof); and any holder of
any Rights (other than Acquiring Persons or Affiliates or Associates thereof),
-23-
without the consent of the Rights Agent or of the holder of any other Rights,
may, on such holder's own behalf and for such holder's own benefit and the
benefit of other holders of Rights, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise such holder's Rights in the manner
provided in such holder's Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
IV.8 HOLDER OF RIGHTS NOT DEEMED A STOCKHOLDER. No holder, as such, of any
Right shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of Series A Preferred Stock or any other securities that may at any
time be issuable on the exercise of such Rights, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 4.9 hereof), or to receive dividends
or subscription rights, or otherwise, until such Rights shall have been
exercised in accordance with the provisions hereof.
IV.9 NOTICE OF PROPOSED ACTIONS. If the Company shall propose after the
Separation Time and prior to the Expiration Time to effect a liquidation, a
consolidation or merger with or a sale of all or substantially all of its assets
to any other Person or a reclassification of the Series A Preferred Stock, then,
in each such case, the Company shall give to each holder of a Right, in
accordance with Section 4.10 hereof, a notice of such proposed action, which
shall specify the date on which such action is to take place, and such notice
shall be so given at least 20 Business Days prior to the date of the taking of
such proposed action.
IV.10 NOTICES. Notices or demands authorized or required by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights to or on
the Company shall be sufficiently given or made if delivered or sent by first
class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) an follows:
American Medical Providers, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
-24-
Attention:
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the Rights Register or, prior to the Separation Time, on the registry books
of the transfer agent for the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice.
IV.11 COSTS OF ENFORCEMENT. The Company agrees that if the Company or any
other Person the securities of which are purchasable upon exercise of Rights
fails to fulfill any of its obligations pursuant to this Agreement, then the
Company or such Person will reimburse the holder of any Rights for the costs and
expenses (including legal fees) incurred by such holder in actions to enforce
such holder's rights pursuant to any Rights or this Agreement.
IV.12 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.
IV.13 BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
holders of the Rights any legal or equitable right, remedy or claim under this
Agreement, and this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.
IV.14 DESCRIPTIVE HEADINGS. Descriptive headings appear herein for
convenience of reference only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IV.15 GOVERNING LAW. This Agreement and each Right issued hereunder shall
be deemed to be a contract made under the laws of the State of Texas and for all
purposes shall be governed by, and construed in accordance with, the laws of
such state without regard to the laws of such state as to choice or conflict of
laws.
IV.16 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, but all such counterparts shall together constitute one and the
same instrument.
IV.17 SEVERABILITY. If any term or provision hereof or the application
thereof to any circumstance shall, in any jurisdiction and to any extent, be
invalid or unenforceable, such term or
-25-
provision shall be ineffective as to such jurisdiction to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining terms and provisions hereof or the application of such terms or
provision to circumstances other than those as to which it is held invalid or
unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested as of the date first above set forth.
AMERICAN MEDICAL PROVIDERS, INC.
___________________________________________
By: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman, President and Chief
Executive Officer
Attest:
______________________________________
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:Senior Vice President and Chief
Financial Officer
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_________________________________________
By:
Title:
Witness:
___________________________________
By:________________________________
________________________________
Signature page of the Stockholder
Protection Agreement, dated as of October
___ , 1997, between American Medical
Providers, Inc. and ______________________
as Rights Agent
-27-
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
AMERICAN MEDICAL PROVIDERS, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman, President and Chief Executive Officer,
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President and Chief Financial Officer, of
American Medical Providers, Inc. a corporation organized and existing under
the General Corporation Law of the State of Delaware, in accordance with
provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Certificate of Incorporation of the said Corporation, the said Board of
Directors on October , 1997, adopted the following resolution creating a series
of shares of Preferred Stock designated as Series A Junior Participating
Preferred Stock:
NOW THEREFORE BE IT RESOLVED, that a series of the Company's Preferred
Stock consisting of shares of Preferred Stock be, and hereby is,
designated as Series A Junior Participating Preferred Stock, par value
$0.001 per share (the "Series A Preferred"), and that the Series A
Preferred shall have the designations, powers, preferences, rights and
qualifications, limitations and restrictions substantially as set forth in
the Certificate of Designation, Preferences and Rights of Series A Junior
Participating Preferred Stock (the "Series A Certificate") attached hereto
as EXHIBIT .
That said Certificate states that the Board of Directors does hereby fix
and herein state and express such designations, powers, preferences and relative
and other special rights and qualifications, limitations and restrictions
thereof as follows (all terms used herein which are defined in the Certificate
of Incorporation shall be deemed to have the meanings provided therein).
Section (a) DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting such series shall be
_________________. Such number of shares of Series A Preferred Stock may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares of Series A Preferred Stock then
outstanding plus the number of shares of Series A Preferred Stock 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 or exercisable into Series A Preferred Stock.
Section (b) DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders of any shares
of any series of preferred stock ranking prior and superior to the shares of
Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
dividends payable in cash in an amount per share (rounded to the nearest cent),
subject to the provision for adjustment hereinafter set forth, equal to 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 payable in shares of the Class A Common
Stock, par value $0.001 per share, of the Corporation (the "Class A Common
Stock") or the Class B Common Stock, par value $0.001 per share of the
Corporation (the "Class B Common Stock") or a subdivision of the outstanding
shares of Class A Common Stock or Class B Common Stock (collectively, the
"Common Stock") (by reclassification or otherwise)), declared on the Common
Stock 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 (the
"Rights Declaration Date") (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event under the preceding sentence shall
be adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series
A Preferred Stock as provided in paragraph (A) above immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock).
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the date of issue of such shares of
Series A Preferred Stock. 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 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 no more than 30 days
prior to the date fixed for the payment thereof.
Section (c) VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A
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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 the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each 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 Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of shares
of Series A Preferred Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of stockholders of the
Corporation.
(C) Except as otherwise provided herein or provided by law, the holders of
shares of Series A Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section (d) CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other distribution on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on 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 Series A Preferred Stock,
except dividends paid or distributions made ratably on the Series A
Preferred Stock and all such stock ranking on a parity with respect to the
particular dividend or distribution in proportion to the total amounts to
which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares
of any stock of the Corporation ranking junior (both as to dividends and
upon dissolution, liquidation or winding up) to the Series A Preferred
Stock;
-30-
(iv) purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any 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 in accordance with a purchase or
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section (e) REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
Section (f) LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any liquidation (voluntary or otherwise), dissolution or winding
up of the Corporation, no distribution shall be made to the holders of shares of
stock ranking junior (either as 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 (the "Series A Liquidation
Preference"). Following the payment of the full amount of the Series A
Liquidation Preference, no additional distributions shall be made to the holders
of shares of Series A Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Stock Liquidation Amount') equal to the quotient obtained by dividing (i) the
Series A Liquidation Preference by (ii) 100 (as appropriately adjusted an set
forth in subparagraph C below to reflect such events as stock splits, stock
dividends and recapitalization with respect to the Common Stock) (such number in
clause (ii), the "Adjustment Number"). Following the payment of the full amount
of the Series A Liquidation Preference and the Common Stock Liquidation Amount
in respect of all outstanding shares of Series A Preferred Stock and Common
Stock, respectively, holders of Series A Preferred Stock and holders of shares
of Common Stock shall receive their ratable and proportionate share of remaining
assets to be distributed in the ratio of the Adjustment Number to 1 with respect
to such Preferred Stock and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets available
to permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other
-31-
series of preferred stock, if any, which rank on a parity with the Series A
Preferred Stock, then such remaining assets shall be distributed ratably to the
holders of the Series A Preferred Stock and the holders of such parity shares in
proportion to their respective liquidation preferences.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares, (iv) reclassify the
Common Stock or (v) effect a recapitalization of the Common Stock, then in each
such case the Adjustment Number in effect immediately prior to such event shall
be adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section (g) CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section (h) NO REDEMPTION. The shares of Series A Preferred Stock
shall not be redeemable.
Section (i) RANKING. The Series A Preferred Stock shall rank junior to all
other series of the Corporation's preferred stock, if any, as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise. Nothing in this Certificate shall limit the power of
the Board of Directors to create a new series of preferred stock ranking senior
to the Series A Preferred Stock in any respect.
Section (j) AMENDMENT. The Amended and Restated Certificate of
Incorporation of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preferences or special rights
of the Series A Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of two-thirds or more of the outstanding shares
of Series A Preferred Stock, voting separately as a class.
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Section (k) FRACTIONAL SHARES. Series A Preferred Stock may be issued in
fractions of a share, which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and
do affirm the foregoing as true under the penalties of perjury this day of
October, 1997.
__________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman, President and Chief Executive
Officer
Attest:
________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President
and Chief Financial Officer
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