1
RIGHTS AGREEMENT
-----------------------------
UNITED THERAPEUTICS CORPORATION
and
THE BANK OF NEW YORK
Rights Agent
-----------------------------
Dated as of December 17, 2000
2
INDEX
-----
Page
----
Section 1. Certain Definitions..............................................................1
-------------------
Section 2. Appointment of Rights Agent......................................................4
---------------------------
Section 3. Issue of Right Certificates......................................................5
---------------------------
Section 4. Form of Right Certificates.......................................................6
--------------------------
Section 5. Countersignature and Registration................................................7
---------------------------------
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
-------------------------------------------------------------------------------
Destroyed, Lost or Stolen Right Certificates......................................8
--------------------------------------------
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights....................8
-------------------------------------------------------------
Section 8. Cancellation of Right Certificates..............................................10
----------------------------------
Section 9. Reservation and Availability of Shares of Preferred Stock.......................11
---------------------------------------------------------
Section 10. Preferred Stock Record Date....................................................11
---------------------------
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights.............12
------------------------------------------------------------------
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.....................18
----------------------------------------------------------
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...........19
--------------------------------------------------------------------
Section 14. Fractional Rights and Fractional Shares........................................21
---------------------------------------
Section 15. Rights of Action...............................................................22
----------------
Section 16. Agreement of Right Holders.....................................................23
--------------------------
Section 17. Right Certificate Holder Not Deemed a Stockholder..............................23
-------------------------------------------------
Section 18. Concerning the Rights Agent....................................................23
---------------------------
Section 19. Merger or Consolidation or Change of Name of Rights Agent......................24
---------------------------------------------------------
Section 20. Duties of Rights Agent.........................................................24
----------------------
Section 21. Change of Rights Agent.........................................................26
----------------------
Section 22. Issuance of New Right Certificates.............................................27
----------------------------------
Section 23. Redemption and Termination.....................................................28
--------------------------
i
3
Section 24. Exchange.......................................................................28
--------
Section 25. Notice of Proposed Actions.....................................................29
--------------------------
Section 26. Notices........................................................................30
-------
Section 27. Supplements and Amendments.....................................................31
--------------------------
Section 28. Successors.....................................................................32
----------
Section 29. Benefits of This Rights Agreement..............................................32
---------------------------------
Section 30. Severability...................................................................32
------------
Section 31. Governing Law..................................................................32
-------------
Section 32. Counterparts...................................................................32
------------
Section 33. Descriptive Headings...........................................................32
--------------------
Exhibit A - Form of Certificate of Designations for
Series A Junior Participating
Preferred Stock
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Preferred Stock Purchase Rights
ii
4
RIGHTS AGREEMENT
This Rights Agreement, dated as of December 17, 2000 is entered into
between United Therapeutics Corporation, a Delaware corporation (the
"Company"), and The Bank of New York, a New York banking corporation (the
"Rights Agent").
W I T N E S S E T H
WHEREAS, on December 17, 2000 the Board of Directors of the Company
authorized and declared a dividend distribution of one right (hereinafter
referred to as a "Right") for each share of Common Stock, par value $0.01 per
share, of the Company outstanding at the close of business on December 29, 2000
(the "Record Date"), (other than shares of such Common Stock held in the
Company's treasury on such date) and has authorized the issuance of one Right in
respect of each share of Common Stock of the Company issued between the Record
Date (whether originally issued or issued from the Company's treasury) and the
Distribution Date (as such term is defined in Section 3 hereof), each Right
representing the right to purchase one one-thousandth of a share of Series A
Junior Participating Preferred Stock of the Company having the rights, powers
and preferences set forth in the form of Certificate of Designations attached
hereto as Exhibit A, upon the terms and subject to the conditions hereinafter
set forth (the "Rights"); and
WHEREAS, the Company desires to appoint the Rights Agent to act as
provided herein, and the Rights Agent is willing to so act.
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 Rights Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as hereinafter defined)
who or which, together with all Affiliates (as hereinafter defined) and
Associates (as hereinafter defined) of such Person, without the Prior Written
Approval of the Company (as hereinafter defined), shall be the Beneficial
Owner (as hereinafter defined) of securities of the Company constituting 15%
or more of the Voting Power (as hereinafter defined) of the Company or was
such a Beneficial Owner at any time after the date hereof, whether or not such
Person continues to be the Beneficial Owner of securities representing 15% or
more of the Voting Power of the Company, but shall not include (i) the
Company, any Subsidiary of the Company, any employee benefit plan or
compensation arrangement of the Company or any Subsidiary of the Company, or
any entity holding securities of the Company to the extent organized,
appointed or established by the Company or any Subsidiary of the Company for
or pursuant to the terms of any such employee benefit plan or compensation
arrangement or (ii) any Person who or which, together with all Affiliates and
Associates of such Person, inadvertently may become the Beneficial Owner of
securities of the Company representing 15% or more of the Voting Power of the
Company or otherwise becomes such a Beneficial Owner without a plan or
intention to acquire control of the Company, so long as such Person,
individually or together with the Affiliates and
5
Associates of such Person, promptly enters into, and delivers to the Company,
an irrevocable commitment promptly to divest, and thereafter promptly divests
(without exercising or retaining any power, including voting, with respect to
such securities), sufficient securities of the Company so that such Person,
together with all Affiliates and Associates of such Person, ceases to be the
Beneficial Owner of 15% or more of the Voting Power of the Company.
Notwithstanding the foregoing, no Person shall become an "Acquiring Person" as
the result of an acquisition of voting securities of the Company by the Company
which, by reducing the amount of such securities outstanding, increases the
proportionate voting power of such securities beneficially owned by such Person
to 15% or more of the Voting Power; provided, however, that if a Person becomes
the Beneficial Owner of securities constituting 15% or more of the Voting Power
of the Company by reason of purchases by the Company and shall, after such
purchases by the Company, become the Beneficial Owner of any additional voting
securities of the Company without the Prior Written Approval of the Company,
then such Person shall be deemed to be an Acquiring Person.
(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 Exchange Act, as in effect on the date hereof.
(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 as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act, as in effect on the date hereof;
(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 (other than customary agreements with and
between underwriters and selling group members with respect to a bona fide
public offering of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), warrants or options, or
otherwise, provided, however, that a Person shall not be deemed the
"Beneficial Owner" of 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
payment or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding, provided, however, that a Person shall not
be deemed the "Beneficial Owner" of any security under this clause (B) if
the agreement, arrangement or understanding to vote such security (1)
arises solely from a revocable proxy or consent given in response to a
public proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations under the Exchange Act and (2)
is not also then reportable by such person 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 with which such Person or any of such Person's Affiliates
or Associates has any
2
6
agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a
bona fide public offering of securities) for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy or consent as
described in clause (B) of subparagraph (ii) of this paragraph (c)) or
disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when used with
reference to a Person's Beneficial Ownership of securities of the Company,
shall mean the number of such securities then issued and outstanding together
with the number of such securities not then actually issued and outstanding
which such Person would be deemed to own beneficially hereunder.
(d) "Board of Directors" shall mean the Board of Directors of
the Company as constituted from time to time.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(g) "Common Stock" shall mean the Common Stock, par value
$0.01 per share, of the Company, except that "Common Stock" when used with
reference to any Person other than the Company shall mean the capital stock
with the greatest Voting Power of such Person or the equity securities or
other equity interest having power to control or direct the management of such
Person or, if such Person is a Subsidiary (as hereinafter defined) of another
Person, of the Person which ultimately controls such first-mentioned Person
and which has issued and outstanding such capital stock, equity securities or
equity interests.
(h) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(i) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(j) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(k) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(l) "Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor (by merger or
otherwise) of any such entity.
(m) "Preferred Stock" shall mean the Series A Junior
Participating Preferred Stock, par value $0.01 per share, of the Company.
3
7
(n) "Prior Written Approval of the Company" shall mean prior
express written consent of the Company to the actions in question, executed on
behalf of the Company by a duly authorized officer of the Company following
express approval by action of at least a majority of the members of the Board
of Directors then in office.
(o) "Purchase Price" shall have the meaning set forth in
Section 4 hereof.
(p) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(q) "Section 11(b) Event" shall have the meaning set forth in
Section 11(b) hereof.
(r) "Section 13 Event" shall mean an event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(s) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(t) "Stock Acquisition Date" shall mean the earlier of (i) the
first date of public announcement by the Company or a Person that an Acquiring
Person has become an Acquiring Person, or (ii) the date on which the Company
first has notice, direct or indirect, or otherwise determines that a Person
has become an Acquiring Person.
(u) "Subsidiary" shall mean, with respect to any Person, any
other Person of which securities or other ownership interests having ordinary
Voting Power, in the absence of contingencies, to elect a majority of the
board of directors (or other persons performing similar functions) of such
other Person are at the time directly or indirectly owned by such Person or
one or more of such Person's Subsidiaries, except that "Subsidiary" when used
with reference to the Company shall mean any Person of which either a majority
of the Voting Power of the voting equity securities or a majority of the
equity interests is owned, directly or indirectly, by the Company.
(v) "Voting Power" shall mean the voting power of all
securities of a Person then outstanding generally entitled to vote for the
election of directors of the Person (or, where appropriate, for the election
of persons performing similar functions).
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Stock) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable. In the event the Company appoints one
or more Co-Rights Agents, the respective duties of the Rights Agents and any
Co-Rights Agents shall be as the Company shall determine.
4
8
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the Close of Business on the
tenth Business Day after the Stock Acquisition Date or (ii) the Close of
Business on the tenth Business Day (or such later date as may be determined by
action of the Board of Directors but in no event later than the tenth Business
Day after such time as any Person becomes an Acquiring Person) after the date
that a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan or compensation
arrangement of the Company or of any Subsidiary of the Company, or any entity
holding securities of the Company to the extent organized, appointed or
established by the Company or any Subsidiary of the Company for or pursuant to
the terms of any such employee benefit plan or compensation arrangement) is
first published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act, without the Prior
Written Approval of the Company, which tender or exchange offer would result
in any Person becoming the Beneficial Owner of Voting Power aggregating 15% or
more of the outstanding Voting Power (including any such date which is after
the date of this Rights Agreement and prior to the issuance of the Rights; the
earlier of such dates being herein referred to as the "Distribution Date"),
(y) the Rights will be evidenced (subject to the provisions of paragraph (b)
of this Section 3) by the certificates for the Common Stock registered in the
names of the holders of the Common Stock (which certificates for Common Stock
shall be deemed also to be Right Certificates) and not by separate Right
Certificates, as more fully set forth below, and (z) the Rights (and the right
to receive certificates therefor) will be transferable only in connection with
the transfer of the underlying shares of Common Stock, as more fully set forth
below. As soon as practicable after the Company has notified the Rights Agent
of the occurrence of the Distribution Date, the Company shall prepare and
execute, and the Rights Agent shall countersign and send, by first-class,
insured, postage prepaid mail, to each record holder of the Common Stock as of
the Close of Business on the Distribution Date, at the address of such holder
shown on the records of the Company, a right certificate, in substantially the
form of Exhibit B hereto (the "Right Certificate"), evidencing one Right for
each share of Common Stock so held, subject to adjustment as provided herein.
As of and after the Distribution Date, the Rights will be evidenced solely by
such Right Certificates.
(b) On the Record Date or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Preferred
Stock, in substantially the form of Exhibit C hereto (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of the
Common Stock as of the Close of Business on the Record Date, at the address of
such holder shown on the records of the Company. With respect to certificates
for the Common Stock outstanding as of the Record Date, until the Distribution
Date (or the earlier redemption, expiration or termination of the Rights), the
Rights will be evidenced by such certificates for the Common Stock registered
in the names of the holders of the Common Stock and the registered holders of
the Common Stock shall also be registered holders of the associated Rights.
Until the Distribution Date (or the earlier redemption, expiration or
termination of the Rights), the surrender for transfer of any of the
certificates for the Common Stock outstanding in respect of which Rights have
been issued shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate.
5
9
(c) Certificates for the Common Stock issued after the Record
Date but prior to the earlier of the Distribution Date or the redemption,
expiration or termination of the Rights shall be deemed also to be
certificates for Rights and shall have impressed, printed or written on, or
otherwise affixed to them a legend substantially to the following effect:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between United
Therapeutics Corporation (the "Company") and The Bank of New
York, as Rights Agent (the "Rights Agreement"), as it may from
time to time be supplemented or amended, the terms of which are
incorporated herein by reference and a copy of which is on file
at the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
may expire or may be redeemed, exchanged or be evidenced by
separate certificates and no longer be evidenced by this
certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge
promptly after receipt of a written request therefor. Under
certain circumstances, Rights issued to or held by Acquiring
Persons or their Affiliates or Associates (as defined in the
Rights Agreement) and any subsequent holder of such Rights may
become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date (or the earlier redemption, expiration or termination of the
Rights), the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any of such certificates shall also constitute the transfer of
the Rights associated with the Common Stock represented by such certificates.
In the event that the Company purchases or acquires any Common
Stock after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Stock shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights associated with
shares of Common Stock which are no longer outstanding.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof) shall
be in substantially the same form 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 Rights Agreement, or as may be
required to comply with any applicable law, rule or regulation 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 customary usage. Subject to the provisions of
Section 11 and Section 22 hereof, the Right Certificates, whenever issued,
shall be dated as of the Record Date, and on their face shall entitle the
holders thereof to purchase such number of one one-thousandths of a share of
Preferred Stock as shall be set forth therein at the price per one
one-thousandth of a share as set forth therein (the "Purchase Price"), but the
number and identity of such shares and the Purchase Price shall be and remain
subject to adjustment as provided in Sections 11, 13 and 22 hereof.
6
10
(b) Any Right Certificate issued pursuant hereto that
represents Rights beneficially owned by (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) which becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) which becomes a
transferee prior to or concurrently with the Acquiring Person becoming such
and which receives such Rights pursuant to either (A) a transfer (whether or
not for consideration) from the Acquiring Person (or any such Associate or
Affiliate) to holders of equity interests in such Acquiring Person (or such
Associate or Affiliate) or to any Person with whom such Acquiring Person (or
such Associate or Affiliate) has any continuing plan, agreement, arrangement
or understanding regarding either the transferred Rights, shares of Company
Common Stock or the Company or (B) a transfer which a majority of the Board of
Directors has determined to be part of a plan, agreement, arrangement or
understanding which has as a primary purpose or effect the avoidance of
Section 7(e), and any Right Certificate issued pursuant to Section 6 hereof,
Section 11 hereof or Section 22 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or an Associate of an Acquiring Person.
Accordingly, this Right Certificate and the Rights represented
hereby are void in the circumstances specified in Section 7(e) of
the Rights Agreement.
The failure to print the foregoing legend on any such Right Certificate or any
defect therein shall not affect in any manner whatsoever the application or
interpretation of the provisions of Section 7(e) hereof.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board and Chief Executive Officer, President
and Chief Operating Officer, any Executive Vice President or any Vice
President, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by
the Secretary or any Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be countersigned manually by
the Rights Agent or the registrar or co-registrar for the Common Stock (the
"Registrar") and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company whose manual or facsimile signature is
affixed to the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent or the Registrar and
issuance and delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent or the Registrar, issued and
delivered 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. 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 Rights Agreement any such person was not such an
officer.
7
11
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its stockholder services office or such other
office designated for such purpose, 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, the
certificate number of 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 Section 14 hereof, at any
time after the Close of Business on the Distribution Date, and at or prior to
the Close of Business on the Expiration Date (as such term is defined in
Section 7(a) hereof), 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 shares of Preferred Stock as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate
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 stockholder services office of the Rights
Agent or such office designated for such purpose. Thereupon, the Rights Agent
shall 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 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
Certificate if mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) 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 on the reverse side
thereof duly executed, to the Rights Agent at the stockholder services office
of the Rights Agent or such office designated for such purpose, together with
payment of the Purchase Price for each one one-thousandth of a share of
Preferred Stock as to which the Rights are exercised, at or prior to the Close
of Business on the Expiration Date. The "Expiration Date", as used in this
Rights Agreement, shall be the earliest of (i) the Final Expiration Date (as
defined below), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof, or (iii)
8
12
the time at which the Rights are exchanged as provided in Section 24 hereof.
The "Final Expiration Date", as used in this Rights Agreement, shall be
December 29, 2010.
(b) The Purchase Price for each one one-thousandth of a share
of Preferred Stock pursuant to the exercise of a Right shall initially be
$129.50, shall be subject 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, with the form of
election to purchase duly executed, accompanied by payment of the Purchase
Price for each one one-thousandth of a share of Preferred Stock to be
purchased and an amount equal to any applicable transfer tax required to be
paid by the holder of the Rights pursuant hereto in accordance with Section 9
hereof by certified check, bank draft or money order payable to the order of
the Company or the Rights Agent, the Rights Agent shall, subject to Section
20(k) hereof, thereupon promptly (i) either (A) requisition from any transfer
agent of the shares of Preferred Stock (or make available, if the Rights Agent
is the transfer agent) certificates for the number of shares of Preferred
Stock to be purchased and the Company hereby irrevocably authorizes any such
transfer agent to comply with all such requests, or (B) if the Company, in its
sole discretion, shall have elected to deposit the shares of Preferred Stock
issuable upon exercise of the Rights hereunder into a depositary, requisition
from the depositary agent depositary receipts representing such number of one
one-thousandths of a share of Preferred Stock as are to be purchased (in which
case certificates for the shares of Preferred Stock represented by such
receipts shall be deposited by the transfer agent with the depositary agent)
and the Company hereby directs such depositary agent to comply with all such
requests, (ii) 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, (iii) 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, (iv) after receipt of any such cash,
promptly deliver such cash to or upon the order of the registered holder of
such Right Certificate, (v) when appropriate, requisition from the Company the
amount of cash or securities issuable upon exercise of a Right pursuant to the
adjustment provisions of Section 11 or the exchange provisions of Section 24,
and (vi) after receipt of any such cash or securities, promptly deliver such
cash or securities to or upon the order of the registered holder of such Right
Certificate, of any such cash or securities.
(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 such holder's duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Rights Agreement to the
contrary, upon the first occurrence of a Section 11(b) Event or a Section 13
Event, any Rights beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) which becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of
an Acquiring Person
9
13
(or of any such Associate or Affiliate) which becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and which receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person (or any such Associate or Affiliate) to holders of
equity interests in such Acquiring Person (or any such Associate or Affiliate)
or to any Person with whom such Acquiring Person (or such Associate or
Affiliate) has any continuing plan, agreement, arrangement or understanding
regarding the transferred Rights, shares of Company Common Stock or the
Company or (B) a transfer which a majority of the Board of Directors has
determined to be part of a plan, agreement, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section 7(e), shall
be null and void without any further action, and no holder of such Rights
shall have any rights whatsoever with respect to such Rights, whether under
any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) and
Section 4(b) are complied with, but shall have no liability to any holder of
Rights or any other Person as a result of its failure to make any
determination under this Section 7(e) or Section 4(b) with respect to an
Acquiring Person or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Rights 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 the
certificate contained in the appropriate form of election to purchase set
forth on the reverse side of the Right Certificate surrendered for such
exercise shall have been properly completed and duly executed by the
registered holder thereof and the Company shall have been provided with such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation 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 canceled form,
or, if surrendered to the Rights Agent, shall be canceled 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 canceled Right Certificates to the Company.
10
14
Section 9. Reservation and Availability of Shares of Preferred
Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock or its authorized and issued shares of Preferred Stock held in
its treasury, the number of shares of Preferred Stock that will be sufficient
to permit the exercise in full of all outstanding Rights and, after the
occurrence of a Section 11(b) Event or a Section 13 Event, shall so reserve
and keep available a sufficient number of shares of Preferred Stock, Common
Stock and/or other securities which may be required to permit the exercise in
full of the Rights pursuant to this Rights Agreement.
(b) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Preferred Stock
and/or other securities delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares or other securities (subject
to payment of the Purchase Price), be duly and validly authorized and issued
and fully paid and nonassessable shares or securities.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the first occurrence of an event which would
establish the Distribution Date, a registration statement under the Securities
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 Securities Act) until the Expiration Date. The
Company will also take such action as may be appropriate under the "blue sky
laws" of the various states.
(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 shares of Preferred Stock and/or other securities upon
the exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer involved in the
transfer or delivery of Right Certificates or the issuance or delivery of
certificates or depositary receipts for Preferred Stock and/or other
securities in a name other than that of the registered holder of the Right
Certificate evidencing Rights surrendered for exercise, nor shall the Company
be required to issue or deliver any certificates or depositary receipts for
shares of Preferred Stock and/or other securities 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 Stock Record Date. Each person (other than
the Company) in whose name any certificate for shares of Preferred Stock (or
other securities) is issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of the Preferred Stock (or other
securities) 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 Stock (or other securities)
transfer books of the Company are closed, such person shall be deemed to
11
15
have become the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock (or other
securities) 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 to any rights of a stockholder of the Company with respect to shares
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number and identity of shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) In the event the Company shall at any time after the date
of this Rights Agreement (i) declare a dividend on the Preferred Stock payable
in shares of Preferred Stock, (ii) subdivide the outstanding Preferred Stock,
(iii) combine the outstanding Preferred Stock into a smaller number of shares
or (iv) issue any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11, the Purchase
Price in effect at the time of the record date for such dividend or the time
of the effective date of such subdivision, combination or reclassification,
and the number and kind of shares of capital stock, including Preferred Stock,
issuable upon exercise of a Right, shall be proportionately adjusted so that
the holder of any Right exercised after such time, upon payment of the
aggregate consideration such holder would have had to pay to exercise such
Right prior to such time, shall be entitled to receive the aggregate number
and kind of shares of capital stock, including Preferred Stock, which, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, such holder would
have owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification.
(b) In the event any Person becomes an Acquiring Person
("Section 11(b) Event"), then proper provision shall be made so that each
holder of a Right, subject to Section 7(e) and Section 24 hereof and except as
provided below, shall after the later of the occurrence of such event and the
effective date of an appropriate registration statement pursuant to Section 9
hereof, have a right to receive, upon exercise thereof at the then current
Purchase Price, multiplied by the then number of one one-thousandths of a
share of Preferred Stock for which a Right is then exercisable, in accordance
with the terms of this Rights Agreement, in lieu of shares of Preferred Stock,
such number of shares of Common Stock of the Company as shall equal the result
obtained by (y) multiplying the then current Purchase Price by the then number
of one one-thousandths of a share of Preferred Stock for which a Right is then
exercisable and dividing that product by (z) 50% of the current market price
per one share of Common Stock (determined pursuant to Section 11(f) hereof on
the date of the occurrence of the Section 11(b) Event) (such number of shares
being referred to as the "number of Adjustment Shares").
(c) In the event that there shall not be sufficient Treasury
shares or authorized but unissued shares of Common Stock to permit the
exercise in full of the Rights in accordance
12
16
with the foregoing Section 11(b), and the Rights become so exercisable,
notwithstanding any other provision of this Rights Agreement, to the extent
necessary and permitted by applicable law and any agreements in effect on the
date hereof to which the Company is a party, each Right shall thereafter
represent the right to receive, upon exercise thereof at the then current
Purchase Price, multiplied by the then number of one one-thousandths of a
share of Preferred Stock for which a Right is then exercisable, in accordance
with the terms of this Rights Agreement, a number of shares, or units of
shares, of (y) Common Stock, and (z) preferred stock (or other equity
securities) of the Company, including, but not limited to Preferred Stock,
equal in the aggregate to the number of Adjustment Shares where the Board of
Directors shall have in good faith deemed such shares or units, other than the
shares of Common Stock, to have at least the same value and voting rights as
the Common Stock (a "common stock equivalent"); provided, however, if there
are unavailable sufficient shares (or fractions of shares) of Common Stock
and/or common stock equivalents, then the Company shall take all such action
as may be necessary to authorize additional shares of Common Stock or common
stock equivalents for issuance upon exercise of the Rights, including the
calling of a meeting of stockholders; and provided, further, that if the
Company is unable to cause sufficient shares of Common Stock and/or common
stock equivalents to be available for issuance upon exercise in full of the
Rights, then the Company, to the extent necessary and permitted by applicable
law and any agreements or instruments in effect on the date thereof to which
it is a party, shall make provision to pay an amount in cash equal to twice
the Purchase Price (as adjusted pursuant to this Section 11), in lieu of
issuing shares of Common Stock and/or common stock equivalents. To the extent
that the Company determines that some action needs to be taken pursuant to
this Section 11(c), the Board of Directors by action of at least a majority of
its members then in office may suspend the exercisability of the Rights for a
period of up to sixty (60) days following the date on which the Section 11(b)
Event shall have occurred, in order to decide the appropriate form of
distribution to be made pursuant to this Section 11(c) 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. The Board of Directors may, but shall not be required
to, establish procedures to allocate the right to receive Common Stock and
common stock equivalents upon exercise of the Rights among holders of Rights,
which such allocation may be, but is not required to be, pro-rata.
(d) If the Company shall fix a record date for the issuance of
rights or warrants to all holders of Preferred Stock entitling them (for a
period expiring within 90 calendar days after such record date) to subscribe
for or purchase Preferred Stock (or securities having the same or more
favorable rights, privileges and preferences as the Preferred Stock
("equivalent preferred stock")) or securities convertible into Preferred Stock
or equivalent preferred stock, at a price per share of Preferred Stock or per
share of equivalent preferred stock or having a conversion or exercise price
per share, as the case may be, less than the current market price per share of
Preferred Stock (as defined in Section 11(f) hereof) on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such date by a
fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of shares of Preferred
Stock which the aggregate offering price of the total number of shares of
Preferred Stock or equivalent preferred stock to be offered (and/or the
aggregate initial conversion price of the
13
17
convertible securities so to be offered) would purchase at such current market
price, and the denominator of which shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of additional shares of
Preferred Stock and/or equivalent preferred stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be
paid in a consideration, part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
a majority of the Board of Directors, whose determination shall be described
in a statement filed with the Rights Agent. Shares of Preferred Stock owned by
or held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(e) If the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend out of
earnings or retained earnings of the Company), assets (other than a dividend
payable in Preferred Stock, but including any dividend payable in stock other
than Preferred Stock) or convertible securities, subscription rights or
warrants (excluding those referred to in Section 11(d) hereof), the Purchase
Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the current market price for
one share of Preferred Stock (as defined in Section 11(f) hereof) on such
record date less the fair market value (as determined in good faith by a
majority of the Board of Directors, whose determination shall be described in
a statement filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such convertible
securities, subscription rights or warrants applicable to one share of
Preferred Stock, and the denominator of which shall be such current market
price for one share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(f) (i) For the purpose of any computation hereunder, the
"current market price" of any security (a "Security" for purposes of
this Section 11(f)(i)) on any date shall be deemed to be the average
of the daily closing prices per share of such Security for the 30
consecutive Trading Days (as hereinafter defined) immediately prior to
such date; provided, however, that in the event that the current
market price per share of such Security is determined during a period
following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of such
Security or securities convertible into shares of such Security or (B)
any subdivision, combination or reclassification of such Security, and
prior to the expiration of 30 Trading Days 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 share equivalent of such
Security. The closing price for each day shall be the last sale
14
18
price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Security is not
listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the
principal national securities exchange on which the Security is listed
or admitted to trading or, if the Security is not listed or admitted
to trading on any national securities exchange, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation
System ("Nasdaq") National Market, or if the Security is not listed or
admitted to trading on any national securities exchange or included in
the Nasdaq National Market, 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 Security is 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 Security selected by a majority of the Board of
Directors. If on any such date no market maker is making a market in
the Security, the fair value of such Security on such date as
determined in good faith by a majority of the Board of Directors shall
be used. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the Security is listed
or admitted to trading is open for the transaction of business or, if
the Security is not listed or admitted to trading on any national
securities exchange a day on which the Nasdaq National Market is open
for the transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange or included in
the Nasdaq National Market, a Business Day. If the Security is not
publicly held or not so listed or traded, "current market price" shall
mean the fair value as determined in good faith by a majority of the
Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent.
(ii) For the purpose of any computation hereunder, the
"current market price" per share (or one one-thousandth of a share) of
Preferred Stock shall be determined in the same manner as set forth
above for the Common Stock in clause (i) of this Section 11(f) (other
than the last sentence thereof). If the current market price per share
(or one one-thousandth of a share) of Preferred Stock cannot be
determined in the manner provided above or if the Preferred Stock is
not publicly held or listed or traded in a manner described in clause
(i) of this Section 11(f), the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an amount equal to
1,000 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to
the Common Stock occurring after the date of this Rights Agreement)
multiplied by the current market price per share of the Common Stock
and the "current market price" per one one-thousandth of a share of
Preferred Stock shall be equal to the current market price per share
of the Common Stock (as appropriately adjusted). If neither the Common
Stock nor the Preferred Stock is publicly held or so listed or traded,
"current market price" per share shall mean the fair value per share
as determined in good faith by the Board of Directors, whose
determination shall be
15
19
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(g) 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(g) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth
of a share, as the case may be. Notwithstanding the first sentence of this
Section 11(g), 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 mandates such adjustment or (ii) the Expiration Date.
(h) In the event that at any time, as a result of an
adjustment made pursuant to Section 11(a) or (b) hereof, the holder of any
Right shall be entitled to receive upon exercise of such Right any shares of
capital stock of the Company other than shares of Preferred Stock, thereafter
the number of such other shares so receivable upon exercise of any Right shall
be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares
contained in Section 11(a) through (e) hereof, inclusive, and the provisions
of Sections 7, 9, 10, 13 and 14 hereof with respect to the shares of Preferred
Stock shall apply on like terms to any such other shares.
(i) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of one one-thousandths
of a share of Preferred Stock or other capital stock of the Company
purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment of the Purchase Price.
(j) Unless the Company shall have exercised its election as
provided in Section 11(k) hereof, upon each adjustment of the Purchase Price
as a result of the calculations made in Section 11(d) and (e) hereof, each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-thousandths of a share of Preferred Stock (calculated
to the nearest ten-thousandth) obtained by (i) multiplying (A) the number of
one one-thousandths of a share of Preferred Stock covered by a Right
immediately prior to the adjustment by (B) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(k) 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 shares of Preferred Stock
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-thousandths of a share of Preferred Stock for which such Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase
16
20
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(k), 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 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 may bear, at the option of the Company,
the adjusted Purchase Price) and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in the
public announcement.
(l) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Preferred Stock issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of shares which were
expressed in the initial Right Certificates issued hereunder.
(m) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the shares of
Common Stock or other securities and below one one-thousandth of the then par
value, if any, of the Preferred Stock, 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 nonassessable shares of such Preferred Stock, Common Stock or
other securities at such adjusted Purchase Price. If upon any exercise of the
Rights, a holder is to receive a combination of Common Stock and common stock
equivalents, a portion of the consideration paid upon such exercise, equal to
at least the then par value of a share of Common Stock of the Company, shall
be allocated as the payment for each share of Common Stock of the Company so
received.
(n) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the shares of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due ββββ or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
17
21
(o) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment a majority
of the Board of Directors shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly
for cash of any Preferred Stock at less than the then current market price,
(iii) issuance wholly for cash of Preferred Stock or securities which by their
terms are convertible into or exchangeable for Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to
hereinabove in this Section 11, hereafter made by the Company to the holders
of its Preferred Stock, shall not be taxable to such stockholders.
(p) In the event that at any time after the date of this
Rights Agreement and prior to the Distribution Date, the Company shall (i)
declare or pay any dividend on the Common Stock payable in shares of Common
Stock or (ii) effect a subdivision, combination or consolidation of the Common
Stock (by reclassification or otherwise than by payment of dividends in shares
of Common Stock) into a greater or lesser number of shares of Common Stock,
then in any such case (y) the number of one one-thousandths of a share of
Preferred Stock purchasable after such event upon proper exercise of each
Right shall be determined by multiplying the number of one one-thousandths of
a share of Preferred Stock so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately before such event and the denominator of which is the
number of shares of Common Stock outstanding immediately after such event, and
(z) each share of Common Stock outstanding immediately after such event shall
have issued with respect to it that number of Rights which each share of
Common Stock outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section 11(p) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
(q) The Company covenants and agrees that it shall not, at any
time after the Distribution Date and so long as the Rights have not been
redeemed pursuant to Section 23 hereof or exchanged pursuant to Section 24
hereof, (i) consolidate with, (ii) merge with or into, or (iii) sell or
transfer, in one or more transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any 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.
(r) The Company covenants and agrees that, after the Stock
Acquisition Date, it will not, except as permitted by Sections 23 and 24
hereof, take any action the purpose or effect of which is to diminish
substantially or otherwise eliminate the benefits intended to be afforded by
the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 or 13
hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment, and a brief statement of the facts
18
22
accounting for such adjustment, (b) promptly file with the Rights Agent and with
each transfer agent for the Preferred Stock and the Common Stock a copy of such
certificate and (c) include a brief summary thereof in a mailing to each holder
of a Right Certificate in accordance with Section 26 hereof, or prior to the
Distribution Date, disclose a brief summary in a filing under the Exchange Act.
The Rights Agent shall be fully protected in relying on any such certificate and
on any adjustments therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
(a) In the event that, directly or indirectly, at any time
after a Person has become an Acquiring Person, (x) the Company shall consolidate
with, or merge with and into, any other Person, (y) any Person shall consolidate
with or merge with and into the Company, and the Company shall be the continuing
or surviving corporation of such merger and, in connection with such merger, all
or part of the Common Stock shall be changed into or exchanged for stock or
other securities of any other Person (or the Company) or cash or any other
property, or (z) the Company shall sell, or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one 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 other than to the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right, subject to Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price multiplied by the then number of one one-thousandths of a
share of Preferred Stock for which a Right is then exercisable (or if a Section
11(b) Event has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such one one-thousandths of a share for which a Right
was exercisable immediately prior to the first occurrence of a Section 11(b)
Event by the Purchase Price in effect immediately prior to such first
occurrence) in accordance with the terms of this Rights Agreement, in lieu of
Preferred Stock, such number of shares of freely tradable Common Stock of the
Principal Party (as hereinafter defined), free and clear of liens, rights of
call or first refusal, encumbrances or other adverse claims, as shall be equal
to the result obtained by (A) multiplying the then current Purchase Price by the
number of one one-thousandths of a share of Preferred Stock for which a Right is
then exercisable (or if a Section 11(b) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such one
one-thousandths of a share for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(b) Event by the Purchase Price in effect
immediately prior to such first occurrence), and dividing that product by (B)
50% of the current market price per share of the Common Stock of such Principal
Party (determined in the manner described in Section 11(f) hereof) on the date
of consummation of such consolidation, merger, sale or transfer; (ii) the
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 Rights Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof, except for the provisions of
11(b), shall apply to such Principal Party; and (iv) such Principal Party shall
take such steps (including, but not limited to, the authorization and
reservation of a sufficient number of shares of its Common Stock to permit
exercise of all outstanding Rights in accordance with this Section 13(a)) in
connection with such
19
23
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
shares of its Common Stock thereafter deliverable upon the exercise of the
Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a) hereof, the
Person that is the issuer of any securities into which shares of Common
Stock of the Company are converted in such merger or consolidation, and
if no securities are so issued, the Person, including the Company, that
is the other party to the merger or consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a) hereof, 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 case described in clause (i) or (ii) in
this Section 13(b), (x) if the Common Stock of such Person is not at
such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person
is a direct or indirect Subsidiary or Affiliate of another Person,
"Principal Party" shall refer to such other Person; (y) in case such
Person is a Subsidiary, directly or indirectly, or Affiliate of more
than one Person, the Common Stocks of all of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Stock having the greatest aggregate market
value, and (z) in case such Person is, or is owned directly or
indirectly by, a partnership or joint venture formed by two or more
Persons that are not owned, directly or indirectly, by the same Person,
the rules set forth in (x) and (y) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such
party were a "Subsidiary" of both or all of such joint venturers and the
Principal Parties in each such chain shall bear the obligations set
forth in this Section 13 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of shares of its authorized Common Stock 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 each Principal
Party and each other Person who may become a Principal Party as a result of such
consolidation, merger, sale or transfer 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, sale or transfer of
assets mentioned in paragraph (a) of this Section 13, the Principal Party will:
(i) prepare and file a registration statement under
the Securities Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, will use
its best efforts to cause such registration statement to become
effective as soon as practicable after such filing and will use its best
efforts to
20
24
cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Securities Act) until the
Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights under
the "blue sky laws" of such jurisdictions as may be necessary or
appropriate; and
(iii) will 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 a Section 13 Event shall occur at any time after the occurrence of a
Section 11(b) Event, the Rights which have not theretofore been exercised shall
thereafter also become exercisable in the manner described in Section 13(a)
hereof.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights 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 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 New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading 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, as reported by the Nasdaq National Market or,
if the Rights are not listed or admitted to trading on any national securities
exchange or included in the Nasdaq National Market, 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 a majority of the Board
of Directors. 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
a majority of the Board of Directors shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one one-thousandth of a share of
21
25
Preferred Stock) upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock).
Fractions of shares of Preferred Stock in integral multiples of one
one-thousandth of a share of Preferred Stock 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 shares of Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-thousandth of a share of Preferred Stock, the
Company may pay to the registered holders of Right Certificates at the time such
Right Certificates are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one one-thousandths of a share
of Preferred Stock. For purposes of this Section 14(b), the current market value
of one one-thousandth of a share of Preferred Stock shall be one one-thousandth
of the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(f)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) Following the occurrence of one of the transactions or
events specified in Section 11 hereof giving rise to the right to receive common
stock equivalents (other than Preferred Stock) or other securities upon the
exercise of a Right, the Company shall not be required to issue fractions of
shares or units of such common stock equivalents or other securities upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of such common stock equivalents or other securities. In lieu of
fractional shares or units of such common stock equivalents or other securities,
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 a share or unit of such common stock
equivalent or other securities. For purposes of this Section 14(c), the current
market value shall be determined in the manner set forth in Section 11(f) hereof
for the Trading Day immediately prior to the date of such exercise and, if such
common stock equivalent is not traded, each such common stock equivalent shall
have the value of one one-thousandth of a share of Preferred Stock.
(d) Except as otherwise expressly provided in this Section
14, the holder of a Right by the acceptance of the Right expressly waives such
holder's right to receive any fractional Rights or any fractional share upon
exercise of Rights.
Section 15. Rights of Action. All rights of action in respect of
this Rights Agreement, except for rights of action given to the Rights Agent
under Section 18 or Section 20 hereof, are vested in the respective registered
holders of the Right Certificates (and, prior to the Distribution Date, the
registered holders of Common Stock); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Stock), without
the consent of the Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Stock), may, in such holder's
own behalf and for such holder's own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, such holder's right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this
22
26
Rights 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 Rights
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 Rights Agreement. Holders of Rights
shall be entitled to recover the reasonable costs and expenses, including
attorneys' fees, incurred by them in any action to enforce the provisions of
this Rights 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 Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the stockholder services office of the Rights Agent or such office designated
for such purpose, 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 Stock Certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Preferred Stock, Common
Stock 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 such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such 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 Rights
Agreement and the exercise and performance of its duties hereunder.
23
27
The Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without gross
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 Rights Agreement, including the costs and expenses of
defending against any claim of liability. The provisions of this Section 18(a)
shall survive the expiration of the Rights and the termination of this Rights
Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Rights Agreement in reliance upon any
Right Certificate or certificate for Preferred Stock, Common Stock 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.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
corporate trust powers or business or the stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights Agent
under this Rights Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such Person
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Rights Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such 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 Rights 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 Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Rights 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:
24
28
(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
Rights 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 the Chairman of
the Board and Chief Executive Officer, President and Chief Operating Officer,
any Executive Vice President, or any Vice President and by the Treasurer or any
Assistant Treasurer or the Secretary or any Assistant Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Rights Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its
own gross 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 Rights 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 Rights 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 Rights Agreement or in
any Right Certificate; nor shall it be responsible for any adjustment required
under the provisions of Sections 11 or 13 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after actual notice to the
Rights Agent of any such adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Preferred Stock or other securities to be issued
pursuant to this Rights Agreement or any Right Certificate or as to whether any
shares of Preferred Stock or other securities will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Chairman of the Board and
25
29
Chief Executive Officer, President and Chief Operating Officer, any Executive
Vice President, or any Vice President, the Secretary, any Assistant Secretary,
the Treasurer or any Assistant 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.
(h) The Rights Agent and any stockholder, director, officer,
employee, agent or representative of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely
as though it were not the Rights Agent under this Rights 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 that reasonable care was exercised
in the selection and continued employment thereof.
(j) No provision of this Rights Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise 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,
clause 2 and/or, in the case of the certificate attached to the form of election
to purchase, clause 3 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise of 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
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and to the holders of the 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 Stock and
Preferred Stock by registered or certified mail, and to the holders of the Right
Certificates by first-class mail or, prior to the Distribution Date, through any
filing made by the Company pursuant to the Exchange Act. 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
26
30
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (which holder
shall, with such notice, submit such holder's Right Certificate for inspection
by the Company), then the Rights Agent or 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) a corporation or other entity organized
and doing business under the laws of the United States or of any state, in good
standing, having an office in the States of New York or Maryland, which is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authority, or
(b) an affiliate of a corporation or other entity described in clause (a) of
this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and Preferred Stock, and mail a notice thereof in writing to
the registered holders of the Right Certificates or, prior to the Distribution
Date, through any filing made by the Company pursuant to the Exchange Act.
Failure to give any notice provided for 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.
(a) Notwithstanding any of the provisions of this Rights
Agreement or of the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form as may be approved
by a majority of the Board of Directors then in office to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares of
stock or other securities or property purchasable under the Right Certificates
made in accordance with the provisions of this Rights Agreement.
(b) In addition, in connection with the issuance or sale of
Common Stock following the Distribution Date and prior to the redemption,
exchange or expiration of the Rights, the Company (a) shall with respect to
shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee benefit plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors, issue Right Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) no
such Right Certificates shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the Person to whom such
Right Certificates would be issued, and (ii) no Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
27
31
Section 23. Redemption and Termination.
(a) A majority of the Board of Directors then in office may,
at its option, at any time prior to the earlier of (i) the Close of Business on
the Stock Acquisition Date or (ii) the Close of Business on the Final Expiration
Date, elect to redeem all but not less than all of the then outstanding Rights
at a redemption price of $0.01 per Right, as 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"). The redemption of the Rights by the Board of Directors may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
(b) Immediately upon the action of a majority of the Board
of Directors then in office electing to redeem the Rights, evidence of which
shall be promptly filed with the Rights Agent, or, when appropriate, immediately
upon the time or satisfaction of such conditions as the Board of Directors may
have established, 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. The Company shall
promptly give public disclosure of any such redemption; provided, however, that
the failure to give, or any defect in, any such disclosure shall not affect the
validity of such redemption. Within 10 days after the action of the Board of
Directors 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 Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made.
(c) Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23 or in
Section 24 hereof and other than in connection with the purchase of Common Stock
prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors may, at its option, at any time
after any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become null and void pursuant to the provisions of Section 7(e) hereof) for
Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect adjustments in the number of Rights pursuant
to Section 11 of this Rights Agreement (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board
of Directors shall not be empowered to effect such exchange at any time after
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan or compensation arrangement of the Company or any such Subsidiary,
or any entity holding securities of the Company to the extent organized,
appointed or established by the Company or any such Subsidiary for or pursuant
to the terms of any such employee benefit plan or compensation arrangement),
together with all
28
32
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Voting Power of the Company.
(b) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company promptly shall give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of Common Stock for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Stock (or equivalent preferred
stock, as such term is defined in Section 11(d) hereof) for Common Stock
exchangeable for Rights, at the initial rate of one one-thousandth of a share of
Preferred Stock (or equivalent preferred stock) for each share of Common Stock,
as appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Stock pursuant to the terms thereof, so that the fraction of a share
of Preferred Stock delivered in lieu of each share of Common Stock shall have
the same voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient shares
of Common Stock or Preferred Stock (or equivalent preferred stock) issued but
not outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional shares of Common Stock or
Preferred Stock (or equivalent preferred stock) for issuance upon exchange of
the Rights.
(e) The Company shall not be required to issue fractions of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of such fractional shares of Common Stock, the Company
shall pay to the registered holders of the Right Certificates with regard to
which such fractional shares of Common Stock would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a whole
share of Common Stock. For the purposes of this paragraph (e), the current
market value of a whole share of Common Stock shall be the closing price of a
share of Common Stock (as determined pursuant to the second sentence of Section
11(f)(i) hereof) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 24.
Section 25. Notice of Proposed Actions.
29
33
(a) 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 the Preferred Stock or to make any other distribution to the holders
of the Preferred Stock (other than a regular periodic cash dividend out of
earnings or retained earnings of the Company), (b) to offer to the holders of
the Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any other class or
any other securities, rights or options, (c) to effect any reclassification of
the Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), (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 sales 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, (e) to effect the liquidation, dissolution or winding up of the Company,
or (f) to declare or pay any dividend on the Common Stock payable in Common
Stock or to effect a subdivision, combination or consolidation of the Common
Stock (by reclassification or otherwise than by payment of dividends in Common
Stock), then, in each such case, the Company shall give to each holder of a
Right, in accordance with Section 26 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
Common Stock and/or Preferred Stock, if any such date is to be fixed. Such
notice shall be so given in the case of any action covered by clauses (a) or (b)
above at least ten days prior to the record date for determining holders of the
Preferred Stock for purposes of such action, and in the case of any such other
action, at least ten days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of Preferred Stock,
whichever shall be the earlier. The failure to give notice required by this
Section 25 or any defect therein shall not affect the legality or validity of
the action taken by the Company or the vote upon any such action.
(b) In case a Section 11(b) Event shall occur, then the
Company shall as soon as practicable thereafter give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of the occurrence of
such event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(b) hereof.
Section 26. Notices. Notices or demands authorized by this
Rights 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:
United Therapeutics Corporation
ββββ ββββββ ββββββ
ββββββ ββββββ, ββββββββ βββββ
Attention: Chief Executive Officer
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Rights Agreement to be given or made by the Company or by the holder of
any Right Certificate to or on
30
34
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:
The Bank of New York
βββ βββββββ ββββββ
βββββ βββ
βββ ββββ, βββ ββββ βββββ
Attention: Stock Transfer Administration
Notices or demands authorized by this Rights 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 27. Supplements and Amendments. The Company may from
time to time supplement or amend this Rights Agreement without the approval of
any holders of Right Certificates in order (a) to cure any ambiguity, (b) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (c) to shorten or lengthen any
time period hereunder (including without limitation to extend the Final
Expiration Date), (d) increase or decrease the Purchase Price, or (e) to change
or supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable; provided, however, that from and after such time as any
Person becomes an Acquiring Person, this Rights Agreement shall not be amended
in any manner which would adversely affect the interests of the holders of
Rights; provided further that this Rights Agreement may not be supplemented or
amended to lengthen pursuant to clause (c) of this sentence, (A) the time period
relating to when the Rights may be redeemed at such time as the Rights are not
then redeemable, or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of the Rights; provided further that the Company shall
have the right to make unilaterally any changes necessary to facilitate the
appointment of a successor Rights Agent, which such changes shall be set forth
in a writing by the Company or by the Company and such successor Rights Agent.
Without limiting the foregoing, the Company may at any time prior to such time
as any Person becomes an Acquiring Person amend this Rights Agreement to lower
the thresholds set forth in Sections 1(a) and 3(a) hereof from 15% to not less
than the greater of (i) any percentage greater than the largest percentage of
the Voting Power of the Company then known by the Company to be beneficially
owned by any Person (other than the Company, any Subsidiary of the Company, or
any employee benefit plan or compensation arrangement of the Company or any
Subsidiary of the Company, and any entity holding securities of the Company to
the extent organized, appointed or established by the Company or any such
Subsidiary for or pursuant to the terms of any such employee benefit plan or
compensation arrangement) together with all Affiliates and Associates of such
Person and (ii) 10%. 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 27, the Rights Agent shall execute
such supplement or amendment. Notwithstanding any other provision hereof, the
Rights Agent's consent must be obtained
31
35
regarding any amendment or supplement pursuant to this Section 27 which alters
the Rights Agent's rights or duties.
Section 28. Successors. All the covenants and provisions of this
Rights Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of This Rights Agreement. Nothing in this
Rights Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Stock) any legal or equitable
right, remedy or claim under this Rights Agreement; but this Rights 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 Stock).
Section 30. Severability. If any term, provision, covenant or
restriction of this Rights 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 Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated. It is the intent of the parties hereto to enforce the
remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement to the maximum extent permitted by law.
Section 31. Governing Law. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State; provided, however, that the
rights, duties and obligations of the Rights Agent hereunder shall be governed
and construed in accordance with the laws of the State of New York. The parties
hereto waive the right to a jury trial in any action arising out of this
Agreement. Any dispute arising out of this Agreement. Any dispute arising out of
this Agreement shall be litigated in the borough of Manhattan, New York City,
New York, and the parties hereby submit to the jurisdiction of such courts and
acknowledge that such courts are a convenient forum.
Section 32. Counterparts. This Rights 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 Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
32
36
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
Attest: UNITED THERAPEUTICS CORPORATION
By_______________________ By /s/βββββββ β. βββββββββ
-----------------------
Name:____________________ Name: βββββββ β. βββββββββ
Title:_____________________ Title: Chief Executive Officer
Attest: THE BANK OF NEW YORK
By_______________________ By /s/βββββββ ββββββββ
-----------------------
Name:____________________ Name: βββββββ ββββββββ
Title:_____________________ Title: Assistant Vice President
33
37
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF SERIES A
JUNIOR PARTICIPATING PREFERRED STOCK
OF
UNITED THERAPEUTICS CORPORATION
PURSUANT TO SECTION 151(g) OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE
We, _________, [NAME OF OFFICE], and __________, [NAME OF
OFFICE], of United Therapeutics Corporation, a corporation organized and
existing under the General Corporation Law of the state of Delaware (the
"DGCL"), in accordance with the provisions of Section 151(g) thereof, DO HEREBY
CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Amended and Restated Certificate of Incorporation of the
Company, the said Board of Directors on December __, 2000, adopted the following
resolution creating a series of One Hundred Thousand (100,000) shares of
Preferred Stock designated as Series A Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Company in accordance with the provisions of its Amended and
Restated Certificate of Incorporation, as amended, a series of Preferred Stock
of the company be and it hereby is created, and that the designation and amount
thereof and the powers, preferences and relative, participating, optional and
other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Section 1. Designation and Amount.
There shall be a series of the Preferred Stock which shall be
designated as the "Series A Junior Participating Preferred Stock," par value
$0.01 per share, and the number of shares constituting such series shall be
100,000. Such number of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall reduce the number of
shares of Series A Junior Participating Preferred Stock to a number less than
that of the shares then outstanding plus the number of shares issuable upon
exercise of outstanding rights, options or warrants or upon conversion of
outstanding securities issued by the Company.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of
any series of preferred stock of the Company ranking prior and superior to the
Series A Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series A Junior Participating Preferred Stock, in
preference to the holders of shares of Common Stock, par value $0.01 per share
of the
34
38
Company (the "Common Stock"), 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 any
regular quarterly dividend payment date as shall be established by the Board of
Directors (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 Junior
Participating 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, 1,000 times the aggregate per share amount of
all cash dividends, and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Junior Participating Preferred Stock.
In the event the Company shall at any time after December 29, 2000 (the "Rights
Declaration Date") declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount to which
holders of shares of Series A Junior Participating 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 Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Company shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series A Junior Participating 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 Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Junior Participating 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
35
39
among all such shares at the time outstanding. The Board of Directors may, in
accordance with applicable law, fix a record date for the determination of
holders of shares of Series A Junior Participating Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than such number of days prior to the date fixed for the
payment thereof as may be allowed by applicable law.
Section 3. Voting Rights.
The holders of shares of Series A Junior Participating Preferred
Stock shall have the following voting rights:
(A) Each share of Series A Junior Participating Preferred
Stock shall entitle the holder thereof to 1,000 votes on all matters submitted
to a vote of the stockholders of the Company. In the event the Company shall at
any time after the Rights Declaration Date declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event
under the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(B) Except as otherwise provided herein, in the Company's
Amended and Restated Certificate of Incorporation or by law, the holders of
shares of Series A Junior Participating Preferred Stock, the holders of shares
of Common Stock, and the holders of shares of any other capital stock of the
Company having general voting rights, shall vote together as one class on all
matters submitted to a vote of stockholders of the Company.
(C) Except as otherwise set forth herein or in the Company's
Amended and Restated Certificate of Incorporation, and except as otherwise
provided by law, holders of Series A Junior Participating Preferred Stock shall
have no special voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever dividends or distributions payable on the
Series A Junior Participating Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Company shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking
3
40
junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, except dividends paid
ratably on the Series A Junior Participating 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;
(iii) except as permitted in Section 4(A)(iv) below,
redeem or purchase or otherwise acquire for consideration shares of any
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior Participating
Preferred Stock, provided that the Company may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Company ranking junior (either
as to dividends or upon dissolution, liquidation or winding up) to the
Series A Junior Participating Preferred Stock; and
(iv) purchase or otherwise acquire for consideration
any shares of Series A Junior Participating Preferred Stock, or any
shares of stock ranking on a parity with the Series A Junior
Participating 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.
(B) The Company shall not permit any subsidiary of the
Company to purchase or otherwise acquire for consideration any shares of stock
of the Company unless the Company could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares.
Any shares of Series A Junior Participating Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. The Company shall
cause all such shares upon their cancellation to be authorized but unissued
shares of Preferred Stock which may be reissued as part of a new series of
Preferred Stock, subject to the conditions and restrictions on issuance set
forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Subject to the rights of the holders of any shares of
any series of Preferred Stock of the Company ranking prior and superior to the
Series A Junior Participating Preferred Stock with respect to liquidation, upon
any liquidation (voluntary or otherwise), dissolution or
4
41
winding up of the Company, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received $1,000.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series A Liquidation Preference"). Following
the payment of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series A
Junior Participating Preferred Stock, unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock dividends, and
subdivisions, combinations and consolidations with respect to the Common Stock)
(such number in clause (ii) being referred to as the "Adjustment Number").
Following the payment of the full amount of the Series A Liquidation Preference
and the Common Adjustment in respect of all outstanding shares of Series A
Junior Participating Preferred Stock and Common Stock, respectively, holders of
Series A Junior Participating Preferred Stock and holders of shares of Common
Stock shall receive their ratable and proportionate share of the remaining
assets to be distributed in the ratio of the Adjustment Number to 1 with respect
to such Series A Junior Participating Preferred Stock and Common Stock, on a per
share basis, respectively.
(B) In the event there are not sufficient assets available
to permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of preferred stock, if any, which
rank on a parity with the Series A Junior Participating Preferred Stock, then
such remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the event
there are not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed ratably to
the holders of Common Stock.
(C) In the event the Company shall at any time after the
Rights Declaration Date declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the Adjustment Number
in effect immediately prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. Consolidation, Merger, etc.
In case the Company shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Series A Junior Participating
Preferred Stock shall at the same time be similarly exchanged or changed in an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 1,000
5
42
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Company shall at any time
after the Rights Declaration Date declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that are
outstanding immediately prior to such event.
Section 8. Redemption.
The shares of Series A Junior Participating Preferred Stock
shall not be redeemable.
Section 9. Ranking.
The Series A Junior Participating Preferred Stock shall rank
junior to all other series of the Company's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.
Section 10. Fractional Shares.
Series A Junior Participating Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Junior Participating Preferred Stock."
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of perjury
this ____th day of December, 2000.
By:_________________________
Name: [NAME OF OFFICER]
Title: [OFFICE]
Attest
By:_________________________
Name: [NAME OF OFFICER]
Title: [OFFICE]
6
43
Exhibit B
[Form of Right Certificate]
Certificate No. R-___________ ____ Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE.
AT THE OPTION OF THE COMPANY, THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $0.01 PER RIGHT OR
EXCHANGE FOR COMMON STOCK, UNDER THE
CIRCUMSTANCES AND ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON AND 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. THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
ARE VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
Right Certificate
UNITED THERAPEUTICS 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 Rights Agreement
dated as of December 17, 2000 (the "Rights Agreement") between United
Therapeutics Corporation, a Delaware corporation (the "Company"), and The Bank
of New York, an New York banking corporation (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 p.m. Silver Spring, Maryland
time, on the Expiration Date, as that term is defined in the Rights Agreement,
at the stockholder services office (or such office designated for such purpose)
of the Rights Agent, or its successor as Rights Agent, one one-thousandth of a
fully paid, nonassessable share of the Series A Junior Participating Preferred
Stock, par value $0.01 per share ("Preferred Stock"), of the Company, at a
purchase price of $129.50 per one one-thousandth of a share (the "Purchase
Price") upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase duly executed. The number of Rights evidenced by this
Right Certificate (and the number of shares which may be purchased upon exercise
of each Right) and the Purchase Price set forth above, are
-----------------------
* The portion of the legend in brackets shall be inserted only if applicable.
44
the number and Purchase Price as of _________, _____based on the shares of
Preferred Stock of the Company as constituted at such date.
The Purchase Price and the number of shares of Preferred Stock which may
be purchased upon the exercise of each of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events as provided in the Rights Agreement.
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 Company and the
above-mentioned office of the Rights Agent and are also available upon written
request to the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the stockholder services office (or such office designated for
such purpose) of the Rights Agent, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of shares of
Preferred Stock 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 be redeemed by the Company at its option at a
redemption price of $0.01 per Right on or prior to the Stock Acquisition Date
(as defined in the Rights Agreement). In addition, subject to the provisions
of the Rights Agreement, each Right evidenced by this Certificate may be
exchanged by the Company at its option for one share of Common Stock following
the Stock Acquisition Date and prior to the time an Acquiring Person, as that
term is defined in the Rights Agreement, owns 50% or more of the Voting Power,
as that term is defined in the Rights Agreement, of the Company.
No fractional shares of Preferred Stock will be issued upon the exercise
of any Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock, which may, at
the election of the Company, be evidenced by depositary receipts). In lieu of
fractions of a share, a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of Preferred Stock
or of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or
2
45
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise,
until the Rights evidenced by this 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 __________, _____.
Attest: UNITED THERAPEUTICS CORPORATION
By_______________________ By_______________________
Name:____________________ Name:____________________
Title:_____________________ Title:_____________________
Countersigned:
THE BANK OF NEW YORK
By:________________________
Authorized signature
3
46
[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 must conform in all
respects to name of holder as
specified on the face of this Right
Certificate)
Signature Guaranteed:
Signatures must be guaranteed by a member or a participant in the
Securities Transfer Agent Medallion Program, the New York Stock Exchange
Medallion Signature Program or the Stock Exchange Medallion Program.
4
47
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);
(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
(Signature must conform in all
respects to name of holder as
specified on the face of this
Right Certificate)
5
48
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To UNITED THERAPEUTICS CORPORATION:
The undersigned hereby irrevocably elects to exercise _____________ Rights
represented by this Right Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of such Rights and requests that certificates for
such shares be issued in the name of:
Name:
----------------------
Address:
-------------------
Social security or taxpayer identification
number:
--------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Name:
----------------------
Address:
-------------------
Social security or taxpayer identification
number:
--------------------
Dated:
------------------ -----------------------------------
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this Right
Certificate)
Signature Guaranteed:
Signatures must be guaranteed by a member or a participant in
the Securities Transfer Agent Medallion Program, the New York Stock Exchange
Medallion Signature Program or the Stock Exchange Medallion Program.
6
49
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 such Acquiring Person (as such
terms are defined pursuant to the Rights Agreement);
(2) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(3) 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 became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:
--------------- -----------------------------------
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this Right
Certificate)
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the form of Assignment
or the form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and such Assignment
or Election to Purchase will not be honored as described in Section 7(e) of
the Rights Agreement.
7
50
Exhibit C
UNITED THERAPEUTICS CORPORATION
SUMMARY OF PREFERRED STOCK
PURCHASE RIGHTS
On December 17, 2000, the Board of Directors of United Therapeutics
Corporation (the "Company") declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of Common Stock, par
value $0.01 per share, of the Company (the "Common Stock"). The dividend
distribution is payable on December 29, 2000, (the "Record Date") to the
stockholders of record on that date. Each Right entitles the registered holder
to purchase from the Company one one-thousandth of a share of Series A Junior
Participating Preferred Stock, par value $0.01 per share (the "Preferred
Stock") of the Company at a price of $129.50 per one one-thousandth of a share
of Preferred Stock (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement dated
as of December 17, 2000, as the same may be amended from time to time (the
"Rights Agreement"), between the Company and The Bank of New York, as Rights
Agent (the "Rights Agent").
Until the earlier to occur of (i) the close of business on the tenth
business day following the date of public announcement or the date on which
the Company first has notice or determines that a person or group of
affiliated or associated persons (other than the Company, any subsidiary of
the Company or any employee benefit plan of the Company) (an "Acquiring
Person") has acquired, or obtained the right to acquire, 15% or more of the
outstanding shares of voting stock of the Company without the prior express
written consent of the Company executed on behalf of the Company by a duly
authorized officer of the Company following express approval by action of at
least a majority of the members of the Board of Directors then in office (the
"Stock Acquisition Date") or (ii) the close of business on the tenth business
day (or such later date as may be determined by action of the Board of
Directors but not later than the Stock Acquisition Date) following the
commencement of a tender offer or exchange offer, without the prior written
consent of the Company, by a person (other than the Company, any subsidiary of
the Company or an employee benefit plan of the Company and certain affiliated
entities) which, upon consummation, would result in such party's control of
15% or more of the Company's voting stock (the earlier of the dates in clause
(i) or (ii) above being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Stock certificates outstanding as
of the Record Date, by such Common Stock certificates.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Company's Common Stock. Until the
Distribution Date (or earlier redemption, exchange or expiration of the
Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuances of Common Stock will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption, exchange or expiration of the Rights), the surrender
for transfer of any certificates for shares of Common Stock outstanding as of
the Record Date, even without such notation or a copy of this Summary
51
of Rights, will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of
the close of business on the Distribution Date and such separate certificates
alone will then evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire, if not previously exercised, on December 29, 2010 (the "Final
Expiration Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company.
The Purchase Price payable, and the number of shares of Preferred Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event
of a stock dividend on, or a subdivision, combination or reclassification of
the Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or purchase Preferred Stock at a
price, or securities convertible into Preferred Stock with a conversion price,
less than the then-current market price of the Preferred Stock or (iii) upon
the distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular periodic cash dividends or dividends
payable in Preferred Stock) or of subscription rights or warrants (other than
those referred to above).
The number of outstanding Rights and the number of one one-thousandths
of a share of Preferred Stock issuable upon exercise of each Right are also
subject to adjustment in the event of a stock split of the Common Stock or a
stock dividend on the Common Stock payable in shares of Common Stock or
subdivisions, consolidations or combinations of the Common Stock occurring, in
any such case, prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights will
not be redeemable and junior to any other series of preferred stock the
Company may issue (unless otherwise provided in the terms of such stock). Each
share of Preferred Stock will have a preferential dividend in an amount equal
to 1,000 times any dividend declared on each share of Common Stock. In the
event of liquidation, the holders of the Preferred Stock will receive a
preferred liquidation payment of equal to the greater of $1,000 and 1,000
times the payment made per share of Common Stock. Each share of Preferred
Stock will have 1,000 votes, voting together with the Common Stock. In the
event of any merger, consolidation or other transaction in which shares of
Common Stock are converted or exchanged, each share of Preferred Stock will be
entitled to receive 1,000 times the amount and type of consideration received
per share of Common Stock. The rights of the Preferred Stock as to dividends,
liquidation and voting, and in the event of mergers and consolidations, are
protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the value of the one one-thousandth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
If any person or group (other than the Company, any subsidiary of the
Company, any employee benefit plan of the Company) acquires 15% or more of the
Company's outstanding
2
52
voting stock without the prior written consent of the Board of Directors, each
Right, except those held by such persons, would entitle each holder of a Right
to acquire such number of shares of the Company's Common Stock as shall equal
the result obtained by multiplying the then current Purchase Price by the
number of one one-thousandths of a share of Preferred Stock for which a Right
is then exercisable and dividing that product by 50% of the then current
per-share market price of Company Common Stock.
If any person or group (other than the Company, any subsidiary of the
Company, any employee benefit plan of the Company) acquires more than 15% but
less than 50% of the outstanding Company Common Stock without prior written
consent of the Board of Directors, each Right, except those held by such
persons, may be exchanged by the Board of Directors for one share of Company
Common Stock.
If the Company were acquired in a merger or other business combination
transaction where the Company is not the surviving corporation or where
Company Common Stock is exchanged or changed or 50% or more of the Company's
assets or earnings power is sold in one or several transactions without the
prior written consent of the Board of Directors, each Right would entitle the
holders thereof (except for the Acquiring Person) to receive such number of
shares of the acquiring company's common stock as shall be equal to the result
obtained by multiplying the then current Purchase Price by the number one
one-thousandths of a share of Preferred Stock for which a Right is then
exercisable and dividing that product by 50% of the then current market price
per share of the common stock of the acquiring company on the date of such
merger or other business combination transaction.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock will be issued
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts), and in lieu thereof an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading day prior to the date of exercise.
At any time prior to the time an Acquiring Person becomes such, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $0.01 per Right (the "Redemption Price"). The redemption
of the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including, but not
limited to, an amendment to lower certain thresholds described above to not
less than the greater of (i) any percentage greater than the largest
percentage of the voting power of all securities of the Company then known to
the Company to be beneficially owned by any person or group of affiliated or
associated persons and (ii) 10%, except that from and after such time as any
person
3
53
or group of affiliated or associated persons becomes an Acquiring Person no
such amendment may adversely affect the interests of the holders of the
Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Current Report on Form 8-K dated
December 18, 2000. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, as the same may be amended from time to time, which is hereby
incorporated herein by reference.
4