EXHIBIT 4
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STOCKHOLDER PROTECTION RIGHTS AGREEMENT
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February 1, 1999
TABLE OF CONTENTS
Section PAGE
1. Certain Definitions -1-
1.1 Certain Definitions -1-
2. The Rights -6-
2.1 Summary of Rights -6-
2.2 Legend on Common Stock Certificates -6-
2.3 Exercise of Rights; Separation of Rights -6-
2.4 Adjustments to Exercise Price; Number of Rights -8-
2.5 Date on Which Exercise is Effective -9-
2.6 Execution, Authentication, Delivery and Dating of
Rights Certificates -9-
2.7 Registration, Registration of Transfer and Exchange -10-
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates -11-
2.9 Persons Deemed Owners -11-
2.10 Delivery and Cancellation of Certificates -11-
2.11 Agreement of Rights Holders -12-
3. Adjustments to the Rights in the Event of Certain Transactions -12-
3.1 Flip-In -12-
3.2 Flip-Over -14-
4. The Rights Agent -15-
4.1 General -15-
4.2 Merger or Consolidation or Change of Name of Rights Agent -15-
4.3 Duties of Rights Agent -16-
4.4 Change of Rights Agent -18-
5. Miscellaneous -19-
5.1 Redemption and Termination -19-
5.2 Expiration -19-
5.3 Issuance of New Rights Certificate -20-
5.4 Supplements and Amendments -20-
5.5 Fractional Shares -20-
5.6 Rights of Action -20-
5.7 Holder of Rights Not Deemed a Stockholder -21-
5.8 Notice of Proposed Actions -21-
5.9 Notices -21-
5.10 Suspension of Exercisability -22-
5.11 Costs of Enforcement -22-
5.12 Successors -22-
5.13 Benefits of this Agreement -22-
TABLE OF CONTENTS
Section PAGE
5.14 Determination and Actions by the Board of Directors -22-
5.15 Descriptive Headings -23-
5.16 Governing Law -23-
5.17 Counterparts -23-
5.18 Severability -23-
EXHIBITS
Description Exhibit
Form of Rights Certificate................................................ A
Certificate of Designation of Preferences and Rights...................... B
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
THIS STOCKHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time to time,
this "Agreement") is made and entered into as of February 1, 1999, between
CARETENDERS HEALTH CORP., a Delaware corporation (the "Company"), and RELIANCE
TRUST COMPANY, a bank chartered under the laws of the State of Georgia, as
Rights Agent (the "Rights Agent," which term shall include any successor Rights
Agent hereunder).
RECITALS:
1. The Board of Directors of the Company has (a) authorized and declared a
dividend of one right ("Right") in respect of each share of Common Stock (as
hereinafter defined) held of record as of the close of business on February
16, 1999 (the "Record Time") and (b) as provided in Section 2.4, authorized
the issuance of one Right in respect of each share of Common Stock issued
after the Record Time and prior to the Separation Time (as hereinafter
defined) and, to the extent provided in Section 5.3, each share of Common
Stock issued after the Separation Time;
2. Subject to Sections 3.1, 5.1, 5.2 and 5.10, each Right entitles the holder
thereof, after the Separation Time, to purchase securities of the Company (or,
in certain cases, of certain other entities) pursuant to the terms and subject
to the conditions set forth herein; and
3. The Company desires to appoint the Rights Agent to act on behalf of the
Company, and the Rights Agent is willing so to act, in connection with the
issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein.
AGREEMENT:
NOW, THEREFORE, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS.
1.1 Certain Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who is a Beneficial
Owner of 20% or more of the outstanding shares of Common Stock;
provided, however, that the term "Acquiring Person" shall not include
any Person who is the Beneficial Owner of 20% or more of the
outstanding shares of Common Stock on the date of this Agreement or
who shall become the Beneficial Owner of 20% or more of the
outstanding shares of Common Stock solely as a result of an
acquisition by the Company of shares of Common Stock, until such time
hereafter or thereafter as such Person shall become the Beneficial
Owner (other than by means of a stock dividend or stock split) of any
additional shares of Common Stock, (ii) who is the Beneficial Owner
of 20% or more of the outstanding shares of Common Stock but who
acquired Beneficial Ownership of shares of Common Stock without any
plan or intention to seek or affect control of the Company, if such
Person promptly enters into an irrevocable commitment promptly to
divest, and thereafter promptly divests (without exercising or
retaining any power, including voting power, with respect to such
shares), sufficient shares of Common Stock (or securities convertible
into, exchangeable into or exercisable for Common Stock) so that such
Person ceases to be the Beneficial Owner of 20% or more of the
outstanding shares of Common Stock or (iii) who Beneficially Owns
shares of Common Stock consisting solely of one or more of (A) shares
of Common Stock Beneficially Owned pursuant to the grant or exercise
of an option granted to such Person by the Company in connection with
an agreement to merge with, or acquire, the Company entered into
prior to a Flip-In Date, (B) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock),
Beneficially Owned by such Person or its Affiliates or Associates at
the time of grant of such option or (C) shares of Common Stock (or
securities convertible into, exchangeable into or exercisable for
Common Stock) acquired by Affiliates or Associates of such Person
after the time of such grant which, in the aggregate, amount to less
than 1% of the outstanding shares of Common Stock. Notwithstanding
the foregoing, no Person shall become an Acquiring Person as a result
of such Person's acquisition of Common Stock (or any security
convertible into, exchangeable for or exercisable for Common Stock)
upon the exercise or receipt of any option, warrant or right to
acquire Common Stock (or any security convertible into, exchangeable
for or exercisable for Common Stock) outstanding as of the date of
this Agreement. In addition, the Company, any wholly owned
Subsidiary of the Company and any employee stock ownership or other
employee benefit plan of the Company or a wholly owned Subsidiary of
the Company shall not be an Acquiring Person.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Securities Exchange
Act of 1934, as such Rule is in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" and to have
"Beneficial Ownership" of, and to "Beneficially Own," any securities
as to which such Person or any of such Person's Affiliates or
Associates is or may be deemed to be the beneficial owner of pursuant
to Rule 13d-3 and 13d-5 under the Securities Exchange Act, as such
Rules are in effect on the date of this Agreement as well as any
securities as to which such Person or any of such Person's Affiliates
or Associates has the right to become the Beneficial Owner (whether
such right is exercisable immediately or only after the passage of
time or the occurrence of conditions) pursuant to any agreement,
arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or
options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner," or to have "Beneficial Ownership" of,
or to "Beneficially Own," any security (i) solely because such
security has been tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or Associates
until such tendered security is accepted for payment or exchange,
(ii) securities which such Person or any of such Person's Affiliates
or Associates may acquire, do acquire, or may be deemed to have the
right to acquire pursuant to any merger or other acquisition
agreement between the Company and such Person (or one or more of such
Person's Affiliates or Associates) if such agreement has been
approved by the Board of Directors of the Company prior to such
Person's becoming an Acquiring Person or (iii) solely because such
Person or any of such Person's Affiliates or Associates has or shares
the power to vote or direct the voting of such security pursuant to a
revocable proxy given in response to a public proxy or consent
solicitation made to more than ten holders of shares of a class of
stock of the Company registered under Section 12 of the Securities
Exchange Act of 1934 and pursuant to, and in accordance with, the
applicable rules and regulations under the Securities Exchange Act of
1934, except if such power (or the arrangements relating thereto) is
then reportable under Item 6 of Schedule 13D under the Securities
Exchange Act of 1934 (or any similar provision of a comparable or
successor report). Notwithstanding the foregoing, no officer or
director of the Company shall be deemed to Beneficially Own any
securities of any other Person by virtue of any actions such officer
or director takes in such capacity. For purposes of this Agreement,
in determining the percentage of the outstanding shares of Common
Stock with respect to which a Person is the Beneficial Owner, all
shares as to which such Person is deemed the Beneficial Owner shall
be deemed outstanding.
(d) "Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in Louisville, Kentucky are
generally authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 p.m.
Louisville, Kentucky time on such date (or, if such date is not a
Business Day, 5:00 p.m. Louisville, Kentucky time on the next
succeeding Business Day).
(f) "Common Stock" shall mean the shares of Common Stock, par value
$.10 per share, of the Company.
(g) "Exchange Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 3.1(c)
hereof.
(h) "Exercise Price" shall mean, as of any date, the price at which
a holder may purchase the securities issuable upon exercise of one
whole Right. Until adjustment thereof in accordance with the terms
hereof, the Exercise Price shall equal $16.
(i) "Expiration Time" shall mean the earliest of (i) the Exchange
Time, (ii) the Termination Time, (iii) February 1, 2009 and (iv) upon
the merger of the Company into another corporation pursuant to an
agreement approved by the Board of Directors and entered into prior
to a Flip-In Date.
(j) "Flip-In Date" shall mean the tenth business day after any Stock
Acquisition Date or such earlier or later date as the Board of
Directors of the Company may from time to time fix by resolution
adopted prior to the Flip-In Date that would otherwise have occurred.
(k) "Flip-Over Entity" for purposes of Section 3.2, shall mean (i)
in the case of a Flip-Over Transaction or Event described in clause
(i) of the definition thereof, the Person issuing any securities into
which shares of Common Stock are being converted or exchanged and, if
no such securities are being issued, the other party to such
Flip-Over Transaction or Event and (ii) in the case of a Flip-Over
Transaction or Event referred to in clause (ii) of the definition
thereof, the Person receiving the greatest portion of the assets or
earning power being transferred in such Flip-Over Transaction or
Event, provided in all cases if such Person is a subsidiary of a
corporation, the parent corporation shall be the Flip-Over Entity.
(l) "Flip-Over Stock" shall mean the capital stock (or similar
equity interest) with the greatest voting power in respect of the
election of directors (or other persons similarly responsible for
direction of the business and affairs) of the Flip-Over Entity.
(m) "Flip-Over Transaction or Event" shall mean a transaction or
series of transactions after a Flip-In Date in which, directly or
indirectly, (i) the Company shall consolidate or merge or participate
in a share exchange with any other Person if, at the time of the
consolidation, merger or share exchange or at the time the Company
enters into any agreement with respect to any such consolidation,
merger or share exchange, the Acquiring Person Controls the Board of
Directors of the Company and either (A) any term of or arrangement
concerning the treatment of shares of capital stock in such
consolidation, merger or share exchange relating to the Acquiring
Person is not identical to the terms and arrangements relating to
other holders of the Common Stock or (B) the Person with whom the
transaction or series of transactions occurs is the Acquiring Person
or an Affiliate or Associate of the Acquiring Person or (ii) the
Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer) assets (A) aggregating
more than 50% of the assets (measured by either book value or fair
market value) or (B) generating more than 50% of the operating income
or cash flow, of the Company and its Subsidiaries (taken as a whole)
to any Person (other than the Company or one or more of its wholly
owned Subsidiaries) or to two or more such Persons which are
Affiliates or Associates or otherwise acting in concert, if, at the
time of the entry by the Company (or any such Subsidiary) into an
agreement with respect to such sale or transfer of assets, the
Acquiring Person Controls the Board of Directors of the Company. An
Acquiring Person shall be deemed to "Control" the Company's Board of
Directors when, following a Flip-In Date, the persons who were
directors of the Company before the Flip-In Date shall cease to
constitute a majority of the Company's Board of Directors.
(n) "Market Price" per share of any securities on any date shall
mean the average of the daily closing prices per share of such
securities (determined as described below) on each of the 20
consecutive Trading Days through and including the Trading Day
immediately preceding such date; provided, however, that if an event
of a type analogous to any of the events described in Section 2.4
hereof shall have caused the closing prices used to determine the
Market Price on any Trading Days during such period of 20 Trading
Days not to be fully comparable with the closing price on such date,
each such closing price so used shall be appropriately adjusted in
order to make it fully comparable with the closing price on such
date. The closing price per share of any securities on any date
shall be the last reported sale price, regular way, or, in case no
such sale takes place or is quoted on such date, the average of the
closing bid and asked prices, regular way, for each share of such
securities, 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, Inc. or, if the
securities are not listed or admitted to trading on the New York
Stock Exchange, Inc., as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the securities are
listed or admitted to trading or, if the securities are not listed or
admitted to trading on any national securities exchange, as reported
by The Nasdaq Stock Market, Inc.'s Nasdaq National Market or such
other system then in use, or, if on any such date the securities are
not listed or admitted to trading on any national securities exchange
or quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a
market in the securities selected by the Board of Directors of the
Company; provided, however that if on any such date the securities
are not listed or admitted to trading on a national securities
exchange or traded in the over-the-counter market, the closing price
per share of such securities on such date shall mean the fair value
per share of securities on such date as determined in good faith by
the Board of Directors of the Company, after consultation with a
nationally recognized investment banking firm, and set forth in a
certificate delivered to the Rights Agent.
(o) "Person" shall mean any individual, firm, partnership,
association, group (as such term is used in Rule 13d-5 under the
Securities Exchange Act of 1934, as such Rule is in effect on the
date of this Agreement), corporation or other entity.
(p) "Preferred Stock" shall mean the Series B Junior Participating
Preferred Stock, par value $.05 per share, of the Company created by
the Certificate of Designation, Preferences and Rights of Series B
Junior Participating Preferred Stock in substantially the form set
forth in Exhibit B hereto appropriately completed.
(q) "Separation Time" shall mean the Close of Business on the
earlier of (i) the tenth business day (or such later date as the
Board of Directors of the Company may from time to time fix by
resolution adopted prior to the Separation Time that would otherwise
have occurred) after the date on which any Person commences a tender
or exchange offer which, if consummated, would result in such
Person's becoming an Acquiring Person and (ii) the Flip-In Date;
provided, that if the foregoing results in the Separation Time being
prior to the Record Time, the Separation Time shall be the Record
Time and provided further, that if any tender or exchange offer
referred to in clause (i) of this paragraph is canceled, terminated
or otherwise withdrawn prior to the Separation Time without the
purchase of any shares of Common Stock pursuant thereto, such offer
shall be deemed, for purposes of this paragraph, never to have been
made.
(r) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) that an Acquiring Person
has become such.
(s) "Subsidiary" of any specified Person shall mean any corporation
or other entity of which a majority of the voting power of the equity
securities or a majority of the equity interest is Beneficially
Owned, directly or indirectly, by such Person.
(t) "Termination Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 5.1 hereof.
(u) "Trading Day," when used with respect to any securities, shall
mean a day on which the New York Stock Exchange, Inc. is open for the
transaction of business or, if such securities are not listed or
admitted to trading on the New York Stock Exchange, Inc., a day on
which the principal national securities exchange on which such
securities are listed or admitted to trading is open for the
transaction of business or, if such securities are not listed or
admitted to trading on any national securities exchange, a Business
Day.
2. THE RIGHTS.
2.1 Summary of Rights. As soon as practicable after the Record Time, the
Company will mail a letter summarizing the terms of the Rights to each
holder of record of Common Stock as of the Record Time, at such holder's
address as shown by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for the Common
Stock issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and
shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:
"Until the Separation Time (as defined in the Rights Agreement referred to
below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement, dated as of February 1,
1999 (as such may be amended from time to time, the "Rights Agreement"),
between Caretenders Health Corp. (the "Company") and Reliance Trust
Company, as Rights Agent, 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 may be terminated, may become
exercisable for securities or assets of the Company or of another entity,
may be exchanged for shares of Common Stock or other securities or assets
of the Company, may expire, may be redeemed, may become void (if they are
"Beneficially Owned" by an "Acquiring Person" or an Affiliate or Associate
thereof, as such terms are defined in the Rights Agreement, or by any
transferee of any of the foregoing) or may be evidenced by separate
certificates and may no longer be evidenced by this certificate. The
Company will mail or arrange for the mailing of a copy of the Rights
Agreement to the holder of this certificate without charge promptly after
the receipt of a written request therefor."
Certificates representing shares of Common Stock that are issued and
outstanding at the Record Time shall evidence one Right for each share of
Common Stock evidenced thereby notwithstanding the absence of the
foregoing
legend.
2.3 Exercise of Rights; Separation of Rights.
(a) Subject to Sections 3.1, 5.1, 5.2 and 5.10 and subject to
adjustment as herein set forth, each Right will entitle the holder
thereof, after the Separation Time and prior to the Expiration Time,
to purchase, for the Exercise Price, one one-hundredth (1/100th) of a
share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised and
(ii) each Right will be evidenced by the certificate for the
associated share of Common Stock (together, in the case of
certificates issued prior to the Record Time, with the letter or
notice mailed to the record holder thereof pursuant to Section 2.1)
and will be transferable only together with, and will be transferred
by a transfer (whether with or without such letter or notice) of,
such associated share.
(c) Subject to this Section 2.3 and to Sections 3.1, 5.1, 5.2 and
5.10, after the Separation Time and prior to the Expiration Time, the
Rights (i) may be exercised and (ii) may be transferred independent
of shares of Common Stock. Promptly following the Separation Time,
the Rights Agent will mail to each holder of record of Common Stock
as of the Separation Time (other than any Person whose Rights have
become void pursuant to Section 3.1(b)), at such holder's address as
shown by the records of the Company (the Company hereby agreeing to
furnish copies of such records to the Rights Agent for this purpose),
(x) a certificate (a "Rights Certificate") in substantially the form
of Exhibit A hereto appropriately completed, representing the number
of Rights held by such holder at the Separation Time and having such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and
as are not inconsistent with the provisions of this Agreement, or as
may be required to comply with any law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any national
securities exchange or quotation system on which the Rights may from
time to time be listed or traded, or to conform to usage, and (y) a
disclosure statement describing the Rights.
(d) Subject to Sections 3.1, 5.1, 5.2 and 5.10, Rights may be
exercised on any Business Day after the Separation Time and prior to
the Expiration Time by submitting to the Rights Agent the Rights
Certificate evidencing such Rights with an Election to Exercise (an
"Election to Exercise") substantially in the form attached to the
Rights Certificate duly completed, accompanied by payment in cash, or
by certified or official bank check or money order payable to the
order of the Company, of a sum equal to the Exercise Price multiplied
by the number of Rights being exercised and a sum sufficient to cover
any transfer tax or charge which may be payable in respect of any
transfer involved in the transfer or delivery of Rights Certificates
or the issuance or delivery of certificates for shares or depository
receipts (or both) in a name other than that of the holder of the
Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 2.3(d), and
subject to Sections 3.1, 5.1, 5.2 and 5.10, the Rights Agent will
thereupon promptly (i) (A) requisition from a transfer agent stock
certificates evidencing such number of shares or other securities to
be purchased (the Company hereby irrevocably authorizing its transfer
agent to comply with all such requisitions) and (B) if the Company
elects pursuant to Section 5.5 not to issue certificates representing
fractional shares, requisition from the depository selected by the
Company depository receipts representing the fractional shares to be
purchased or requisition from the Company the amount of cash to be
paid in lieu of fractional shares in accordance with Section 5.5 and
(ii) after receipt of such certificates, depository receipts and/or
cash, deliver the same to or upon the order of the registered holder
of such Rights Certificate, registered (in the case of certificates
or depository receipts) in such name or names as may be designated by
such holder.
(f) In case the holder of any Rights shall exercise less than all
the Rights evidenced by such holder's Rights Certificate, a new
Rights Certificate evidencing the Rights remaining unexercised will
be issued by the Rights Agent to such holder or to such holder's duly
authorized assigns.
(g) The Company covenants and agrees that it will (i) take all such
action as may be necessary to ensure that all shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates
for such shares (subject to payment of the Exercise Price), be duly
and validly authorized, executed, issued and delivered and fully paid
and nonassessable; (ii) take all such action as may be necessary to
comply with any applicable requirements of the Securities Act of 1933
or the Securities Exchange Act of 1934, and the rules and regulations
thereunder, and any other applicable law, rule or regulation, in
connection with the issuance of any shares upon exercise of Rights;
and (iii) pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
original issuance or delivery of the Rights Certificates or of any
shares issued upon the exercise of Rights, provided that the Company
shall not be required to pay any transfer tax or charge which may be
payable in respect of any transfer involved in the transfer or
delivery of Rights Certificates or the issuance or delivery of
certificates for shares in a name other than that of the holder of
the Rights being transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights.
(a) In the event the Company shall at any time after the Record Time
and prior to the Separation Time (i) declare or pay a dividend on
Common Stock payable in Common Stock, (ii) subdivide the outstanding
Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares of Common Stock, (x) the Exercise Price in
effect after such adjustment will be equal to the Exercise Price in
effect immediately prior to such adjustment divided by the number of
shares of Common Stock (the "Expansion Factor") that a holder of one
share of Common Stock immediately prior to such dividend, subdivision
or combination would hold thereafter as a result thereof and (y) each
Right held prior to such adjustment will become that number of Rights
equal to the Expansion Factor, and the adjusted number of Rights will
be deemed to be distributed among the shares of Common Stock with
respect to which the original Rights were associated (if they remain
outstanding) and the shares issued in respect of such dividend,
subdivision or combination, so that each such share of Common Stock
will have exactly one Right associated with it. Each adjustment made
pursuant to this paragraph shall be made as of the payment or
effective date for the applicable dividend, subdivision or
combination.
In the event the Company shall at any time after the Record Time and
prior to the Separation Time issue any shares of Common Stock
otherwise than in a transaction referred to in the preceding
paragraph, each such share of Common Stock so issued shall
automatically have one new Right associated with it, which Right
shall be evidenced by the certificate representing such share. To
the extent provided in Section 5.3, Rights shall be issued by the
Company in respect of shares of Common Stock that are issued or sold
by the Company after the Separation Time.
(b) In the event the Company shall at any time after the Record Time
and prior to the Separation Time issue or distribute any securities
or assets in respect of, in lieu of or in exchange for Common Stock
(other than pursuant to a regular periodic cash dividend or a
dividend paid solely in Common Stock) whether by dividend, in a
reclassification or recapitalization (including any such transaction
involving a merger, consolidation or share exchange), or otherwise,
the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property
purchasable upon exercise of Rights as the Board of Directors of the
Company, in its sole discretion, may deem to be appropriate under the
circumstances in order to adequately protect the interests of the
holders of Rights generally, and the Company and the Rights Agent
shall amend this Agreement as necessary to provide for such
adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this
Section 2.4 shall be calculated to the nearest cent. Whenever an
adjustment to the Exercise Price is made pursuant to this Section
2.4, the Company shall (i) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting
for such adjustment and (ii) promptly file with the Rights Agent and
with each transfer agent for the Common Stock a copy of such
certificate. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment therein and shall not be
deemed to have knowledge of any such adjustment unless and until it
shall have received such a certificate.
Rights Certificates shall represent the securities purchasable under
the terms of this Agreement, including any adjustment or change in
the securities purchasable upon exercise of the Rights, even though
such certificates may continue to express the securities purchasable
at the time of issuance of the initial Rights Certificates.
2.5 Date on Which Exercise is Effective. Each person in whose name any
certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares
represented thereby on the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Exercise
Price for such Rights (and any applicable taxes and other governmental
charges payable by the exercising holder hereunder) was made; provided,
however, that if the date of such surrender and payment is a date upon
which the stock transfer books of the Company are closed such person shall
be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
stock transfer books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by
its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Rights Certificates may be manual or
facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company
shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the
countersignature and delivery of such Rights Certificates.
Promptly after the Separation Time, the Company will notify the
Rights Agent of such Separation Time and will deliver Rights
Certificates executed by the Company to the Rights Agent for
countersignature, and, subject to Section 3.1(b), the Rights Agent
shall manually countersign and deliver such Rights Certificates to
the holders of the Rights pursuant to Section 2.3(c) hereof. No
Rights Certificate shall be valid for any purpose unless manually
countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.7 Registration, Registration of Transfer and Exchange.
(a) After the Separation Time, the Company will cause to be kept a
register (the "Rights Register") in which, subject to such reasonable
regulations as it may prescribe, the Company will provide for the
registration and transfer of Rights. The Rights Agent is hereby
appointed "Rights Registrar" for the purpose of maintaining the
Rights Register for the Company and registering Rights and transfers
of Rights after the Separation Time as herein provided. In the event
that the Rights Agent shall cease to be the Rights Registrar, the
Rights Agent will have the right to examine the Rights Register at
all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Section 2.7(c) and (d),
the Company will execute and the Rights Agent will countersign and
deliver, in the name of the holder or the designated transferee or
transferees, as required pursuant to the holder's instructions, one
or more new Rights Certificates evidencing the same aggregate number
of Rights as did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights
issued upon any registration of transfer or exchange of Rights
Certificates shall be the valid obligations of the Company, and such
Rights shall be entitled to the same benefits under this Agreement as
the Rights surrendered upon such registration of transfer or
exchange.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company or
the Rights Agent, as the case may be, duly executed by the holder
thereof or such holder's attorney duly authorized in writing. As a
condition to the issuance of any new Rights Certificate under this
Section 2.7, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in
relation thereto.
(d) The Company shall not be required to register the transfer or
exchange of any Rights after such Rights have become void under
Section 3.1(b), been exchanged under Section 3.1(c) or been redeemed
and terminated under Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates.
(a) If any mutilated Rights Certificate is surrendered to the Rights
Agent prior to the Expiration Time, then, subject to Sections 3.1(b),
3.1(c), 5.1 and 5.2, the Company shall execute and the Rights Agent
shall countersign and deliver in exchange therefor a new Rights
Certificate evidencing the same number of Rights as did the Rights
Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of
the destruction, loss or theft of any Rights Certificate and (ii)
such security or indemnity as may be required by them to save each of
them and any of their agents harmless, then, subject to Sections
3.1(b), 3.1(c), 5.1 and 5.2 and in the absence of notice to the
Company or the Rights Agent that such Rights Certificate has been
acquired by a bona fide purchaser, the Company shall execute and upon
its request the Rights Agent shall countersign and deliver, in lieu
of any such destroyed, lost or stolen Rights Certificate, a new
Rights Certificate evidencing the same number of Rights as did the
Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate
under this Section 2.8, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the
fees and expenses of the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.8
in lieu of any destroyed, lost or stolen Rights Certificate shall
evidence a contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and, subject to Section 3.1(b), shall be
entitled to all the benefits of this Agreement equally and
proportionately with any and all other Rights duly issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent
and any agent of the Company or the Rights Agent may deem and treat the
person in whose name such Rights Certificate (or, prior to the Separation
Time, such Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary. As used in this Agreement, unless the context
otherwise requires, the term "holder" of any Rights shall mean the
registered holder of such Rights (or, prior to the Separation Time, the
associated shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights Certificates
surrendered upon exercise or for registration of transfer or exchange
shall, if surrendered to any person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly canceled
by the Rights Agent. The Company may at any time deliver to the Rights
Agent for cancellation any Rights Certificates previously countersigned
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Rights Certificates so delivered shall be promptly
canceled by the Rights Agent. No Rights Certificates shall be
countersigned in lieu of or in exchange for any Rights Certificates
canceled as provided in this Section 2.10, except as expressly permitted
by this Agreement. The Rights Agent shall return all canceled Rights
Certificates to the Company.
2.11 Agreement of Rights Holders. Every holder of Rights by accepting
the same consents and agrees with the Company and the Rights Agent and
with every other holder of Rights that:
(a) prior to the Separation Time, each Right will be transferable
only together with, and will be transferred by a transfer of, the
associated share of Common Stock;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to
the Separation Time, the associated Common Stock certificate) for
registration of transfer, the Company, the Rights Agent and any agent
of the Company or the Rights Agent may deem and treat the person in
whose name the Rights Certificate (or, prior to the Separation Time,
the associated Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby for all
purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from time to time
pursuant to Section 2.4(b) or 5.4 hereof.
3. ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS.
3.1 Flip-In.
(a) In the event that prior to the Expiration Time a Flip-In Date
shall occur, except as provided in this Section 3.1, each Right shall
constitute the right to purchase from the Company, upon exercise
thereof in accordance with the terms hereof (but subject to Section
5.1, 5.2 and 5.10), that number of shares of Common Stock having an
aggregate Market Price on the Stock Acquisition Date equal to twice
the Exercise Price for an amount in cash equal to the Exercise Price
(such right to be appropriately adjusted in order to protect the
interests of the holders of Rights generally in the event that on or
after such Stock Acquisition Date an event of a type analogous to any
of the events described in Section 2.4(a) or (b) shall have occurred
with respect to the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an
Acquiring Person or an Affiliate or Associate thereof or by any
transferee, direct or indirect, of any of the foregoing shall become
void and any holder of such Rights (including transferees) shall
thereafter have no right to exercise or transfer such Rights under
any provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person presenting the
same will not complete the certification set forth at the end of the
form of assignment or notice of election to exercise and provide such
additional evidence of the identity of the Beneficial Owner and its
Affiliates and Associates (or former Beneficial Owners and their
Affiliates and Associates) as the Company shall reasonably request,
then the Company shall be entitled conclusively to deem the
Beneficial Owner thereof to be an Acquiring Person or an Affiliate or
Associate thereof or a transferee of any of the foregoing and
accordingly will deem the Rights evidenced thereby to be void and not
transferable or exercisable.
(c) The Board of Directors of the Company may, at its option, at any
time after a Flip-In Date and prior to the time that an Acquiring
Person becomes the Beneficial Owner of more than 50% of the
outstanding shares of Common stock, elect to exchange all (but not
less than all) the then outstanding Rights (which shall not include
Rights that have become void pursuant to the provisions of Section
3.1(b)) for shares of Common Stock at an exchange ratio of one share
of Common Stock per Right, appropriately adjusted in order to protect
the interests of holders of Rights generally in the event that after
the Separation Time an event of a type analogous to any of the events
described in Section 2.4(a) or (b) shall have occurred with respect
to the Common Stock (such exchange ratio, as adjusted from time to
time, being hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and
without any notice, the right to exercise the Rights will terminate
and each Right (other than Rights that have become void pursuant to
Section 3.1(b)) will thereafter represent only the right to receive a
number of shares of Common Stock equal to the Exchange Ratio.
Promptly after the action of the Board of Directors electing to
exchange the Rights, the Company shall give notice thereof
(specifying the steps to be taken to receive shares of Common Stock
in exchange for Rights) to the Rights Agent and the holders of the
Rights (other than Rights that have become void pursuant to Section
3.1(b)) outstanding immediately prior thereto by mailing such notice
in accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued upon
the exchange of Rights pursuant to this Section 3.1(c) or Section
3.1(d) shall for all purposes be deemed to have become the holder of
record of the shares represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing
such Rights was duly surrendered and payment of any applicable taxes
and other governmental charges payable by the holder was made;
provided, however, that if the date of such surrender and payment is
a date upon which the stock transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding
Business Day on which the stock transfer books of the Company are
open.
(d) Whenever the Company shall become obligated under Section 3.1(a)
or (c) to issue shares of Common Stock upon exercise of or in
exchange for Rights, the Company, at its option, may substitute
therefor shares of Preferred Stock, at a ratio of one one-hundredth
(1/l00th) of a share of Preferred Stock for each share of Common
Stock so issuable.
(e) In the event that there shall not be sufficient treasury shares
or authorized but unissued shares of Common Stock or Preferred Stock
of the Company to permit the exercise or exchange in full of the
Rights in accordance with Section 3.1(a) or (c), the Company shall
either (i) call a meeting of stockholders seeking approval to cause
sufficient additional shares to be authorized (provided that if such
approval is not obtained the Company will take the action specified
in clause (ii) of this sentence) or (ii) take such action as shall be
necessary to ensure and provide, to the extent permitted by
applicable law and any agreements or instruments in effect on the
Stock Acquisition Date to which it is a party, that each Right shall
thereafter constitute the right to receive, (x) at the Company's
option, either (A) in return for the Exercise Price, debt or equity
securities or other assets (or a combination thereof) having a fair
value equal to twice the Exercise Price, or (B) without payment of
consideration (except as otherwise required by applicable law), debt
or equity securities or other assets (or a combination thereof)
having a fair value equal to the Exercise Price, or (y) if the Board
of Directors of the Company elects to exchange the Rights in
accordance with Section 3.1(c), debt or equity securities or other
assets (or a combination thereof) having a fair value equal to the
product of the Market Price of a share of Common Stock on the Flip-In
Date times the Exchange Ratio in effect on the Flip-In Date, where in
any case set forth in (x) or (y) above the fair value of such debt or
equity securities or other assets shall be as determined in good
faith by the Board of Directors of the Company, after consultation
with a nationally recognized investment banking firm.
3.2 Flip-Over.
(a) Prior to the Expiration Time, the Company shall not enter into
any agreement with respect to, consummate or permit to occur any
Flip-Over Transaction or Event unless and until it shall have entered
into a supplemental agreement with the Flip-Over Entity, for the
benefit of the holders of the Rights, providing that, upon
consummation or occurrence of the Flip-Over Transaction or Event (i)
each Right shall thereafter constitute the right to purchase from the
Flip-Over Entity, upon exercise thereof in accordance with the terms
hereof, that number of shares of Flip-Over Stock of the Flip-Over
Entity having an aggregate Market Price on the date of consummation
or occurrence of such Flip-Over Transaction or Event equal to twice
the Exercise Price for an amount in cash equal to the Exercise Price
(such right to be appropriately adjusted in order to protect the
interests of the holders of Rights generally in the event that after
such date of consummation or occurrence an event of a type analogous
to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Flip-Over Stock) and (ii) the Flip-Over
Entity shall thereafter be liable for, and shall assume, by virtue of
such Flip-Over Transaction or Event and such supplemental agreement,
all the obligations and duties of the Company pursuant to this
Agreement. The provisions of this Section 3.2 shall apply to
successive Flip-Over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be
terminated pursuant to Section 5.1 hereof in connection therewith,
the Company shall not enter into any agreement with respect to,
consummate or permit to occur any Flip-Over Transaction or Event if
at the time thereof there are any rights, warrants or securities
outstanding or any other arrangements, agreements or instruments that
would eliminate or otherwise diminish in any material respect the
benefits intended to be afforded by this Rights Agreement to the
holders of Rights upon consummation of such transaction.
4. THE RIGHTS AGENT.
4.1 General.
(a) The Company hereby appoints the Rights Agent to act as agent for
the Company in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company agrees
to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder.
The Company also agrees to indemnify the Rights Agent, its directors,
officers, employees and agents for, and to hold each of them harmless
against, any loss, liability, or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights
Agent or such indemnified party, for anything done or omitted to be
done by the Rights Agent in connection with the acceptance and
administration of this Agreement or the exercise or performance of
its duties hereunder, including the costs and expenses of defending
against any claim of liability. The indemnity provided in this
Section 4.1(a) shall survive the expiration of the Rights and the
termination of this Agreement.
(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 or the exercise
or performance of its duties hereunder in reliance upon any
certificate for securities purchasable upon exercise of Rights,
Rights Certificate, certificate for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons.
4.2 Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which
the Rights Agent or any successor Rights Agent is a party, or any
corporation succeeding to the stockholder services business of the
Rights Agent or any successor Rights Agent, will be the successor to
the Rights Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 4.4 hereof. In case at the time such successor Rights Agent
succeeds to the agency created by this Agreement any of the Rights
Certificates have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights
Certificates have not been countersigned, any successor Rights Agent
may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates will have the
full force provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and
at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates
so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in
this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the advice or opinion of such
counsel will be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith
and in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent deems it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate
signed by a person believed by the Rights Agent to be the Chairman of
the Board, the President or any Vice President and by the Treasurer
or any Assistant Treasurer or the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such
certificate will be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in
the certificates for securities purchasable upon exercise of Rights
or the Rights Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements and recitals
are and will be deemed to have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect
of the validity of any provision of this Agreement or the execution
and delivery hereof (except the due authorization, execution and
delivery hereof by the Rights Agent) or in respect of the validity or
execution of any certificate for securities purchasable upon exercise
of Rights or Rights Certificate (except its countersignature
thereof); nor will it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void
pursuant to Section 3.1(b) hereof) or any adjustment required under
any provision of this Agreement or responsible for the manner, method
or amount of any such adjustment or the ascertaining of the existence
of facts that would require any such adjustment (except with respect
to the exercise of Rights after receipt of the certificate
contemplated by Section 2.4 describing any such adjustment); nor will
it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any securities
purchasable upon exercise of Rights or any Rights or as to whether
any securities purchasable upon exercise of Rights will, when issued,
be duly and validly authorized, executed, issued and delivered and
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this
Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from any person believed by the Rights Agent to be the Chairman of
the Board, the President or any Vice President or the Secretary or
any Assistant Secretary or the Treasurer or any Assistant Treasurer
of the Company, and to apply to such persons for advice or
instructions in connection with its duties, and it shall not be
liable for any action taken or suffered by it in good faith in
accordance with instructions of any such person, or for any delay in
acting while awaiting instructions. Any application by the Rights
Agent for written instructions from the Company may, at the option of
the Rights Agent, set forth in writing any action proposed to be
taken or omitted by the Rights Agent under this Agreement and the
date on or after which such action shall be taken or such omission
shall be effective. The Rights Agent shall not be liable for any
action taken by, or omission of, the Rights Agent in accordance with
a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five
Business Days after the date any officer of the Company actually
receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any
such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to
such application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock,
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent
will not be answerable or accountable for any act, default, neglect
or misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, default, neglect or misconduct,
provided the Rights Agent was not grossly negligent in the selection
and continued employment thereof.
(j) The Rights Agent undertakes only the express duties and
obligations imposed on it by this Agreement and no implied duties or
obligations shall be read into this Agreement against the Rights
Agent.
(k) 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).
(l) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(m) The Company agrees that it will provide prompt written notice to
the Rights Agent of any transaction or event of which the Company
becomes aware that has resulted in or that is reasonably likely to
result in the occurrence of a Flip-In Date, a Flip-Over Transaction
or Event, the Separation Time or a Stock Acquisition Date.
4.4 Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days notice (or
such lesser notice as is acceptable to the Company) in writing mailed to
the Company and to each transfer agent of Common Stock by registered or
certified mail, and to the holders of the Rights in accordance with
Section 5.9. The Company may remove the Rights Agent upon 30 days notice
in writing, mailed to the Rights Agent and to each transfer agent of the
Common Stock by registered or certified mail, and to the holders of the
Rights in accordance with Section 5.9. If the Rights Agent should resign
or be removed or otherwise become incapable of acting, the Company will
appoint a successor to the Rights Agent. If the Company fails to make such
appointment within a period of 30 days after such removal or after it has
been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of any Rights
(which holder shall, with such notice, submit such holder's Rights
Certificate for inspection by the Company), then the holder of any Rights
may apply to any court of competent jurisdiction for the appointment of a
new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a corporation organized and doing
business under the laws of the United States or any State of the United
States, in good standing, which is authorized under such laws to exercise
the powers of the Rights Agent contemplated by this Agreement and is
subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined
capital and surplus of at least $5,000,000 or (b) an affiliate of a
corporation described in the immediately preceding clause (a). After
appointment, the successor Rights Agent will be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company will
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock, and mail a notice thereof in writing
to the holders of the Rights. Failure to give any notice provided for in
this Section 4.4, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or
the appointment of the successor Rights Agent, as the case may be.
5. MISCELLANEOUS.
5.1 Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to a Flip-in Date, redeem all but not less than all of the
then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend,
recapitalization or similar transaction occurring after the date of
this Agreement (such redemption price being hereinafter referred to
as the "Redemption Price"). The Company may, at its option, pay the
Redemption Price in shares of Common Stock (based on current Market
Price at the time of redemption), cash or any other form of
consideration deemed appropriate by the Board of Directors. The
redemption of the Rights by the Board of Directors may be made
effective at such time, on such basis and subject to such conditions
as the Board of Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights (or at such later time
as the Board of Directors may establish for the effectiveness of such
redemption), and without any further action and without any notice,
the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. The Company shall promptly
give public notice of such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not affect
the validity of such redemption. The Company shall promptly give, or
cause the Rights Agent to 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 Separation Time, on the
registry books of the transfer agent for the Common Stock. Any
notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such
notice of redemption shall state the method by which payment of the
Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value
any Rights at any time in any manner other than as set forth herein.
5.2 Expiration. The Rights and this Agreement shall expire at the
Expiration Time and no Person shall have any rights pursuant to this
Agreement or any Right after the Expiration Time, except, if the Rights
are exchanged, as provided in Section 3.1 hereof, or if the Rights are
redeemed, as provided in Section 5.1 hereof.
5.3 Issuance of New Rights Certificate. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the number or kind or class of shares of stock
purchasable upon exercise of Rights made in accordance with the provisions
of this Agreement. In addition, in connection with the issuance or sale
of shares of Common Stock by the Company following the Separation Time and
prior to the Expiration Time pursuant to the terms of securities
convertible or redeemable into shares of Common Stock or to options, in
each case issued or granted prior to, and outstanding at, the Separation
Time, the Company shall issue to the holders of such shares of Common
Stock, Rights Certificates representing the appropriate number of Rights
in connection with the issuance or sale of such shares of Common Stock;
provided, however, in each case, (i) no such Rights Certificate shall be
issued, if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material
adverse tax consequences to the Company or to the Person to whom such
Rights Certificates would be issued, (ii) no such Rights Certificates
shall be issued if, and to the extent that, appropriate adjustment shall
have otherwise been made in lieu of the issuance thereof and (iii) the
Company shall have no obligation to distribute Rights Certificates to any
Acquiring Person or Affiliate or Associate of an Acquiring Person or any
transferee of any of the foregoing.
5.4 Supplements and Amendments. The Company and the Rights Agent may
from time to time supplement or amend this Agreement without the approval
of any holders of Rights (i) prior to the Close of Business on the Flip-In
Date, in any respect and (ii) after the Close of Business on the Flip-In
Date, to make any changes that the Company may deem necessary or desirable
and which shall not materially adversely affect the interests of the
holders of Rights generally or in order to cure any ambiguity or to
correct or supplement any provision contained herein which may be
inconsistent with any other provisions herein or otherwise defective. The
Rights Agent will duly execute and deliver any supplement or amendment
hereto requested by the Company upon receipt of a certificate from the
Company that such supplement or amendment satisfies the terms of the
preceding sentence. Notwithstanding anything contained in this Agreement
to the contrary, no supplement or amendment that changes the rights and
duties of the Rights Agent under this Agreement shall be effective without
the consent of the Rights Agent.
5.5 Fractional Shares. If the Company elects not to issue certificates
representing fractional shares upon exercise of Rights, the Company shall,
in lieu thereof, in the sole discretion of the Board of Directors, either
(a) evidence such fractional shares by depository receipts issued pursuant
to an appropriate agreement between the Company and a depository selected
by it, providing that each holder of a depository receipt shall have all
of the rights, privileges and preferences to which such holder would be
entitled as a beneficial owner of such fractional share, or (b) sell such
shares on behalf of the holders of Rights and pay to the registered holder
of such Rights the appropriate fraction of price per share received upon
such sale.
5.6 Rights of Action. Subject to the terms of this Agreement (including
Section 3.1(b)), rights of action in respect of this Agreement, other than
rights of action vested solely in the Rights Agent, are vested in the
respective holders of the Rights; and any holder of any Rights, without
the consent of the Rights Agent or of the holder of any other Rights, may,
on such holder's own behalf and for such holder's own benefit and the
benefit of other holders of Rights, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, such holder's right to exercise such holder's
Rights in the manner provided in such holder's Rights Certificate and in
this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders
of Rights would not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of,
the obligations of any Person subject to this Agreement.
5.7 Holder of Rights Not Deemed a Stockholder. No holder, as such, of
any Rights shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of shares or any other securities which may at any
time be issuable on the exercise of such Rights, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon
the holder of any Rights, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in Section 5.8
hereof), or to receive dividends or subscription rights, or otherwise,
until such Rights shall have been exercised or exchanged in accordance
with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose after
the Separation Time and prior to the Expiration Time (i) to effect or
permit occurrence of any Flip-Over Transaction or Event or (ii) to effect
the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Right, in accordance
with Section 5.9 hereof, a notice of such proposed action, which shall
specify the date on which such Flip-Over Transaction or Event,
liquidation, dissolution, or winding up is to take place, and such notice
shall be so given at least 20 Business Days prior to the date of the
taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights to
the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
Caretenders Health Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
Any notice or demand authorized or required by this Agreement to be given
or made by the Company or by the holder of any Rights to or on the Rights
Agent shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
Reliance Trust Company
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Notices or demands authorized or required by this Agreement to be given or
made by the Company or the Rights Agent to or on the holder of any Rights
shall be sufficiently given or made if delivered or sent by first-class
mail, postage prepaid, addressed to such holder at the address of such
holder as it appears upon the registry books of the Rights Agent or, prior
to the Separation Time, on the registry books of the transfer agent for
the Common Stock. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice.
5.10 Suspension of Exercisability. To the extent that the Company
determines in good faith that some action will or need be taken pursuant
to Section 3.1 or to comply with federal or state securities laws, the
Company may suspend the exercisability of the Rights for ninety (90) days
and any additional period that may be reasonable in order to take such
action or comply with such laws. In the event of any such suspension, the
Company shall issue as promptly as practicable a public announcement
stating that the exercisability or exchangeability of the Rights has been
temporarily suspended. Notice thereof pursuant to Section 5.9 shall not
be required.
Failure to give a notice pursuant to the provisions of this Agreement
shall not affect the validity of any action taken hereunder.
5.11 Costs of Enforcement. The Company agrees that if the Company or any
other Person the securities of which are purchasable upon exercise of
Rights fails to fulfill any of its obligations pursuant to this Agreement,
then the Company or such Person will reimburse the holder of any Rights
for the costs and expenses (including legal fees) incurred by such holder
in actions to enforce such holder's rights pursuant to any Rights or this
Agreement.
5.12 Successors. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Rights Agent shall bind and inure
to the benefit of their respective successors and assigns hereunder.
5.13 Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent
and the holders of the Rights any legal or equitable right, remedy or
claim under this Agreement and this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of the
Rights.
5.14 Determination and Actions by the Board of Directors. The Board of
Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of
this Agreement and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement. All such actions,
calculations, interpretations and determinations (including, for purposes
of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties, and (y) not subject the Board of
Directors of the Company to any liability to the holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT 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.
5.17 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.
5.18 Severability. If any term or provision hereof or the application
thereof to any circumstance shall, in any jurisdiction and to any extent,
be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the
remaining terms and provisions hereof or the application of such term or
provision to circumstances other than those as to which it is held invalid
or unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
CARETENDERS HEALTH CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board,
President and Chief
Executive Officer
("Company")
RELIANCE TRUST COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Title: Senior Vice President
("Rights Agent")
EXHIBIT A
Certificate No. ______
(Form of Rights Certificate)
_______ Rights
THE RIGHTS ARE SUBJECT TO TERMINATION, REDEMPTION OR MANDATORY EXCHANGE, AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES OR ASSOCIATES THEREOF AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE
FOREGOING WILL BE VOID.
Rights Certificate
CARETENDERS HEALTH CORP.
This certifies that _____________________________, or registered assigns, is
the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Stockholder Protection Rights Agreement, dated as of February
1, 1999 (as amended from time to time, the "Rights Agreement"), between
Caretenders Health Corp., a Delaware corporation (the "Company"), and Reliance
Trust Company, a Georgia state banking corporation, as Rights Agent (the
"Rights Agent," which term shall include any successor Rights Agent under the
Rights Agreement), to purchase from the Company at any time after the
Separation Time (as such term is defined in the Rights Agreement) and prior to
the Close of Business on February 1, 2009, one one-hundredth (1/100th) of a
fully paid share of Series B Junior Participating Preferred Stock, par value
$.05 per share (the "Preferred Stock"), of the Company (subject to adjustment
as provided in the Rights Agreement) at the Exercise Price referred to below,
upon presentation and surrender of this Rights Certificate with the Form of
Election to Exercise duly executed at the principal office of the Rights Agent.
The Exercise Price shall initially be $16 per Right and shall be subject to
adjustment as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase
securities of an entity other than the Company or securities or assets of the
Company other than Preferred Stock, all as provided in the Rights Agreement.
This Rights 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 Rights Certificates. Copies
of the Rights Agreement are on file at the principal office of the Company and
are available without cost upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
evidencing an aggregate number of Rights equal to the aggregate number of
Rights evidenced by the Rights Certificate or Rights Certificates surrendered.
If this Rights Certificate shall be exercised in part, the registered holder
shall be entitled to receive, upon surrender hereof, another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, each Right evidenced by this
Certificate may be (a) amended, redeemed and terminated by the Company under
certain circumstances, at its option, or (b) exchanged by the Company under
certain circumstances, at its option, for one share of Common Stock or one
one-hundredth (1/100th) of a share of Preferred Stock per Right (or, in certain
cases, other securities or assets of the Company), subject in each case to
adjustment in certain events as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of any securities
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 Rights evidenced by
this Rights Certificate shall have been exercised or exchanged as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and its
corporate seal.
Date: ______________
ATTEST: CARETENDERS HEALTH CORP.
______________________________ By:_____________________________
Secretary
Title:__________________________
Countersigned:
RELIANCE TRUST COMPANY
By: ______________________________
Title: _____________________________
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
_ _ _ _ _ _ _ _ _ _ _ _ _ _
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED ___________________ hereby sells, assigns and transfers unto
_______________________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________
Attorney, to transfer the within Rights Certificate on the books of the within
named Company, with full power of substitution.
Date: ______________
Signature Guaranteed: _______________________________________
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular,
without alteration or enlargement or
any change whatsoever.)
Signatures must be guaranteed by an eligible guarantor institution (Banks,
Stockholders, Savings and Loan Associations and Credit Unions with membership
in an approved Signature guarantee medallion program) pursuant to S.E.C. Rule
17 Ad-15.
______________________________________________________________________________
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate
are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
_______________________________________
Signature
______________________________________________________________________________
NOTICE
_ _ _ _ _
In the event the certification set forth above is not completed in connection
with a purported assignment, the Company will deem the Beneficial Owner of the
Rights evidenced by the enclosed Rights Certificate to be an Acquiring Person
or an Affiliate or Associate thereof (as defined in the Rights Agreement) or a
transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
(To be executed if holder desires to exercise the
Rights represented by the Rights Certificate.)
TO: CARETENDERS HEALTH CORP.
The undersigned hereby irrevocably elects to exercise ___________________ whole
Rights represented by the attached Rights Certificate to purchase the shares of
Series B Junior Participating Preferred Stock issuable upon the exercise of
such Rights and requests that certificates for such shares be issued in the
name of:
__________________________________
Address:
Social Security or other Taxpayer
Identification Number:
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
__________________________________
Address:
Social Security or other Taxpayer
Identification Number:
Date: ______________
Signature Guaranteed: __________________________________
Signature
(Signature must correspond to name
as written upon the face of this
Rights Certificate in every
particular, without alteration or
enlargement or any change
whatsoever.)
Signatures must be guaranteed by an eligible guarantor institution (Banks,
Stockholders, Savings and Loan Associations and Credit Unions with membership
in an approved Signature guarantee medallion program) pursuant to S.E.C. Rule
17 Ad-15.
______________________________________________________________________________
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate
are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
__________________________________
Signature
______________________________________________________________________________
NOTICE
_ _ _ _ _
In the event the certification set forth above is not completed in connection
with a purported assignment, the Company will deem the Beneficial Owner of the
Rights evidenced by the enclosed Rights Certificate to be an Acquiring Person
or an Affiliate or Associate thereof (as defined in the Rights Agreement) or a
transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
EXHIBIT B
CERTIFICATE OF DESIGNATION OF RIGHTS AND PREFERENCES
OF
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
OF
CARETENDERS HEALTH CORP.
Pursuant to Section 151 of the
Delaware General Corporation Law
Caretenders Health Corp., a corporation organized under the laws of the State
of Delaware (the "Corporation"), hereby certifies that, pursuant to the
authority conferred upon the Board of Directors by the Certificate of
Incorporation, as amended, of the Corporation, the Board of Directors on
February 1, 1999 adopted the following resolution creating a series of 100,000
shares of Preferred Stock designated as Series B Junior Participating Preferred
Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors in
accordance with the provisions of the Certificate of Incorporation of the
Corporation, the Board of Directors hereby creates, authorizes and provides for
the issuance of Series B Junior Participating Preferred Stock having the
designations and relative rights, preferences and limitations that are set
forth below:
1. Series B Junior Participating Preferred Stock. There is hereby established
a series of Preferred Stock, par value $.05 per share, of the Corporation, and
the designation and certain terms, powers, preferences and other rights of the
shares of such series, and certain qualifications, limitations and restrictions
thereon, are hereby fixed as follows:
(i) The distinctive serial designation of this series shall be "Series B
Junior Participating Preferred Stock" (hereinafter called "this Series").
Each share of this Series shall be identical in all respects with the
other shares of this Series except as to the dates from and after which
dividends thereon shall be cumulative.
(ii) The number of shares in this Series shall initially be 100,000 which
number may from time to time be increased or decreased (but not below the
number then outstanding) by the Board of Directors. Shares of this Series
purchased by the Corporation shall be canceled and shall revert to
authorized but unissued shares of Preferred Stock undesignated as to
series. Shares of this Series may be issued in fractional shares, which
fractional shares shall entitle the holder, in proportion to such holder's
fractional share, to all rights of a holder of a whole share of this
Series.
(iii) The holders of full or fractional shares of this Series shall be
entitled to receive, when and as declared by the Board of Directors, but
only out of funds legally available therefor, dividends, (A) on each date
that dividends or other distributions payable in Common Stock of the
Corporation are payable on or in respect of Common Stock comprising part of
the Reference Package (as defined below), in an amount per whole share of
this Series equal to the aggregate amount of dividends or other
distributions (other than dividends or distributions payable in Common
Stock of the Corporation) that would be payable on such date to a holder of
the Reference Package and (B) on the last day of March, June, September and
December in each year, in an amount per whole share of this Series equal to
the excess (if any) of $1.00 over the aggregate dividends paid per whole
share of this Series during the three-month period ending on such last day.
Each such dividend shall be paid to the holders of record of shares of this
Series on the date, not exceeding sixty days preceding such dividend or
distribution payment date, fixed for that purpose by the Board of Directors
in advance of payment of each particular dividend or distribution.
Dividends on each full and each fractional share of this Series shall be
cumulative from the date such full or fractional share is originally
issued; provided that any such full or fractional share originally issued
after a dividend record date and on or prior to the dividend payment date
to which such record date relates shall not be entitled to receive the
dividend payable on such dividend payment date or any amount in respect of
the period from such original issuance to such dividend payment date.
The term "Reference Package" shall initially mean 100 shares of Common
Stock, par value $0.10 per share ("Common Stock"), of the Corporation. In
the event the Corporation shall at any time (A) declare or pay a dividend
on any Common Stock payable in Common Stock, (B) subdivide any Common Stock
or (C) combine any Common Stock into a smaller number of shares, then and
in each such case the Reference Package after such event shall be the
Common Stock that a holder of the Reference Package immediately prior to
such event would hold thereafter as a result thereof.
Holders of shares of this Series shall not be entitled to any dividends,
whether payable in cash, property or stock, in excess of full cumulative
dividends, as herein provided, on this Series.
So long as any shares of this Series are outstanding, no dividend (other
than a dividend in Common Stock or in any other stock ranking junior to
this Series as to dividends and upon liquidation) shall be declared or paid
or set aside for payment or other distribution declared or made upon the
Common Stock or upon any other stock ranking junior to this Series as to
dividends or upon liquidation, nor shall any Common Stock nor any other
stock of the Corporation ranking junior to this Series as to dividends or
upon liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any shares of any such stock) by the Corporation
(except by conversion into or exchange for stock of the Corporation ranking
junior to this Series as to dividends and upon liquidation), unless, in
each case, the full cumulative dividends (including the dividend to be due
upon payment of such dividend, distribution, redemption, purchase or other
acquisition) on all outstanding shares of this Series shall have been, or
shall contemporaneously be, paid.
(iv) In the event of any merger, consolidation, reclassification or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property,
then in any such case the shares of this Series shall at the same time be
similarly exchanged or changed in an amount per whole share equal to the
aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, that a holder of the Reference
Package would be entitled to receive as a result of such transaction.
(v) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the holders
of full and fractional shares of this Series shall be entitled, before any
distribution or payment is made on any date to the holders of the Common
Stock or any other stock of the Corporation ranking junior to this Series,
but after any distribution or payment is made on any date to the holders of
Series A Preferred Stock upon liquidation, to be paid in full an amount per
whole share of this Series equal to the greater of (A) $1.00 or (B) the
aggregate amount distributed or to be distributed prior to such date in
connection with such liquidation, dissolution or winding up to a holder of
the Reference Package (such greater amount being hereinafter referred to as
the "Liquidation Preference"), together with accrued dividends to such
distribution or payment date, whether or not earned or declared. If such
payment shall have been made in full to all holders of shares of this
Series, the holders of shares of this Series as such shall have no right or
claim to any of the remaining assets of the Corporation.
In the event the assets of the Corporation available for distribution to
the holders of shares of this Series upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, shall be
insufficient to pay in full all amounts to which such holders are entitled
pursuant to the first paragraph of this Section (v), no such distribution
shall be made on account of any shares of any other class or series of
Preferred Stock ranking on a parity with the shares of this Series upon
such liquidation, dissolution or winding up unless proportionate
distributive amounts shall be paid on account of the shares of this Series,
ratably in proportion to the full distributable amounts for which holders
of all such parity shares are respectively entitled upon such liquidation,
dissolution or winding up.
Upon the liquidation, dissolution or winding up of the Corporation, the
holders of shares of this Series then outstanding shall be entitled to be
paid out of assets of the Corporation available for distribution to its
stockholders all amounts to which such holders are entitled pursuant to the
first paragraph of this Section (v) before any payment shall be made to the
holders of Common Stock or any other stock of the Corporation ranking
junior upon liquidation to this Series, but after payments made to the
holders of Series A Preferred Stock.
For the purposes of this Section (v), the consolidation or merger of, or
share exchange by, the Corporation with any other corporation shall not be
deemed to constitute a liquidation, dissolution or winding up of the
corporation.
(vi) The shares of this Series shall not be redeemable.
(vii) In addition to any other vote or consent of stockholders required by
law or by the Certificate of Incorporation, as amended, of the Corporation,
each whole share of this Series shall, on any matter, vote as a class with
any other capital stock comprising part of the Reference Package and voting
on such matter and shall have the number of votes thereon that a holder of
the Reference Package would have.
Notwithstanding any provision hereof, the rights and preferences of this Series
shall be deemed, in all respects, junior to the Company's Series A Preferred
Stock.
IN WITNESS WHEREOF, Caretenders Health Corp. has caused this Certificate of
Designation of Rights and Preferences to be executed as of February 1, 1999.
By:____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board, President
and Chief Executive Officer