RIGHTS AGREEMENT
DATED AS OF NOVEMBER 8, 1996
AND AMENDED AND RESTATED AS OF SEPTEMBER 25, 2001
BETWEEN
NAPRO BIOTHERAPEUTICS, INC.
AND
AMERICAN STOCK TRANSFER AND TRUST COMPANY
AS RIGHTS AGENT
TABLE OF CONTENTS
Page
Section 1 Certain Definitions......................................................................1
Section 2. Appointment Of Rights Agent..............................................................4
Section 3. Issuance Of Rights Certificates..........................................................4
Section 4. Form of Rights Certificates..............................................................6
Section 5. Countersignature And Registration........................................................6
Section 6. Transfer, Split Up, Combination And Exchange Of Rights Certificates;
Mutilated, Destroyed, Lost Or Stolen Rights Certificates.................................7
Section 7. Exercise Of Rights; Purchase Price; Expiration Date Of Rights............................8
Section 8. Cancellation And Destruction Of Rights Certificates.....................................10
Section 9. Reservation and Availability of Capital Stock...........................................10
Section 10. Preferred Stock Record Date.............................................................12
Section 11. Adjustment Of Purchase Price, Number And Kind Of Shares Or Number Of Rights.............12
Section 12. Certificate Of Adjusted Purchase Price Or Number Of Shares..............................19
Section 13. Consolidation, Merger Or Sale Or Transfer Of Assets Or Earning Power....................19
Section 14. Fractional Rights And Fractional Shares.................................................21
Section 15. Rights Of Action.......................................................................23
Section 16. Agreement Of Rights Holders.............................................................23
Section 17. Rights Certificate Holder Not Deemed A Stockholder......................................24
Section 18. Concerning The Rights Agent.............................................................24
Section 19. Merger Or Consolidation Or Change Of Name Of Rights Agent...............................25
Section 20. Duties Of Rights Agent..................................................................25
Section 21. Change Of Rights Agent..................................................................28
Section 22. Issuance Of New Rights Certificates.....................................................28
Section 23. Redemption And Termination..............................................................29
Section 24. Exchange................................................................................30
Section 25. Notice Of Certain Events................................................................31
Section 26. Notices.................................................................................32
Section 27. Supplements And Amendments..............................................................32
Section 28. Successors..............................................................................33
Section 29. Determinations And Actions By The Board Of Directors....................................33
Section 30. Benefits Of This Agreement..............................................................34
Section 31. Severability............................................................................34
Section 32. Governing Law...........................................................................34
Section 33. Counterparts............................................................................34
Section 34. Descriptive Headings....................................................................34
Exhibit A - Form Of Certificate Of Designations Of Series B Junior Participating
Preferred Stock Of Napro Biotherapeutics, Inc............................................1
Exhibit B - Form Of Rights Certificate...............................................................1
Exhibit C - Summary Of Rights To Purchase Preferred Stock............................................1
RIGHTS AGREEMENT
This Rights Agreement is entered into as of November 8, 1996, between
NaPro BioTherapeutics, Inc., a Delaware corporation (the "Company"), and
American Stock & Transfer Company (the "Rights Agent"), and amended and restated
as of September 25, 2001.
RECITALS
On November 8, 1996 (the "Declaration Date"), the Board of Directors of
the Company authorized and declared a dividend distribution of one right for
each share of common stock, par value $.0075 per share, of the Company
outstanding at the close of business on November 26, 1996 (the "Record Date"),
and has authorized the issuance of one Right (subject to adjustment pursuant to
Section 11(p) of this Agreement) for each share of common stock of the Company
issued between the Record Date (whether originally issued or from the Company's
treasury) and the Distribution Date. This Agreement, as amended and restated as
of September 25, 2001, sets forth the terms of the Rights.
The parties agree as follows:
SECTION 1 CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" means any Person that, together with all
Affiliates and Associates of such Person, is the Beneficial Owner of 20% or more
of the shares of Common Stock then outstanding, but shall not include (i) the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such
plan; or (ii) any Person who would otherwise become an Acquiring Person solely
as a result of a reduction in the number of shares of Common Stock outstanding
due to the acquisition of shares of Common Stock by the Company or a Subsidiary
of the Company, unless and until such Person shall thereafter purchase or
otherwise become the Beneficial Owner of additional shares of Common Stock
constituting one percent or more of the then outstanding shares of Common Stock.
(b) "Act" means the Securities Act of 1933.
(c) "Affiliate" and "Associate" have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934 (the "Exchange Act"), as in effect on the date
of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall
be deemed to "beneficially own," any securities
(i) that such Person or any of such Person's Affiliates or Associates,
directly or indirectly, has the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement,
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arrangement or understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or otherwise;
PROVIDED, however, that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," (A) securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or exchange,
or (B) securities issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event, or (C) securities issuable upon exercise of
Rights from and after the occurrence of a Triggering Event which Rights were
acquired by such Person or any of such Person's Affiliates or Associates prior
to the Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in connection with an
adjustment made with respect to any Original Rights;
(ii) that such Person or any of such Person's Affiliates or Associates,
directly or indirectly, has the right to vote or dispose of or has "beneficial
ownership" of (as determined pursuant to Rule 13d-3 or any successor regulation
of the General Rules and Regulations under the Exchange Act), including pursuant
to any agreement, arrangement or understanding, whether or not in writing;
PROVIDED, however, that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (ii) as a result
of an agreement, arrangement or understanding to vote such security if such
agreement, arrangement or understanding: (A) arises solely from a revocable
proxy given in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable provisions of the General Rules and
Regulations under the Exchange Act, and (B) is not also then reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) that are beneficially owned, directly or indirectly, by any other
Person (or any Affiliate or Associate thereof) with which such Person (or any of
such Person's Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in the
proviso to subparagraph (ii) of this paragraph (d)) or disposing of any voting
securities of the Company; PROVIDED, however, that nothing in this paragraph (d)
shall cause a person engaged in business as an underwriter of securities to be
the "Beneficial Owner" of, or to "beneficially own," any securities acquired
through such person's participation in good faith in a firm commitment
underwriting until the expiration of forty days after the date of such
acquisition.
Notwithstanding the foregoing, a Person shall be deemed the "Beneficial
Owner" of, or to "beneficially own," securities subject to the Stockholders
Agreement dated June 7, 1993 among D & N Holding Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and the Company, as now in
effect or as hereafter amended, or to any successor agreement, only to the
extent that such Person would be considered the Beneficial Owner of such
securities if such agreement were not in effect.
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(e) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
(f) "Close of business" on a date shall mean 5:00 P.M., New York City
time, on such date; PROVIDED, however, that if such date is not a Business Day
it shall mean 5:00 P.M., New York City time, on the next succeeding Business
Day.
(g) "Common Stock" shall mean the common stock, par value $.0075 per
share, of the Company (including the Company's Nonvoting Common Stock), except
that "Common Stock" when used with reference to any Person other than the
Company shall mean the capital stock of such Person with the greatest voting
power, or the equity securities or other equity interest having power to control
or direct the management, of such Person.
"Distribution Date" shall mean the earlier of the following:
the close of business on the tenth day after the Stock Acquisition
Date (or, if the tenth day after the Stock Acquisition Date occurs before the
Record Date, the close of business on the Record Date), or
(ii) the close of business on the tenth Business Day after the date
that a tender or exchange offer (or such later date as may be determined by
action of the Board of Directors of the Company prior to such time as any Person
becomes an Acquiring Person) by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to any such plan) is commenced, if
upon consummation thereof, such Person would be the Beneficial Owner of 20% or
more of the shares of Common Stock then outstanding.
(i) "Person" means any individual, firm, corporation, partnership or
other entity, and includes any successor (by merger or otherwise) of such
entity.
(j) "Preferred Stock" means shares of the Company's Series B Junior
Participating Preferred Stock, par value $.001 per share and, to the extent that
there are not enough shares authorized to permit the full exercise of the
Rights, any other series of Preferred Stock, par value $.001 per share, of the
Company designated for such purpose containing terms substantially similar to
the terms of the Series B Junior Participating Preferred Stock.
(k) "Purchase Price" means the exercise price at which a holder of a
Right may purchase one one-hundredth of a share of Preferred Stock upon exercise
of a Right. The Purchase Price shall initially be $60.00, and shall be subject
to adjustment from time to time as provided in this Agreement.
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(l) "Section 11(a)(ii) Event" means any event described in Section
11(a)(ii) of this Agreement.
(m) "Section 13 Event" means any event described in clauses (x), (y) or
(z) of Section 13(a) of this Agreement.
(n) "Stock Acquisition Date" means the first date of public
announcement (which, for purposes of this definition, includes, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such.
(o) "Subsidiary" means, with reference to any Person, any corporation
of which an amount of voting securities sufficient to elect at least a majority
of the directors of such corporation is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such Person.
(p) "Triggering Event" means any Section 11(a)(ii) Event or Section 13
Event.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the Rights
Agent to act as agent for the Company and the holders of the Rights (who, in
accordance with Section 3 hereof, shall prior to the Distribution Date also be
the holders of the Common Stock) in accordance with the terms of this Agreement,
and the Rights Agent hereby accepts such appointment. The Company may from time
to time appoint such Co-Rights Agents as it deems necessary or desirable.
SECTION 3. ISSUANCE OF RIGHTS CERTIFICATES.
(a) Until the Distribution Date, (i) the Rights will be evidenced
(subject to paragraph (b) of this Section 3) by the certificates for the Common
Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (ii) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company). As soon as practicable after
the Distribution Date, the Rights Agent will send by first-class, insured,
postage prepaid mail, to each record holder of the Common Stock as of the close
of business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more right certificates in substantially the form
of Exhibit B hereto (the "Rights Certificates"), evidencing one Right for each
share of Common Stock sold, subject to adjustment as provided herein. If an
adjustment in the number of Rights per share of Common Stock has been made
pursuant to Section 11(p) hereof at the time of distribution of the Right
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. On and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates.
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(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights, in substantially the form attached
hereto as Exhibit C (the "Summary of Rights"), by first-class, postage prepaid
mail, to each record holder of the Common Stock as of the close of business on
the Record Date, at the address of such holder shown on the records of the
Company. With respect to certificates for the Common Stock outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the Common Stock
shall also be the registered holders of the associated Rights. Until the earlier
of the Distribution Date or the Expiration Date (as defined in Section 7
hereof), the transfer of any certificates representing shares of Common Stock in
respect of which Rights have been issued shall also constitute the transfer of
the Rights associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common Stock
that are issued (whether originally issued or from the Company's treasury) after
the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date and, in certain circumstances as provided in Section 22 of this
Agreement, after the Distribution Date. Certificates representing such shares of
Common Stock shall also be deemed to be certificates for Rights, and shall bear
the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between NaPro
BioTherapeutics, Inc. (the "Company") and American Stock Transfer and Trust
Company (the "Rights Agent") dated as of November 8, 1996 (the "Rights
Agreement"), as amended and restated as of September 25, 2001, the terms of
which are incorporated herein by this reference and a copy of which is on file
at the principal offices of the Company. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. The Company
will mail to the holder of this certificate a copy of the Rights Agreement, as
in effect on the date of mailing, without charge promptly after receipt of a
written request therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to or held by any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration Date, the
Rights associated with the Common Stock represented by such certificates shall
be evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates. If the
Company acquires any Common Stock after the Record Date but before the
Distribution Date, any Rights associated with such Common Stock shall be deemed
canceled and retired so that the Company shall not be entitled to exercise any
rights associated with Common Stock that is no longer outstanding.
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SECTION 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to purchase and
of assignment to be printed on the reverse thereof) shall each be substantially
in the form set forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with this Agreement, or as may be required to comply with any applicable law,
rule or regulation, including any rule or regulation of any stock exchange or
other trading facility on which the Rights may from time to time be listed or
traded, or to conform to usage. Subject to Section 11 and Section 22 of this
Agreement, the Rights Certificates, whenever distributed, shall be dated as of
the Record Date and on their face shall entitle the holders thereof to purchase
such number of one- hundredths of a share of Preferred Stock as shall be set
forth therein at the Purchase Price, but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof shall
be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section
22 hereof that represents Rights beneficially owned by a Person described in
Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6 or
Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances specified in
Section 7(e) of such Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its Chief Executive Officer, its President or any
Vice President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Rights Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless
so countersigned. If any officer of the Company who has signed any of the Rights
Certificates ceases to be such officer of the Company before countersignature by
the Rights Agent and issuance and delivery by the Company, such Rights
Certificates, nevertheless, may be countersigned by the Rights Agent and issued
and delivered by the Company with the same force and effect as though the person
who signed such Rights Certificates had not ceased to be such officer of the
Company. Any Rights Certificate may be signed on behalf of the Company by any
person who, at the actual date of the execution of such Rights Certificate, is a
proper officer of the Company to sign such Rights Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
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(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to Sections 4(b), 7(e) and 14 hereof, at any time after the
close of business on the Distribution Date, and at or prior to the close of
business on the Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of
one-hundredths of a share of Preferred Stock (or, following a Triggering Event,
Common Stock, other securities, cash or other assets, as the case may be) as the
Rights Certificate or Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the principal office or offices of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Sections 4(b), 7(e) and 14 hereof,
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
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SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of one-hundredths of a share (or other securities, cash or
other assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earlier of (i) the close of business on November
8, 2006 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof, (iii) or the time at which the Rights
are exchanged as provided in Section 24 hereof (the earliest of (i), (ii), and
(iii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one-hundredth of a share of Preferred
Stock pursuant to the exercise of a Right shall initially be $60.00 and shall be
subject to adjustment from time to time as provided in Sections 11 and 13(a)
hereof and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one- hundredth of a share of Preferred Stock (or other shares,
securities, cash or other assets, as the case may be) to be purchased as set
forth below and an amount equal to any applicable transfer tax, the Rights Agent
shall, subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition
from any transfer agent of the shares of Preferred Stock (or make available, if
the Rights Agent is the transfer agent for such shares) certificates for the
total number of one-hundredths of a share of Preferred Stock to be purchased and
the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) if the Company shall have elected to deposit the total
number of shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one-hundredths of a share of
Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will direct the
depositary agent to comply with such request, (ii) requisition from the Company
the amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, and (iv) after receipt thereof, deliver
such cash, if any, to or upon the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) shall be made in cash or by certified
bank check or bank draft payable to the order of the Company. If the Company is
obligated to issue other securities (including Common Stock) of the Company, to
pay cash and/or to distribute other property pursuant to Section 11(a) hereof,
the Company will make all
8
arrangements necessary so that such other securities, cash and/or other property
are available for distribution by the Rights Agent, if and when appropriate.
(d) If the registered holder of any Rights Certificate exercises fewer
than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder, subject to Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Triggering Event, any Rights that are or
were acquired or beneficially owned by (i) an Acquiring Person or an Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
that the Board of Directors has determined is part of a plan, arrangement or
understanding that has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void without any further action and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) of such Rights or Affiliates or
Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All Rights
Certificates surrendered for exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or any of its agents, be delivered
to the Rights Agent for cancellation or in canceled form, or, if surrendered to
the Rights Agent, shall be canceled by it, and no Rights Certificates shall be
issued in lieu thereof except as expressly permitted by this Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Rights Certificates to the
9
Company, or shall, at the written request of the Company, destroy such canceled
Rights Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred Stock
(and, following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities or out of its authorized
and issued shares held in its treasury), the number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock and/or other
securities) that, as provided in this Agreement, including Section 11(a)(iii)
hereof, will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities) issuable
and deliverable upon the exercise of the Rights shall be listed on any national
securities exchange or authorized for quotation on the National Association of
Securities Dealers, Inc. Automated Quotation System ("Nasdaq"), the Company
shall use its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be authorized for
such quotation or to be listed on such exchange upon official notice of issuance
upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event, a registration statement under the Act, with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the Expiration Date. The Company will
also take such action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for up to 90
days after the date set forth in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. In addition,
if the Company shall determine that a registration statement is required
following the Distribution Date, the Company may temporarily suspend the
exercisability of the Rights until such time as a registration statement has
been declared effective so long as the Company uses good faith efforts to that
end. Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction has not been obtained, the exercise thereof is
10
not permitted under applicable law or a registration statement has not been
declared effective.
(d) The Company will take all such action as may be necessary to ensure
that all one-hundredths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges that may be
payable in respect of the issuance or delivery of the Rights Certificates and of
any certificates for a number of one-hundredths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) upon the exercise
of Rights. The Company shall not, however, be required to pay any transfer tax
payable in respect of any transfer or delivery of Rights Certificates to a
Person other than, or the issuance or delivery of Preferred Stock (or Common
Stock and/or other securities, as the case may be) in respect of a name other
than that of, the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for Preferred
Stock (or Common Stock and/or other securities, as the case may be) in a name
other than that of the registered holder upon the exercise of any Rights until
such tax shall have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been established to
the Company's reasonable satisfaction that no such tax is due.
SECTION 10. PREFERRED STOCK RECORD DATE. Each person in whose name
any certificate for Preferred Stock (or Common Stock and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of such Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a stockholder of the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
11
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number and kind of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) If the Company at any time after the date of this Agreement (A) declares
a dividend on the Preferred Stock payable in shares of Preferred Stock, (B)
subdivides the outstanding Preferred Stock, (C) combines the outstanding
Preferred Stock into a smaller number of shares, or (D) issues any shares of its
capital stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the number and kind of
shares of Preferred Stock or capital stock, as the case may be, issuable on the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number and kind of
shares of Preferred Stock or capital stock, as the case may be, that, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right.
(ii) If any Person becomes an Acquiring Person other than pursuant to a
transaction subject to Section 13(a) of this Agreement and the Distribution Date
occurs, then, promptly following the Distribution Date, proper provision shall
be made so that each holder of a Right (except as provided below and in Section
7(e) hereof) shall thereafter have the right to receive, upon exercise thereof
at the then current Purchase Price in accordance with this Agreement, in lieu of
Preferred Stock, such number of shares of Common Stock of the Company as shall
equal the result obtained by (x) multiplying the then current Purchase Price by
the number of one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event, and (y) dividing that product (which, following such first occurrence,
shall thereafter be referred to as the "Purchase Price" for each Right and for
all purposes of this Agreement) by 50% of the current market price (determined
pursuant to Section 11(d) hereof) per share of Common Stock on the date of such
first occurrence (such number of shares, the "Adjustment Shares").
(iii) If the number of shares of Common Stock authorized by the Company's
certificate of incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with the foregoing
12
subparagraph (ii) of this Section 11(a), the Company shall take all action as
may be necessary to authorize additional Common Shares for issuance upon
exercise 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 Shares, the Company shall substitute, for each Common Share
that would otherwise be issuable upon exercise of a Right, a number of shares of
Preferred Stock or fraction thereof such that the current per share market price
of one share of Preferred Stock multiplied by such number or fraction is equal
to the current per share market price of one Common Share as of the date of
issuance of such shares of Preferred Stock or fraction thereof.
(b) If the Company fixes a record date for the issuance of rights, options or
warrants to all holders of Preferred Stock entitling them to subscribe for or
purchase (for a period expiring within forty-five (45) calendar days after such
record date) Preferred Stock (or shares having the same rights, privileges and
preferences as the shares of Preferred Stock ("equivalent preferred stock")) or
securities convertible into Preferred Stock or equivalent preferred stock at a
price per share of Preferred Stock or per share of equivalent preferred stock
(or having a conversion price per share, if a security convertible into
Preferred Stock or equivalent preferred stock) less than the current market
price (as determined pursuant to Section 11(d) hereof) per share of Preferred
Stock on such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
before such record date by a fraction, the numerator of which is the number of
shares of Preferred Stock outstanding on such record date, plus the number of
shares of Preferred Stock that the aggregate offering price of the total number
of shares of Preferred Stock and/or equivalent preferred stock so to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current market price, and the denominator
of which shall be the number of shares of Preferred Stock outstanding on such
record date, plus the number of additional shares of Preferred Stock and/or
equivalent preferred stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). If
such subscription price may be paid by delivery of consideration part or all of
which may be in a form other than cash, the value of such consideration shall be
as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Shares of
Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed, and in the
event that such rights or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price that would then be in effect if such record
date had not been fixed.
(c) If the Company fixes a record date for a distribution to all holders of
Preferred Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the surviving or continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or rights,
13
options or warrants (excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock on
such record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to a share of Preferred Stock and the denominator of which
shall be such current market price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and if such distribution is
not so made, the Purchase Price shall be adjusted to be the Purchase Price that
would have been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than computations
made pursuant to Section 11(a)(iii) hereof, the "current market price" per share
of Common Stock on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the 30 consecutive Trading
Days (as defined below) immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the "current market
price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days immediately following such date; PROVIDED, however,
that if the current market price per share of the Common Stock is determined
during a period following the announcement by the issuer of such Common Stock of
(A) a dividend or distribution on such Common Stock payable in shares of such
Common Stock or securities convertible into shares of such Common Stock (other
than the Rights), or (B) any subdivision, combination or reclassification of
such Common Stock, and prior to the expiration of the requisite 30 Trading Day
or 10 Trading Day period, as set forth above, after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the "current
market price" shall be properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the shares
of Common Stock are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the shares of Common Stock are listed or admitted to trading or, if the
shares of Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
Nasdaq or such other system then in use, or, if on any such date the shares of
Common Stock are not quoted by any such organization, the
14
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. If on any such date no market maker is making a market
in the Common Stock, the fair value of such shares on such date as determined in
good faith by the Board of Directors of the Company shall be used. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, a
Business Day. If the Common Stock is not publicly held or not so listed or
traded, "current market price" per share shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current market price"
per share of Preferred Stock shall be determined in the same manner as set forth
above for the Common Stock in clause (i) of this Section 11(d) (other than the
last sentence thereof). If the current market price per share of Preferred Stock
cannot be determined in the manner provided above or if the Preferred Stock is
not publicly held or listed or traded in a manner described in clause (i) of
this Section 11(d), the "current market price" per share of Preferred Stock
shall be conclusively deemed to be an amount equal to 100 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring after the date of
this Agreement) multiplied by the current market price per share of the Common
Stock. If neither the Common Stock nor the Preferred Stock is publicly held or
so listed or traded, "current market price" per share of the Preferred Stock
shall mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the "current market price" of one-hundredth of a
share of Preferred Stock shall equal the "current market price" of one share of
Preferred Stock divided by 100.
(e) Notwithstanding anything in this Agreement to the contrary, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent in the Purchase Price; PROVIDED,
however, that any adjustments that by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest ten-thousandth of a share of Common Stock or
other share or millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction that mandates such adjustment, or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) or Section
13(a) hereof, the holder of any Right thereafter exercised becomes entitled to
receive any
15
shares of capital stock other than Preferred Stock, the number of such other
shares so receivable upon exercise of any Right and the Purchase Price thereof
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Preferred
Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and
(m), and Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company after any adjustment of the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one-hundredths of a share of Preferred Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in Section
11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one-hundredths of a
share of Preferred Stock (calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of one- hundredths of a share covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the Purchase
Price to adjust the number of Rights, in lieu of any adjustment in the number of
one-hundredths of a share of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least eleven (11) days later than the date of the
public announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled
16
after such adjustment. Rights Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the number
of one-hundredths of a share of Preferred Stock issuable upon the exercise of
the Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one-hundredth of a share and the
number of one-hundredths of a share that were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then stated value, if any, of the number of
one-hundredths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action that may, in the opinion of
its counsel, be necessary for the Company validly to issue fully paid and
nonassessable such number of one-hundredths of a share of Preferred Stock at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment in the
Purchase Price be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuance to
the holder of any Right exercised after such record date the number of
one-hundredths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of one-hundredths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due ▇▇▇▇ or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the Company
shall be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as and to the extent
that in their good faith judgment the Board of Directors of the Company shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred
Stock at less than the current market price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities that by their terms are convertible into
or exchangeable for shares of Preferred Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time after the
Distribution Date, (i) consolidate with or merge with or into any other Person
(other than a Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof), or (ii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any
17
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof),
if (x) at the time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities outstanding or
agreements in effect that would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
shareholders of the Person who constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) hereof shall have received a distribution
of Rights previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that, after the Distribution Date, it will
not, except as permitted by Section 23, Section 24, or Section 27 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or eliminate the benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the contrary, if the Company
at any time after the Declaration Date and before the Distribution Date (i)
declares a dividend on the outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivides the outstanding shares of Common Stock, or
(iii) combines the outstanding shares of Common Stock into a smaller number of
shares, (A) the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights associated
with each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event, and (B) each Common Share outstanding
immediately after such event shall have issued with respect to it that number of
Rights which each Common share outstanding immediately prior to such event had
issued with respect to it. The adjustments provided for in this Section 11(p)
shall be made successively whenever such a dividend is declared or paid or such
subdivision, combination or consolidation is effected.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES. Whenever
an adjustment is made as provided in Section 11 or Section 13 hereof (other than
adjustments occurring prior to the Distribution Date), the Company shall (a)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b) promptly file with
the Rights Agent, and with each transfer agent for the Preferred Stock and the
Common Stock, a copy of such certificate, and (c) mail a brief summary thereof
to each holder of a Rights Certificate in accordance with Section 25 hereof.
Promptly after the Distribution Date, the Company shall comply with the
foregoing for any adjustment that occurred prior to the Distribution Date. The
Rights Agent shall be fully protected in relying on any certificate delivered by
the Company pursuant to this Section 12 and on any adjustment therein contained.
18
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS
OR EARNING POWER.
(a) If, following the Stock Acquisition Date, directly or indirectly,
(x) the Company shall consolidate with, or merge into, any other Person (other
than a Subsidiary of the Company in a transaction that complies with Section
11(o) hereof), and the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (y) any Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof) shall consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all or part of
the outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other property, or
(z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or a series
of related transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons (other than the Company or any Subsidiary of the
Company in one or more transactions each of which complies with Section 11(o)
hereof), then, and in each such case, proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, such
number of validly authorized and issued, fully paid, non-assessable and freely
tradeable shares of Common Stock of the Principal Party (as defined below), not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one-hundredths of a share of Preferred
Stock for which a Right is exercisable immediately prior to the first occurrence
of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to
the first occurrence of a Section 13 Event, multiplying the number of such
one-hundredths of a share for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event) by the Purchase Price in
effect immediately prior to such first occurrence, and dividing that product
(which, following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the current market price (determined pursuant to
Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party
on the date of consummation of such Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 hereof
shall apply only to such Principal Party following the first occurrence of a
Section 13 Event; (iv) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of shares of its
Common Stock) in connection with the consummation of any such transaction as may
be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares of Common
Stock thereafter deliverable upon the exercise of the Rights; and (v) Section
11(a)(ii) hereof shall be of no effect following the first occurrence of any
Section 13 Event.
19
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted in
such merger or consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that receives the greatest portion
of the assets or earning power transferred pursuant to such transaction or
transactions; Provided, however, that in any such case, (1) if the Common Stock
of such Person is not at such time or has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the Exchange
Act, and such Person is a direct or indirect Subsidiary of another Person the
Common Stock of which is and has been so registered, "Principal Party" shall
refer to such other Person; and (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common Stocks of two or
more of which are and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the greatest
aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock that have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the Rights
on an appropriate form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after such filing and
(B) remain effective (with a prospectus at all times meeting the requirements of
the Act) until the Expiration Date; and
(ii) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates that comply in all respects
with the requirements for registration on Form 10 under the Exchange Act.
This Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. If a Section 13 Event occurs at any
time after the occurrence of a Section 11(a)(ii) Event, the Rights that have not
theretofore been exercised shall
20
thereafter become exercisable in the manner described in Section 13(a), subject
to Section 7(e).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(p) hereof, or to
distribute Rights Certificates that evidence fractional Rights. After the
Distribution Date, in lieu of such fractional Rights, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right. For purposes of this
Section 14(a), the current market value of a whole Right shall be the closing
price of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing price of
the Rights for any day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by Nasdaq or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights, the fair value of
the Rights on such date shall be as determined in good faith by the Board of
Directors of the Company.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than integral multiples of one-hundredths of a share of
Preferred Stock) upon exercise of the Rights or to distribute certificates that
evidence fractional shares of Preferred Stock (other than integral multiples of
one-hundredths of a share). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one-hundredths of a share, the Company may pay to
the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one-hundredths of a share of Preferred Stock. For
purposes of this Section 14(b), the current market value of one-hundredths of a
share of Preferred Stock shall be one-hundredth of the closing price of a share
of Preferred Stock (as determined pursuant to Section 11(d)(ii) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of shares of Common Stock upon exercise of
the Rights or to distribute certificates that evidence fractional shares of
Common Stock. In lieu of
21
fractional shares of Common Stock, the Company may pay to the registered holders
of Rights Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of one
share of Common Stock. For purposes of this Section 14(c), the current market
value of one share of Common Stock shall be the closing price of one share of
Common Stock (as determined pursuant to Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this Agreement
are vested in the respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the Common Stock). Any
registered holder of any Rights Certificate (or, prior to the Distribution Date,
of the Common Stock), without the consent of the Rights Agent or of the holder
of any other Rights Certificate (or, prior to the Distribution Date, of the
Common Stock), may, on his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of this Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable only
on the registry books of the Rights Agent if surrendered at the principal office
or offices of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights
Agent may deem and treat the person in whose name a Rights Certificate (or,
prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all
22
purposes, and neither the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use its best efforts to have any
such order, decree or ruling lifted or otherwise overturned as soon as possible.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the number of
one- hundredths of a share of Preferred Stock or any other securities of the
Company that may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights Certificate
have been exercised in accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, suit, action, proceeding or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for any action taken or suffered by the Rights Agent
in connection with the acceptance and administration of this Agreement and the
exercise and performance of its duties hereunder, including the costs and
expenses of defending against and appealing any claim of liability arising
therefrom, directly or indirectly.
(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 acceptance and administration of this Agreement or the exercise and
performance of its duties hereunder in reliance upon any Rights Certificate or
certificate for Preferred Stock, Common Stock or for other securities of the
Company, instrument of assignment or
23
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, instruction 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 21 hereof.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stockholder services business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates in
this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent shall have only the duties
and obligations expressly set forth in this Agreement. There shall be no implied
duties or obligations of the 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 selected by it (who may be
legal counsel for the Company), and the advice of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken, suffered or omitted by it in good faith and in accordance with such
advice.
24
(b) Whenever in the administration, exercise and performance of its duties under
this Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any Acquiring
Person and the determination of "current market price") be proved or established
by the Company prior to taking, suffering or omitting any action hereunder, such
fact or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, any Vice Chairman of
the Board, the Chief Executive Officer, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; and any such certificate shall be
full authorization and protection to the Rights Agent for any action taken,
suffered or omitted in good faith by it under the provisions of this Agreement
in reliance upon such certificate.
(c) The Rights Agent shall not be liable or responsible hereunder to the Company
except for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable or responsible for or by reason of any
of the representations, warranties, statements of fact or recitals contained in
this Agreement or in the Rights Certificates (except as to the fact that it has
countersigned the Rights Certificates) or be required to verify the same, but
all such representations, warranties, statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not have any liability or responsibility in respect
of the legality, validity or enforceability of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the legality, validity, enforceability or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be liable or
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Rights Certificate; nor shall it be liable or
responsible for any adjustment including, without limitation, as required under
the provisions of Section 11 or 13 hereof (including any adjustment which
results in the Rights becoming void) or liable or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after receipt of a notice or
certificate pursuant to Section 12 describing any such adjustment); nor shall it
by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock or other
securities to be issued pursuant to this Agreement or any Rights Certificate or
as to whether any shares of Preferred Stock or other securities will, when so
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be required by the
Rights
25
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 or
directions with respect to the administration of this Agreement and the
execution and performance of its duties hereunder and certificates delivered
pursuant to any provision hereof from the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and is authorized to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable or responsible for any
action taken, suffered or omitted to be taken by it in good faith in accordance
with instructions of any such officer or for any delay in acting while waiting
for such instructions.
(h) The Rights Agent and any affiliate, stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though the Rights Agent were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent or any such affiliate, stockholder, director, officer or employee from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or by or through its
attorneys or agents, and the Rights Agent shall not be liable or responsible for
any act, omission, default, neglect or misconduct of any such attorneys or
agents or for any loss or damages to the Company or to the holders of the Rights
resulting from any such act, omission, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued employment thereof.
The Rights Agent shall not be under any duty or responsibility to insure
compliance with any applicable federal or state securities laws in connection
with the issuance, transfer or exchange of the Rights Certificates.
(j) No provision of this Agreement shall require the Rights Agent to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of its rights if there shall
be reasonable grounds for believing that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights Agent
for exercise, transfer, split up, combination or exchange, the Certificate
attached to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise, transfer, split up, combination or
exchange without first consulting with the Company.
26
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon 30
days' notice in writing mailed to the Company, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within thirty (30) days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then any registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of the State of Colorado, in
good standing, having a principal office in the State of Colorado, which is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $100,000,000. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and the Preferred Stock, and mail a notice thereof in writing
to the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Rights Certificates made in accordance with
this Agreement. In addition, in connection with the issuance or sale of shares
of Common Stock following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock options or
warrants or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors
27
of the Company, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) no
such Rights Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION AND TERMINATION.
(a) The Board of Directors of the Company may, at its option, at any
time before the earlier of (i) the close of business on the tenth day following
the Stock Acquisition Date (or, if the Stock Acquisition Date occurs before the
Record Date, the close of business on the tenth day after the Record Date), or
(ii) the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right, as such amount may
be appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). Notwithstanding anything in
this Agreement to the contrary, the Rights shall not be exercisable at any time
when the Company may redeem them pursuant to this Section 23. The Company may,
at its option, pay the Redemption Price in cash, shares of Common Stock (based
on the "current market price" as defined in Section 11(d)(i) hereof, of the
Common Stock at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors.
(b) At such time as specified in the resolution of the Board of
Directors ordering redemption of the Rights (or at such time as is determined by
a committee of the Board of Directors authorized by the Board of Directors to
specify such time at the time of the Board's adoption of such resolution or
immediately upon such action of the Board of Directors if the Board does not
specify a date or so empower a committee) and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price for each Right so held. Promptly after the action of the Board 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 by mailing such notice to all such holders at each holder's last address
as it appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent for the Common
Stock. Any notice mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be made.
Any failure to give or inadequacy of such notice shall not affect the validity
of the redemption. The Redemption Price shall be payable to those Persons who
are record holders of the Rights at the close of business on a date determined
by the Board of Directors, which date shall be at least eleven days after the
Board of Directors orders redemption of the Rights.
28
SECTION 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 11(a)(ii) hereof) for
Common Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any adjustment in the number of Rights pursuant to Section
11(i) (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors of the Company
shall not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity holding Common Shares
for or pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Common Shares equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares 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 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional Common Shares
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 Shares, the Company shall substitute, for each
Common Share that would otherwise be issuable upon exchange of a Right, a number
of Preferred Shares or fraction thereof such that the current per share market
price of one Preferred Share multiplied by such number or fraction is equal to
the current per share market price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be
29
issuable an amount in cash equal to the same fraction of the current market
value of a whole Common Share. For the purposes of this paragraph (d), the
current market value of a whole Common Share shall be the closing price of a
Common Share (as determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of exchange pursuant
to this Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, or (iii) to effect any reclassification of its Preferred
Stock (other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of the Company in
a transaction that complies with Section 11(o) hereof), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related transactions, of
more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least 20 days prior to the
record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least 20
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Preferred Stock, whichever
shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii) hereof
shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in the preceding paragraph to Preferred Stock shall be deemed
thereafter to refer to Common Stock and/or, if appropriate, other securities.
SECTION 26. NOTICES. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights to or on the
Company shall be
30
sufficiently given or made if and when sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
NaPro BioTherapeutics, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Secretary
Subject to Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if and
when sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
American Stock Transfer and Trust Company
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Administration Department
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate (or, if
before the Distribution Date, to the holder of certificates representing shares
of Common Stock) shall be sufficiently given or made if and when sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date and
subject to the penultimate sentence of this Section 27, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the Distribution Date and
subject to the penultimate sentence of this Section 27, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein that may
be defective or inconsistent with any other provisions herein, (iii) to shorten
or lengthen any time period hereunder, or (iv) to change or supplement the
provisions hereunder in any manner that the Company deems necessary or desirable
and that does not adversely affect the interests of the holders of Rights
Certificates; PROVIDED, this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating
to when the Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Company stating that the proposed supplement or
amendment is in compliance with this Section 27, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment shall be made that changes the Redemption
Price, the Final Expiration
31
Date, the Purchase Price or the number of one-hundredths of a share of Preferred
Stock for which a Right is exercisable. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock.
SECTION 28. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS. For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect on the date of this
Agreement. The Board of Directors of the Company shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret this Agreement, and (ii) make
all determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) that are done or made by the Board in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board to
any liability to the holders of the Rights.
SECTION 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
SECTION 31. SEVERABILITY. If any term of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated; PROVIDED, however, that notwithstanding anything in
this Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable, and the Board of Directors of the Company determines in its good
faith judgment that severing the invalid language from this Agreement would
materially adversely affect the purpose or effect of this Agreement, the right
of redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the
32
close of business on the tenth day following the date of such determination by
the Board of Directors.
SECTION 32. GOVERNING LAW. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under
Delaware law and for all purposes shall be governed by and construed in
accordance with Delaware law applicable to contracts made and to be performed
entirely within such state.
SECTION 33. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each which shall be an original, and all of which shall together
constitute a single instrument.
SECTION 34. DESCRIPTIVE HEADINGS. Descriptive headings of the Sections of this
Agreement are inserted for convenience only and shall not affect the meaning of
this Agreement.
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: NAPRO BIOTHERAPEUTICS, INC.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇
____________________________
Vice President, General Counsel
AMERICAN STOCK TRANSFER AND
TRUST COMPANY
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
____________________________
Vice President
34
EXHIBIT A
FORM OF CERTIFICATE OF DESIGNATIONS
OF SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
OF NAPRO BIOTHERAPEUTICS, INC.
Pursuant to Section 151 of the Delaware General Corporation Law, the
undersigned President and Secretary of NaPro BioTherapeutics, Inc., certify that
the Board of Directors of NaPro BioTherapeutics, Inc., adopted the following
resolution at a meeting duly called and held on November 8, 1996:
"BE IT RESOLVED, that pursuant to the authority expressly granted by
the provisions of the Amended and Restated Certificate of Incorporation of the
Corporation, the Board of Directors hereby creates and authorizes the issuance
of a series of preferred stock, par value $.001 per share of the Corporation,
and hereby fixes the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special rights of
the shares of such series, and the qualifications, limitations or restrictions
thereof are as follows:
Section 1 Designation and Amount. The shares of such series (the "Series B
Stock") shall be designated as "Series B Junior Participating Preferred Stock"
and the number of shares constituting such series shall be 190,000.
Section 2 Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
series of Preferred Stock ranking prior and superior to the Series B Stock with
respect to dividends, the holders of Series B Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available for such purpose, quarterly dividends payable in cash on the first day
of March, June, September, and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series B Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) the product of the
Adjustment Number (defined below) multiplied by the aggregate per share amount
of all cash dividends, and the Adjustment Number multiplied by the aggregate per
share amount (payable in kind) of all non-cash dividends or other distributions
other than a dividend payable in shares of common stock or a subdivision of the
outstanding shares of common stock (by reclassification or otherwise), declared
on the common stock, par value $.0075 per share, of the Corporation (the "Common
Stock") since the immediately preceding Quarterly Dividend Payment Date, or,
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series B Stock. As used herein,
the "Adjustment Number" shall initially be 100, but if the Corporation at any
time after November 8, 1996 (the "Declaration Date") (i) declares
A-1
any dividend on Common Stock payable in shares of Common Stock, (ii) subdivides
the outstanding Common Stock, or (iii) combines the outstanding Common Stock
into a smaller number of shares, then in each such case the Adjustment Number
immediately after such event shall equal the Adjustment Number immediately
before such event multiplied 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 before such event.
(B) The Corporation shall declare a dividend or distribution on the
Series B Stock as provided in paragraph (A) above immediately after it declares
a dividend or distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, if the total dividends declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date is less than $.01 per share,
a dividend equal $1.00 per share on the Series B Stock, minus an amount per
share equal to the dividends already paid on the Series B Stock during such
period, shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Stock from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares, unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
Series B Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series B Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of the Series B Stock shall have the
following voting rights:
(A) Each share of Series B Stock shall entitle the holder thereof to a
number of votes equal to the Adjustment Number on each matter submitted to a
vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein or by law, the holders of
Series B 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.
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(C) If at the time of any annual meeting of stockholders for the
election of directors a default in preference dividends on the shares of the
Series B Stock shall exist, the number of directors constituting the Board of
Directors shall be increased by two, and the holders of Series B Stock (whether
or not the holders of the Series B Preferred Stock would be entitled to vote for
the election of Directors if such default in preference dividends did not
exist), shall have the right at such meeting, voting together as a single class,
to the exclusion of the holders of Common Stock, to elect two directors of the
Company to fill such newly created directorships. Such right shall continue
until there are no dividends in arrears upon the Series B Stock. Each director
elected by the holders of shares of Series B Stock (herein called a "Preferred
Director") shall continue to serve as such director for the full term for which
he shall have been elected, notwithstanding that prior to the end of such term a
default in preference dividends shall cease to exist. Any Preferred Director may
be removed by, and shall not be removed except by, the vote of the holders of
record of the outstanding shares of Series B Stock, voting together as a single
class, at a meeting of the stockholders, or of the holders of shares of Series B
Stock, called for that purpose. So long as a default in any preference dividends
on the Series B Stock shall exist, (i) any vacancy in the office of a Preferred
Director may be filled (except as provided in the following clause (ii)) by an
instrument in writing signed by the remaining Preferred Director and filed with
the corporation and (ii) in the case of the removal of any Preferred Director,
the vacancy may be filled by the vote of the holders of the outstanding shares
of Series B Stock, voting together as a single class, at the same meeting at
which such removal shall be voted. Each director appointed as aforesaid by the
remaining Preferred Director shall be deemed, for all purposes hereof, to be a
Preferred Director. Whenever the term of office of the Preferred Directors shall
end and a default in preference dividends shall no longer exist, the number of
Directors constituting the Board of Directors of the Corporation shall be
reduced by two. For the purposes hereof, a "default in preference dividends on
the Series B Stock" shall be deemed to have occurred whenever the amount of
accrued dividends upon the Series B Stock shall be equivalent to six full
quarter-yearly dividends or more, and, having so occurred such default shall be
deemed to exist thereafter until, but only until, all accrued dividends on all
shares of Series B Stock shall have been paid, or declared and set aside for
payment, to the end of the last preceding quarterly dividend.
(D) Except as set forth herein, holders of Series B Stock shall have no
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series B Stock outstanding have been paid in full,
the Corporation shall not
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of stock
A-3
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series B Stock;
(ii) declare or pay dividends or make any other distributions on any
shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series B Stock, except dividends paid
ratably on the Series B Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series B Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such parity stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or winding up)
to the Series B Stock;
(iv) purchase or otherwise acquire for consideration any shares of
Series B Stock except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors shall determine in good faith
will result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series B Stock purchased or
otherwise acquired by the Corporation in any manner shall be retired and
canceled promptly after such acquisition. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Stock unless, prior thereto, the
holders of Series B Stock have received, for each such share, a number of
dollars equal to the Adjustment Number, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date
of such payment (the "Series B Liquidation Preference"). Following the payment
of the full amount of the Series B Liquidation Preference, no additional
distributions shall be made to the holders of Series B Stock unless, prior
thereto, the holders of Common Stock
A-4
shall have received an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series B Liquidation Preference by (ii)
the Adjustment Number. Following the payment of the full amount of the Series B
Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series B Stock and Common Stock, respectively, holders of Series B
Stock and holders of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed to them in the ratio of the
Adjustment Number to one with respect to such Preferred Stock and Common Stock,
on a per share basis, respectively.
(B) If there are not sufficient assets available to permit payment in
full of the Series B Liquidation Preference and the liquidation preferences of
all other series of preferred stock, if any, that rank on a parity with the
Series B Stock, then such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective liquidation
preferences. If thereafter there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock (subject to the rights of any
Preferred Stock other than the Series B Stock).
Section 7. Consolidation, Merger, etc. If the Corporation enters 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 each such case the Series B Stock shall at
the same time be similarly exchanged or changed in an amount per share equal to
the Adjustment Number multiplied by 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.
Section 8. No Redemption. The Series B Stock shall not be redeemable.
Section 9. Ranking. The Series B Stock shall rank junior to all other series of
the Corporation's Preferred Stock as to the payment of dividends and the
distribution of assets, unless the terms of any such series provide otherwise.
Section 10. Amendment. Whenever any Series B Stock is outstanding, the
Certificate of Incorporation of the Corporation shall not be amended in any
manner that would materially adversely affect the powers, preferences or special
rights of the Series B Stock without the affirmative vote of the holders of a
majority of the outstanding shares of Series B Stock, voting separately as a
class.
Section 11. Fractional Shares. Series B Stock may be issued in fractions of a
share which shall entitle the holder, in proportion to such holder's fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series B
Stock.
NAPRO BIOTHERAPEUTICS, INC.
By: /s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
By: /s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Ph.D.
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Ph.D.
Title: Secretary
A-5
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R-________ ________ Rights
EXPIRES ON NOVEMBER 8, 2006 OR EARLIER IF REDEEMED BY THE COMPANY. THE RIGHTS
ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT)
AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.]
Rights Certificate
NAPRO BIOTHERAPEUTICS, INC.
This certifies that __________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms of the Rights Agreement dated as of
November 8, 1996, and as amended and restated as of September 25, 2001 (the
"Rights Agreement") between NaPro BioTherapeutics, Inc. (the "Company"), and
American Stock Transfer and Trust Company (the "Rights Agent"), to purchase from
the Company at any time prior to 5:00 P.M. (New York City time) on November 8,
2006, at the office or offices of the Rights Agent designated for such purpose,
or its successor as Rights Agent, one- hundredths of a fully paid,
non-assessable share of Series B Junior Participating Preferred Stock (the
"Preferred Stock") of the Company, at a purchase price of $60.00 per
one-hundredths of a share (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares that may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth above, are
the number and Purchase Price as of Distribution Date (as defined in the Rights
Agreement), based on the Preferred Stock as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as defined in the
Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person,
B-1
Associate or Affiliate, or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities that may be purchased
upon exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the occurrence of certain events.
This Rights Certificate is subject to the terms of the Rights
Agreement, which terms are hereby incorporated herein by reference and made a
part hereof and to which Rights Agreement reference is made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the circumstances set
forth in the Rights Agreement. Copies of the Rights Agreement are on file at the
above- mentioned office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent designated
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one- hundredths of a share of Preferred
Stock as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this Rights
Certificate is exercised in part, the holder shall be entitled to receive upon
surrender hereof another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Company at its option at a redemption price
of $.01 per Right at any time prior to the earlier of the close of business on
(i) the tenth day following the Stock Acquisition Date (as such time period may
be extended pursuant to the Rights Agreement), and (ii) the Final Expiration
Date.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than integral multiples
of one one-hundredth of a share of Preferred Stock, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred
Stock or of any other securities of the Company issuable upon the exercise
hereof, nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such,
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any of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid for any purpose unless
countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of
---------------
ATTEST: NAPRO BIOTHERAPEUTICS, INC.
By:
Countersigned:
AMERICAN STOCK TRANSFER
AND TRUST COMPANY
By:
Authorized Signature
[Form of Reverse Side of Rights Certificate]
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FORM OF ASSIGNMENT
(To be executed by the registered holder to transfer the Rights
Certificate.)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _____________________________________________________________
-------------------------------------------------------------
(Please print name and address of transferee)
-------------------------------------------------------------
this Rights Certificate, together with all right, title and interest therein and
does hereby irrevocably constitute and appoint ________________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated:_________________
---------------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [] is [] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[] did [] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:____________________ ________________________________
Signature
Signature Guaranteed:
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NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular.
FORM OF ELECTION TO PURCHASE (To be
executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: NaPro BioTherapeutics, Inc.:
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person that may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
Please insert social security
or other identifying number
-------------------------------
(Please print name and address)
-------------------------------
-------------------------------
-------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
-------------------------------
(Please print name and address)
----------------------------------------------------------
----------------------------------------------------------
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----------------------------------------------------------
Dated:___________________
--------------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [] are [] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[] did [] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:_____________________________
---------------------------------
Signature
Signature Guaranteed:
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NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular. DO NOT DESTROY. ATTACH TO YOUR NAPRO BIOTHERAPEUTICS, INC.
STOCK CERTIFICATE.
B-7
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
General. On November 8, 1996, the Board of Directors of NaPro BioTherapeutics,
Inc. (the "Company") declared a dividend of one Right for each outstanding share
of the Company's common stock, par value $.0075 per share (the "Common Stock").
The Rights were issued on November 26, 1996, to holders of record of Common
Stock on that date. In addition, until the Rights become exercisable as
described below and in certain limited circumstances thereafter, the Company has
issued and will continue to issue one Right for each share of Common Stock
issued after November 26, 1996. Each Right, when it becomes exercisable, will
entitle its registered holder to purchase from the Company one one-hundredth of
a share (a "Unit") of the Company's Series B Junior Participating Preferred
Stock, par value $.001 ("Preferred Stock") at a price of $60.00 (the "Purchase
Price") subject to adjustment. The Rights were issued pursuant to a Rights
Agreement (the "Rights Agreement" between the Company and American Stock
Transfer and Trust Company, as Rights Agent. The Rights Agreement was amended
and restated on September 25, 2001. The following summary does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
as so amended and restated and exhibits thereto, which is incorporated herein by
reference, including the definition of certain terms contained therein.
Distribution Date. The Rights will not be exercisable until the Distribution
Date (as defined below). Prior to the Distribution Date, they will be evidenced
by the certificates for Common Stock and will be transferred with and only with
the Common Stock. In general, the Rights will separate from the Common Stock and
the "Distribution Date" will occur upon the earlier of the following: (i) the
tenth day after the first public disclosure that a person or group (an
"Acquiring Person") has acquired beneficial ownership of 20% or more of the
outstanding Common Stock (the "Stock Acquisition Date"), or (ii) the tenth
business day after the commencement of a tender or exchange offer that, if
consummated, would result in one person or group beneficially owning 20% or more
of the outstanding Common Stock.
On the Distribution Date, each Right will become exercisable to purchase one
one-hundredth share of Preferred Stock until November 8, 2006 (the "Expiration
Date"), except as described below, unless the Rights are earlier redeemed. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights (the "Rights Certificates") will be mailed to holders of
record of the Common Stock as of the close of business on the Distribution Date.
The separate Rights Certificates will thereafter evidence ownership of
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the Rights, which will then trade separately from the Common Stock.
Issuance of Preferred Shares. The Preferred Stock will have a liquidation
preference of $1.00 per hundredth of a share. Dividends on the Preferred Stock
will be payable quarterly in an amount for each one-hundredth of a share of
Preferred Stock equal to the greater of $.01 or the amount per share of any
dividend paid on the Company's Common Stock for such quarter. Unpaid dividends
will cumulate. The Preferred Stock will not be redeemable. Each one-hundredth
share of Preferred Stock will have the same voting rights as one share of Common
Stock.
Pursuant to the Rights Agreement, the purchase price payable, and the number of
Units of Preferred Stock or other securities or property issuable, upon the
exercise of the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision, combination
or reclassification of the Preferred Stock, (ii) if holders of the Preferred
Stock are granted certain rights or warrants to subscribe for Preferred Stock or
convertible securities at less than the current market price of the Preferred
Stock, or (iii) upon the distribution to the holders of the Preferred Stock of
evidences of indebtedness or assets (excluding regular quarterly cash
dividends), assets or subscription rights or warrants (other than those referred
to above).
The Preferred Stock may be issued in fractions that are integral multiples of
one one-hundredth of a share. No fractional Units will be issued upon any
exercise of Rights, and in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Stock on the then-current market
price of such shares.
Effects of "Triggering Events." Under certain circumstances, the Rights will
entitle their holders to purchase securities other than Preferred Stock. If any
person becomes an Acquiring Person, each holder of a Right (except Rights that
are void as set forth below) will thereafter have the right to receive, upon
exercise, Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the exercise price
of the Right. However, the Rights are not exercisable in any event until such
time as the Rights are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $60 per Right, each Right not owned by an
Acquiring Person (or by certain related parties) following an event set forth in
the preceding paragraph would entitle its holder to purchase $120 worth of
Common Stock (or other consideration, as noted above) for $60. Assuming that the
Common Stock had a per share value of $30 at such time, the holder of each valid
Right would be
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entitled to purchase four shares of Common Stock for $60.
If at any time following the Stock Acquisition Date (i) the Company is acquired
in a merger or other business combination transaction in which the Common Stock
is changed or exchanged or in which the Company is not the surviving
corporation, or (ii) 50% or more of the Company's assets or earning power is
sold or transferred, each holder of a Right (except Rights that are void as set
forth below) shall thereafter have the right to receive, upon exercise, common
stock of the acquiring company having a value equal to two times the exercise
price of the Right. The events set forth in this paragraph and in the second
paragraph of this Item 1 are referred to as the "Triggering Events."
Any Rights that are beneficially owned by a person who is or who later becomes
an Acquiring Person (or any affiliate or associate of an Acquiring Person) or
are owned by certain transferees of an Acquiring Person shall become void from
and after the time such person becomes an Acquiring Person. Thus, any holder of
such a Right (including any subsequent holder) may be unable to exercise the
Right after the occurrence of a Triggering Event.
Redemption. At any time before the earlier of (i) the tenth day following the
Stock Acquisition Date, or (ii) November 8, 2006, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, for $.01 per Right (the
"Redemption Price"). The redemption period may be extended if it has not yet
expired at the time of the extension.
If the Board of Directors elects to redeem the Rights, the Company will announce
the redemption, the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price.
Exchange. At any time after any person becomes an Acquiring Person, the Board of
Directors of the Company may exchange all or any part of the then outstanding
and exercisable Rights (except for Rights that have become void) for Common
Shares at an exchange ratio of one Common Share per Right, appropriate adjusted.
However, the Board of Directors is not empowered to effect such exchange at any
time after any person, together with all affiliates and associates of such
person) becomes the beneficial owner of 50% or more of the Common Shares then
outstanding.
Amendments. At any time before the Distribution Date, the Company may, without
the approval of any holder of the Rights, amend any provision of the Rights
Agreement, except that the Company cannot change the Redemption Price, the
Expiration Date, the Purchase Price or the number of one-hundredths of a share
of Preferred Stock for which a Right is exercisable. At any time after the
Distribution Date, the Company may amend the Rights Agreement without the
approval of the holders of the Rights to cure any ambiguity, to correct any
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defective or inconsistent provision, subject to certain exceptions, to shorten
or lengthen any time period or to change a provision in any manner the Company
deems necessary and that does not adversely affect the interests of the holders
of the Rights. However, the Company can extend the redemption period only if the
Rights are redeemable at the time of the extension.
Other Considerations. Until a Right is exercised, its holder, as such, will have
no rights as a stockholder of the Company, such as the right to vote or to
receive dividends. While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon the
circumstances, recognize taxable income if the Rights become exercisable upon
the occurrence of a Triggering Event as set forth above.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A, dated
October [_], 2001. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
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