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GENZYME CORPORATION
and
American Stock Transfer and Trust Company,
Rights Agent
Renewed Rights Agreement
Dated as of March 16, 1999
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TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions..............................................2
Section 2. Appointment of Rights Agent......................................6
Section 3. Issue of Right Certificates......................................6
Section 4. Forms of Right Certificates......................................8
Section 5. Countersignature and Registration................................8
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.....................................................9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights..........................................................10
Section 8. Cancellation and Destruction of Right Certificates..............11
Section 9. Reservation and Availability of Preferred Shares................12
Section 10. Preferred Shares Record Date....................................13
Section 11. Adjustment in Rights; Exchange of Rights; Certain Covenants.....13
Section 12. Certificate of Adjustment.......................................20
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power...................................................20
Section 14. Fractional Rights and Fractional Shares.........................22
Section 15. Rights of Action................................................24
Section 16. Agreement of Right Holders......................................24
Section 17. Right Certificate Holder Not Deemed a Shareholder...............24
Section 18. Concerning the Rights Agent.....................................25
Section 19. Merger or Consolidation or Change of Name of Rights Agent.......25
Section 20. Duties of Rights Agent..........................................26
Section 21. Change of Rights Agent..........................................28
Section 22. Issuance of New Right Certificates..............................28
Section 23. Redemption......................................................29
Section 24. Notice of Certain Events........................................29
Section 25. Notices.........................................................30
Section 26. Supplements and Amendments......................................31
Section 27. Successors......................................................31
Section 28. Determinations and Actions by the Board of Directors............32
Section 29. Benefits of this Agreement......................................32
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 30. Severability....................................................32
Section 31. Governing Law...................................................32
Section 32. Counterparts....................................................32
Section 33. Descriptive Headings............................................32
EXHIBIT A -- CERTIFICATE OF DESIGNATIONS....................................A-1
EXHIBIT B -- FORM OF RIGHT CERTIFICATE......................................B-1
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RENEWED RIGHTS AGREEMENT
Renewed Rights Agreement (this "Agreement"), dated as of March 16,
1999, between Genzyme Corporation, a Massachusetts corporation (the "Company"),
and American Stock Transfer and Trust Company, (the "Rights Agent").
WHEREAS, on March 14, 1989, the Board of Directors of the Company (the
"Board") adopted a shareholder rights plan governed by the terms of the Rights
Agreement dated as of March 14, 1989 (the "Original Agreement") and distributed
one preferred share purchase right (an "Original Right") for each share of
common stock, par value $.01 per share, of the Company outstanding at the close
of business on March 28, 1989 and authorized the issue of one Original Right for
each share of common stock issued after March 28, 1989.
WHEREAS, on October 13, 1994, the Board approved an amendment and
restatement of the Original Agreement which became effective December 16, 1994,
the effective date of an Amendment to the Articles of Organization of the
Company, pursuant to which the GTR Stock (as such term is hereinafter defined)
was created. Pursuant to such amendment, the Board (i) authorized and declared a
dividend distribution of one GTR Stock Purchase Right (an "Existing GTR Stock
Right") for each outstanding share of GTR Stock (as such term is hereinafter
defined) (ii) redesignated each Original Right outstanding as a General Stock
Purchase Right (an "Existing GGD Stock Right"), and (iii) authorized and
directed the issuance of one Existing Right with respect to each Common Share
(as such term is hereinafter defined) issued prior to the earliest of the
"Distribution Date", the "Redemption Date" and the "Final Expiration Date", each
as defined under the Original Agreement;
WHEREAS, on April 16, 1997, the Board approved an amendment and
restatement of the Original Agreement (as amended, the "Existing Agreement")
effective upon the creation and issuance of the GMO Stock (as such term is
hereinafter defined). In connection with such amendment, the Board authorized
and declared a dividend distribution of one GMO Stock Purchase Right (an
"Existing GMO Stock Right") for each share of GMO Stock outstanding and (ii)
authorized and directed the issuance of one Right with respect to each Common
Share issued prior to the earliest of the "Distribution Date," the "Redemption
Date" and the "Final Expiration Date," each as defined under the Existing
Agreement;
WHEREAS, the Existing Agreement is scheduled to expire on March 28,
1999;
WHEREAS, on March 2, 1999, the Board deemed it desirable and in the
best interest of the Company and its shareholders for the Company to renew,
subject to certain modifications, the Existing Agreement upon its expiration and
to implement such renewal by executing this Agreement;
WHEREAS, on March 2, 1999, (the "Rights Dividend Declaration Date"),
the Board (i) authorized and declared a dividend distribution of (x) one General
Stock Purchase Right (a "GGD Stock Right") for each share of GGD Stock (as such
term is hereinafter defined), outstanding upon the "Final Expiration Date" under
the Existing Agreement (the "Record Date") (y) one GTR Stock Purchase Right (a
"GTR Stock Right") for each share of GTR Stock outstanding upon the Record Date
and (z) one GMO Stock Purchase Right (a "GMO Stock
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Right") for each share of GMO Stock outstanding upon the Record Date, and (ii)
authorized and directed the issuance of one Right (as such number may hereafter
be adjusted pursuant to Section 11 hereof) for each Common Share issued after
the Record Date (whether originally issued or delivered from the Company's
treasury) and the Distribution Date (as hereinafter defined), and under certain
circumstances thereafter, each Right initially representing the right to
purchase one one-hundredth of a share of Series A Preferred Stock, Series B
Preferred Stock or Series C Preferred Stock, as appropriate, upon the terms and
subject to the conditions hereinafter set forth; and
WHEREAS, each GGD Stock Right, GTR Stock Right and GMO Stock Right
initially represents the right to purchase one one-hundredth of a share of the
Company's Series A Junior Participating Preferred Stock, par value $.01 per
share ("Series A Preferred Stock"), one one-hundredth of a share of Series B
Junior Participating Preferred Stock, par value $.01 per share ("Series B
Preferred Stock"), and one one-hundredth of a share of Series C Junior
Participating Preferred Stock, par value $.01 per share ("Series C Preferred
Stock"), respectively, such preferred shares having the rights and preferences
set forth in the Certificate of Vote Establishing Series A, Series B and Series
C Junior Participating Preferred Stock filed with the Secretary of the
Commonwealth of Massachusetts on June 18, 1997 and a copy of which is attached
hereto as EXHIBIT A, upon the terms and subject to the conditions herein set
forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) (i) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall become,
after the effective date of this Agreement, the Beneficial Owner (as such term
is hereinafter defined) of Common Shares representing 15% or more of the total
Voting Rights of all the Common Shares then outstanding, but shall not include
the Company, any Subsidiary (as such term is hereinafter defined) of the
Company, or any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity organized, appointed or established by the Company
holding Common Shares for or pursuant to the terms of any such plan; PROVIDED,
HOWEVER, that if a Person inadvertently becomes the Beneficial Owner of Common
Shares representing 15% or more of such Voting Rights solely due to an
adjustment in the number of votes to which GMO Stock or GTR Stock is entitled
pursuant to the Company's Articles of Organization, such Person shall not be an
Acquiring Person unless and until such Person acquires additional Common Shares.
(ii) Notwithstanding the foregoing, a Person shall not
become an "Acquiring Person" solely as the result of an acquisition of Common
Shares by the Company or any Subsidiary which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned by
such Person to 15% or more of the Common Shares then outstanding as determined
above; PROVIDED, HOWEVER, that if a Person becomes the Beneficial Owner of 15%
or more of the Common Shares then outstanding as determined above solely by
reason of such a share acquisition by the Company and such Person shall, after
becoming the
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Beneficial Owner of such Common Shares, become the Beneficial Owner of any
additional Common Shares by any means whatsoever (other than as a result of the
subsequent occurrence of a stock dividend or a subdivision of the Common Shares
into a larger number of shares or a similar transaction), then such Person shall
be deemed to be an "Acquiring Person."
(iii) Notwithstanding the foregoing, if a majority of the
Board determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
Section 1(a), has become such inadvertently, and such Person divests as promptly
as practicable a sufficient number of Common Shares so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the foregoing provisions
of this Section 1(a), then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Agreement. The determination of whether such
Person's becoming an Acquiring Person shall have been inadvertent and the
determination of whether the divestment of sufficient shares shall have been
made as promptly as practicable shall be made by the Board.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the exercise
of conversion rights, exchange rights, rights (other than the Rights at any time
prior to the occurrence of a Triggering Event, as hereinafter defined, but
thereafter including Rights acquired from and after the Distribution Date (as
defined in Section 3(a) below) other than Rights acquired pursuant to Section
3(a), 11(a)(iv) or 22 hereof), warrants or options, or otherwise; PROVIDED,
HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or exchange;
or (B) the right to vote or dispose of or "beneficial ownership" (as defined in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act) of
(including pursuant to any agreement, arrangement or understanding, whether or
not in writing); PROVIDED, HOWEVER, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which such
Person or any of such Person's Affiliates
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or Associates has any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting (except to the extent contemplated by the proviso to
Section 1(c)(ii)(B)) or disposing of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the Commonwealth of
Massachusetts are authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M.,
Massachusetts time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 P.M., Massachusetts time, on the next succeeding
Business Day.
(f) "Common Shares" when used with reference to the Company shall
mean the GGD Stock, the GTR Stock and/or the GMO Stock, as the context requires,
or any other shares of capital stock of the Company into which GGD Stock, GTR
Stock and/or GMO Stock may be reclassified or changed; PROVIDED, HOWEVER, that
"Common Shares" shall mean all of the GGD Stock, the GTR Stock and the GMO Stock
(or any other shares of capital stock into which GGD Stock, GTR Stock and/or GMO
Stock may be reclassified or changed) whenever a determination of whether a
Person shall have become the Beneficial Owner of, or shall have made a tender or
exchange offer for, Common Shares representing a specified percentage of the
total Voting Rights of all the Common Shares then outstanding is required to be
made herein. "Common Shares" when used with reference to any Person other than
the Company shall mean the capital stock with the greatest voting power of such
other Person or equity interest having power to control or direct the management
of such Person, or, if such other Person is a Subsidiary of another Person, the
Person or Persons which ultimately controls such first-mentioned Person.
(g) "Final Expiration Date" shall mean the close of business on
March 28, 2009.
(h) "GGD Stock" shall mean the Genzyme General Division Common
Stock, par value $.01 per share, of the Company.
(i) "GMO Stock" shall mean the Genzyme Molecular Oncology Division
Common Stock of the Company.
(j) "GTR Stock" shall mean the Genzyme Tissue Repair Division
Common Stock of the Company.
(k) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(l) "Preferred Shares" shall mean shares of Series A Preferred
Stock, Series B Preferred Stock and/or Series C Preferred Stock as the context
requires.
(m) "Redemption Date" shall mean the time at which Rights are
redeemed as provided in Section 23 hereof.
(n) "Rights" shall mean GGD Stock Rights, GTR Stock Rights and/or
GMO Stock Rights, as the context requires.
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(o) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company that an Acquiring Person has become such.
(p) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interests is beneficially owned, directly or indirectly, by such
Person.
(q) "Triggering Event" shall mean a Person becoming an Acquiring
Person.
(r) "Voting Rights" when used with reference to the capital stock
of, or units of equity interest in, any Person shall mean the right under
ordinary circumstances to vote in the election of directors of such Person (if
such Person is a corporation) or to participate in the management and control of
such Person (if such Person is not a corporation).
(s) The following terms shall have the meanings indicated in the
following Sections of this Agreement:
(i) "Act" - Section 9(b).
(ii) "Adjustment Shares" - Section 11(b).
(iii) "Board" - Preamble.
(iv) "Current Value" - Section 11(c)(i).
(v) "Distribution Date" - Section 3(a).
(vi) "Exchange Act" - Section 1(b)
(vii) "Exchange Consideration" - Section 11(c)(ii)(A).
(viii) "Existing Agreement" - Preamble.
(ix) "Existing GGD Stock Right" - Preamble.
(x) "Existing GMO Stock Right" - Preamble.
(xi) "Existing GTR Stock Right" - Preamble.
(xii) "Existing Right" - Preamble.
(xiii) "Extension Date" - Section 26.
(xiv) "GGD Stock Right" - Preamble.
(xv) "GGD Stock Right Certificate" - Section 3(a).
(xvi) "GMO Stock Right" - Preamble.
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(xvii) "GMO Stock Right Certificate" - Section 3(a).
(xviii) "GTR Stock Right" - Preamble.
(xix) "GTR Stock Right Certificate" - Section 3(a).
(xx) "Nasdaq" - Section 11(d).
(xxi) "NYSE" - Section 11(d).
(xxii) "Original Agreement" - Preamble.
(xxiii) "Original Right" - Preamble.
(xxiv) "Principal Party" - Section 13(b).
(xxv) "Purchase Price" - Sections 4, 7, 11(b) and 13(a).
(xxvi) "Record Date" - Preamble.
(xxvii) "Redemption Price" - Section 23(a)(i).
(xxviii) "Rights Agreement".
(xxix) "Series A Preferred Stock" - Preamble.
(xxx) "Series B Preferred Stock" - Preamble.
(xxxi) "Series C Preferred Stock" - Preamble.
(xxxii) "Spread" - Section 11(c).
(xxxiii) "Substitution Period" - Section 11(c).
(xxxiv) "Trading Day" - Section 11(d)(i).
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. Upon prior written notice to the Rights Agent, the Company may from
time to time appoint such co-Rights Agents as it may deem necessary or desirable
(the term "Rights Agent" being used herein to refer, collectively, to the Rights
Agent together with any such co-Rights Agent).
Section 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the close of business on the tenth
day (or such later date as may be determined by the Board) after the Shares
Acquisition Date or (ii) the close of business
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on the tenth Business Day (or such later date as may be determined by the Board)
after the date of the commencement of, or of the first public announcement of
the intention of any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity organized, appointed or established by the Company holding
Common Shares for or pursuant to the terms of any such plan) to commence, within
the meaning of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act, a tender or exchange offer the consummation of which would result
in beneficial ownership by a Person of Common Shares representing 15% or more of
the total Voting Rights of all the outstanding Common Shares (the earliest of
such dates being herein referred to as the "Distribution Date"), (x) the GGD
Stock Rights, GTR Stock Rights and GMO Stock Rights will be evidenced by the
certificates for GGD Stock, GTR Stock and GMO Stock, respectively, registered in
the names of the holders thereof (which certificates for GGD Stock, GTR Stock
and GMO Stock shall also be deemed to be certificates for GGD Stock Rights, GTR
Stock Rights and GMO Stock Rights, respectively) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of GGD Stock, GTR Stock and GMO
Stock as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, a right certificate, in
substantially the form of EXHIBIT B hereto (a "GGD Stock Right Certificate,"
"GTR Stock Right Certificate" or "GMO Stock Right Certificate," as the case may
be), evidencing one GGD Stock Right for each share of GGD Stock so held, one GTR
Stock Right for each share of GTR Stock so held and one GMO Stock Right for each
share of GMO Stock so held. In the event that an adjustment in the number of
Rights per Common Share has been made pursuant to Section 11(a) hereof, at the
time of distribution of the Right Certificates, the Company shall make the
necessary and appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Right Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) Until the earliest of the Distribution Date, the Redemption
Date or Final Expiration Date, the surrender for transfer of any certificate for
Common Shares shall also constitute the transfer of the Rights associated with
the Common Shares represented thereby.
(c) (i) With respect to certificates for Common Shares of the
Company outstanding as of the Record Date, until the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date, the Rights
will be evidenced by certificates for Common Shares as legended pursuant to the
terms of the Existing Agreement, and the registered holders of the Common Shares
of the Company shall also be the registered holders of the associated Rights.
(ii) Certificates for Common Shares which become
outstanding (including, without limitation, reacquired Common Shares referred to
in the last sentence of this paragraph (c)) after the Record Date but prior to
the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
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This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Renewed Rights Agreement
between Genzyme Corporation and American Stock Transfer and
Trust Company dated as of March 16, 1999 (the "Rights
Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal
executive offices of Genzyme Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. Genzyme Corporation
will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written
request therefor. Under certain circumstances, Rights
beneficially owned by Acquiring Persons (as defined in the
Rights Agreement) and any subsequent holder of such Rights may
become null and void.
(iii) With respect to such certificates containing the
foregoing legends, until the Distribution Date, the Rights associated with the
Common Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificate shall
also constitute the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases or acquires any
Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed cancelled and retired
so that the Company shall not be entitled to exercise any Rights associated with
the Common Shares which are no longer outstanding.
(d) Notwithstanding the requirements of Section 3(c), the omission
of a legend shall not affect the enforceability of any part of this Agreement or
the rights of any holder of Rights.
Section 4. FORMS OF RIGHT CERTIFICATES. The GGD Stock Right
Certificates, the GTR Stock Right Certificates and the GMO Stock Right
Certificates (and the forms of election to purchase Preferred Shares and of
assignment to be printed on the reverse thereof) shall be in substantially the
forms set forth as EXHIBIT B hereto, and may have such marks of identification
or designation and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Sections 11 and 22 hereof, the
Right Certificates shall entitle the holders thereof to purchase such number of
one one-hundredths of a Preferred Share as shall be set forth therein at the
price per one one-hundredth of a Preferred Share set forth therein (the
"Purchase Price"), but the number of such one one-hundredths of a Preferred
Share and the Purchase Price shall be subject to adjustment as provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any Vice President,
either manually or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof, and shall be attested by the Clerk or an
Assistant Clerk of the Company, either manually or by facsimile signature. The
Right Certificates shall be countersigned manually, or, if permitted by the
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Company, by facsimile signature, by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for such purposes, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 7(e) and 14 hereof, at
any time after the close of business on the Distribution Date, and at or prior
to the close of business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates may be transferred,
split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of one
one-hundredths of a Preferred Share (or, following a Triggering Event, Common
Shares, other securities or property, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purposes. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Right Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall request. Thereupon the
Rights Agent shall (subject to Section 7(e) hereof) countersign and deliver to
the person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right
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Certificate if mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
(c) Notwithstanding any other provision hereof, the Company and
the Rights Agent may amend this Rights Agreement to provide for uncertificated
Rights in addition to or in place of Rights evidenced by Right Certificates.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
and the certificate contained in the form of election to purchase on the reverse
side of the Right Certificate duly executed, to the Rights Agent at the
principal offices of the Rights Agent, together with payment of the Purchase
Price for the Preferred Shares (or other shares, securities or property, as the
case may be) as to which the Rights are exercised, at or prior to the earlier of
the Redemption Date and the Final Expiration Date. (b) The Purchase Price with
respect to each GGD Stock Right shall initially be $300 for each one
one-hundredth of a Series A Preferred Share; with respect to each GTR Stock
Right shall initially be $26 for each one one-hundredth of a Series B Preferred
Share; and with respect to each GMO Stock Right shall initially be $26 for each
one one-hundredth of a Series C Preferred Share; shall be subject in each case
to adjustment from time to time as provided in Sections 11 and 13 hereof and
shall be payable in lawful money of the United States of America in accordance
with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate contained in
the form of election to purchase and the Right Certificate duly executed,
accompanied by payment of the Purchase Price for the Preferred Shares (or other
shares, securities or property, as the case may be) to be purchased and an
amount equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof in cash, or by
certified check or cashier's check payable to the order of the Company, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares certificates for the
number of Preferred Shares to be purchased (and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests), or (B) if the
Company shall have elected to deposit the Preferred Shares issuable upon
exercise of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14 hereof, (iii)
promptly after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, promptly
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deliver such cash to or upon the order of the registered holder of such Right
Certificate. In the event that the Company is obligated to issue other
securities (including Common Shares), pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
any Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee from an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such (and any subsequent transferees of such transferee), or
(iii) a transferee of an Acquiring Person (or such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action, and any holder (including any subsequent holder) of such Rights shall
thereupon have no rights whatsoever with respect to such Rights, whether under
any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(e) hereof are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure or inability to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
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request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred Shares
(and, following the occurrence of a Triggering Event, Common Shares and/or other
securities) or any Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) held in its treasury,
the number of Preferred Shares (and, following the occurrence of a Triggering
Event, Common Shares and/or other securities) that will be sufficient (in
accordance with the terms of this Agreement, including Section 11(c)(i) hereof)
to permit the exercise in full of all outstanding Rights. Prior to the
occurrence of a Triggering Event, the Company shall not be obliged to cause to
be reserved and kept available out of its authorized and unissued Common Shares
or shares of preferred stock (other than Preferred Shares), any such Common
Shares or any shares of preferred stock (other than Preferred Shares) to permit
exercise of outstanding Rights.
(b) If then required by applicable law, the Company shall use its
best efforts to (i) file, either (A) as soon as practicable following the
earliest date after the occurrence of a Triggering Event as to which the
consideration to be delivered by the Company upon exercise of the Rights has
been determined pursuant to this Agreement, or (B) as soon as is required by law
following the Distribution Date, as the case may be, a registration statement
under the Securities Act of 1933, as amended (the "Act"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the date of the expiration of the
Rights. If then required by applicable law, the Company will also take such
action as may be appropriate under the securities or "blue sky" laws of the
various states. The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause (i) of this Section
9(b), the exercisability of the Rights in order to prepare and file such
registration statement or to comply with such blue sky laws. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction unless the requisite qualification in such jurisdiction
shall have been obtained.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
Preferred Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and non-assessable shares.
(d) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right Certificates
or of any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be
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payable in respect of any transfer or delivery of Right Certificates to a Person
other than, or the issuance or delivery of certificates or depositary receipts
for the Preferred Shares in a name other than that of, the registered holder of
the Right Certificate evidencing Rights surrendered for exercise or to issue or
to deliver any certificates or depositary receipts for Preferred Shares upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's satisfaction that no such tax
is due.
Section 10. PREFERRED SHARES RECORD DATE. Each Person in whose
name any certificate for Preferred Shares is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred Shares (or Common Shares and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes) was made; PROVIDED,
HOWEVER, that if the date of such surrender and payment is a date upon which the
Preferred Shares (or Common Shares and/or other securities, as the case may be)
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the Preferred Shares (or Common Shares
and/or other securities, as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled (in such holder's capacity as such) to
any rights of a shareholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. ADJUSTMENT IN RIGHTS; EXCHANGE OF RIGHTS; CERTAIN
COVENANTS. The Purchase Price, the number of Preferred Shares (or number and
kind of other shares of capital stock, as the case may be) covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) ANTI-DILUTION ADJUSTMENTS; ADJUSTMENTS, GENERALLY.
(i) To preserve the actual or potential economic value of
the Rights, if at any time after the date of this Agreement there shall be any
change in the Common Shares or the Preferred Shares, whether by reason of stock
dividends, stock splits, recapitalizations, reclassifications, mergers,
consolidations, combinations or exchanges of securities, split-ups, split-offs,
spin-offs, liquidations, other similar changes in capitalization, any
distribution or issuance of cash, assets, evidences of indebtedness or
subscription rights, options or warrants to holders of Common Shares or
Preferred Shares, as the case may be (other than the Rights or regular quarterly
cash dividends) or otherwise, then, in each such event adjustments in the number
of Preferred Shares (or the number and kind of other securities) issuable upon
exercise of each Right, the Purchase Price and Redemption Price in effect at
such time (including the number of Rights or fractional Rights associated with
each Common Share) shall be made if and as deemed appropriate by the Board, such
that following such adjustments such event shall not have had the effect of
reducing or limiting the benefits the holders of the Rights would have had
absent such event.
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(ii) If, as a result of an adjustment made pursuant to
this Section 11, the holder of any Right thereafter exercised shall become
entitled to receive any securities other than Preferred Shares, thereafter the
number of such securities so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions of Section 11(a)(i), and the
provisions of Sections 7, 9 and 10 with respect to the Preferred Shares shall
apply, as nearly as reasonably may be, on like terms to any such other
securities.
(iii) All Rights originally issued by the Company
subsequent to any adjustment made to the amount of Preferred Shares or other
securities relating to a Right shall evidence the right to purchase, for the
Purchase Price, the adjusted number and kind of securities purchasable from time
to time hereunder upon exercise of the Rights, all subject to further adjustment
as provided herein.
(iv) Irrespective of any adjustment or change in the
Purchase Price or the number of Preferred Shares or number or kind of other
securities issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the terms which were
expressed in the initial Right Certificates issued hereunder.
(v) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; PROVIDED, HOWEVER, that any adjustments which by reason of
this Section 11(a) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of
a Common Share or other share or one-millionth of a Preferred Share as the case
may be. Notwithstanding the first sentence of this Section 11(a), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(vi) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of one one-hundredths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(a)(vi), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the
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Company, shall cause to be distributed to such holders of record in substitution
and replacement for the Right Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for herein and shall
be registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(vii) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-hundredth of the then par
value, if any, of the Preferred Shares issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and non-assessable Preferred Shares at such adjusted Purchase Price.
(viii) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any (a) consolidation or subdivision of the
Preferred Shares, (b) issuance wholly for cash of any Preferred Shares at less
than the current market price, (c) issuance wholly for cash of Preferred Shares
or securities which by their terms are convertible into or exchangeable for
Preferred Shares, (d) dividends on Preferred Shares payable in Preferred Shares
or (e) issuance of rights, options or warrants referred to hereinabove in
Section 11(b), hereafter made by the Company to holders of its Preferred Shares
shall not be taxable to such shareholders.
(ix) In any case which action taken pursuant to
Section 11(a)(i) requires that an adjustment be made effective as of a record
date for a specified event, the Company may elect to defer until the occurrence
of such event the issuing to the holder of any Right exercised after such record
date the Preferred Shares and/or other securities, if any, issuable upon such
exercise over and above the Preferred Shares and/or other securities, if any,
issuable before giving effect to such adjustment; PROVIDED, HOWEVER, that the
Company shall deliver to such holder a due ▇▇▇▇ or other appropriate instrument
evidencing such holder's right to receive such additional securities upon the
occurrence of the event requiring such adjustment.
(b) INITIAL ADJUSTMENT UPON TRIGGERING EVENT. Upon the first
occurrence of a Triggering Event (except as otherwise provided in this
Agreement), proper provision shall be made so that each holder of a Right,
except as provided below and in Section 7(e) hereof, shall thereafter have a
right to receive, upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of Preferred Shares and
subject to the provisions of Section 11(a), such number of shares of GGD Stock
in the case of a GGD Stock Right, GTR Stock in the case of a GTR Stock Right,
and GMO Stock in the case a GMO Stock Right as shall equal the result obtained
by (x) multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the Triggering Event (whether or not such Right was then
exercisable), and dividing that product (which, following such Triggering Event,
shall be referred to as the "Purchase Price" for all purposes of this Agreement)
by (y) 50% of the then current per share market price of the GGD Stock, GTR
Stock or GMO Stock in the case of a GGD Stock Right,
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GTR Stock Right or GMO Stock Right, respectively (determined pursuant to
Section 11(d)), on the date of the occurrence of the Triggering Event (such
number of shares being referred to herein as the "Adjustment Shares").
Notwithstanding the foregoing, upon the occurrence of the Triggering Event, any
Rights that are or were on or after the earlier of the Distribution Date or the
date of the Triggering Event beneficially owned by an Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) or by certain transferees of
such Persons as specified in Section 7(e), shall become void and any holder
(including subsequent holders) of such Rights shall thereafter have no right to
exercise such Rights under any provision of this Agreement. Any Right
Certificate issued pursuant to Section 3 or Section 22 hereof that represents
Rights beneficially owned by an Acquiring Person or any Associate or Affiliate
thereof and any Right Certificate issued at any time upon the transfer of any
Rights to an Acquiring Person or any Associate or Affiliate thereof or to any
nominee of such Acquiring Person, Associate or Affiliate, and any Right
Certificate issued pursuant to Section 6, 7(d), 7(e) or 22 hereof or this
Section 11 upon transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain the following legend:
The Rights represented by this Right Certificate were issued
to a Person who was an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement). This Right Certificate and the Rights
represented hereby may become void in the circumstances
specified in the Rights Agreement, including Sections 7(e) and
11(a)(ii) thereof;
PROVIDED THAT the Rights Agent shall not be under any responsibility to
ascertain the existence of facts that would require the imposition of such
legend but shall be required to impose such legend only if instructed to do so
by the Company or if a holder fails to certify upon transfer or exchange in the
space provided on the Right Certificate that such holder is not an Acquiring
Person or an Affiliate or Associate thereof.
(c) OTHER ADJUSTMENTS UPON OR FOLLOWING TRIGGERING EVENT.
(i) USE OF COMMON EQUIVALENTS OR CASH. In the event that
(x) the total of the Common Shares that are issued but not outstanding and
authorized but unissued (excluding Common Shares reserved for issuance pursuant
to the specific terms of any indenture, option plan or other agreement) is not
sufficient to permit the exercise in full of the Rights in accordance with
Section 11(b) or 11(c)(ii) hereof, or (y) the total number of Common Shares
available for exercise of the Rights in accordance with Section 11(b) hereof is
sufficient to permit the exercise in full of the Rights in accordance with
Section 11(b) but the Board determines that the exercise of the Rights in
accordance with Section 11(b) above will not afford adequate protection to the
shareholders of the Company and that shareholders should be given an option to
acquire a substitute for the Adjustment Shares, and subject to such limitations
as are necessary to prevent a default under any agreement for money borrowed as
presently constituted to which the Company is a party, then the Board shall: (A)
determine the excess of (1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") over (2) the Purchase Price (such
excess, the "Spread"), and (B) with respect to each Right, make adequate
provision to substitute for, or provide an election to acquire in lieu of, the
Adjustment Shares, upon payment of the applicable Purchase Price (which term
shall include any reduced Purchase Price) any combination of the following
having an aggregate value equal to the Current Value
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(such aggregate value to be determined by the Board based upon the advice of a
nationally recognized investment banking firm selected by the Board: (1) voting
and other securities of one or more subsidiaries of the Company, (2) a reduction
in the Purchase Price, (3) Common Shares and/or other equity securities of the
Company and/or (4) debt securities of the Company and/or cash and other assets;
PROVIDED, HOWEVER, if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the
first occurrence of a Triggering Event, then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, Common Shares (to the extent available) and then,
if necessary, cash, which securities and/or cash in the aggregate are equal to
the Spread. If the Board shall determine in good faith that it is likely that
sufficient additional Common Shares could be authorized for issuance upon
exercise in full of the Rights, the thirty (30) day period set forth above may
be extended to the extent necessary, but not more than ninety (90) days
following the first occurrence of a Triggering Event, in order that the Company
may seek shareholder approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution Period"). To the extent
that the Board determines that some action need be taken pursuant to the first
and/or second sentences of this Section 11(c)(i), the Company (x) shall provide,
subject to Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(c)(i), the value of the Common Shares
shall be the current per share market price (as determined pursuant to Section
11(d) hereof) of the Common Shares on the date of the first occurrence of a
Triggering Event.
The provisions of this Section 11(c)(i) shall apply only to
Common Shares of the Company and shall not apply to the securities of any other
Person.
(ii) EXCHANGE OPTION.
(A) At any time after the occurrence of a
Triggering Event and prior to the earlier of (i) the time any Person,
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding
and (ii) the occurrence of a Section 13(a) Event, the Board may, at its
option, cause the Company to exchange mandatorily all or part of the
then outstanding and exercisable Rights (which shall not include Rights
that shall have become null and void pursuant to the provisions of
Section 7(e) hereof) for consideration per Right consisting of one half
of the securities that would be issuable at such time upon the exercise
of one Right in accordance with Section 11(b) (the consideration
issuable per Right pursuant to this Section 11(c)(ii)(A) being the
"Exchange Consideration"). Any partial exchange shall be effected on a
pro rata basis based on the number of Rights (other than Rights which
have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights. If the Board elects to exchange all the
Rights for Exchange Consideration pursuant to this Section 11(c)(ii)(A)
prior to the physical distribution of the Rights Certificates, the
Company may distribute the Exchange Consideration in lieu of
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distributing Rights Certificates, in which case for purposes of this
Rights Agreement holders of Rights shall be deemed to have
simultaneously received and surrendered for exchange Rights
Certificates on the date of such distribution.
(B) Immediately upon the action of the Board
ordering the exchange of any particular Rights pursuant to this Section
11(c)(ii) and without any further action and without any notice, the
right to exercise those particular Rights shall terminate and the only
right a holder shall have thereafter with respect to any of those
particular Rights shall be to receive the Exchange Consideration. The
Company shall promptly give public notice of any such exchange and in
addition, the Company shall promptly mail a notice of any such exchange
to all of the holders of such Rights in accordance with Section 25 of
this Agreement; PROVIDED, HOWEVER, that the failure to give, any delay
in giving or any defect in, such notice shall not affect the validity
of such exchange. Each such notice of exchange will state the method by
which the exchange of the Exchange Consideration for Rights will be
effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. In the event the Exchange Consideration
consists of Common Shares, the Company shall not be required to issue
fractions of Common Shares or to distribute certificates which evidence
fractional Common Shares. In lieu of such fractional Common Shares, the
Company shall pay to the registered holders of the Rights Certificates
with regard to which such fractional Common Shares would otherwise be
issuable an amount in cash equal to the product derived by multiplying
(x) the subject fraction, by (y) the last sale price of the Common
Shares on the fifth Trading Day following the public announcement of
the exchange by the Company, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices on such day,
in either case on a when issued basis (taking into account the
exchange), as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the Nasdaq National Market (or, if the Common Shares are not
so listed or traded, then as determined in the manner provided in
Section 11(d)(i) for determining "current per share market price,"
adjusted to take into account the exchange). In determining whether any
particular holder shall be obligated to receive cash in lieu of a
fractional share, the holder shall be entitled to have all Rights
beneficially owned by such holder aggregated so that only one
fractional share shall be attributable to all the Rights so
beneficially owned.
(d) COMPUTATION OF CURRENT MARKET PRICE.
(i) For the purpose of any computation hereunder, other
than computations made pursuant to 11(c)(i) hereof, the "current per share
market price" of the Common Shares on any date shall be deemed to be the average
of the daily closing prices per share of such Common Shares for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date and for purposes of computations made pursuant to Section 11(c)(i)
hereof, the "current per share market price" of the Common Shares on any date
shall be deemed to be the average of the daily closing prices per Common Share
for the 10 consecutive Trading Days immediately following such date; PROVIDED,
HOWEVER, that in the event that the current per share market price of the Common
Shares is determined during a period following the announcement by the issuer of
such Common Shares of (A) a dividend or distribution on such Common Shares
payable in such Common Shares or securities convertible into such Common Shares,
or (B) any
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subdivision, combination or reclassification of such Common Shares, and prior to
the expiration of the requisite 30 or 10 Trading Day period, as the case may be,
after the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in each such
case, the current market price shall be appropriately adjusted to reflect the
current market price per Common Share equivalent. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange (the "NYSE") or, if the Common Shares are not listed or admitted
to trading on the NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Common Shares are listed or admitted to trading
or, if the Common Shares are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
the National Association of Securities Dealers, Inc. Automated Quotations
("Nasdaq") system or such other system then in use, or, if on any such date the
Common Shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Common Shares selected by the Board. If on any such date no
market maker is making a market in the GGD Stock, the GTR Stock or the GMO
Stock, the fair value of such shares on such date as determined in good faith by
the Board shall be used. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the Common Shares are listed or
admitted to trading is open for the transaction of business or, if the Common
Shares are not listed or admitted to trading on any national securities
exchange, a Business Day. If the Common Shares are not publicly held or not so
listed or traded, "current market price" per share shall mean the fair value per
share as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be determined in
the same manner as set forth above for Common Shares in Section 11(d)(i) (other
than the last sentence thereof). If the current per share market price of the
Preferred Shares of any series cannot be determined in the manner provided
above, the "current per share market price" of the shares of Series A Preferred
Stock, Series B Preferred Stock and Series C Preferred Stock shall be
conclusively deemed to be the current per share market price of the shares of
GGD Stock, GTR Stock and GMO Stock, respectively (appropriately adjusted to
reflect any stock splits, stock dividends, recapitalizations or similar
transactions occurring after the date hereof), multiplied by one hundred. If
neither the applicable Common Shares nor the applicable Preferred Shares are
publicly held or so listed or traded, "current per share market price" shall
mean the fair value per share as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(e) CERTAIN COVENANTS. The Company covenants and agrees that,
after the Distribution Date, it:
(i) will not, and shall not permit any Subsidiary to,
(i) consolidate with, (ii) merge with or into, or (iii) sell or transfer, in one
or more transactions, assets or earning power
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aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person if at the time of or
immediately after such consolidation, merger or sale there are any rights,
warrants or other instruments or securities outstanding or agreements in effect
which would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights.
(ii) will not, except as permitted by Section 23 or
Section 26 hereof, take (or permit any Subsidiary to take) any action which at
the time it is reasonably foreseeable will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights, PROVIDED, HOWEVER,
that the issuance of additional Rights pursuant hereto, including by action of
the Board under Section 22 hereof, shall not be deemed to violate this Section
11(e)(ii).
Section 12. CERTIFICATE OF ADJUSTMENT. Whenever an adjustment is
made as provided in Sections 11 and 13 hereof, the Company shall promptly (a)
prepare a certificate setting forth such adjustment, and a brief statement of
the facts accounting for such adjustment, (b) promptly file with the Rights
Agent and with each transfer agent for the Common Shares or the Preferred Shares
a copy of such certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate in accordance with Section 25 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS
OR EARNING POWER.
(a) In the event that, following the Distribution Date, directly
or indirectly, any transactions specified in the following clause (i), (ii) or
(iii) of this Section 13(a) shall be consummated:
(i) the Company shall consolidate with, or merge with and
into, any other Person and the Company shall not be the continuing or surviving
corporation of any such consolidation or merger;
(ii) any Person shall consolidate with the Company, or
merge with and into the Company and the Company shall be the continuing or
surviving corporation of such merger and, in connection with such merger, all or
part of the Common Shares shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other property;
or
(iii) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons other than the Company or any Subsidiary of the Company;
PROVIDED, HOWEVER, that this clause (iii) of Section 13(a) hereof shall not
apply to the pro rata distribution by the Company of assets (including
securities) of the Company or any of its Subsidiaries to all holders of Common
Shares of the Company in accordance with each such holder's interest in such
assets prior to the distribution;
then, and in each such case, proper provision shall be made so that (i) each
holder of a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise
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thereof in accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and freely tradable Common
Shares of the Principal Party (as hereinafter defined), not subject to any
rights of first refusal, redemption or repurchase, as shall be equal to the
result obtained by (1) multiplying the then current Purchase Price by the number
of one one-hundredths of a Preferred Share for which a Right is then exercisable
immediately prior to the first occurrence of any of the events described in
clauses (i), (ii) or (iii) of this Section 13(a) (a "Section 13(a) Event"), or,
if a Triggering Event has occurred prior to the Section 13(a) Event, multiplying
the number of such fractional shares for which a Right was exercisable
immediately prior to the Triggering Event hereof by the Purchase Price
immediately prior to such Triggering Event, and dividing that product (which,
following the Section 13(a) Event, shall thereafter be referred to as the
"Purchase Price" for all purposes of this Agreement) by (2) 50% of the then
current per share market price of the Common Shares of such other Person
(determined pursuant to Section 11(d)) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such issuer, it being specifically intended that the provisions of Section 11
hereof shall apply only to such Principal Party following the first occurrence
of a Section 13(a) Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
Common Shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the Rights; and (v)
the provisions of Sections 11(b) and 11(c)(i) hereof shall thereafter be of no
effect following the first occurrence of a Section 13(a) Event. The Company
shall not enter into any transaction of the kind referred to in this Section
13(a) if at the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or arrangements which,
as a result of the consummation of such transaction, would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(i) or (ii) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which Common Shares of the Company are converted
in such merger or consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause
(iii) of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
PROVIDED, HOWEVER, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal Party" shall refer
to such other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which
are
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and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the greatest aggregate
market value.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized Common Shares, which have not been issued or reserved for
issuance, to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Act, with respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after such
filing and (B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Final Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that one of
the transactions described in Section 13(a) hereof shall occur at any time after
the occurrence of a Triggering Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in Section
13(a).
(d) Notwithstanding any other provision of this Agreement, no
adjustment to the number or kind of shares (or fractions of a share), cash or
other property for which a Right is exercisable or the number of Rights
outstanding or associated with any Common Share or any similar or other
adjustment shall be made or be effective if such adjustment would have the
effect of reducing or limiting the benefits the holders of the Rights would have
had absent such adjustment, including, without limitation, the benefits under
Sections 11 and 13, unless the terms of this Agreement are amended so as to
preserve such benefits, provided that this paragraph shall not prevent any
change prior to the Distribution Date permitted by Section 26(a) and provided
that this Section 13(d) shall not be deemed to limit or impair the right to
engage in an exchange pursuant to Section 11(c)(ii).
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights
except prior to the Distribution Date as the Board may in its discretion
determine in effecting an adjustment in the number of Rights pursuant to Section
11(a ) hereof, or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the registered
holders of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole
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Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the NYSE or, if the Rights are not listed or
admitted to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
Nasdaq or such other system then in use or, if on any such date the Rights are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Rights
selected by the Board. If on any such date no such market maker is making a
market in the Rights the fair value of the Rights on such date as determined in
good faith by the Board shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-hundredth of a Preferred Share).
Fractions of Preferred Shares in integral multiples of one one-hundredth of a
Preferred Share may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred
Shares represented by such depositary receipts. In lieu of fractional Preferred
Shares that are not integral multiples of one one-hundredth of a Preferred
Share, the Company shall pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one Preferred Share. For
purposes of this Section 14(b), the current market value of a Preferred Share
shall be the closing price of a Preferred Share (as determined pursuant to the
second sentence of Section 11(d)(ii) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of Common Shares upon exercise of the
Rights or to distribute certificates that evidence fractional Common Shares. In
lieu of fractional Common Shares, the Company may pay to the registered holders
of Right Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of one
Common Share. For purposes of this Section 14(c), the current market value of
one Common Share shall be the closing price of one Common Share (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
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Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent under
Sections 18 and 20 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares), without
the consent of the Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Shares), may, in his own
behalf and for his own benefit, enforce, and institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as
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such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 24 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability which may arise under this Agreement. The indemnity provided herein
shall survive the expiration of the Rights and the termination of this Rights
Agreement.
(b) The Rights Agent shall be fully indemnified against, shall be
protected from and shall incur no liability or expense for, or in respect of any
action taken, suffered or omitted by it in connection with, its administration
of this Agreement in reliance upon any Right Certificate or certificate for the
Preferred Shares or Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof. Such
indemnity shall specifically include any loss, liability or expense which the
Rights Agent may suffer in administering this Agreement against a Person who was
an Acquiring Person or an Affiliate or an Associate of an Acquiring Person and
any costs and expenses of defending against any claim of liability from such
Person, Acquiring Person or Affiliate or Associate of such Acquiring Person.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21 hereof. In case
at the time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the
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countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Clerk of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be
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responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(b) hereof) or any adjustment in the
terms of the Rights (including the manner, method or amount thereof) provided
for in Sections 3, 11, 13 or 23, or the ascertaining of the existence of facts
that would require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after receipt of a
certificate furnished pursuant to Section 13 describing such change or
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares will, when issued, be validly
authorized and issued, fully paid and non-assessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the Clerk
or the Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under this Rights
Agreement and the date on or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any officer of the Company actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the specified effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become peculiarly interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
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(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its rights
if there shall be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2 on such
certificate attached to the form of assignment or form of election to purchase,
the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Shares or
Preferred Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of any other state of the United States in good standing, which is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Shares or Preferred Shares, and mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option,
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issue new Right Certificates evidencing Rights in such form as may be approved
by its Board to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Agreement. In addition, the Company may, if deemed necessary or appropriate by
the Board, issue Right Certificates in connection with the issuance or sale of
Common Shares following the Distribution Date.
Section 23. REDEMPTION.
(a) (i) The Board may, at its option, at any time prior to
5:00 p.m., Massachusetts time, on the earlier of (A) the tenth day following the
Shares Acquisition Date (or such later date as may be determined by the Board)
or (B) the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.001 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). Notwithstanding anything contained in
this Agreement to the contrary, the Rights shall not be exercisable pursuant to
Section 11(b) or 11(c) at a time when the Rights are then redeemable hereunder.
(ii) Following the occurrence of a Shares Acquisition Date
but prior to any event described in Section 13(a), the Board may redeem all but
not less than all of the then outstanding Rights at the Redemption Price in
connection with any event, not involving an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, that either (A) is of the type specified in
Section 13(a) or (B) involves a Person merging into the Company or otherwise
combining with the Company, where the Company shall be the continuing or
surviving corporation of such merger or combination and the Common Shares of the
Company shall remain outstanding and not changed into or exchanged for stock or
other securities of any other Person or the Company or cash or any other
property,
(b) In the case of a redemption permitted under Section 23(a),
immediately upon the action of the Board ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent and without any
further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. Within ten days after the action of the Company
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the Common Shares. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price will be made.
Section 24. NOTICE OF CERTAIN EVENTS. In case the Company shall
propose, at any time after the Distribution Date, (a) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to make
any other distribution to the holders of its Preferred Shares (other than a
regular quarterly cash dividend) or (b) to offer to the holders of its Preferred
Shares rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of
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any class or any other securities, rights or options, or (c) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding Preferred Shares), or (d) to
effect any consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person, or (e) to effect the liquidation, dissolution or winding up of the
Company, or (f) to declare or pay any dividend on any series of Common Shares
payable in Common Shares of the same series or to effect a subdivision,
combination or consolidation of any series of Common Shares (by reclassification
or otherwise than by payment of dividends in Common Shares on the Common Shares
of the same series), then, in each such case, the Company shall give to each
holder of a Right Certificate, in accordance with Section 25 hereof, a notice of
such proposed action, which shall specify the record date for the purposes of
such stock dividend, or distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (a) or (b) above at least 20 days prior to the record date for
determining holders of the Preferred Shares for purposes of such action, and in
the case of any such other action, at least 20 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares and/or Preferred Shares, whichever shall be the
earlier.
In case any Triggering Event or Section 13(a) Event shall occur, then,
in any such case, (i) the Company shall as soon as practicable thereafter give
to each holder of a Right Certificate, in accordance with Section 25 hereof, a
notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11 or 13 hereof,
and (ii) all references in the preceding paragraph to Preferred Shares shall be
deemed thereafter to refer to Common Shares and/or, if appropriate, other
securities.
Section 25. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Genzyme Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Legal Officer
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇ & Dodge LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or
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34
on the Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Company) as follows:
▇▇. ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇
American Stock Transfer and Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 26. SUPPLEMENTS AND AMENDMENTS.
(a) Prior to the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend any provision of
this Agreement without the approval of any holders of certificates representing
Common Shares.
(b) From and after the Distribution Date, the Company and the
Rights Agent shall, if the Company shall so direct, supplement or amend this
Agreement without the approval of any holders of Right Certificates in order (i)
to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
(iii) to extend the period of redemption provided in Section 23 hereof (which
amendment shall set forth a date after which the Rights are no longer redeemable
("Extension Date") unless the Rights are further amended prior to the Extension
Date to further extend the time during which the Rights are redeemable, and
which amendment may provide for the termination of the right of redemption prior
to any Extension Date), or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Right Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person),
PROVIDED, this Agreement may not be supplemented or amended pursuant to clause
(iii) of this sentence after the period for redemption of the Rights pursuant to
Section 23 hereof shall have expired.
(c) Upon the delivery of a certificate from an appropriate officer
of the Company, which states that the proposed supplement or amendment is in
compliance with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the redemption price or the number of shares of Common Stock of the
Company for which a Right is exercisable. Prior to the Distribution Date, the
interests of the holders of GGD Stock Rights, GTR Stock Rights and GMO Stock
shall be deemed coincident with the interests of the holders of GGD Stock, GTR
Stock and GMO Stock, respectively.
Section 27. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
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35
Section 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.
The Board shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board or 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
(including a determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations, interpretations and determinations
(including, for purposes of clause (ii) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith, shall (i) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Right Certificates and all other parties, and (ii) not subject the Board to
any liability to the holders of the Right Certificates.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares).
Section 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, notwithstanding anything in this Agreement to the contrary,
if any such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board determines in its
good faith judgment that severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth day following the date of such
determination by the Board.
Section 31. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the Commonwealth of Massachusetts and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State.
Section 32. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
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36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
[CORPORATE SEAL] GENZYME CORPORATION
Attest
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------- ------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Clerk Title: Executive Vice President
[CORPORATE SEAL] AMERICAN STOCK TRANSFER AND TRUST
COMPANY
Attest
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------- -------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Secretary Title: Vice President
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37
Exhibit A -- cERTIFICATE OF dESIGNATIONS
TERMS OF THE
SERIES A, SERIES B AND SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
OF
GENZYME CORPORATION
VOTED, that pursuant to paragraph IV.F.1 of this Corporation's Articles
of Organization, the Board of Directors hereby establishes three series of
Preferred Stock of the Corporation with the following designations, powers,
preferences and rights:
A. AUTHORIZED AMOUNTS AND DESIGNATIONS. Two million shares of
Preferred Stock of the Corporation are designated as Series A Junior
Participating Preferred Stock (the "Series A Preferred Stock"), 400,000 shares
of Preferred Stock are designated as Series B Junior Participating Preferred
Stock (the "Series B Preferred Stock"), and 400,000 shares of Preferred Stock
are designated as Series C Junior Participating Preferred Stock (the "Series C
Preferred Stock," and together with the Series A Preferred Stock, the Series B
Preferred Stock, and any other series of Preferred Stock so designated by the
Corporation's Board of Directors, the "Junior Preferred Stock"). To the extent
legally permitted, such numbers of shares may be increased or decreased by vote
of the Board of Directors, provided that no decrease shall reduce the number of
shares of Junior Preferred Stock of any series to a number less than the number
of shares of such series then outstanding plus the number of shares of such
series reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into such series of Junior Preferred Stock.
B. SERIES A PREFERRED STOCK. A description of the Series A
Preferred Stock and a statement of its preferences, voting powers,
qualifications and special or relative rights or privileges is as follows:
1. DIVIDENDS AND DISTRIBUTIONS.
a. Subject to the prior and superior rights of
the holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series A Preferred Stock with respect to dividends, the holders
of shares of Series A Preferred Stock, in preference to the holders of all
shares of common stock of the Corporation (the "Common Shares"), and of any
other junior stock, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend on shares of Genzyme General
Division Common Stock (the "GGD Stock") payable in shares of GGD Stock or a
subdivision of the
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outstanding shares of GGD Stock (by reclassification or otherwise), declared on
the GGD Stock since the immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Preferred Stock. In the
event the Corporation shall at any time after June 12, 1997 declare or pay any
dividend on shares of GGD Stock payable in shares of GGD Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of GGD
Stock (by reclassification or otherwise than by payment of a dividend in shares
of GGD Stock) into a greater or lesser number of shares of GGD Stock, then in
each such case the amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of GGD Stock outstanding immediately
after such event and the denominator of which is the number of shares of GGD
Stock that were outstanding immediately prior to such event.
b. The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in paragraph a. of this
Section B.1 immediately after it declares a dividend or distribution on any
shares of GGD Stock (other than a dividend payable in shares of GGD Stock),
provided that, in the event no dividend or distribution shall have been declared
on the GGD Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
c. Dividends shall begin to accrue and be
cumulative on outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
2. VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
a. Subject to the provision for adjustment
hereinafter set forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
after June 12, 1997 declare or pay any dividend on any shares of GGD Stock
payable in shares of GGD Stock, or effect a subdivision or combination or
consolidation of the outstanding
A-2
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shares of GGD Stock (by reclassification or otherwise than by payment of a
dividend in shares of GGD Stock) into a greater or lesser number of shares of
GGD Stock, then in each such case the number of votes per share to which holders
of shares of Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the numerator
of which is the number of shares of GGD Stock outstanding immediately after such
event and the denominator of which is the number of shares of GGD Stock that
were outstanding immediately prior to such event.
b. Except as otherwise provided herein, in the
Articles of Organization, in any other vote of the Board of Directors of the
Corporation creating a series of Preferred Stock, or by law, the holders of
shares of Series A Preferred Stock and the holders of Common Shares and any
other capital stock of the Corporation having general voting rights shall vote
together as one series on all matters submitted to a vote of stockholders of the
Corporation.
c. Except as set forth herein or as otherwise
provided by law, holders of Series A Preferred Stock shall have no voting
rights.
3. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GGD Stock, or (2) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
A Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
June 12, 1997 declare or pay any dividend on shares of GGD Stock payable in
shares of GGD Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GGD Stock (by reclassification or otherwise than by
payment of a dividend in shares of GGD Stock) into a greater or lesser number of
shares of GGD Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GGD Stock outstanding immediately after such event and the
denominator of which is the number of shares of GGD Stock that were outstanding
immediately prior to such event.
4. CONSOLIDATION, MERGER, ETC. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which Common Shares are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case each share of Series A
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property
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40
(payable in kind), as the case may be, into which or for which each share of GGD
Stock is changed or exchanged. In the event the Corporation shall at any time
after June 12, 1997 declare or pay any dividend on any shares of GGD Stock
payable in shares of GGD Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GGD Stock (by reclassification or
otherwise than by payment of a dividend in shares of GGD Stock) into a greater
or lesser number of shares of GGD Stock, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of GGD Stock
outstanding immediately after such event and the denominator of which is the
number of shares of GGD Stock that were outstanding immediately prior to such
event.
C. SERIES B PREFERRED STOCK. A description of the Series B
Preferred Stock and a statement of its preferences, voting powers,
qualifications and special or relative rights or privileges is as follows:
1. DIVIDENDS AND DISTRIBUTIONS.
a. Subject to the prior and superior rights of
the holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series B Preferred Stock with respect to dividends, the holders
of shares of Series B Preferred Stock, in preference to the holders of all
Common Shares, and of any other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first day
of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series B Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions, other than a
dividend on shares of Genzyme Tissue Repair Division Common Stock (the "GTR
Stock") payable in shares of GTR Stock or a subdivision of the outstanding
shares of GTR Stock (by reclassification or otherwise), declared on the GTR
Stock since the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series B Preferred Stock. In the event
the Corporation shall at any time after June 12, 1997 declare or pay any
dividend on any shares of GTR Stock payable in shares of GTR Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of GTR
Stock (by reclassification or otherwise than by payment of a dividend in shares
of GTR Stock) into a greater or lesser number of shares of GTR Stock, then in
each such case the amount to which holders of shares of Series B Preferred Stock
were entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of GTR Stock outstanding immediately
after such event and the denominator of which is the number of shares of GTR
Stock that were outstanding immediately prior to such event.
b. The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in paragraph a. of this
Section C.1 immediately after it
A-4
41
declares a dividend or distribution on any shares of GTR Stock (other than a
dividend payable in shares of GTR Stock), provided that, in the event no
dividend or distribution shall have been declared on the GTR Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series B
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
c. Dividends shall begin to accrue and be
cumulative on outstanding shares of Series B Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series B Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series B Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series B Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
2. VOTING RIGHTS. The holders of shares of Series B
Preferred Stock shall have the following voting rights:
a. Subject to the provision for adjustment
hereinafter set forth, each share of Series B Preferred Stock shall entitle the
holder thereof to 100 times the number of votes to which the holder of each
outstanding share of GTR Stock is then entitled on all matters submitted to a
vote of the stockholders of the Corporation. In the event the Corporation shall
at any time after June 12, 1997 declare or pay any dividend on shares of GTR
Stock payable in shares of GTR Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GTR Stock (by reclassification or
otherwise than by payment of a dividend in shares of GTR Stock) into a greater
or lesser number of shares of GTR Stock, then in each such case the number of
votes per share to which holders of shares of Series B Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of GTR
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GTR Stock that were outstanding immediately prior to
such event.
b. Except as otherwise provided herein, in the
Articles of Organization, in any other vote of the Board of Directors of the
Corporation creating a series of Preferred Stock, or by law, the holders of
shares of Series B Preferred Stock and the holders of Common Shares and any
other capital stock of the Corporation having general voting rights shall vote
together as one series on all matters submitted to a vote of stockholders of the
Corporation.
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c. Except as set forth herein or as otherwise
provided by law, holders of Series B Preferred Stock shall have no voting
rights.
3. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series B
Preferred Stock unless, prior thereto, the holders of shares of Series B
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series B
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GTR Stock, or (2) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
B Preferred Stock, except distributions made ratably on the Series B Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
June 12, 1997 declare or pay any dividend on any shares of GTR Stock payable in
shares of GTR Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GTR Stock (by reclassification or otherwise than by
payment of a dividend in shares of GTR Stock) into a greater or lesser number of
shares of GTR Stock, then in each such case the aggregate amount to which
holders of shares of Series B Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GTR Stock outstanding immediately after such event and the
denominator of which is the number of shares of GTR Stock that were outstanding
immediately prior to such event.
4. CONSOLIDATION, MERGER, ETC. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which Common Shares are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case each share of Series B
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of GTR Stock is changed or exchanged. In the event the Corporation
shall at any time after June 12, 1997 declare or pay any dividend on any shares
of GTR Stock payable in shares of GTR Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of GTR Stock (by
reclassification or otherwise than by payment of a dividend in shares of GTR
Stock) into a greater or lesser number of shares of GTR Stock, then in each such
case the amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series B Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of GTR
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GTR Stock that were outstanding immediately prior to
such event.
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D. SERIES C PREFERRED STOCK. A description of the Series C
Preferred Stock and a statement of its preferences, voting powers,
qualifications and special or relative rights or privileges is as follows:
1. DIVIDENDS AND DISTRIBUTIONS.
a. Subject to the prior and superior rights of
the holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series C Preferred Stock with respect to dividends, the holders
of shares of Series C Preferred Stock, in preference to the holders of Common
Shares, and of any other junior stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series C Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend on shares of
Genzyme Molecular Oncology Division Common Stock (the "GMO Stock") payable in
shares of GMO Stock or a subdivision of the outstanding shares of GMO Stock (by
reclassification or otherwise), declared on the GMO Stock since the immediately
preceding Quarterly Dividend Payment Date or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series C Preferred Stock. In the event the Corporation
shall at any time after June 12, 1997 declare or pay any dividend on any shares
of GMO Stock payable in shares of GMO Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of GMO Stock (by
reclassification or otherwise than by payment of a dividend in shares of GMO
Stock) into a greater or lesser number of shares of GMO Stock, then in each such
case the amount to which holders of shares of Series C Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of GMO Stock outstanding immediately
after such event and the denominator of which is the number of shares of GMO
Stock that were outstanding immediately prior to such event.
b. The Corporation shall declare a dividend or
distribution on the Series C Preferred Stock as provided in paragraph a. of this
Section C.1 immediately after it declares a dividend or distribution on any
shares of GMO Stock (other than a dividend payable in shares of GMO Stock),
provided that, in the event no dividend or distribution shall have been declared
on the GMO Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series C Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
c. Dividends shall begin to accrue and be
cumulative on outstanding shares of Series C Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to
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accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series C Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series C Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series C Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
2. VOTING RIGHTS. The holders of shares of Series C
Preferred Stock shall have the following voting rights:
a. Subject to the provision for adjustment
hereinafter set forth, each share of Series C Preferred Stock shall entitle the
holder thereof to 100 times the number of votes to which the holder of each
outstanding share of GMO Stock is then entitled on all matters submitted to a
vote of the stockholders of the Corporation. In the event the Corporation shall
at any time after June 12, 1997 declare or pay any dividend on any shares of GMO
Stock payable in shares of GMO Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GMO Stock (by reclassification or
otherwise than by payment of a dividend in shares of GMO Stock) into a greater
or lesser number of shares of GMO Stock, then in each such case the number of
votes per share to which holders of shares of Series C Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of GMO
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GMO Stock that were outstanding immediately prior to
such event.
b. Except as otherwise provided herein, in the
Articles of Organization, in any other vote of the Board of Directors of the
Corporation creating a series of Preferred Stock, or by law, the holders of
shares of Series C Preferred Stock and the holders of Common Shares and any
other capital stock of the Corporation having general voting rights shall vote
together as one series on all matters submitted to a vote of stockholders of the
Corporation.
c. Except as set forth herein or as otherwise
provided by law, holders of Series C Preferred Stock shall have no voting
rights.
3. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series C
Preferred Stock unless, prior thereto, the holders of shares of Series C
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series C
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GMO Stock, or
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(2) to the holders of shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series C
Preferred Stock, except distributions made ratably on the Series C Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
June 12, 1997 declare or pay any dividend on any shares of GMO Stock payable in
shares of GMO Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GMO Stock (by reclassification or otherwise than by
payment of a dividend in shares of GMO Stock) into a greater or lesser number of
shares of GMO Stock, then in each such case the aggregate amount to which
holders of shares of Series C Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GMO Stock outstanding immediately after such event and the
denominator of which is the number of shares of GMO Stock that were outstanding
immediately prior to such event.
4. CONSOLIDATION, MERGER, ETC. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which Common Shares are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case each share of Series C
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of GMO Stock is changed or exchanged. In the event the Corporation
shall at any time after June 12, 1997 declare or pay any dividend on shares of
GMO Stock payable in shares of GMO Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of GMO Stock (by reclassification or
otherwise than by payment of a dividend in shares of GMO Stock) into a greater
or lesser number of shares of GMO Stock, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series C Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of GMO Stock
outstanding immediately after such event and the denominator of which is the
number of shares of GMO Stock that were outstanding immediately prior to such
event.
E. GENERAL PROVISIONS. Except as otherwise specifically provided
in a particular series of Junior Preferred Stock, the following provisions shall
apply to all series of Junior Preferred Stock:
1. CERTAIN RESTRICTIONS.
a. Whenever quarterly dividends or other
dividends or distributions payable on the Junior Preferred Stock are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Junior Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:
(1) declare or pay dividends, or make
any other distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Junior
Preferred Stock;
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(2) declare or pay dividends, or make
any other distributions, on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Junior
Preferred Stock, except dividends paid ratably on the Junior Preferred Stock and
all such parity stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are then entitled;
(3) redeem or purchase or otherwise
acquire for consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Junior
Preferred Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for shares of
any stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Junior Preferred Stock; or
(4) redeem, purchase or otherwise
acquire for consideration any shares of Junior Preferred Stock, or any shares of
stock ranking on a parity with the Junior Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the Board
of Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment among
the respective series or classes.
2. The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph a. of
this paragraph E.1. purchase or otherwise acquire such shares at such time and
in such manner.
F. REACQUIRED SHARES. Any shares of Junior Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as shares of the same series of Preferred
Stock or as part of a new series of Preferred Stock, subject to the conditions
and restrictions on issuance set forth herein, in the Articles of Organization,
in any other vote of the Board of Directors of the Corporation creating a series
of Preferred Stock, or as otherwise required by law.
G. REDEMPTION. The shares of Junior Preferred Stock shall not be
redeemable.
H. RANK. The Series A Preferred Stock, the Series B Preferred
Stock and the Series C Preferred Stock shall rank equally with respect to the
payment of dividends and the distribution of assets together with any other
series of the Corporation's Preferred Stock that specifically provide that they
shall rank equally with Junior Preferred Stock. The Junior Preferred Stock shall
rank junior with respect to the payment of dividends and the distribution of
assets to all series of the Corporation's Preferred Stock that specifically
provide that they shall rank prior to the Junior Preferred Stock. Nothing herein
shall preclude the Board from creating any series of Preferred Stock ranking on
a parity with or prior to the Junior Preferred Stock as to the payment of
dividends or the distribution of assets.
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I. AMENDMENT. The Articles of Organization of the Corporation
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the holders of Junior Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of each outstanding series of Junior Preferred Stock, voting
together as a single series, provided that, any two or more series of Junior
Preferred Stock that are adversely affected in the same manner shall vote
together as a single class.
J. FRACTIONAL SHARES. The Junior Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of the Junior Preferred Stock.
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Exhibit B -- Form of Right Certificate
Certificate No [GGD/GTR/GMO]R- _________ Rights
NOT EXERCISABLE AFTER MARCH 28, 2009 OR EARLIER IF REDEMPTION
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER
RIGHT, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 7(e) AND 11(b) OF
THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT
CERTIFICATE WERE ISSUED TO A PERSON WHO WAS AN ACQUIRING
PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). THIS
RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
VOID IN THE CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT,
INCLUDING SECTION 7(e) AND SECTION 11(b) THEREOF.](1)
Right Certificate
GENZYME CORPORATION
This certifies that __________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Renewed Rights Agreement, dated as of March 16, 1999 (the "Rights Agreement"),
between Genzyme Corporation, a Massachusetts corporation (the "Company"), and [
] (the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 P.M., Massachusetts time, on March 28, 2009 at the office of the Rights
Agent designated for such purposes, or at the office of its successor as Rights
Agent, one one-hundredth of a fully paid non-assessable share of Series [A/B/C]
Junior Participating Preferred Stock (the "Preferred Shares") of the Company, at
a purchase price of $[300.00/26.00] per one one-hundredth of a Preferred Share
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and related Certificate duly
executed.
------------------
(1)The portion of the legend in brackets shall be inserted only if applicable.
B-1
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The number of Rights evidenced by this Right Certificate (and the number of one
one-hundredths of a Preferred Share which may be purchased upon exercise hereof)
set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of ___________, based on the Preferred Shares as constituted
at such date.
Upon the occurrence of a Triggering Event (as such term is defined in
the Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of any such Triggering
Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of Preferred Shares or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purposes, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may, but are not required to, be redeemed by the Company at
a redemption price of $.01 per Right.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the
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Company which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided in the
Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ____________, ____.
[CORPORATE SEAL]
GENZYME CORPORATION
ATTEST
_______________________________________ By: ___________________________________
Clerk Name:
Title:
Countersigned:
[ ]
By: ___________________________________
Authorized Signature
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Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ___________________ hereby sells, assigns
and transfers unto __________________________________________________
(Please print name and address of transferee)
_________________________________ this Right Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint ___________ Attorney, to transfer the within Right Certificate on the
books of the within-named Company, with full power of substitution.
Dated: __________________, ____
--------------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor
Institution, as defined in Rule 17Ad-15 under the Securities Exchange Act of
1934, as amended.
--------------------------------------------------------------------------------
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
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Form of Reverse Side of Right Certificate -- continued
--------------------------------------------------------------------------------
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: _________________, ____ ___________________________________
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
--------------------------------------------------------------------------------
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: GENZYME CORPORATION
The undersigned hereby irrevocably elects to exercise ________
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance
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Form of Reverse Side of Right Certificate -- continued
--------------------------------------------------------------------------------
remaining of such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated: __________________, ____
----------------------------------------
Signature
(Signature must conform in all respects
to name of holder as specified on the
face of this Right Certificate in every
particular, without alteration or
enlargement or any change whatsoever)
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
--------------------------------------------------------------------------------
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any
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Form of Reverse Side of Right Certificate - continued
--------------------------------------------------------------------------------
such Acquiring Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: ________________, ____ _______________________________________
Signature
--------------------------------------------------------------------------------
NOTICE
The signatures in the foregoing Forms of Assignment and Election must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the Certificates set forth above in the Forms of
Assignment and Election are not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
and in the case of an Assignment, will affix a legend to that effect on any
Right Certificates issued in exchange for this Right Certificate.
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