EXHIBIT 4.1
RIGHTS AGREEMENT
between
ODYSSEY HEALTHCARE, INC.
and
U.S. STOCK TRANSFER CORPORATION
as Rights Agent
Dated as of November 5, 2001
TABLE OF CONTENTS
Section 1. Certain Definitions.......................................................1
Section 2. Appointment of Rights Agent..............................................10
Section 3. Issue of Right Certificates..............................................11
Section 4. Form of Right Certificates...............................................13
Section 5. Execution, Authentication and Delivery...................................15
Section 6. Registration, Registration of Transfer and Exchange......................16
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates.................17
Section 8. Exercise of Rights; Purchase Price; Expiration Date of Rights............18
Section 9. Cancellation and Destruction of Right Certificates.......................21
Section 10. Reservation and Availability of Shares...................................21
Section 11. Record Date..............................................................23
Section 12. Adjustment of Purchase Price, Number of Shares or Number of Rights.......23
Section 13. Certificate of Adjusted Purchase Price or Number of Shares...............33
Section 14. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.....34
Section 15. Fractional Rights and Fractional Shares..................................36
Section 16. Rights of Action.........................................................37
Section 17. Agreement of Right Holders...............................................38
Section 18. Right Certificate Holder Not Deemed a Stockholder........................39
Section 19. Concerning the Rights Agent..............................................40
Section 20. Duties of Rights Agent...................................................40
Section 21. Merger or Consolidation or Change of Name of Rights Agent................43
Section 22. Change of Rights Agent...................................................44
Section 23. Issuance of New Right Certificates.......................................45
Section 24. Redemption...............................................................45
Section 25. Mandatory Redemption and Exchange........................................47
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Section 26. Notice of Certain Events.................................................48
Section 27. Securities Laws Registrations............................................50
Section 28. Notices..................................................................51
Section 29. Supplements and Amendments...............................................51
Section 30. Successors...............................................................52
Section 31. Benefits of this Agreement...............................................52
Section 32. Severability.............................................................52
Section 33. Governing Law............................................................53
Section 34. Counterparts.............................................................53
Section 35. Descriptive Headings.....................................................53
Section 36. Board of Directors.......................................................53
Exhibits
Exhibit A - Certificate of Designation of Series A Junior Participating Preferred Stock
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights To Purchase Preferred Stock
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RIGHTS AGREEMENT
This
Rights Agreement, dated as of November 5, 2001, is between Odyssey
HealthCare, Inc., a
Delaware corporation (the "Company"), and U.S. Stock
Transfer Corporation, as Rights Agent.
WHEREAS, the Board of Directors (as defined in Section 1(a) hereof),
having determined its actions to be in the interests of the Company, has
authorized the creation of Rights, has authorized and directed the issuance to
the holders of record of Common Shares of the Company outstanding as of the
Close of Business (as defined in Section 1(g) hereof) on November 5, 2001 (the
"Record Date"), of one Right with respect to each Common Share of the Company
outstanding on the Record Date, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earlier of the Distribution Date,
the Redemption Date and the Final Expiration Date; and
WHEREAS, the Board of Directors has authorized and directed that the
terms and conditions under which the Rights are to be distributed, including
without limitation those affecting the exercise thereof, the securities or other
property to be acquired thereby and the purchase price to be paid therefor,
shall be set forth in a written agreement between the Company and a rights
agent.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or
which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 15% or more of the
Voting Shares then outstanding, but shall not include the
Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or any
trustee of or fiduciary with
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respect to any such plan when acting in such capacity.
Notwithstanding the foregoing, no member of the ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇ Group shall be considered an "Acquiring Person" unless
the ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ Group, collectively, shall become the
Beneficial Owner of 17% or more of the Voting Shares then
outstanding, which percentage shall be reduced automatically
to an amount equal to the ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ Group's then
current Beneficial Ownership immediately following any
disposition of Voting Shares by any one or more members of the
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ Group or new issuances of Voting Shares by
the Company, but in no event to a percentage less than 15%.
Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" solely as the result of an acquisition of Voting
Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially
owned by such Person to the amount of Voting Shares necessary for such
Person to become an Acquiring Person; provided, however, that, if a
Person shall become the Beneficial Owner of the amount of Voting Shares
necessary for such Person to become an Acquiring Person by reason of
share purchases by the Company and shall, after such share purchases by
the Company and at a time when such Person is the Beneficial Owner of
the amount of Voting Shares necessary for such Person to become an
Acquiring Person, become the Beneficial Owner of any additional Voting
Shares, then such Person shall be deemed to be an "Acquiring Person".
Notwithstanding the foregoing, if the Board of Directors determines in
good faith that a Person who would otherwise be an "Acquiring Person",
as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently, and such Person divests as promptly as
practicable, but in any event within the time period directed by the
Board of Directors, a sufficient number of Common Shares so that such
Person would no
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longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring Person" for any purposes of this Agreement. Nothing
in this Section 1(a) shall affect the effect or application of Section
8(e).
(b) "Agreement" shall mean this
Rights Agreement as hereafter
amended from time to time.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under 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 "own beneficially" any securities which (without
duplication):
(1) such Person or any of such Person's Affiliates or
Associates has the right to acquire (whether such right is
exercisable immediately or only after the passage of time,
compliance with regulatory requirements, the fulfillment of a
condition or otherwise) pursuant to any oral or written
agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group
members (A) with respect to a bona fide public offering of
securities or (B) in connection with a placement of securities
pursuant to Rule 144A under the Securities Act), or upon the
exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise; or the
right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, (i)
securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered
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securities are accepted for purchase or exchange, or (ii)
securities issuable upon exercise of Rights at any time prior
to any Person becoming an Acquiring Person;
(2) such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the Exchange Act) or has a
"pecuniary interest" or an "indirect pecuniary interest" in
(as determined pursuant to Rule 16a-1(a)(2) of the Exchange
Act), in either case 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 (2) as a result of an agreement,
arrangement or understanding to vote such security (A) which
arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable rules
and regulations of the Exchange Act and (B) is not also then
reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(3) are beneficially owned, directly or indirectly,
by any other Person with which such Person or any of such
Person's Affiliates or Associates has any oral or written
agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group
members (A) with respect to a bona fide public offering of
securities or (B) in connection with a placement of securities
pursuant to Rule 144A under the Securities Act) for the
purpose of acquiring, holding, voting (other than voting
pursuant to a revocable proxy as contemplated by the proviso
to subparagraph (2) of this paragraph) or disposing of any
securities of the Company.
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Notwithstanding anything in this definition to the contrary, the phrase
"then outstanding", when used with reference to a Person's Beneficial Ownership
of securities of the Company (or to the number of such securities "beneficially
owned"), shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially hereunder.
(e) "Board of Directors" means the Board of Directors of the
Company.
(f) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of Texas are
authorized or obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00
P.M., Dallas, Texas time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., Dallas, Texas time,
on the next succeeding Business Day.
(h) "Closing Price", with respect to any security, shall mean
the last sale price, regular way, on a specific Trading Day or, in case
no such sale takes place on such Trading 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 such security is not then listed or admitted to trading
on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which such
security is listed or admitted to trading or, if such security is not
then listed or admitted to trading on any national securities exchange,
the last quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations
System or such other system then in use, or, if on any such Trading Day
such security is not quoted by any such organization, the average of
the closing bid and
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asked prices as furnished by a professional market maker making a
market in such security selected by the Board of Directors. If such
security is not publicly held or so listed or traded, "Closing Price"
shall mean the fair value per unit of such security as determined in
good faith by the Board of Directors, whose determination shall be
described and the Closing Price set forth in a statement filed with the
Rights Agent.
(i) "Common Shares" when used with reference to the Company
shall mean shares of capital stock of the Company which have no
preference over any other class of stock with respect to dividends or
assets, which are not redeemable at the option of the Company and with
respect to which no sinking, purchase or similar fund is provided and
shall initially mean the shares of Common Stock, par value $.001 per
share, of the Company. "Common Shares" when used with reference to any
Person other than the Company shall, if used with reference to a
corporation, mean the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other Person is
a Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person and, if used with reference to any
other Person, mean the equity interest in such Person (or, if the net
worth determined in accordance with generally accepted accounting
principles of another Person (other than an individual) which controls
such first-mentioned Person is greater than such first-mentioned
Person, then such other Person) with the greatest voting power or
managerial power with respect to the business and affairs of such
Person. Common Shares used without reference to the Company or any
other Person shall be deemed to refer to Common Shares of the Company
unless the context otherwise requires.
(j) "Company" shall mean Odyssey HealthCare, Inc., a
Delaware
corporation, and its successors.
(k) "Company Order" means a written request or order signed in
the name of the Company by its Chairman of the Board, its President,
its Chief Executive Officer or a Vice
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President, and by its Chief Financial Officer, its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Rights Agent.
(l) "Corporate Trust Office" means the principal office of the
Rights Agent at which it administers its corporate trust business,
which, in the case of U.S. Stock Transfer Corporation, shall, until
hereafter changed, be its office at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(m) "Distribution Date" shall mean the Close of Business on
the earlier of (1) the tenth Business Day after the Shares Acquisition
Date or (2) the tenth Business Day (or such later date as may be
determined by action of the Board of Directors prior to such time as
any Person becomes an Acquiring Person) after the date of commencement
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 trustee of or fiduciary with respect to any such plan
when acting in such capacity) of, or after the date of the first public
announcement of, the intent of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company, or any trustee of or fiduciary with
respect to any such plan when acting in such capacity) to commence a
tender or exchange offer, the consummation of which would result in any
Person becoming an Acquiring Person; provided, however, that an
occurrence described in clause (2) of this definition above shall not
cause the occurrence of the Distribution Date if the Board of Directors
shall, prior to the Close of Business on such tenth Business Day (or
such later date as described in clause (2) above), determine that such
tender or exchange offer is spurious, unless, thereafter, the Board of
Directors shall make a contrary determination, in which event the
Distribution Date shall occur on the later to occur of the Close of
Business on such tenth Business Day (or the Close of Business on such
later date as described in clause (2) above) and the Close of Business
on the date of such latter determination.
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(n) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and any successor statute thereto.
(o) "Final Expiration Date" shall mean the Close of Business
on November 5, 2011.
(p) "Person" shall mean any individual, firm, corporation,
partnership, limited partnership, limited liability company, joint
venture, association, trust, unincorporated organization, group or
other entity, and shall include any successor (by merger or otherwise)
of such entity.
(q) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.001 per share, of the
Company having the rights and preferences set forth in the form of
Certificate of Designation of Series A Junior Participating Preferred
Stock attached hereto as Exhibit A, and, to the extent that there is
not a sufficient number of shares of Series A Junior Participating
Preferred Shares outstanding to permit the full exercise of the Rights,
any other authorized shares of preferred stock, par value $.001 per
share, of the Company having rights and preferences substantially
identical to such Series A Preferred Shares.
(r) "Purchase Price" shall mean the initial price at which the
holder of a Right may, subject to the terms and conditions of this
Agreement, purchase one one-thousandth (1/1000) of a Preferred Share
(which initial price is set forth in Section 8(b) hereof), as such
price shall be adjusted pursuant to the terms of this Agreement.
(s) "Record Date" shall have the meaning provided in the
recitals to this Agreement.
(t) "Redemption Date" shall mean the time at which the Rights
are redeemed pursuant to Section 24 herein or the time at which all of
the Rights are mandatorily redeemed and exchanged pursuant to Section
25 hereof.
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(u) "Redemption Price" shall have the meaning specified in
Section 24(b) herein.
(v) "Right" shall mean one preferred share purchase right
which initially represents the right of the registered holder thereof
to purchase one one-thousandth (1/1000) of a Preferred Share upon the
terms and subject to the conditions herein set forth.
(w) "Right Certificate" shall mean a certificate, in
substantially the form of Exhibit B attached to this
Rights Agreement,
evidencing the Rights registered in the name of the holder thereof.
(x) "Rights Agent" shall mean U.S. Stock Transfer Corporation
and any successor thereto appointed in accordance with the terms
hereof, in its capacity as agent for the Company and the holders of the
Rights pursuant to this Agreement.
(y) "Rights Register" and "Rights Registrar" shall have the
meanings specified in Section 6.
(z) "Securities Act" shall mean the Securities Act of 1933, as
amended, and any successor statute thereto.
(aa) "Shares Acquisition Date" shall mean the first date of
public announcement (which for purposes of this definition shall
include without limitation a report filed pursuant to Section 13(d) or
Section 16(a) of the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such.
(bb) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the outstanding capital stock or
other equity interests having ordinary voting power in the election of
directors or similar officials is owned, directly or indirectly, by
such Person.
(cc) "Summary of Rights" shall mean a Summary of Rights to
Purchase Preferred Shares in substantially the form attached as Exhibit
C to this Agreement.
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(dd) "Trading Day" shall mean a day on which the principal
national securities exchange on which any of the Voting Shares are
listed or admitted to trading is open for the transaction of business
or, if none of the Voting Shares is listed or admitted to trading on
any national stock exchange, a Business Day.
(ee) "Voting Shares" shall mean (1) the Common Shares of the
Company and (2) any other shares of capital stock of the Company
entitled to vote generally in the election of directors or entitled to
vote together with the Common Shares in respect of any merger or
consolidation of the Company, any sale of all or substantially all of
the Company's assets or any liquidation, dissolution or winding up of
the Company. Whenever any provision of this Agreement requires a
determination of whether a number of Voting Shares comprising a
specified percentage of such Voting Shares is, was or will be
beneficially owned or has been voted, tendered, acquired, sold or
otherwise disposed of or a determination of whether a Person has
offered or proposed to acquire a number of Voting Shares comprising
such specified percentage, the number of Voting Shares comprising such
specified percentage of Voting Shares shall in every such case be
deemed to be the number of Voting Shares comprising the specified
percentage of all the Company's then outstanding Voting Shares.
(ff) "▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ Group" shall mean, collectively, WPG
Enterprise Fund, L.L.C., ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ Venture Associates III,
L.L.C. and their respective Affiliates or Associates.
(gg) "Wholly-Owned Subsidiary" of a Person shall mean any
corporation or other entity all the outstanding capital stock or other
equity interests of which having ordinary voting power in the election
of directors or similar officials (other than directors' qualifying
shares or similar interests) are owned, directly or indirectly, by such
Person.
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
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Section 3 hereof, shall prior to the Distribution Date also be the holders of
the Common Shares of the Company) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Right Certificates. (a) Until the Distribution
Date, (1) outstanding Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) (A) with respect to Common Shares that are held
in certificated form, by the certificates for outstanding Common Shares of the
Company and not by separate Right Certificates and (B) with respect to Common
Shares that are held in book-entry form, by a notation in the records of the
Rights Agent (and the records of the Company's transfer agent if different from
the Rights Agent), and (2) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares of the
Company. As soon as practicable after the Distribution Date, the Company will
prepare and execute, and the Rights Agent will countersign and send, by
first-class, insured, postage-prepaid mail, to each record holder of Common
Shares of the Company as of the Close of Business on the Distribution Date, at
the address of such holder shown on the stock transfer records of the Company, a
Right Certificate evidencing one Right for each Common Share so held, subject to
adjustments as provided herein. From and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon thereafter as practicable,
the Company will send a copy of a Summary of Rights, by first-class,
postage-prepaid mail, to each record holder of Common Shares of the Company as
of the Close of Business on the Record Date, at the address of such holder shown
on the stock transfer records of the Company. With respect to Common Shares
outstanding on the Record Date, the certificates evidencing such Common Shares
shall thereafter also evidence the outstanding Rights (as such Rights may be
amended or supplemented) distributed with respect thereto until the Distribution
Date and the registered holders of the Common Shares
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shall also be the registered holders of the associated Rights. Until the
Distribution Date (or, if earlier, the Redemption Date or Final Expiration
Date), the surrender for registration of transfer or exchange of (1) any
certificate for Common Shares outstanding as of the Close of Business on the
Record Date, with or without a copy of the Summary of Rights attached thereto,
and (2) any Common Shares held in book-entry form, shall also constitute the
surrender for registration of transfer or exchange of the outstanding Rights
associated with the Common Shares represented thereby.
(c) The Company agrees that, at any time after the Record Date
and prior to the Distribution Date (or, if earlier, the Redemption Date or Final
Expiration Date) at which it issues any of its Common Shares upon original issue
or out of treasury, it will concurrently distribute to the holder of such Common
Shares one Right for each such Common Share, which Right shall be subject to the
terms and provisions of this Agreement and will evidence the right to purchase
the same number of one one-thousandth (1/1000) of a Preferred Share at the same
Purchase Price as the Rights then outstanding.
(d) Certificates for Common Shares issued after the Record
Date but prior to the earliest of the Distribution Date, the Redemption Date and
the Final Expiration Date, whether upon registration of transfer or exchange of
Common Shares outstanding on the Record Date or upon original issue or out of
treasury thereafter, shall also be deemed to be certificates for the Rights and
shall have impressed on, printed on, written on or otherwise affixed to them the
following legend or such similar legend as the Company may deem appropriate and
as is not inconsistent with the provisions of this Agreement:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a
Rights Agreement, between Odyssey
HealthCare, Inc. (the "Company") and U.S. Stock Transfer Corporation,
dated as of November 5, 2001, as it may be amended (the "
Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of 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 without charge after receipt of a written
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request therefor. As described in the
Rights Agreement, Rights issued
to or acquired by any Acquiring Person or any Affiliate or Associate
thereof (each as defined in the Rights Agreement), whether currently
held by or on behalf of such Person or by any subsequent holder, shall,
under certain circumstances, become null and void.
With respect to certificates containing the foregoing legend, until the earlier
of the Distribution Date or the Final Expiration Date, outstanding Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender of any such certificate
for registration of transfer or exchange of the Common Shares evidenced thereby
shall also constitute surrender for registration of transfer or exchange of the
outstanding Rights (as such Rights may be amended or supplemented) associated
with the Common Shares represented thereby. The failure to print the foregoing
legend on any certificate or any other defect therein shall not affect in any
manner whatsoever the application or interpretation of the provisions of Section
8(e) hereof.
(e) If the Company purchases or acquires any of its Common
Shares after the Record Date, but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights associated with the
Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates. (a) The form of Right
Certificates (and the forms of election to purchase Preferred Shares (or other
securities) and of assignment to be printed on the reverse thereof) shall in
form and substance be substantially the same as Exhibit B hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, as may be required to comply
with any applicable law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which the Rights may from
time to time be listed or as may be necessary to conform to usage. Subject to
the provisions of Section 23 hereof, the Right Certificates, whenever issued,
shall be dated as of the date of authentication thereof, but, regardless of any
adjustments of the Purchase Price or the number of
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Preferred Shares (or other securities) as to which a Right is exercisable
(whether pursuant to this Agreement or any future amendments or supplements to
this Agreement), or both, occurring after the Record Date and prior to the date
of such authentication, such Right Certificates may, on their face, without
invalidating or otherwise affecting any such adjustment, expressly entitle the
holders thereof to purchase such number of Preferred Shares at the Purchase
Price per one one-thousandth (1/1000) of a Preferred Share as to which a Right
would be exercisable if the Distribution Date were the Record Date; no
adjustment of the Purchase Price or the number of Preferred Shares (or other
securities) as to which a Right is exercisable, or both, effected subsequent to
the date of authentication of any Right Certificate shall be invalidated or
otherwise affected by the fact that such adjustment is not expressly reflected
on the face or in the provisions of such Right Certificate.
(b) Pending the preparation of definitive Right Certificates, the
Company may execute, and upon Company Order the Rights Agent shall authenticate
and send, by first-class, insured, postage-prepaid mail, to each record holder
of Common Shares of the Company as of the Close of Business on the Distribution
Date, temporary Right Certificates which are printed, lithographed, typewritten,
mimeographed or otherwise produced substantially of the tenor of the definitive
Right Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Right Certificates may determine, as evidenced by their execution
of such Right Certificates.
(c) If temporary Right Certificates are issued, the Company will cause
definitive Right Certificates to be prepared without unreasonable delay. After
the preparation of definitive Right Certificates, the temporary Right
Certificates shall be exchangeable for definitive Right Certificates, upon
surrender of the temporary Right Certificates at the Corporate Trust Office of
the Rights Agent, without charge to the holder. Upon surrender for cancellation
of any one or more temporary Right Certificates, the Company shall execute and
the Rights Agent shall authenticate and deliver in exchange therefor one or more
definitive Right Certificates, evidencing a like number of Rights.
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Until so exchanged, the temporary Right Certificates shall in all respects be
entitled to the same benefits under this Agreement as definitive Right
Certificates.
(d) Any Right Certificate issued pursuant to Section 3(a) or Section 23
hereof that represents Rights beneficially owned by (1) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (2) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (3) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
avoidance of Section 8(e) hereof, and any Right Certificate issued pursuant to
Section 6 or Section 7 hereof upon transfer, exchange, replacement or adjustment
of any other Right Certificate referred to in this sentence, shall contain (to
the extent feasible) the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly,
this Right Certificate and the Rights represented hereby may
become null and void in the circumstances specified in Section
8(e) of such Agreement.
Section 5. Execution, Authentication and Delivery. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President, its Chief Executive Officer or one of its Vice Presidents,
under its corporate seal reproduced thereon attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the Right
Certificates may be manual or facsimile.
-15-
(b) Right Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Right
Certificates or did not hold such offices at the date of authentication of such
Right Certificates. At any time and from time to time after the execution and
delivery of this Agreement and prior to the Distribution Date, the Company may
deliver Right Certificates executed by the Company to the Rights Agent for
authentication, together with a Company Order for the authentication and
delivery of such Right Certificates; and the Rights Agent in accordance with
such Company Order shall authenticate and deliver such Right Certificates as
provided in this Agreement and not otherwise.
(c) No Right Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on such
Right Certificate a certificate of authentication substantially in the form
provided for herein executed by the Rights Agent by manual signature, and such
certificate upon any Right Certificate shall be conclusive evidence, and the
only evidence, that such Right Certificate has been duly authenticated and
delivered hereunder.
Section 6. Registration, Registration of Transfer and Exchange. From
and after the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Company shall cause to be kept at the
Corporate Trust Office of the Rights Agent a rights register (a "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Right Certificates and of
transfers of Rights. The Rights Agent is hereby appointed the registrar and
transfer agent (the "Rights Registrar") for the purpose of registering Right
Certificates and transfers of Rights as herein provided and the Rights Agent
agrees to maintain such Rights Register in accordance with such regulations so
long as it continues to be designated as Rights Registrar hereunder.
-16-
Upon surrender to the Rights Agent for registration of transfer of any
Right Certificate, the Company shall execute, and the Rights Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Right Certificates evidencing a like number of
Rights.
At the option of the holder, Right Certificates may be exchanged for
other Right Certificates upon surrender of the Right Certificates to be
exchanged to the Rights Agent. Whenever any Right Certificates are so
surrendered for exchange, the Company shall execute, and the Rights Agent shall
authenticate and deliver, the Right Certificates which the holder making the
exchange is entitled to receive.
All Right Certificates issued upon any registration of transfer or
exchange of Right Certificates shall be the valid obligations of the Company,
evidencing the same Rights, and entitled to the same benefits under this
Agreement, as the Right Certificates surrendered upon such registration of
transfer or exchange.
Every Right Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Rights Agent)
be duly endorsed, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Rights Registrar duly executed, by the
holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Right Certificates, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Right Certificates,
other than exchanges not involving any transfer.
The provisions of this Section 6 shall be subject to the provisions of
Section 4(d), Section 8(e) and Section 15.
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates.
(a) If any mutilated Right Certificate is surrendered to the Rights Agent, the
Company shall execute and the Rights Agent
-17-
shall authenticate and deliver in exchange therefor a new Right Certificate of
like tenor, for a like number of Rights and bearing a registration number not
contemporaneously outstanding.
(b) If there shall be delivered to the Company and the Rights Agent (1)
evidence to their satisfaction of the destruction, loss or theft of a Right
Certificate and (2) such security or indemnity, if any, as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Rights Agent that such Right Certificate
has been acquired by a bona fide purchaser, the Company shall execute and upon
its request the Rights Agent shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Right Certificate, a new Right Certificate of like
tenor, for a like number of Rights and bearing a registration number not
contemporaneously outstanding.
(c) Upon the issuance of any new Right Certificate under this Section,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Rights Agent) connected
therewith.
(d) Every new Right Certificate issued pursuant to this Section in lieu
of any destroyed, lost or stolen Right Certificate shall constitute an
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Right Certificate shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Right Certificates duly issued hereunder.
(e) The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Right Certificates.
Section 8. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Subject to the provisions of Section 8(e) hereof, the registered
holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at any time after
-18-
the Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at its Corporate Trust Office, together with payment of the Purchase Price
for each one one-thousandth (1/1000) of a Preferred Share (or other securities)
as to which the Rights are exercised, at or prior to the earliest of (1) the
Close of Business on the Final Expiration Date, (2) the time of redemption on
the Redemption Date or (3) the time at which such Rights are mandatorily
redeemed and exchanged as provided in Section 25 hereof.
(b) The Purchase Price for each one one-thousandth (1/1000) of a
Preferred Share pursuant to the exercise of a Right shall initially be $75.00,
shall be subject to adjustment from time to time as provided in Sections 12 and
14 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the securities to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 10 in cash, or by certified check
or cashier's check payable to the order of the Company, the Rights Agent shall
thereupon promptly (1) (A) requisition from any transfer agent of the Preferred
Shares (or other securities) certificates for such number of one one-thousandths
of a Preferred Share (or other securities) as are to be purchased and registered
in such name or names as may be designated by the registered holder of such
Right Certificate or, if appropriate, in the name of a depositary agent or its
nominee, 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 Preferred Shares issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from such depositary agent
appointed by the Company, depositary receipts representing such number of one
one-thousandths of a Preferred Share as are to be purchased and registered in
such name or names as may be designated by such holder (in
-19-
which case certificates for the Preferred Shares represented by such receipts
shall be deposited by the transfer agent with such depositary agent), and the
Company hereby directs such depositary agent to comply with all such requests,
(2) when appropriate, requisition from the Company the amount of cash to be paid
in lieu of issuance of fractional shares in accordance with Section 15 hereof,
(3) promptly after receipt of such certificates or depositary receipts
registered in such name or names as may be designated by such holder, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificate and (4) when appropriate, after receipt, promptly deliver such cash
to or upon the order of such holder. In the event that the Company is obligated
to issue other securities (including Common Shares) of the Company, pay cash
and/or distribute other property pursuant to Section 12(a) hereof, the Company
will make all arrangements necessary so that 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 the Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equal to the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 15 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, if any
Person shall become an Acquiring Person, thereafter any Rights beneficially
owned by (1) such Acquiring Person or an Associate or Affiliate of such
Acquiring Person, (2) a transferee of such Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (3) 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
-20-
or (B) a transfer which at least a majority of the Board of Directors has
determined is part of a plan or an agreement, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section 8(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 any
provision of this Agreement or otherwise. The Company shall use all reasonable
efforts to insure that the provisions of this Section 8(e) and Section 4(d)
hereof are complied with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to any Acquiring Person or its Affiliates,
Associates or transferees hereunder.
Section 9. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up
or exchange shall, if surrendered to the Company or to any of its other agents,
be delivered to the Rights Agent for such purpose and for cancellation or, if
surrendered to the Rights Agent for such purpose, shall be canceled by it. No
Right Certificates shall be authenticated in lieu of or in exchange for any
Right Certificates canceled as provided in this Section except as expressly
permitted by any of the provisions of 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 Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, pursuant to a Company
Order, destroy such canceled Right Certificates and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 10. Reservation and Availability of Shares. (a) The Company
covenants and agrees that it will cause to be reserved and kept available out of
its authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights.
-21-
(b) The Company further covenants and agrees that it will, from and
after the Distribution Date, cause to be reserved and kept available out of its
authorized and unissued Common Shares or any Common Shares held in its treasury,
the number of Common Shares of the Company that will be sufficient to permit the
exercise in full of all outstanding Rights if adjusted pursuant to Section
12(a)(2).
(c) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares or Common Shares of the
Company issued upon exercise of Rights shall (subject to payment of the Purchase
Price) at the time of delivery of the certificates representing any such
Preferred Shares or Common Shares be duly authorized, validly issued, fully paid
and nonassessable. The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares (or depositary receipts therefor) or
Common Shares of the Company upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than, or in
respect of the issuance or delivery of certificates or depositary receipts for
the Preferred Shares or Common Shares of the Company upon exercise of Rights
evidenced by Right Certificates in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for transfer or
exercise or to issue or deliver any certificates or depositary receipts for
Preferred Shares or Common Shares of the Company upon the exercise of any Rights
until any such tax shall have been paid (any such tax being payable by the
holder of such Right Certificate at the time of surrender thereof) or until it
has been established to the Company's satisfaction that no such tax is due.
(d) So long as the Common Shares issuable and deliverable upon the
exercise of the Rights may be listed on any national securities exchange, the
Company shall use its best efforts to promptly cause, from and after such time
as the Rights become exercisable, all Common Shares and
-22-
other securities reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
Section 11. Record Date. Each Person in whose name any certificate for
Preferred Shares or Common Shares of the Company is issued upon the exercise of,
or upon mandatory redemption and exchange of, Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Shares or Common
Shares represented thereby on, and such certificate shall be dated, (a) in the
case of the exercise of Rights, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made, or (b) in the case of the
mandatory redemption and exchange of Rights, the date of such mandatory
redemption and exchange; provided, however, that, if the date of such surrender
and payment or mandatory redemption and exchange is a date upon which the
transfer books of the Company for its Preferred Shares or Common Shares, as the
case may be, are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which such transfer books of the Company are open.
Prior to the exercise of (or the mandatory redemption and exchange of) the
Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred Shares (or Common Shares of the
Company) for which the Rights shall be exercisable, including without limitation
the rights 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.
Section 12. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number and kind of shares of capital stock of
the Company covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 12.
-23-
(a) (1) If the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 12(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised thereafter shall be entitled to
receive, upon payment of the Purchase Price for the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such date, the aggregate number and kind of shares of
capital stock which, if such Right had been duly exercised immediately prior to
such date (at a time when the Preferred Shares transfer books of the Company
were open), such holder would have acquired upon such exercise and been entitled
to receive upon payment or effectuation 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. If an event occurs which would require an adjustment
under both Section 12(a)(1) and Section 12(a)(2), the adjustment provided for in
this Section 12(a)(1) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 12(a)(2).
(2) Subject to action of the Board of Directors pursuant
to Section 25 of this Agreement, if any Person shall become an Acquiring Person,
each holder of a Right shall thereafter have a right to receive, upon exercise
thereof at a price equal to the then current Purchase Price multiplied by the
number of one one-thousandths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such
-24-
number of Common Shares of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of one one-thousandths
of a Preferred Share for which a Right is then exercisable and dividing that
product by (y) 50% of the then current per share market price of the Company's
Common Shares (determined pursuant to Section 12(d)) on the date such Person
became an Acquiring Person. If any Person shall become an Acquiring Person and
the Rights shall then be outstanding, the Company shall not take any action
which would eliminate or diminish the benefits intended to be afforded by the
Rights.
(3) In the event that the number of Common Shares that are
authorized by the Company's certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights are
not sufficient to permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (2) of this Section 12(a), the Company shall: (A)
determine the excess of (1) the value of the Common Shares issuable upon the
exercise of a Right (the "Current Value"), over (2) the Purchase Price (such
excess, the "Spread"), and (B) with respect to each Right, make adequate
provision to substitute for such Common Shares, upon exercise of the Rights and
payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Shares or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred stock
which the Board of Directors of the Company has deemed to have the same value as
shares of Common Shares (such shares of preferred stock, "Common Share
Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board of Directors
of the Company based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the Company; provided,
however, that if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty (30) days following the first
occurrence of a Shares Acquisition Date, then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and
-25-
without requiring payment of the Purchase Price, Common Shares (to the extent
available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If the Board of Directors of the Company
shall determine in good faith that it is likely that sufficient additional
Common Shares could be authorized for issuance upon exercise in full of the
Rights, the thirty (30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the Shares Acquisition Date,
in order that the Company may seek stockholder approval for the authorization of
such additional shares (such period, as it may be extended, the "Substitution
Period"). To the extent that the Company determines that some action need be
taken pursuant to the first and/or second sentences of this Section 12(a)(3),
the Company (x) shall provide, subject to Section 8(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension, the Company
shall promptly notify the Rights Agent in writing of such suspension and 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 (with prompt written notice to the Rights
Agent that such suspension is no longer in effect). For purposes of this Section
12(a)(3), the value of Common Shares shall be the current market price (as
determined pursuant to Section 12(d) hereof) per share of the Common Shares on
the Shares Acquisition Date and the value of any Common Stock Equivalent shall
be deemed to have the same value as the Common Shares on such date.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares") or
-26-
securities convertible into or exchangeable for Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (together with any additional consideration required upon
conversion or exchange in the case of a security convertible into or
exchangeable for Preferred Shares or equivalent preferred shares), less than the
current per share market price of the Preferred Shares (determined pursuant to
Section 12(d) on such record date), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of Preferred Shares outstanding on such record date plus the
number of Preferred Shares which the aggregate offering price of the total
number of Preferred Shares and/or equivalent preferred shares so to be offered
(together with the aggregate of any additional consideration required upon
conversion or exchange in the case of any convertible or exchangeable securities
so to be offered) would purchase at such current market price and the
denominator of which shall be the number of Preferred Shares outstanding on such
record date plus the number of additional Preferred Shares and/or equivalent
preferred shares to be offered for subscription or purchase (or into or for
which the convertible or exchangeable securities so to be offered are initially
convertible or exchangeable); 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. In case all or part of such subscription or purchase
price may be paid in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent.
Preferred Shares owned by or held for the account of the Company or any of its
Subsidiaries shall not be deemed outstanding for the purpose of any computation
described in this Section 12(b). The adjustment described in this Section 12(b)
shall be made successively whenever such a record date is fixed; and, if none of
such rights, options or warrants are so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
-27-
(c) If the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 12(b)), 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
then current per share market price of the Preferred Shares (determined pursuant
to Section 12(d)) on such record date, less the fair market value (as determined
in good faith by the Board of Directors, whose determination shall be described
in a statement filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to one Preferred Share and the denominator of which shall be
such current per share market price of the Preferred Shares; 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 to be issued upon the exercise of one Right. 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 again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (1) For the purpose of any computation hereunder, the
"current per share market price" of the Common Shares on any date shall be
deemed to be the average of the daily Closing Prices per share of such Common
Shares for the 30 consecutive Trading Days immediately prior to, but not
including, such date; provided, however, that, if the issuer of such Common
Shares shall announce (A) a dividend or distribution on such Common Shares
payable in such Common
-28-
Shares or securities convertible into such Common Shares or (B) any subdivision,
combination or reclassification of such Common Shares, and the ex-dividend date
for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, shall occur during such period of 30 Trading
Days, then, and in each such case, the current per share market price of the
Common Shares shall be appropriately adjusted to reflect the current market
price per Common Share equivalent.
(2) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be determined in
the same manner as set forth above for Common Shares in paragraph (1) of this
Section 12(d). If the current per share market price of the Preferred Shares
cannot be determined in the manner provided above, the "current per share market
price" of the Preferred Shares shall be conclusively deemed to be the current
per share market price of the Common Shares (determined in the manner provided
above) multiplied by one thousand.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; provided, however, that any adjustments which by reason of
this Section 12(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 12 shall be made to the nearest cent or to the nearest ten-thousandth of
a Common Share or other share or one ten-millionth of a Preferred Share, as the
case may be, and references herein to the "number of one one-thousandth of a
Preferred Share" (or similar phrases) shall be construed to include fractions of
one one-thousandths of a Preferred Share. Notwithstanding the first sentence of
this Section 12(e), any adjustment required by this Section 12 shall be made no
later than the earlier of (1) three years from the date of the transaction which
requires such adjustment or (2) the thirtieth day preceding the Final Expiration
Date.
(f) If as a result of an adjustment made pursuant to Section
12(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the
-29-
Company other than Preferred Shares, thereafter the number of such other shares
so receivable upon exercise of any Right 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 shares contained in this Section 12, and the
provisions of this Agreement, including without limitation Sections 8, 10, 11
and 14, with respect to the Preferred Shares shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall, whether or not the
Right Certificate evidencing such Rights reflects such adjusted Purchase Price,
evidence the right to purchase, at the adjusted Purchase Price, the number of
one one-thousandths of a Preferred Share purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as
provided in Section 12(i), upon each adjustment of the Purchase Price pursuant
to Section 12(b) or 12(c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to purchase, at
the adjusted Purchase Price per one one-thousandth of a Preferred Share, that
number of one one-thousandths of a Preferred Share obtained by (1) multiplying
(x) the number of one-thousandths 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 (2) 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 outstanding in
lieu of any adjustment in the number of one one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each Right outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment of the Purchase Price. Each Right held of
record prior to such adjustment of the number
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of Rights shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. Until such record date, however, any adjustment in the number of
one one-thousandths of a Preferred Share for which a Right shall be exercisable
made as required by this Agreement shall remain in effect. If Right Certificates
have been issued, upon each adjustment of the number of Rights pursuant to this
Section 12(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 15 hereof, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and authenticated in the manner provided for herein
and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a Preferred Share issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-thousandths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.
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(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-thousandth of the amount of
consideration per Preferred Share determined by the Board of Directors to be
capital, or below one one-thousandth of the par value, if any, per Preferred
Share issuable upon exercise of the Rights, the Company agrees to take such
corporate action as is within its power, including without limitation
appropriate action by its Board of Directors, and which is, in the opinion of
its counsel, necessary in order that the Company may validly and legally issue
fully paid and nonassessable one one-thousandths of Preferred Shares at such
adjusted Purchase Price.
(l) In any case in which this Section 12 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
of the Preferred Shares or other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares or 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
securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 12 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 12, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any combination or subdivision of the Preferred
Shares, issuance wholly for cash of any of the Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or issuance of rights,
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options or warrants referred to in subsection (b) of this Section 12, hereafter
effected by the Company to holders of its Preferred Shares shall not be taxable
to such stockholders.
(n) If at any time prior to the Distribution Date, the Company
shall (1) declare or pay any dividend on the Common Shares payable in Common
Shares or (2) effect a subdivision or combination of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (A) the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision or combination shall be adjusted by
multiplying such Purchase Price by a fraction, the numerator of which is the
number of Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding immediately
after such event, and (B) the number of Rights outstanding immediately after
such event shall be adjusted, either through cancellation of outstanding Rights
or through distribution of additional Rights (but without duplication of the
Company's obligations under Section 3(c)), so that the certificate evidencing
each Common Share outstanding immediately after such event shall also evidence
the associated Right to purchase the same number of one one-thousandths of a
Preferred Share as to which a Right would have entitled the holder thereof to
purchase immediately prior to such event. The adjustment provided for in this
Section 12(n) shall be made successively whenever such a dividend is declared or
paid or such a subdivision or combination is effected. If an event occurs which
would require an adjustment under Section 12(a)(2) and this Section 12(n), the
adjustments provided for in this Section 12(n) shall be in addition and prior to
any adjustment required pursuant to Section 12(a)(2).
Section 13. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 12 or 14 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common
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Shares of the Company and the Preferred Shares a copy of such certificate and
(c) mail a brief summary thereof to each holder of record of a Right Certificate
in accordance with Section 28 hereof.
Section 14. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. If, directly or indirectly at any time after a Person has become
an Acquiring Person, (a) the Company shall consolidate with, or merge with and
into, any other Person, (b) any Person shall merge with and into the Company and
the Company shall be the continuing or surviving corporation of such merger and,
in connection with any such merger, all or part of the Common Shares of the
Company shall be changed into or exchanged for stock or other securities of any
other Person (or the Company) or cash or any other property, or (c) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one or a series of two or more transactions, assets
of the Company or its Subsidiaries which constitute more than 50% of the assets
or which produce more than 50% of the earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or any Affiliate or Associate of
such Person other than the Company or one or more of its Wholly-Owned
Subsidiaries, then, and in each such case, the Company agrees that, as a
condition to engaging in any such transaction, it will make or cause to be made
proper provision so that (1) each holder of a Right (except as otherwise
provided herein) shall thereafter have the right to receive, upon the exercise
thereof in accordance with the terms of this Agreement and in lieu of Preferred
Shares, such number of Common Shares of such other Person (including the Company
as successor thereto or as the surviving corporation) or, if such other Person
is a Subsidiary of another Person, of the Person or Persons (other than
individuals) which ultimately control such first-mentioned Person, as shall be
equal to the result obtained by (x) multiplying the then current Purchase Price
by the number of one one-thousandths of a Preferred Share for which a Right is
then exercisable (without taking into account any adjustment previously made
pursuant to Section 12(a)(2)) and dividing that product by (y) 50% of the
current per share market price of the Common Shares of such other Person
(determined pursuant to Section 12(d) hereof) on the date of consummation of
such consolidation,
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merger, sale or transfer; (2) the issuer of such Common Shares shall thereafter
be liable for, and shall assume, by virtue of such consolidation, merger, sale
or transfer, all the obligations and duties of the Company pursuant to this
Agreement; (3) the term "Company", as used herein, shall thereafter be deemed to
refer to such issuer; and (4) such issuer shall take such steps (including
without limitation the reservation of a sufficient number of shares of its
Common Shares in accordance with Section 10) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the Rights. The
Company shall not enter into any transaction of the kind referred to in this
Section 14 if at the time of such transaction there are outstanding any rights,
warrants, instruments or securities or any agreement, understanding or
arrangements which, as a result of the consummation of such transaction, would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights. The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and such issuer shall
have executed and delivered to the Rights Agent an agreement supplemental to
this Agreement complying with the provisions of this Section 14. The provisions
of this Section 14 shall similarly apply to successive mergers or consolidations
or sales or other transfers. For the purposes of this Section 14, 50% of the
assets of the Company and its Subsidiaries shall be determined by reference to
the book value of such assets as set forth in the most recent consolidated
balance sheet of the Company and its Subsidiaries (which need not be audited)
and 50% of the earning power of the Company and its Subsidiaries shall be
determined by reference to the mathematical average of the operating income
resulting from the operations of the Company and its Subsidiaries for the two
most recent full fiscal years as set forth in the consolidated and consolidating
financial statements of the Company and its Subsidiaries for such years;
provided, however, that, if the Company has, during such period, engaged in one
or more transactions to which purchase accounting is applicable, such
determination shall be made by reference to the pro forma operating income of
the Company and its Subsidiaries giving effect to such transactions as if they
had occurred at the commencement of such two-year period.
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Section 15. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue or distribute Right Certificates which evidence
fractional Rights. If, on the Distribution Date or thereafter, as a result of
any adjustment effected pursuant to Section 12(i) or otherwise hereunder, a
Person would otherwise be entitled to receive a Right Certificate evidencing a
fractional Right, the Company shall, in lieu thereof, pay or cause to be paid to
such Person an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purpose of this Section 15(a), the current
market value of a whole Right shall be the Closing Price of the Rights for the
Trading Day immediately prior to, but not including, the date on which such
fractional Rights would have been otherwise issuable.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Shares. If, on the Distribution Date or thereafter, as a result of
any adjustment effected hereunder in the number of one one-thousandths of a
Preferred Share as to which a Right has become exercisable, a Person would
otherwise be entitled to receive a fractional Preferred Share that is not an
integral multiple of one one-thousandth of a Preferred Share, the Company shall,
in lieu thereof, pay to such Person at the time such Right is exercised as
herein provided an amount in cash equal to the same fraction (which is not an
integral multiple of one
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one-thousandth of a Preferred Share) of the current market value of one
Preferred Share. For purposes of this Section 15(b), the current market value of
a Preferred Share shall be the Closing Price of a Preferred Share for the
Trading Day immediately prior to, but not including, the date of such exercise.
(c) Should any adjustment contemplated by Section 12(a)(2) or
any mandatory redemption and exchange contemplated by Section 25 occur, the
Company shall not be required to issue fractions of Common Shares upon exercise
of the Rights or to distribute certificates which evidence fractional Common
Shares. If after any such adjustment or mandatory redemption and exchange, a
Person would otherwise be entitled to receive a fractional Common Share of the
Company upon exercise of any Right Certificate or upon mandatory redemption and
exchange as contemplated by Section 25, the Company shall, in lieu thereof, pay
to such Person at the time such Right is exercised as herein provided or upon
such mandatory redemption and exchange an amount in cash equal to the same
fraction of the current market value of one Common Share. For purposes of this
Section 15(c), the current market value of a Common Share shall be the Closing
Price of a Common Share for the Trading Day immediately prior to the date of
such exercise or the date of such mandatory redemption and exchange.
(d) The holder of a Right by the acceptance thereof expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise or mandatory redemption and exchange of a Right (except as provided
above).
Section 16. Rights of Action. (a) All rights of action in respect of
the obligations and duties owed to the holders of the Rights under this
Agreement are vested in the registered holders of the Rights; and, without the
consent of the Rights Agent or of the holder of any other Rights, any registered
holder of any Rights may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding, judicial or
otherwise, against the Company to enforce, or otherwise to act in respect of,
such holder's right to exercise such Rights in the manner
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provided in the Right Certificate evidencing such Rights and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of, the obligations of any Person
subject to this Agreement.
(b) No right or remedy herein conferred upon or reserved to
the registered holder of Rights is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy, whether hereunder or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right or
remedy.
(c) No delay or omission of any registered holder of Rights to
exercise any right or remedy accruing hereunder shall impair any such right or
remedy or constitute a waiver of any default hereunder or an acquiescence
therein. Every right and remedy given hereunder or by law to such holders may be
exercised from time to time, and as often as may be deemed expedient, by such
holders.
Section 17. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares of the
Company;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the Corporate Trust Office of the Rights Agent duly endorsed or accompanied by a
proper instrument of transfer;
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(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; 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, judgment or ruling (whether
interlocutory or final) 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, judgment or ruling lifted or otherwise overturned as soon as possible.
Section 18. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right (whether or not then evidenced by a Right
Certificate) shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of Preferred Shares, Common Shares of the Company or any
other securities of the Company which may at any time be issuable on the
exercise (or mandatory redemption and exchange) of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon any such holder, as such, any of the rights of a
stockholder of the Company, including without limitation any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, to give or withhold consent to any corporate action, to receive
notice of meetings or other actions affecting stockholders (except as provided
in Section 26) or to receive dividends or subscription rights or otherwise.
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Section 19. Concerning the Rights Agent. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for Preferred Shares, Common Shares or other
securities of the Company, Company Order, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of its counsel as set forth in
Section 20 hereof.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
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(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
or any other Person only for its own negligence, bad faith or willful
misconduct. Anything in this Agreement to the contrary notwithstanding, in no
event shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including, but not limited to, lost
profits), even if the Rights Agent has been advised of the likelihood of such
loss or damage and regardless of the form of action.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its authentication thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not have any responsibility with
respect to the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or with respect to the
validity or execution of any Right Certificate (except its authentication
thereof); nor shall it be responsible for any breach by the Company of any
covenant or
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condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 12(a)(2) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Sections 3, 12, 14, 24 and 25, or the ascertainment of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after actual
notice that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares or Common Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares or Common Shares will, when issued, be duly authorized, validly
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer.
(h) The Rights Agent and any 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 it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company.
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(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss of the Company resulting from any such
act, default, neglect or misconduct provided reasonable care was exercised in
the selection and continued employment thereof.
Section 21. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the corporate trust or stock
transfer 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 Person would be eligible for appointment as a successor
Rights Agent under the provisions of Section 22. If at the time such successor
Rights Agent shall succeed to the agency created by this Agreement any of the
Right Certificates shall have been authenticated but not delivered, any such
successor Rights Agent may adopt the authentication of the predecessor Rights
Agent and deliver such Right Certificates so authenticated, and, if at that time
any of the Right Certificates shall not have been authenticated, any successor
Rights Agent may authenticate such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
If at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been authenticated but not
delivered, the Rights Agent may adopt the
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authentication under its prior name and deliver Right Certificates so
authenticated; and, in case at that time any of the Right Certificates shall not
have been authenticated, the Rights Agent may authenticate such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 22. 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
for the Common Shares of the Company and the Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent for the Common Shares of
the Company and the Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the registered holder of a
Right Certificate (or, prior to the Distribution Date, of Common Shares), then
any registered holder of a Right Certificate (or, prior to the Distribution
Date, of Common Shares) 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 either (a) a Person organized and
doing business under the laws of the United States or of any state of the United
States, which is authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million or (b) an Affiliate
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of a Person described in clause (a) of this sentence. 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 for the Common Shares of the Company and the Preferred
Shares, and mail a notice thereof in writing to the registered holders of the
Right Certificates. Failure to give any notice provided for in this Section 22,
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 23. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new 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 per share and the number or kind or class of shares or
other securities purchasable under the Right Certificates made in accordance
with the provisions of this Agreement.
Section 24. Redemption. (a) The Rights may be redeemed by action of the
Board of Directors pursuant to paragraph (b) of this Section 24, or may be
redeemed and exchanged by action of the Board of Directors pursuant to Section
25 herein, but shall not be redeemed in any other manner.
(b) The Board of Directors may, at its option, at any time
prior to the time any Person becomes an Acquiring Person redeem all but not less
than all of the then outstanding Rights at a redemption price of one-thousandth
of one cent ($0.00001) per Right then outstanding, appropriately adjusted to
reflect any adjustment in the number of Rights outstanding pursuant to
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Section 12(i) herein (such redemption price being hereinafter referred to as the
"Redemption Price"). Any such redemption of the Rights by the Board of Directors
may be made effective at such time, on such basis and with such conditions as
the Board of Directors in its sole discretion may establish.
(c) The right of the registered holders of Right Certificates
to exercise the Rights evidenced thereby or, if the Distribution Date has not
theretofore occurred, the inchoate right of the registered holders of Rights to
exercise the same shall, without notice to such holders or to the Rights Agent
and without further action, terminate and be of no further force or effect
effective as of the time of adoption by the Board of Directors of a resolution
authorizing and directing the redemption of the Rights pursuant to paragraph (b)
of this Section 24 (or, alternatively, if the Board of Directors qualified such
action as to time, basis or conditions, then at such time, on such basis and
with such conditions as the Board of Directors may have established pursuant to
such paragraph (b)); thereafter, the only right of the holders of Rights shall
be to receive the Redemption Price. The Company shall promptly give public
notice of any redemption resolution pursuant to paragraph (b) of this Section
24; provided, however, that the failure to give, or any defect in, any such
notice shall not affect the validity of such redemption. Within 10 days after
the adoption of any redemption resolution pursuant to paragraph (b) of this
Section 24, the Company shall give notice of such redemption to the holders of
the then outstanding Rights by mailing such notice to all such holders at their
last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agents for
the Common Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption shall state the method by which the payment of the
Redemption Price will be made.
(d) Neither the Company nor any of its Affiliates or
Associates may acquire (other than, in the case of such Affiliates and
Associates, in their capacity as holders of Common Shares of the Company),
redeem or purchase for value any Rights at any time in any manner other
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than as specifically set forth in this Section 24 or in Section 25 herein, and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.
Section 25. Mandatory Redemption and Exchange. (a) The Board of
Directors may, at its option, at any time after any Person becomes an Acquiring
Person, issue Common Shares of the Company in mandatory redemption of, and in
exchange for, all or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become null and void pursuant to the
provisions of Section 8(e) hereof) at an exchange ratio of one Common Share for
each two Common Shares for which each Right is then exercisable pursuant to the
provisions of Section 12(a)(2) hereof. Notwithstanding the foregoing, the Board
of Directors shall not be empowered to effect such redemption and exchange at
any time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any such Subsidiary, or
any trustee of or fiduciary with respect to any such plan when acting in such
capacity), together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of 50% or more of the Voting Shares then outstanding.
(b) Immediately upon the action of the Board of Directors
ordering the mandatory redemption and exchange of any Rights pursuant to
subsection (a) of this Section 25 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 such number of Common
Shares as is provided in paragraph (a) of this Section 25. The Company shall
promptly give public notice of any such redemption and exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such redemption and exchange. The Company promptly shall
mail a notice of any such redemption and exchange to all 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
mandatory redemption and exchange shall state the method by which the
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redemption and exchange of the Common Shares for Rights will be effected and, in
the event of any partial redemption and exchange, the number of Rights which
will be redeemed and exchanged. Any partial redemption and exchange shall be
effected pro rata based on the number of Rights (other than Rights which have
become null and void pursuant to the provisions of Section 8(e) hereof) held by
each holder of Rights.
(c) In any mandatory redemption and exchange pursuant to this
Section 25, the Company, at its option, may substitute Preferred Shares (or
equivalent preferred shares, as such term is defined in Section 12(b) hereof)
for Common Shares, at the initial rate of one one-thousandth of a Preferred
Share (or equivalent preferred share) for each Common Share, as appropriately
adjusted.
(d) In any exchange pursuant to this Section 25, the Company,
at its option, may substitute for any Common Shares exchangeable for a Right (i)
Common Share Equivalents, (ii) cash, (iii) debt securities of the Company, (iv)
other assets, or (v) any combination of the foregoing, having an aggregate value
which the Board of Directors shall have determined in good faith to be equal to
the current market price of one Common Share (determined pursuant to Section
12(d) hereof) on the Trading Day immediately preceding the date of exchange
pursuant to this Section 25.
Section 26. Notice of Certain Events. If the Company shall, on or after
the Distribution Date, propose (a) to pay any dividend or other distribution
payable in stock of any class of the Company or any Subsidiary of the Company to
the holders of its Preferred Shares, (b) to distribute to the holders of its
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (c) to make any other distribution to the holders
of its Preferred Shares (other than a regular quarterly cash dividend), (d) to
effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (e) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or
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earning power of the Company and its Subsidiaries (determined as provided in
Section 14 herein) to, any other Person (other than the Company or a
Wholly-Owned Subsidiary or Wholly-Owned Subsidiaries), (f) to effect the
liquidation, dissolution or winding up of the Company or (g) if the Rights have
theretofore become exercisable with respect to Common Shares pursuant to Section
12(a)(2) herein, to declare or pay any dividend or other distribution on the
Common Shares payable in Common Shares or in stock of any other class of the
Company or any Subsidiary of the Company or to effect a subdivision or
combination of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares) then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance with Section 28
hereof, notice of such proposed action, which shall specify the date of
authorization by the Board of Directors of, and record date for, such stock
dividend or such distribution of rights or warrants or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, winding up, subdivision or combination is to take place and the
date of participation therein by the holders of the Common Shares of the Company
or the Preferred Shares, or both, if any such date is to be fixed. Such notice
shall be so given in the case of any action covered by clause (a), (b) or (g)
above at least 20 days prior to the record date for determining holders of the
Preferred Shares or of the Common Shares of the Company, as the case may be, 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 Preferred Shares or Common Shares of
the Company, as the case may be, whichever shall be the earlier.
If any of the events set forth in Section 12(a)(2) of this Agreement shall
occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in accordance with
Section 28 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
12(a)(2) hereof.
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Section 27. Securities Laws Registrations. To the extent legally
required, the Company agrees that it will prepare and file, as soon as
practicable following the Distribution Date, and will use its best efforts to
cause to be declared effective, a registration statement under the Securities
Act registering the offering, sale and delivery of the Preferred Shares issuable
upon exercise of the Rights, and the Company will, thereafter, use its best
efforts to maintain such registration statement (or another) continuously in
effect so long as any Rights remain outstanding and exercisable with respect to
Preferred Shares. Should the Rights become exercisable with respect to
securities of the Company or one of its Subsidiaries other than Preferred
Shares, the Company agrees that it will, to the extent legally required,
promptly thereafter prepare and file, or cause to be prepared and filed, and
will use its best efforts to cause to be declared effective, a registration
statement under such Act registering the offering, sale and delivery of such
other securities and the Company will, thereafter, use its best efforts to
maintain such registration statement (or another) continuously in effect so long
as any outstanding Rights are exercisable with respect to such securities. The
Company further agrees to use its best efforts, from and after the Distribution
Date, to qualify or register for sale the Preferred Shares or other securities
of the Company or one of its Subsidiaries issuable upon exercise of the Rights
under the securities or "blue sky" laws (to the extent legally required
thereunder) of all jurisdictions in which registered holders of Right
Certificates reside determined by reference to the Rights Register. The Company
may temporarily suspend, for a period of time not to exceed ninety (90) days
after the Distribution Date, 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 promptly notify the Rights Agent in
writing of such suspension and 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 (with
prompt written notice to the Rights Agent that such suspension is no longer in
effect). Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction if
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the requisite qualification in such jurisdiction shall not have been obtained,
the exercise thereof shall not be permitted under applicable law or a
registration statement shall not have been declared effective.
Section 28. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Odyssey HealthCare, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Subject to the provisions of Section 22 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
U.S. Stock Transfer Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the Rights
Register of the Company or, prior to the Distribution Date, on the stock
transfer records for the Common Shares of the Company.
Section 29. Supplements and Amendments. The Company may from time to
time supplement or amend this Agreement (which supplement or amendment shall be
evidenced by a writing signed by the Company and the Rights Agent) without the
approval of any holders of any certificates representing Common Shares or any
holders of Right Certificates in order to cure any
-51-
ambiguity, to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, to make any other
provisions in regard to matters or questions arising hereunder, or to add,
delete, modify or otherwise amend any provision, which the Company may deem
necessary or desirable, including without limitation extending the Final
Expiration Date; provided that the period during which the Rights may be
redeemed may not be extended at a time when the Rights are not then redeemable;
provided, however, that, from and after the Shares Acquisition Date, any such
amendment or supplement shall not materially and adversely affect the interests
of the holders of Right Certificates other than an Acquiring Person or
transferees of such Acquiring Person. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 29 and, provided such
supplement or amendment does not change or increase the Rights Agent's rights,
duties, liabilities or obligations hereunder, the Rights Agent shall execute
such supplement or amendment.
Section 30. 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 31. 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 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.
Section 32. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
-52-
Section 33. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of
Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 34. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 35. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 36. Board of Directors. The Board of Directors shall have the
exclusive power and authority to administer this Agreement and to exercise the
rights and powers specifically granted to the Board of Directors or to the
Company. All such actions, calculations, interpretations and determinations that
are done or made by the Board of Directors in good faith shall be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights, as such, and all other Persons. The Rights Agent shall always be
entitled to assume that the Company's Board of Directors acted in good faith and
shall be fully protected and incur no liability in reliance thereon.
-53-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
ODYSSEY HEALTHCARE, INC.
Attest:
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------- -----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President, Chief
Executive Officer and Chairman of the
Board
U.S. STOCK TRANSFER CORPORATION,
as Rights Agent
Attest:
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇
---------------------------- -----------------------------------------
Authorized Officer ▇▇▇▇ ▇▇▇▇, Senior Vice President
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
ODYSSEY HEALTHCARE, INC.
Pursuant to Section 151 of the General
Corporation Law of the State of
Delaware
Odyssey HealthCare, Inc., a
Delaware corporation (the "Corporation"),
through the undersigned duly authorized officer, in accordance with the
provisions of Sections 103 and 151 of the General Corporation Law of the State
of
Delaware, DOES HEREBY CERTIFY:
That, the Board of Directors of the Corporation on November 5, 2001,
pursuant to the authority conferred upon the Board of Directors by the Fifth
Amended and Restated Certificate of Incorporation of the Corporation (the
"Certificate of Incorporation") and in accordance with the provisions of Section
151 of the General Corporation Law of the State of
Delaware, adopted the
following resolution creating a series of 250,000 shares of Preferred Stock, par
value $.001 per share:
RESOLVED, that, pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation in accordance with the
provisions of Article Fourth, Section III, Paragraph A of its Certificate of
Incorporation, a series of the Preferred Stock of the Corporation, par value
$.001 per share, be, and it hereby is, created and that the voting powers,
designations, 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:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Junior Preferred Stock") and the number of shares constituting the Series A
Junior Preferred Stock shall be 250,000. Such number of shares may be increased
or decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series A Junior Preferred Stock to a number
less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Junior Preferred Stock.
Section 2. Dividends and Distributions.
(a) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Series
A Junior Preferred Stock with respect to dividends, the holders of shares of
Series A Junior Preferred Stock, in preference to the holders of Common Stock,
par value $0.001 per share (the "Common Stock"), of the Corporation, and of any
A-1
other junior stock, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose, quarterly
dividends payable on the first business day of April, July, October and January
in each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date") as provided in paragraphs (b) and (c) of this Section 2 in an
amount per share (rounded to the nearest cent) equal to the greater of (1)
$10.00 in cash or (2) subject to the provision for adjustment hereinafter set
forth, 1,000 times the aggregate per share amount (payable in cash) of all cash
dividends, and 1,000 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Junior Preferred Stock. If the Corporation shall
at any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Junior Preferred Stock were
entitled immediately prior to such event under clause (2) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that was outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on the
Series A Junior Preferred Stock as provided in paragraph (a) of this Section 2
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 no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $10.00 per share payable in cash
on the Series A Junior Preferred Stock shall nevertheless accrue and be
cumulative on the outstanding shares of Series A Junior Preferred Stock as
provided in paragraph (c) of this Section 2.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series A Junior Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Junior
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Junior
Preferred Stock shall have the following voting rights:
A-2
(a) Subject to the provisions for adjustment hereinafter set forth,
each share of Series A Junior Preferred Stock shall entitle the holder thereof
to 1,000 votes on all matters submitted to a vote of the stockholders of the
Corporation. If the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the number of votes per share to which holders of shares of
Series A Junior Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
was outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in the Certificate of
Incorporation, as it may be amended from time to time, in any other Certificate
of Designation creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Junior Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(c) Except as set forth herein or as otherwise provided by law, holders
of Series A Junior Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Junior Preferred
Stock outstanding shall have been paid in full, or declared and a sum sufficient
for the payment therefor be set apart for payment and be in the process of
payment, the Corporation shall not:
(1) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior
Preferred Stock;
(2) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Junior
Preferred Stock, except dividends paid ratably on the Series A Junior
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(3) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior
Preferred Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking junior (as
to both dividends and upon dissolution, liquidation or winding up) to
the Series A Junior Preferred Stock; or
A-3
(4) redeem or purchase or otherwise acquire for consideration
any shares of Series A Junior Preferred Stock or any shares of stock
ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior Preferred Stock,
except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the holders of 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 A Junior Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock subject to the conditions and restrictions on issuance set forth
herein, in the Certificate of Incorporation, or in any other Certificate of
Designation creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (a) to the holders of shares of stock ranking junior (either as to
dividends or as to amounts payable upon liquidation, dissolution or winding up)
to the Series A Junior Preferred Stock unless, prior thereto, the holders of
Series A Junior Preferred Stock shall have received an amount per share (rounded
to the nearest cent) equal to the greater of (1) $10.00 per share, or (2) an
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 1,000 times the aggregate amount to be distributed per share to holders
of Common Stock, plus, in either case, an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, or (b) to the holders of stock ranking on a parity (either as to
dividends or as to amounts payable upon liquidation, dissolution or winding up)
with the Series A Junior Preferred Stock, except distributions made ratably on
the Series A Junior Preferred Stock and all such parity stock in proportion to
the total amounts to which the holders of all such Shares are entitled upon such
liquidation, dissolution or winding up. If the Corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the aggregate
amount to which holders of shares of Series A Junior Preferred Stock were
entitled immediately prior to such event under the proviso in clause (a)(2) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that was outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. If the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are
A-4
exchanged for or changed into other stock or securities, cash or any other
property, or any combination thereof, then in any such case each share of Series
A Junior Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount of stock,
securities, cash or any other property (payable in kind), or any combination
thereof, as the case may be, into which or for which each share of Common Stock
is changed or exchanged. If the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series A
Junior Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that was outstanding immediately prior to such
event.
Section 8. Redemption. The shares of Series A Junior Preferred Stock
shall not be redeemable. So long as any shares of Series A Junior Preferred
Stock remain outstanding, the Corporation shall not purchase or otherwise
acquire for consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A Junior
Preferred Stock unless the Corporation shall substantially concurrently also
purchase or acquire for consideration a proportionate number of shares of Series
A Junior Preferred Stock.
Section 9. Rank. The Series A Junior Preferred Stock shall rank, with
respect to payment of dividends and the distribution of assets, junior to all
series of any other class of the Corporation's Preferred Stock; provided that
any class or series of the Corporation's Preferred Stock hereafter created may
expressly provide that such class or series shall be pari passu with the Series
A Preferred Stock with respect to the payment of dividends and distributions,
voting rights and/or distributions upon liquidation, dissolution or winding up
of the Corporation.
Section 10. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences, privileges or special rights of the Series A
Junior Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Series A
Junior Preferred Stock, voting together as a single class.
A-5
IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Corporation by its President, and attested by its Secretary, this
____ day of November, 2001.
ODYSSEY HEALTHCARE, INC.
By:
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President,
Chief Executive Officer and
Chairman of the Board
ATTEST:
By:
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary and Chief
Financial Officer
A-6
EXHIBIT B
Form of Right Certificate
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER NOVEMBER 5, 2011 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.00001 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS DEFINED
IN SECTION 1 OF THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID.
Right Certificate
ODYSSEY HEALTHCARE, INC.
This certifies that _____________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of November 5, 2001 the "Rights
Agreement"), between ODYSSEY HEALTHCARE, INC. a
Delaware corporation (the
"Company"), and U.S. STOCK TRANSFER CORPORATION (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 p.m., Dallas, Texas time,
on November 5, 2011, at the Corporate Trust Office of the Rights Agent (or at
the office of its successor as Rights Agent), one one-thousandth (1/1000) of a
fully paid non-assessable share of Series A Junior Participating Preferred
Stock, par value $0.001 per share (the "Preferred Shares"), of the Company, at a
purchase price of $75.00 per one one-thousandth (1/1000) of a Preferred Share
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one
one-thousandths of a Preferred Share which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are the number
and Purchase Price as of November 5, 2001 based on the Preferred Shares as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of one one-thousandths of a Preferred Share which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the Corporate Trust Office of the Rights Agent.
B-1
This Right Certificate, with or without other Right Certificates, upon
surrender at the Corporate Trust Office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price of
$.00001 per Right or (ii) may be exchanged by the Company in whole or in part
for Preferred Shares or shares of the Company's common stock, par value $0.001
per share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be entitled to any benefit under the
Rights Agreement or be valid or obligatory for any purpose until it shall have
been authenticated by the Rights Agent.
B-2
WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.
Dated as of ___________________, ____.
ATTEST: ODYSSEY HEALTHCARE, INC.
[SEAL]
By:
---------------------------------- ------------------------------------
Name: Name:
----------------------------- ----------------------------------
Title: Title:
---------------------------- ---------------------------------
Authentication:
This is one of the Right Certificates referred to in the within-mentioned Rights
Agreement.
U.S. STOCK TRANSFER CORPORATION,
as Rights Agent
By:
----------------------------------------
Authorized Signature
B-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate)
FOR VALUE RECEIVED, _____________________________ hereby sells, assigns
and transfers unto _____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint __________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated as of ___________________, ____.
-------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
--------------------------------------------------------------------------------
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
-------------------------------------
Signature
B-4
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
TO ODYSSEY HEALTHCARE, INC.
The undersigned hereby irrevocably elects to exercise _____________
Rights represented by this Right Certificate to purchase the Preferred Shares
(or other securities) issuable upon the exercise of such Rights and requests
that certificates for such Preferred Shares (or other securities) be issued in
the name of:
Please insert social security
or other identifying number:
---------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number:
---------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
Dated as of ___________________, ____.
------------------------------------
Signature
B-5
[Form of Reverse Side of Right Certificate -- continued]
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
--------------------------------------------------------------------------------
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
------------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
The signature in the foregoing Form of Assignment or Form of Election
to Purchase must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
B-6
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On October 30, 2001 the Board of Directors of Odyssey HealthCare, Inc.
(the "Company"), authorized the issuance of one preferred share purchase right
(a "Right") with respect to each outstanding share of common stock, $0.001 par
value (the "Common Shares"), of the Company. The rights were issued on November
5, 2001 to the holders of record of Common Shares as of the close of business on
that date. Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series A Junior Participating Preferred
Stock, $.001 par value (the "Preferred Shares"), of the Company at a price of
$75.00 per one one-thousandth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") dated as of November 5, 2001,
between the Company and U.S. Stock Transfer Corporation, as Rights Agent (the
"Rights Agent").
Detachment of Rights; Exercise. Initially, the Rights will attach to
all Common Share certificates representing outstanding shares and no separate
Right Certificate will be distributed. The Rights will separate from the Common
Shares and a "Distribution Date" will occur upon the Close of Business (as
defined in the Rights Agreement) on the earlier of (i) 10 business days
following a public announcement that a person or group of affiliated or
associated persons has become an Acquiring Person and (ii) 10 business days
following the commencement or announcement of an intention to commence a tender
offer or exchange offer the consummation of which would result in a person or
group becoming an Acquiring Person, subject to the right of the Board of
Directors to defer the occurrence of a Distribution Date upon the occurrence of
an event described in this clause (ii).
In general, a person becomes and Acquiring Person if such person or a
group of which such person is a member (i) becomes the beneficial owner of 15%
or more of the Company's outstanding common stock, or (ii) in the case of the
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ Group (as defined in the Rights Agreement), becomes the
beneficial owner of 17% or more of the Company's outstanding common stock.
Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced with respect to any of the Common
Shares outstanding on November 5, 2001, by the certificates representing such
Common Shares with a copy of this Summary of Rights attached thereto, (ii) the
Rights will be transferred with and only with the Common Shares, (iii) new
Common Share certificates issued after November 5, 2001, upon transfer or new
issuance of the Common Shares will contain a notation incorporating the Rights
Agreement by reference, and (iv) the surrender for transfer of any certificates
for Common Shares outstanding as of November 5, 2001, even without such notation
or a copy of this Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Shares represented by such
certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
C-1
The Rights are not exercisable until the Distribution Date. The Rights
will expire on November 5, 2011 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or the Rights are earlier redeemed or exchanged by
the Company as described below.
If a person or group were to become an Acquiring Person, then each
Right then outstanding (other than Rights beneficially owned by the Acquiring
Person which would become null and void) would become a right to buy that number
of Common Shares (or under certain circumstances, the equivalent number of one
one-thousandths of a Preferred Share or other assets or securities of the
Company) that at the time of such acquisition would have a market value of two
times the Purchase Price of the Right.
At any time after a person or group of affiliated or associated persons
becomes an Acquiring Person, if the Company were acquired in a merger or other
business combination transaction or more than 50% of its consolidated assets or
earning power were sold, proper provision will be made so that each holder of a
Right will thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction would have
a market value of two times the Purchase Price of the Right.
Preferred Shares. The dividend and liquidation rights, and the
non-redemption feature, of the Preferred Shares are designed so that the value
of one one-thousandth of a Preferred Share purchasable upon exercise of each
Right will approximate the value of one Common Share. The Preferred Shares
issuable upon exercise of the Rights will be non-redeemable and rank junior to
all other series of the Company's preferred stock. Each whole Preferred Share
will be entitled to receive a quarterly preferential dividend in an amount per
share equal to the greater of (i) $10.00 in cash, or (ii) in the aggregate,
1,000 times the dividend declared on each Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to receive a
preferential liquidation payment equal to the greater of (i) $1,000 per share,
or (ii) in the aggregate, 1,000 times the payment made on each Common Share. In
the event of any merger, consolidation or other transaction in which Common
Shares are exchanged for or changed into other stock or securities, cash or
other property, each whole Preferred Share will be entitled to receive 1,000
times the amount received per Common Share. Each whole Preferred Share shall be
entitled to 1,000 votes on all matters submitted to a vote of the stockholders
of the Company, and Preferred Shares shall generally vote together as one class
with the Common Stock and any other capital stock entitled to vote thereon on
all matters submitted to a vote of stockholders of the Company.
The offer and sale of the Preferred Shares issuable upon exercise of
the Rights will be registered with the Securities and Exchange Commission and
such registration will not be effective until the Rights become exercisable.
Antidilution and Other Adjustments. The number of one one-thousandths
of a Preferred Share or other securities or property issuable upon exercise of
the Rights, and the Purchase Price payable, are subject to customary adjustments
from time to time to prevent dilution.
The number of outstanding Rights and the number of one one-thousandths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
C-2
Exchange Option. At any time after a person or group of affiliated or
associated persons has become an Acquiring Person and before the acquisition by
a person or group of 50% or more of the outstanding Voting Shares, the Board of
Directors may, at its option, issue Common Shares (or Preferred Shares) in
mandatory redemption of, and in exchange for, all or part of the then
outstanding and exercisable Rights (other than Rights owned by such person or
group which would become null and void) at an exchange ratio of one Common Share
(or one one-thousandth of a Preferred Share) for each two Common Shares for
which each Right then outstanding is then exercisable, subject to adjustment.
Redemption of Rights. At any time prior to the time that a person or
group has become an Acquiring Person, the Board of Directors of the Company may
redeem all but not less than all the then outstanding Rights at a price of
$0.00001 per Right (the "Redemption Price"). The redemption of the Rights may be
made effective at such time, on such basis and with such conditions as the Board
of Directors in its sole discretion may establish. Immediately upon the action
of the Board of Directors ordering redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
No Rights as Stockholder. Until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends.
Amendment of Rights. The terms of the Rights may be amended by the
Board of Directors of the Company without the consent of the holders of the
Rights, including an amendment to extend the Final Expiration Date, and,
provided a Distribution Date has not occurred, to extend the period during which
the Rights may be redeemed, except that after the first public announcement that
a person or group has become an Acquiring Person, no such amendment may
materially and adversely affect the interests of the holders of the Rights other
than the Acquiring Person and transferees of the Acquiring Person.
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
HEREBY INCORPORATED HEREIN BY REFERENCE.
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
November 5, 2001. A copy of the Rights Agreement is available free of charge
from the Company.
C-3