EXHIBIT 4.1
AMENDED AND RESTATED
RIGHTS AGREEMENT
Dated as of October 15, 2001
between
▇▇▇▇▇▇▇▇▇▇ LABORATORIES, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
Rights Agent
TABLE OF CONTENTS
Page
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Section 1. Certain Definitions 2
Section 2. Appointment of Rights Agent 5
Section 3. Issue of Rights and Right Certificates 5
Section 4. Form of Right Certificates 7
Section 5. Execution, 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; Expiration Date of Rights 8
Section 8. Cancellation and Destruction of Right Certificates 10
Section 9. Reservation and Availability of Capital Stock 10
Section 10. Preferred Shares Record Date 12
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights 12
Section 12. Certificate of Adjustment 19
Section 13. Consolidation, Merger, or Sale or Transfer of Assets or
Earning Power 19
Section 14. Fractional Rights and Fractional Shares 20
Section 15. Rights of Action 21
Section 16. Agreement of Right Holders 22
Section 17. Right Certificate Holder Not Deemed a Shareholder 22
Section 18. Concerning the Rights Agent 22
Section 19. Merger or Consolidation or Change of Name of Rights Agent 23
Section 20. Duties of Rights Agent 23
Section 21. Change of Rights Agent 25
Section 22. Issuance of New Right Certificates and Additional Rights 26
Section 23. Redemption 26
Section 24. Exchange 27
Section 25. Notice of Certain Events 28
Section 26. Notices 29
Section 27. Supplements and Amendments 29
Section 28. Successors 30
Section 29. Benefits of this Agreement 30
Section 30. Severability 30
Section 31. Governing Law 30
Section 32. Counterparts 30
Section 33. Descriptive Headings 30
Signatures. 31
Exhibit A - Form of Statement of Resolution Establishing and
Designating Series D Preferred Stock of ▇▇▇▇▇▇▇▇▇▇
Laboratories, Inc. A-1
Exhibit B - Form of Right Certificate. B-1
Exhibit C - Summary of Rights to purchase Preferred Shares. C-1
AMENDED AND RESTATED
RIGHTS AGREEMENT
This AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of October 15,
2001 (this "Agreement"), between ▇▇▇▇▇▇▇▇▇▇ LABORATORIES, INC., a Texas
corporation (the "Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY, as
rights agent.
W I T N E S S E T H:
WHEREAS, the Company and Ameritrust Company National Association
("Ameritrust"), as rights agent, previously entered into that certain Rights
Agreement dated as of September 19, 1991 (the "Original Rights Agreement"),
pursuant to which the Company declared a dividend of one right (a "Right")
to purchase one one-hundredth of a share of the Company's Series D Preferred
Stock, $100 par value per share (the "Preferred Stock"), on (i) each share
of the Company's Common Stock, par value $0.01 per share (the "Common
Stock"), outstanding at the close of business on October 15, 1991 (the
"Record Date"), and (ii) the shares of Common Stock that shall become
outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date and the Expiration Date (as those terms are
defined in the Original Rights Agreement);
WHEREAS, as successor in interest to Ameritrust, KeyCorp Shareholder
Services ("KeyCorp") became the successor rights agent under the Original
Rights Agreement;
WHEREAS, effective as of October 21, 1998, the Company removed KeyCorp
as the rights agent and appointed AMERICAN STOCK TRANSFER & TRUST COMPANY
(the "Rights Agent"), the transfer agent of the Company's Common Stock, to
serve as successor rights agent under the Original Rights Agreement;
WHEREAS, the Company and the Rights Agent, as successor rights agent,
entered into Amendment No. 1 to the Original Rights Agreement, dated and
effective as of October 21, 1998 ("Amendment No. 1");
WHEREAS, on September 27, 2001, the Board of Directors of the Company
authorized that the Original Rights Agreement, as amended by Amendment No.
1, be further amended and restated as set forth in this Agreement, which
includes amendments that, among other things, (1) extend the Final
Expiration Date from October 15, 2001 to October 15, 2011; (2) lower the
threshold level of beneficial ownership of the Company's outstanding Common
Stock that triggers exercisability of the Rights from 20% to 15%; (3)
decrease the Purchase Price payable upon exercise of the Rights from $80.00
to $20.00; and (4) provide for the issuance of Rights with respect to shares
of Common Stock that become outstanding after the Distribution Date and
prior to the earlier of the Redemption Date and the Final Expiration Date;
and (5) decrease the Redemption Price payable by the Company for the
redemption of Rights from $.01 to $.001 per Right; and
WHEREAS, the Company desires to set forth the amended and restated
terms and conditions governing the Rights;
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the Common Shares of the Company then outstanding, but
shall not include the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, or any entity
holding Common Shares of the Company for or pursuant to the terms of any
such plan. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common Shares of the
Company by the Company which, by reducing the number of such shares
outstanding, increases the proportionate number of shares beneficially owned
by such Person to 15% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person shall become the Beneficial
Owner of 15% or more of the Common Shares of the Company then outstanding by
reason of share purchases by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any additional
Common Shares of the Company, then such Person shall be deemed to be an
"Acquiring Person." Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this definition, has become such inadvertently, and such
Person divests as promptly as practicable a sufficient number of Common
Shares of the Company so that such Person would no longer be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this definition,
then such person shall not be deemed to be an "Acquiring Person" for any
purposes of this Agreement.
"Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
"Affiliate" and "Associate," when used with reference to any Person,
shall have the respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on
the date of this Agreement.
A Person shall be deemed the "Beneficial Owner" of, and shall be deemed
to "beneficially own," and shall be deemed to have "Beneficial Ownership"
of, any securities:
(i) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or Associates
has (A) the right to acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement, arrangement or
understanding (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 the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act and (2)
is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has 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) for the purpose
of acquiring, holding, voting (except to the extent contemplated by the
proviso in clause (ii)(B) of this definition) 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.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in the State of Texas are authorized or
obligated by law or executive order to close.
"Close of business" on any given date shall mean 5:00 P.M., Dallas,
Texas time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Dallas, Texas time, on the next
succeeding Business Day.
"Common Shares" when used with reference to the Company shall mean the
shares of Common Stock of the Company. "Common Shares" when used with
reference to any Person other than the Company shall mean the capital stock
(or equity interest) with the greatest voting power of such other Person or,
if such other Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.
"Common share equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Common Stock" shall have the meaning set forth in the introductory
paragraphs of this Agreement.
"Distribution Date" shall have the meaning set forth in Section 3(b)
hereof.
"Equivalent preferred shares" shall have the meaning set forth in
Section 11(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as in
effect on the date in question, unless otherwise specifically provided.
"Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
"Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
"Flip-In Event" shall have the meaning set forth in Section 11(a)(ii)
hereof.
"Flip-In Trigger Date" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Flip-Over Event" shall have the meaning set forth in Section 13(a)
hereof.
"Formula Number" shall have the meaning set forth in Section 11(d)(ii)
hereof.
"Person" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such entity.
"Preferred Shares" when used with reference to the Company shall mean
the shares of Preferred Stock of the Company. Any reference in this
Agreement to Preferred Shares shall be deemed to include any authorized
fraction of a Preferred Share, unless the context otherwise requires.
"Preferred Stock" shall have the meaning set forth in the introductory
paragraphs of this Agreement.
"Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
"Purchase Price" with respect to each Right shall mean $20.00, as such
amount may from time to time be adjusted as provided herein, and shall be
payable in lawful money of the United States of America. All references
herein to the Purchase Price shall mean the Purchase Price as in effect at
the time in question.
"Record Date" shall have the meaning set forth in the introductory
paragraphs of this Agreement.
"Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
"Redemption Price" shall have the meaning set forth in Section 23
hereof.
"Right Certificate" shall mean a certificate evidencing a Right in
substantially the form attached to this Agreement as Exhibit B.
"Rights" shall mean the rights to purchase Preferred Shares (or other
securities) as provided in this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as in effect on
the date in question, unless otherwise specifically provided.
"Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person
has become such.
"Statement of Resolution" shall mean the Statement of Resolution
Establishing and Designating Series D Preferred Stock of the Company setting
forth the powers, preferences, rights, qualifications, limitations and
restrictions of such series of Preferred Stock of the Company, a copy of the
form of which is attached to this Agreement as Exhibit A.
"Subsidiary" of any Person shall mean any corporation or other entity
of which a majority of the voting power of the voting equity securities or
equity interest is owned, directly or indirectly, by such Person.
"Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall, prior to the
Distribution Date, also be the holders of the Common Shares) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable.
Section 3. Issue of Rights and Right Certificates.
(a) One Right shall be associated with each Common Share outstanding
on the Record Date, each additional Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date and the Final Expiration Date, and each additional
Common Share with which Rights are issued after the Distribution Date and
prior to the earlier of the Redemption Date and the Final Expiration Date as
provided in Section 22 hereof; provided, however, that if the outstanding
Rights are combined into a smaller number of outstanding Rights pursuant to
Section 11 hereof, the appropriate fractional Right determined pursuant to
such Section shall thereafter be associated with each such Common Share.
(b) Until the earlier of (i) the tenth day after the Shares
Acquisition Date and (ii) the tenth Business Day (or such later date as may
be determined by action of the Board of Directors of the Company prior to
such time as any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Shares of the Company for or pursuant
to the terms of any such plan) of, or of the first public announcement of
the intention of any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Shares of the Company for or pursuant
to the terms of any such plan) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming the Beneficial
Owner of Common Shares aggregating 15% or more of the then outstanding
Common Shares (including any such date which is after the date of this
Agreement and prior to the issuance of the Rights) (the earlier of such
dates being herein referred to as the "Distribution Date"), (x) the Rights
will be evidenced (subject to the provisions of Section 3(c) hereof) by the
certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be Right Certificates)
and not by separate Right Certificates, and (y) the Rights, including the
right to receive Right Certificates, will be transferable only in connection
with the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, insured, postage-
prepaid mail, to each record holder of Common Shares 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 evidencing one whole Right
for each Common Share (or for the number of Common Shares with which one
whole Right is then associated if the number of Rights per Common Share held
by such record holder has been adjusted in accordance with the provision in
Section 3(a) hereof) so held. If the number of Rights associated with each
Common Share has been adjusted in accordance with the proviso in Section
3(a) hereof, at the time of distribution of the Right Certificates, the
Company may make any necessary and appropriate rounding adjustments so that
Right Certificates representing only whole numbers of Rights are distributed
and cash is paid in lieu of any fractional Right in accordance with Section
14 hereof. As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(c) With respect to any certificate for Common Shares outstanding as
of the Record Date, until the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date, the Rights will be evidenced
by such certificates registered in the names of the holders thereof together
with a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form attached to this Agreement as Exhibit C (the "Summary
of Rights"), attached thereto. Until the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date, the surrender for
transfer of any certificate for Common Shares outstanding on the Record
Date, with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.
(d) Certificates issued for Common Shares after the date of this
Agreement (including, without limitation, reacquired Common Shares referred
to in the last sentence of this paragraph (d)), but prior to the earliest of
the Distribution Date, the Redemption Date and the Final Expiration Date,
shall have impressed on, printed on, written on or otherwise affixed to them
the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in an Amended and Restated Rights
Agreement (the "Rights Agreement") dated as of October 15, 2001,
as it may be amended from time to time, between ▇▇▇▇▇▇▇▇▇▇
Laboratories, Inc. and American Stock Transfer & Trust Company, as
Rights Agent, the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal
executive offices of ▇▇▇▇▇▇▇▇▇▇ Laboratories, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be
evidenced by this certificate. ▇▇▇▇▇▇▇▇▇▇ Laboratories, Inc. will
mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request
therefor. Under certain circumstances, as set forth in the Rights
Agreement, Rights beneficially owned by an Acquiring Person or
their Affiliates or Associates (as such terms are defined in the
Rights Agreement) and by any subsequent holder of such Rights are
null and void and nontransferable.
With respect to such certificates containing the foregoing legend, until the
earliest of the Distribution Date, the Redemption Date and the Final
Expiration Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented
thereby. In the event that the Company purchases or acquires any Common
Shares after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed canceled and retired so
that the Company shall not be entitled to exercise any Rights associated
with the Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and
the form of election to purchase and form of assignment to be printed on the
reverse side thereof) shall be in substantially the form attached to this
Agreement as Exhibit B and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any securities exchange on which the Rights may
from time to time be listed or of any automated quotations system of a
national securities association on which the Rights may from time to time be
registered or quoted, or to conform to usage. Subject to the provisions of
Section 22 hereof, the Right Certificates, whenever issued, on their face
shall entitle the holders thereof to purchase such number of one one-
hundredths of a Preferred Share as shall be set forth therein for the
Purchase Price per one one-hundredth of a Preferred Share, subject to
adjustment from time to time as herein provided.
Section 5. Execution, Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President, its Chief Executive Officer, or
any of its Vice Presidents, or its Treasurer, either manually or by
facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The
Right Certificates shall be countersigned manually or by facsimile signature
by the Rights Agent and shall not be valid or obligatory for any purpose
unless countersigned. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such an officer of
the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such an officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at
the date of the execution of this Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, 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 Sections 7(e) and 14 hereof, at any
time after the close of business on the Distribution Date, and at or prior
to the close of business on the earlier of the Redemption Date and the Final
Expiration Date, any Right Certificate or Right Certificates (except as
otherwise provided herein, including, without limitation, Right Certificates
representing Rights that have become null and void and nontransferable
pursuant to Section 7(e) hereof or that have been exchanged pursuant to
Section 24 hereof) may be transferred, split-up, combined or exchanged for
another Right Certificate or Right Certificates representing, in the
aggregate, the same number of Rights as the Right Certificate or Right
Certificates surrendered then represented. Any registered holder desiring
to transfer, split-up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split-up, combined or exchanged at the principal office or
offices of the Rights Agent designated for such purpose; provided, however,
that neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any Right Certificate
surrendered for transfer until the registered holder shall have completed
and signed the certification of status contained in the form of assignment
on the reverse side of such Right Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to Sections
7(e) and 14 hereof, countersign and deliver to the Person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any
transfer, split-up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and,
at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, the
Company will make a new Right Certificate of like tenor and deliver such new
Right Certificate to the Rights Agent for delivery to the registered holder
in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Expiration Date of Rights.
(a) Subject to Section 7(e) hereof and except as otherwise provided
herein (including Section 24 hereof), each Right shall entitle the
registered holder thereof, upon exercise thereof as provided herein, to
purchase for the Purchase Price, at any time after the Distribution Date and
at or prior to the earliest of (i) the close of business on October 15, 2011
(the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date") and (iii)
the time at which such Rights are exchanged as provided in Section 24
hereof, one one-hundredth of a Preferred Share, subject to adjustment from
time to time as provided in Section 11 or 13 hereof.
(b) 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 principal office or
offices of the Rights Agent designated for such purpose, together with
payment of the Purchase Price for each one one-hundredth of a Preferred
Share as to which the Rights are exercised, at or prior to the earliest of
(i) the Final Expiration Date, (ii) the Redemption Date and (iii) the time
at which such Rights are exchanged as provided in Section 24 hereof.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the Preferred Shares (or other securities)
to be purchased and an amount equal to any applicable transfer tax required
to be paid by the holder of such Right Certificate in accordance with
Section 9 hereof, in lawful money of the United States of America, in cash
or by certified check, cashier's check or money order payable to the order
of the Company, the Rights Agent shall thereupon (i) either (A) promptly
requisition from any transfer agent of the Preferred Shares (or make
available, if the Rights Agent is a transfer agent for such shares)
certificates for the number of Preferred Shares to be purchased, and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) if the Company shall have elected to deposit the
Preferred Shares with a depositary agent under a depositary arrangement,
promptly requisition from the depositary agent depositary receipts
representing the number of one one-hundredths of a Preferred Share to be
purchased (in which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent with the
depositary agent), and the Company will direct the depositary agent to
comply with all such requests, (ii) when appropriate, promptly requisition
from the Company the amount of cash to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof, (iii) promptly after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and (iv) when appropriate, after receipt, promptly deliver such cash
to or upon the order of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise fewer 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 and delivered to the registered holder
of such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, any
Rights that are at any time beneficially owned by an Acquiring Person or any
Affiliate or Associate of an Acquiring Person shall be null and void and
nontransferable, and any holder of any such Right (including any purported
transferee or subsequent holder) shall not have any right to exercise or
transfer any such Right.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder of any Right Certificate upon the
occurrence of any purported exercise unless such registered holder shall
have (i) completed and signed the certification of status contained in the
form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall reasonably
request.
(g) The Company may temporarily suspend, for a period of time not to
exceed 90 calendar days after the Distribution Date, the exercisability of
the Rights in order to prepare and file a Registration Statement under the
Securities Act, on appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights and permit such Registration
Statement to become effective; provided, however, that no such suspension
shall remain effective after, and the Rights shall without any further
action by the Company or any other Person become exercisable immediately
upon, the effectiveness of such Registration Statement. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended and shall issue
a further public announcement at such time as the suspension is no longer in
effect. Notwithstanding any provision herein to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification
under the Blue Sky or securities laws of such jurisdiction shall not have
been obtained or the exercise of the Rights shall not be permitted under
applicable law.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split-
up, combination or exchange shall, and any Right Certificate representing
Rights that have become null and void and nontransferable pursuant to
Section 7(e) hereof surrendered or presented for any purpose shall, if
surrendered or presented to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in canceled form, or, if
surrendered or presented 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 Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any Right Certificate purchased or
acquired by the Company. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the
Company, destroy such canceled Right Certificates, and in either such case
shall deliver a certificate of destruction thereof or a certificate of
cancellation thereof, as may be appropriate, to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Preferred Shares or
any authorized and issued Preferred Shares held in it treasury, free from
preemptive rights or any right of first refusal, a number of Preferred
Shares sufficient to permit the exercise in full of all outstanding Rights
in accordance with Section 7 hereof.
(b) In the event that there shall not be sufficient Preferred Shares
issued but not outstanding or authorized but unissued to permit the exercise
or exchange of Rights in accordance with Section 11 or 24 hereof, as the
case may be, the Company covenants and agrees that it will take all such
action as may be necessary to authorize additional Preferred Shares for
issuance upon the exercise or exchange of Rights pursuant to Section 11 or
24 hereof, as the case may be; provided, however, that if the Company is
unable to cause the authorization of additional Preferred Shares, then the
Company shall, or in lieu of seeking any such authorization, the Company
may, to the extent necessary and permitted by applicable law and any
agreements or instruments in effect prior to the Distribution Date to which
it is a party, (i) upon surrender of a Right, pay cash equal to the Purchase
Price in lieu of issuing Preferred Shares and requiring payment therefor,
(ii) upon due exercise of a Right and payment of the Purchase Price for each
Preferred Share as to which such Right is exercised, issue equity securities
having a value equal to the value of the Preferred Shares that otherwise
would have been issuable pursuant to Section 11 or 24 hereof, which value
shall be determined by a nationally recognized investment banking firm
selected by the Board of Directors of the Company, or (iii) upon due
exercise of a Right and payment of the Purchase Price for each Preferred
Share as to which such Right is exercised, distribute a combination of
Preferred Shares, cash and/or other equity and/or debt securities having an
aggregate value equal to the value of the Preferred Shares that otherwise
would have been issuable pursuant to Section 11 or 24 hereof, which value
shall be determined in good faith by the Board of Directors of the Company.
To the extent that any legal or contractual restrictions (pursuant to
agreements or instruments in effect prior to the Distribution Date to which
it is a party) prevent the Company from paying the full amount payable in
accordance with the foregoing sentence, the Company shall pay to holders of
the Rights as to which such payments are being made all amounts that are not
then restricted on a pro rata basis as such payments become permissible
under such legal or contractual restrictions until such payments have been
paid in full.
(c) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares delivered upon
exercise or exchange of Rights shall, at the time of delivery of the
certificates for such Preferred Shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(d) So long as the Preferred Shares issuable upon the exercise or
exchange of Rights may be listed on any national securities exchange or
automated quotations system of a registered national securities association
on which the Preferred Shares may from time to time be listed, traded or
quoted, the Company covenants and agrees that it will use reasonable efforts
to cause, from and after such time as the Rights become exercisable or
exchangeable, all Preferred Shares reserved for such issuance to be listed
on such exchange or approved for quotation in such quotation system, upon
official notice of issuance upon such exercise.
(e) The Company further covenants and agrees, subject to the
provisions of this Agreement, 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 Right Certificates or of any
Preferred Shares or Common Shares or other securities upon the exercise or
exchange of the Rights. The Company shall not, however, be required to pay
any transfer tax which may be payable in respect of any transfer or delivery
of Right Certificates to a Person other than, or in respect of the issuance
or delivery of certificates for Preferred Shares or Common Shares or other
securities, as the case may be, in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for exercise
or exchange or to issue or deliver any certificates for Preferred Shares or
Common Shares or other securities, as the case may be, upon the exercise or
exchange of any Rights until such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's satisfaction
that no such tax is due.
Section 10. Preferred Shares Record Date. Each Person in whose name
any certificate for Preferred Shares or Common Shares or other securities is
issued upon the exercise or exchange of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Shares or Common
Shares or other securities, as the case may be, represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of any 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 transfer
books of the Company for the Preferred Shares or Common Shares or other
securities, as the case may be, are closed, such Person shall be deemed to
have become the record holder of such Preferred Shares or Common Shares or
other securities, as the case may be, on, and such certificate shall be
dated, the next succeeding Business Day on which the transfer books of the
Company for the Preferred Shares or Common Shares or other securities, as
the case may be, 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 shareholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights. The Purchase Price, the number of Preferred Shares covered by
each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding Preferred
Shares, (C) combine the outstanding Preferred Shares into a smaller
number of Preferred Shares or (D) issue any shares of its capital stock
in a reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall
be proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive the aggregate number and
kind of shares of capital stock which, if such Right had been exercised
immediately prior to such date and at a time when the transfer books of
the Company for the Preferred Shares were open, he would have owned
upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one
Right. If an event occurs that would require an adjustment under both
this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section
11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in the event any
Person becomes an Acquiring Person (a "Flip-In Event"), each holder of
a Right, except as provided in Section 7(e) hereof, shall thereafter
have a right to receive, upon exercise thereof at a price equal to the
then current Purchase Price multiplied by the number of one one-
hundredths of a Preferred Share for which a Right is then exercisable,
in accordance with the terms of this Agreement and in lieu of Preferred
Shares, such number of Common Shares of the Company (such number of
Common Shares being referred to herein as the "Adjustment Shares") as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable and dividing that product by (y)
50% of the then current per share market price of the Company's Common
Shares (determined pursuant to Section 11(d) hereof) on the date of the
occurrence of such event. In the event that any Person shall become an
Acquiring Person and the Rights shall then be outstanding, the Company
shall not take any action which would eliminate or diminish the
benefits intended to be afforded by the Rights.
(iii) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to permit
the exercise in full of the Rights in accordance with Section 11(a)(ii)
hereof, the Company shall, to the extent permitted by applicable law
and regulation: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current
Value") over (2) the Purchase Price (such excess to be referred to
hereinafter as the "Spread"), and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a reduction in
the Purchase Price, (3) other equity securities of the Company
(including, without limitation, shares, or units of shares, of
preferred stock which the Board of Directors of the Company has deemed
to have the same value as the Common Shares (such shares of preferred
stock being referred to herein as "common share equivalents")), (4)
debt securities of the Company, (5) other assets or (6) any combination
of the foregoing, having an aggregate value equal to the Current Value
as determined by the Board of Directors of the Company; provided,
however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within 30 days following the
first occurrence of a Flip-In Event (the "Flip-In Trigger Date"), then
the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase
Price, Common Shares (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the
Spread. If the Board of Directors of the Company determines in good
faith that it is likely that sufficient additional Common Shares could
be authorized for issuance upon exercise in full of the Rights, the 30-
day period set forth above may be extended to the extent necessary, but
not to more than 120 days after the Flip-In Trigger Date, in order that
the Company may seek shareholder approval for the authorization of such
additional shares (such period, as it may be extended, being herein
called the "Substitution Period"). To the extent the Company
determines that some action need be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares and/or
to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event
of any such suspension, the Company shall deliver a notice to the
Rights Agent and issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as
a notice to the Rights Agent and a public announcement at such time as
the suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Shares shall be the current per
share market price (as determined pursuant to Section 11(d) hereof) of
the Common Shares on the Flip-In Trigger Date, and the value of any
common share equivalent shall be deemed to have the same value as the
Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling
them (for a period expiring within 45 calendar days after such record date)
to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than
the then current per share market price of the Preferred Shares (as defined
in Section 11(d) 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 record date by a
fraction, the numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares which
the aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be
the number of Preferred Shares outstanding on such record date plus the
number of additional Preferred Shares and/or equivalent preferred shares to
be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right. In case such subscription
price may be paid in consideration part or all of which may be in a form
other than cash, the value of such consideration shall be as determined in
good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent. Preferred
Shares 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, options 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.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share market
price of the Preferred Shares on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one
Preferred Share and the denominator of which shall be such current per share
market price of the Preferred Shares; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
to be issued upon exercise of one Right. 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.
(d)(i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "current
per share market price" of any security (a "Security" for the purpose
of this Section 11(d)(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 such term is hereinafter defined)
immediately prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "current per share market
price" of a Security on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the 10
consecutive Trading Days immediately following such date; provided,
however, that in the event that the current per share market price of
the 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 (other than the Rights), or
(B) any subdivision, combination or reclassification of such Security,
and the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification,
shall not have occurred prior to the commencement of the requisite 30
Trading Day or 10 Trading Day period, as set forth above, then, and in
each such case, the "current per share 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 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 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, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotations System ("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 the Board of Directors of the Company. 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 Business Day.
(ii) For the purpose of any computation hereunder, the "current
per share market price" of the Preferred Shares shall be determined in
accordance with the method set forth in Section 11(d)(i) hereof. If
the Preferred Shares are not publicly traded, the "current per share
market price" of the Preferred Shares shall be conclusively deemed to
be the current per share market price of the Common Shares, as
determined pursuant to Section 11(d)(i) hereof (appropriately adjusted
to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by 100 (the "Formula
Number"); provided, however, that if at any time after the Record Date
the Company shall (A) declare or pay any dividend on the Common Shares
payable in Common Shares or make any distribution on the Common Shares
in Common Shares, (B) subdivide (by a stock split or otherwise) the
outstanding Common Shares into a larger number of Common Shares or (C)
combine (by reverse stock split or otherwise) the outstanding Common
Shares into a smaller number of Common Shares, then in each event the
Formula Number shall be adjusted to a number determined by multiplying
the Formula Number in effect immediately prior to such event by a
fraction, the numerator of which is the number of Common Shares that
are outstanding immediately after such event and the denominator of
which is the number of Common Shares that are outstanding immediately
prior to such event (and rounding the result to the nearest whole
number); and provided further, that if at any time after the Record
Date the Company shall issue any shares of its stock in a merger,
reclassification, or change of the outstanding Common Shares, then in
each such event the Formula Number shall be appropriately adjusted to
reflect such merger, reclassification or change so that each Preferred
Share continues to be the economic equivalent of a Formula Number of
Common Shares prior to such merger, reclassification or change. If
neither the Common Shares nor the Preferred Shares are publicly held or
so listed or traded, "current per share market price" shall mean the
fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent.
(e) Except as hereinafter provided, 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(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest one one-millionth of a Preferred Share or one
ten-thousandth of any other share or security, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction which requires such adjustment
and (ii) the date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than Preferred
Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Preferred Shares contained in Section 11(a) through (c)
hereof, inclusive, and the provisions of Sections 7, 9, 10 and 13 hereof
with respect to the Preferred Shares shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths
of a Preferred Share purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i) hereof, upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c) 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-hundredths of a Preferred Share (calculated to the
nearest one one-millionth of a Preferred Share) obtained by (i) multiplying
(x) the number of one one-hundredths of a share covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and (ii)
dividing the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(i), the Company shall,
as promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing,
subject to Section 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 shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one one-
hundredths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of
the Preferred Shares issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid
and nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record
date of the Preferred Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Preferred
Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver
to such holder a due ▇▇▇▇ or other appropriate instrument evidencing such
holder's right to receive such additional shares or securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that it in its sole discretion shall determine to be advisable
in order that any (i) consolidation or subdivision of the Preferred Shares,
(ii) issuance wholly for cash of any Preferred Shares at less than the
current market price, (iii) issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or exchangeable for
Preferred Shares, (iv) dividends on Preferred Shares payable in Preferred
Shares, or (v) issuance of rights, options or warrants referred to
hereinabove in Section 11(b), hereafter made by the Company to holders of
its Preferred Shares, shall not be taxable to such shareholders.
(n) Anything in this Agreement to the contrary notwithstanding, in the
event that at any time after the date of this Agreement and prior to the
Distribution Date the Company shall (i) declare or pay any dividend on the
Common Shares payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares) into a greater or
lesser number of Common Shares, then in any such case (A) the number of one
one-hundredths of a Preferred Share purchasable after such event upon proper
exercise of each Right shall be determined by multiplying the number of one
one-hundredths of a Preferred Share so purchasable immediately prior to such
event by a fraction, the numerator of which is the number of Common Shares
outstanding immediately before such event and the denominator of which is
the number of Common Shares outstanding immediately after such event, and
(B) each Common Share outstanding immediately after such event shall have
issued with respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with respect to it.
The adjustments provided for in this Section 11(n) shall be made
successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjustment. Whenever an adjustment is
made as provided in Section 11 or 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief statement of
the facts accounting for such adjustment, (b) promptly file with the Rights
Agent and with each transfer agent for the Common Shares or the Preferred
Shares a copy of such certificate and (c) mail a brief summary thereof to
each holder of a Right Certificate in accordance with Section 26 hereof.
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, (i) the Company shall consolidate
with, or merge with and into, any other Person, (ii) any Person shall
consolidate with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger and,
in connection with such merger, all or part of the Common Shares shall be
changed into or exchanged for capital stock or other securities of any other
Person (or the Company) or cash or any other property, or (iii) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall
sell or otherwise transfer), in one or more transactions, assets or earning
power aggregating 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person other than the
Company or one or more of its wholly-owned Subsidiaries (any such event
described in clauses (i), (ii) or (iii) being referred to herein as a "Flip-
Over Event"), then, and in each such case, proper provision shall be made so
that (A) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof at a price
equal to the then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable,
in accordance with the terms of this Agreement and in lieu of Preferred
Shares, such number of validly authorized and issued, fully paid,
nonassessable and freely tradable Common Shares of the Principal Party (as
such term is hereinafter defined), free and clear of liens, encumbrances or
other adverse claims, as shall equal the result obtained by multiplying
(1)the then current Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right is exercisable immediately prior to the
first occurrence of a Flip-Over Event (or, if a Flip-In Event has occurred
prior to the first occurrence of a Flip-Over Event, multiplying the number
of such one one-hundredths of a share for which a Right was exercisable
immediately prior to the first occurrence of a Flip-In Event by the Purchase
Price in effect immediately prior to such first occurrence), and dividing
that product (which, following the first occurrence of a Flip-Over Event,
shall be referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by (2) 50% of the then current per share market
price of the Common Shares of such Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such consolidation,
merger, sale or transfer; (B) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such consolidation, merger, sale
or transfer, all the obligations and duties of the Company pursuant to this
Agreement; (C) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Flip-Over Event; (D) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares in accordance with Section 9 hereof) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to the Common Shares thereafter deliverable upon the
exercise of the Rights; and (E) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the first occurrence of any Flip-Over Event.
The Company shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement so
providing. The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction there are
any rights, warrants, instruments or securities outstanding or any
agreements or arrangements which, as a result of the consummation of such
transaction, would eliminate or substantially diminish the benefits intended
to be afforded by the Rights. The provisions of this Section 13 shall
similarly apply to successive mergers or consolidations or sales or other
transfers.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (i) or
(ii) of the first sentence of Section 13(a) hereof, the Person that is
the issuer of any securities into which Common Shares of the Company
are converted in such transaction, or if there is more than one issuer,
the issuer of Common Shares with the greatest aggregate market value,
and if no securities are so issued, the Person that is the other party
to such transaction, or if there is more than one such Person, the
Person having Common Shares with the greatest aggregate market value;
and
(ii) in the case of any transaction described in clause (iii) 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 such case, (A) if the Common Shares of such Person
are not at such time and have not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange Act,
and such Person is a direct or indirect Subsidiary of any other Person
the Common Shares of which are and have been so registered, "Principal
Party" shall refer to such other Person; and (B) in case such Person is
a Subsidiary, directly or indirectly, of more than one Person, the
Common Shares of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Shares having the greatest aggregate market value.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company may, but shall not be required to, issue fractions of
Rights or distribute Right Certificates which evidence fractional Rights.
In lieu of such fractional Rights, the Company may pay 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 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, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on any
such date the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors of the
Company. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good
faith by the Board of Directors of the Company shall be used.
(b) The Company may, but shall not be required to, issue fractions of
Preferred Shares upon exercise of the Rights or distribute certificates
which evidence fractional Preferred Shares. In lieu of fractional Preferred
Shares, the Company may elect to (i) utilize a depository arrangement or
(ii) in the case of a fraction of a Preferred Share (other than one one-
hundredth of a Preferred Share or any integral multiple thereof), 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 whole Preferred Share, if any are outstanding
and publicly traded (or the Formula Number then in effect times the current
market value of a whole Common Share if the Preferred Shares are not
outstanding and publicly traded). For purposes of this Section 14(b), the
current market value of a Preferred Share (or Common Share) shall be the
closing price of a Preferred Share (or Common Share) (as determined pursuant
to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise. If, as a result of an
adjustment made pursuant to Section 11 hereof, the holder of any Right
thereafter exercised shall become entitled to receive any securities other
than Preferred Shares, the provisions of this Section 14(b) shall apply, as
nearly as reasonably may be, on like terms to such other securities.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise or exchange of a Right except as provided in this Section 14.
Section 15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares), may,
in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by
such Right Certificate in the manner provided in such Right Certificate and
in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders
of Rights would not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the obligations
hereunder, and injunctive relief against actual or threatened violations of
the obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates will be
transferable, subject to Section 7(e) hereof, only on the registry books of
the Rights Agent if surrendered at the principal office of the Rights Agent,
duly endorsed or accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Right Certificate or the associated Common
Shares certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligations; provided, however,
that the Company must use reasonable efforts to have any such order, decree
or ruling lifted or otherwise overturned as soon as reasonably practicable.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote or
receive dividends or be deemed, for any purpose, the holder of the Preferred
Shares or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a
shareholder of the Company, including, without limitation, any right to vote
for the election of directors or upon any other matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in Section 25 hereof), or to
receive dividends or other distributions or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder.
(b) The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises. This
indemnity shall survive the termination of this Agreement and expiration of
the Rights issued hereunder.
(c) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
Right Certificate or certificate for the Preferred Shares or Common Shares
or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or corporate trust powers of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case, at the time such
successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and
in all such cases such Right Certificates shall have the full force provided
in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned,
the Rights Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
Certificates (or, prior to the Distribution Date, of the Common Shares), by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the
Treasurer or the Secretary of the Company and delivered to the Rights Agent;
and such certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming null and void
and nontransferable pursuant to Section 7(e) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Section 3, 11, 13, 23 or 24 hereof, or the ascertaining of
the existence of facts that would require any such change or adjustment
(except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice that such change or adjustment is
required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares or Common Shares to be issued pursuant to this Agreement or
any Right Certificate or as to whether any Preferred Shares or Common Shares
will, when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken
or suffered 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 or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not the Rights Agent under this Agreement. Nothing in this Agreement shall
preclude the Rights Agent from acting in any other capacity for the Company
or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Shares or Preferred Shares by registered
or certified mail, and to the holders of the Right Certificates by first-
class mail. The Company may remove the Rights Agent or any successor Rights
Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of
the Common Shares or Preferred Shares by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 days after
giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights
Agent or by the holder of a Right Certificate (or, prior to the Distribution
Date, of the Common Shares) (who shall, with such notice, submit his Right
Certificate or, prior to the Distribution Date, the certificate representing
his Common Shares, for inspection by the Company), then the registered
holder of any Right Certificate (or, prior to the Distribution Date, of the
Common Shares) may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation
organized and doing business under the laws of the United States or any
state of the United States, in good standing, having an office or agency in
any state of the United States, which is authorized under such laws to
exercise stock transfer or corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at
the time of its appointment as Rights Agent a combined capital and surplus
of at least $50 million; provided, however, that the principal transfer
agent for the Common Shares shall in any event be qualified to be the Rights
Agent. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment, the Company shall
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Shares or Preferred Shares, and mail a notice
thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
Section 22. Issuance of New Right Certificates and Additional
Rights. Notwithstanding any of the provisions of this 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 its Board
of Directors to reflect any adjustment or change made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance
or sale of Common Shares following the Distribution Date and prior to the
earlier of the Redemption Date and the Final Expiration Date, the Company
(i) shall, with respect to Common Shares so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon
the exercise, conversion or exchange of securities, notes or debentures
issued by the Company, and (ii) may, in any other case, if deemed necessary
or appropriate by the Board of Directors of the Company, issue Right
Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that no such Right
Certificate shall be issued if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Right Certificate would be issued, and no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the close of business on the tenth day
following the Shares Acquisition Date (or, if the Shares Acquisition Date
shall have occurred prior to the Record Date, the close of business on the
tenth day following the Record Date) and (ii) the Final Expiration Date,
redeem all but not less than all the then outstanding Rights at a redemption
price of $.001 per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price").
The redemption of the Rights by the Board of Directors of the Company may be
made effective at such time, on such basis and with such conditions as the
Board of Directors of the Company in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price. Within ten
(10) Business Days after the action of the Board of Directors of the Company
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Common Shares. Each such
notice of redemption shall state the method by which payment of the
Redemption Price will be made. The notice, if mailed in the manner herein
provided, shall be conclusively presumed to have been duly given, whether or
not the holder of Rights receives such notice. In any case, failure to give
such notice by mail, or any defect in the notice, to any particular holder
of Rights shall not affect the sufficiency of notice to other holders of
Rights. 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 Shares
prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, mandatorily exchange all
or part of the then outstanding and exercisable Rights (which shall not
include Rights that shall have become null and void and nontransferable
pursuant to the provisions of Section 7(e) hereof) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors of the Company shall not be empowered to effect such exchange at
any time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any such Subsidiary, or
any entity holding Common Shares of the Company for or pursuant to the terms
of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common Shares
then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24, and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of Common Shares
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all 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 shall state the method by which the exchange of the
Common Shares for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become null and void and nontransferable 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 Shares (or equivalent preferred shares) for
Common Shares exchangeable for Rights, at the initial rate of one one-
hundredth of a Preferred Share (or equivalent preferred share) for each
Common Share, as appropriately adjusted to reflect adjustments in the voting
rights of the Preferred Shares pursuant to the terms thereof, so that the
fraction of a Preferred Share delivered in lieu of each Common Share shall
have the same voting rights as one Common Share.
(d) In the event that the number of Common Shares or Preferred Shares
which are issued but not outstanding or authorized but unissued are not
sufficient to permit any exchange of Rights as contemplated in accordance
with this Section 24, the Company may, at its option, take all such action
as may be necessary to authorize additional Common Shares or Preferred
Shares.
(e) The Company may, but shall not be required to, issue fractions of
Common Shares upon exchange of Rights pursuant to this Section 24 or
distribute certificates which evidence fractional Common Shares. In lieu of
such fractional Common Shares, the Company may pay to the registered holders
of the Right Certificates with regard to which such fractional Common Shares
would otherwise be issuable an amount in cash equal to the same fraction of
the current market value of a whole Common Share for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24. For
purposes of this paragraph (e), the current market value of a whole Common
Share shall be the closing price of a Common Share (as determined pursuant
to the second sentence of Section 11(d)(i) hereof).
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend payable
in capital stock of any class to the holders of its Preferred Shares or to
make any other distribution to the holders of its Preferred Shares (other
than a regular quarterly cash dividend), (ii) to offer to the holders of its
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of capital stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of
its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any
consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to,
any other Person, (v) to effect the liquidation, dissolution or winding up
of the Company, or (vi) to declare or pay any dividend on the Common Shares
payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares), then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance with Section
26 hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend or distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of the Common Shares and/or
Preferred Shares, if any such date is to be fixed, and such notice shall be
so given in the case of any action covered by clause (i) or (ii) above at
least ten (10) days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case of any such
other action, at least ten (10) days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, whichever shall be the earlier.
(b) In case a Flip-In Event shall occur, then the Company shall as
soon as practicable thereafter give to each holder of a Right Certificate
(or, prior to the Distribution Date, of Common Shares), in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice
shall describe such event and the consequences of such event to holders of
Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
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:
▇▇▇▇▇▇▇▇▇▇ Laboratories, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
American Stock Transfer & Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. Supplements and Amendments. At any time prior to the
Distribution Date and subject to the last sentence of this Section 27, the
Company may by action of its Board of Directors, and the Rights Agent shall
if the Company so directs, supplement or amend any provision of this
Agreement (including, without limitation, the date upon which the
Distribution Date shall occur, the time during which the Rights may be
redeemed pursuant to Section 23 or any provision of the Statement of
Resolution) in any manner without the approval of any holder of the Rights.
From and after the Distribution Date and subject to applicable law, the
Company may by action of its Board of Directors, and the Rights Agent shall
if the Company so directs, from time to time supplement or amend this
Agreement without the approval of any holders of Right Certificates in order
(i) to cure any ambiguity or to correct or supplement any provision
contained in this Agreement which may be defective or inconsistent with any
other provision of this Agreement or (ii) to make any other provisions in
regard to matters or questions arising hereunder which the Company may deem
necessary or desirable and which shall not adversely affect the interests of
the holders of the Rights or Right Certificates (other than an Acquiring
Person or any Affiliate or Associate of an Acquiring Person). Any
supplement or amendment adopted during any period after any Person has
become an Acquiring Person but prior to the Distribution Date shall be null
and void unless such supplement or amendment could have been adopted under
the prior sentence from and after the Distribution Date. Without limiting
the foregoing, the Company may at any time prior to the Distribution Date
amend this Agreement to lower the thresholds set forth in the definition of
Acquiring Person in Section 1 hereof and in Section 3(b) hereof to not less
than the greater of (i) the sum of 0.001% and the largest percentage of the
outstanding Common Shares then known by the Company to be beneficially owned
by any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any Subsidiary of the Company, or
any entity holding Common Shares of the Company for or pursuant to the terms
of any such plan) 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; provided, however, that
the Rights Agent may, but shall not be obligated to, enter into any such
supplement or amendment which affects its own rights, duties or immunities
under this Agreement. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the
holders of the Common Shares of the Company. In addition, notwithstanding
anything to the contrary contained in this Agreement, no supplement or
amendment to this Agreement shall be made which (i) reduces the Redemption
Price with respect to any redemption of Rights that occurs prior to the
Final Expiration Date (except as required hereunder by appropriate
adjustment to reflect any stock split, stock dividend or similar transaction
occurring after the date of this Agreement) or (ii) provides for a Final
Expiration Date that is earlier than October 15, 2011.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, of the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, of the Common Shares).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.
Section 31. Governing Law. THIS AGREEMENT AND EACH RIGHT
CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
LAWS OF THE STATE OF TEXAS AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS
TO BE MADE AND PERFORMED ENTIRELY WITHIN SUCH STATE.
Section 32. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall for all purposes be deemed to be
an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
▇▇▇▇▇▇▇▇▇▇ LABORATORIES, INC.
Attest:
By:
--------------------- -------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Ph.D., D. Sc.
Secretary President and Chief Executive Officer
AMERICAN STOCK TRANSFER &
TRUST COMPANY
Attest:
By:
------------------------------------
Name: Name:
--------------------- -------------------------------------
Title: Title:
--------------------- -------------------------------------
EXHIBIT A
STATEMENT OF RESOLUTION
ESTABLISHING AND DESIGNATING
SERIES D PREFERRED STOCK
of
▇▇▇▇▇▇▇▇▇▇ LABORATORIES, INC.
To the Secretary of State
of the State of Texas:
Pursuant to the provisions of Article 2.13 of the Texas Business
Corporation Act, and pursuant to Article Four of its Articles of
Incorporation, the undersigned, ▇▇▇▇▇▇▇▇▇▇ Laboratories, Inc., a corporation
organized and existing under the Texas Business Corporation Act, as amended
(the "Company"), hereby submits the following statement for the purpose of
establishing and designating 300,000 shares of its Preferred Stock, par
value $100 per share, as "Series D Preferred Stock" (the "Series D Shares")
and fixing and determining the relative rights thereof:
1. The name of the corporation is ▇▇▇▇▇▇▇▇▇▇ Laboratories, Inc.
2. Attached hereto as Annex I is a true and correct copy of the
resolution establishing and designating the Series D Shares and
fixing and determining the relative rights and preferences
thereof.
3. Such resolution was duly adopted by the Board of Directors of the
Company on September 19, 1991.
Dated: September 19, 1991.
▇▇▇▇▇▇▇▇▇▇ LABORATORIES, INC.
By:________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Executive Vice President
and Secretary
Annex I
RESOLUTION OF THE BOARD OF DIRECTORS
OF ▇▇▇▇▇▇▇▇▇▇ LABORATORIES, INC.
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Company in accordance with provisions of its Articles of
Incorporation, (a) the Board of Directors does hereby create, authorize and
provide for the issuance, upon the exercise of the Rights, of a series of
Preferred Stock of the Company to be designated "Series D Preferred Stock"
(hereinafter referred to as the "Series D Preferred Stock"), initially
consisting of 300,000 shares, and (b) the Board of Directors does also
hereby (to the extent that the designations, preferences, limitations and
relative rights (collectively, the "Terms") of the Series D Preferred Stock
are not stated and expressed in the Articles of Incorporation and to the
extent that if such Terms are stated or expressed in the Articles of
Incorporation but the Articles of Incorporation permit the Board of
Directors to otherwise fix and state such Terms) fix and state such
designations, preferences, limitations and relative rights thereof, as
follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series D Preferred Stock", par value $100 per share (the
"Series D Preferred Stock"), and the number of shares constituting the
Series D Preferred Stock shall be 300,000. Notwithstanding the provisions
of Section 9 hereof, 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 D Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Company convertible into Series D Preferred Stock.
Section 2. Dividends. Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the shares of Series D Preferred Stock with respect to
dividends, the holders of Series D Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors, out of funds
legally available therefor, dividends payable in cash, stock or otherwise.
Section 3. Voting Rights. The holders of shares of Series D Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series D Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the
shareholders of the Company. In the event the Company shall at any
time declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise 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 per share to which
holders of shares of Series D Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in any other Statement
of Resolution creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series D Preferred Stock and
the holders of shares of Common Stock and 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 shareholders of the
Company.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series D 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. Reacquired Shares. Any shares of Series D Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock, subject to the conditions and restrictions on issuance set
forth herein, in the Articles of Incorporation, or in any other Statement of
Resolution creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 5. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series D
Preferred Stock unless, prior thereto, the holders of shares of Series D
Preferred Stock shall have received $100 per share, provided that the
holders of shares of Series D Preferred Stock shall be entitled to receive
an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series D Preferred
Stock, except distributions made ratably on the Series D Preferred Stock and
all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution
or winding up. In the event the Company shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise 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 aggregate amount to which
holders of shares of Series D Preferred Stock were entitled immediately
prior to such event under the proviso in clause (1) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of 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 6. 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
each share of Series D Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed
or exchanged. In the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise 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 D
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 were outstanding immediately prior to such
event.
Section 7. No Redemption. The shares of Series D Preferred Stock
shall not be redeemable.
Section 8. Rank. The Series D Preferred Stock shall rank junior to
all other series of the Company's Preferred Stock as to payment of dividends
and the distribution of assets on liquidation or otherwise, unless the terms
of any such series shall provide otherwise. The Series D Preferred Stock
shall rank senior to the Company's Common Stock as to the distribution of
assets on liquidation or otherwise.
Section 9. Amendment. The Articles of Incorporation of the Company
shall not be amended in any manner which would materially alter or change
the powers, preferences or special rights of the Series D Preferred Stock so
as to affect them adversely without the affirmative vote of the holders of
at least two-thirds of the outstanding shares of Series D Preferred Stock,
voting together as a single class.
Section 10. Fractional Shares. Series D Preferred Stock may be issued
in fractions of a share which shall entitle the holder thereof, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and have the benefit of all
of the rights of holders of shares of Series D Preferred Stock.
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER OCTOBER 15, 2011, OR EARLIER IF REDEEMED OR EXCHANGED
BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER RIGHT AND
TO EXCHANGE, EACH AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS ARE
NULL AND VOID AND NONTRANSFERABLE.
▇▇▇▇▇▇▇▇▇▇ LABORATORIES, INC.
Right Certificate
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 Amended and Restated Rights Agreement, dated as of
October 15, 2001 (the "Rights Agreement"), between ▇▇▇▇▇▇▇▇▇▇ Laboratories,
Inc., a Texas corporation (the "Company"), and American Stock Transfer &
Trust Company, as rights agent (the "Rights Agent"), unless the Rights
evidenced hereby have been previously redeemed by the Company, to purchase
from the Company at any time after the Distribution Date (as defined in the
Rights Agreement) and prior to 5:00 P.M., Dallas, Texas time, on October 15,
2011 (the "Final Expiration Date"), at the principal office or agency of the
Rights Agent, or its successors as Rights Agent, one one-hundredth of a
fully paid, nonassessable share of Series D Preferred Stock, par value $100
per share, of the Company (the "Preferred Shares"), at a purchase price of
$20.00 per one one-hundredth of a Preferred Share (the "Purchase Price"),
upon presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly executed.
The Purchase Price and the number and kind of shares that may be
purchased upon exercise of each Right evidenced by this Right Certificate,
as set forth above, are the Purchase Price and the number and kind of shares
that may be purchased as of __________, 20__. As provided in the Rights
Agreement, the Purchase Price and the number and kind of shares that may be
purchased upon the exercise of each Right evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof, and
reference to the Rights Agreement 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 above-
mentioned office and agency of the Rights Agent and are also available from
the Company upon request.
If the Rights evidenced by this Right Certificate are at any time
beneficially owned by an Acquiring Person or an Associate or Affiliate of an
Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and nontransferable and the holder of any such
Right (including any purported transferee or subsequent holder) shall not
have any right to exercise or transfer any such Right.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal stock transfer or corporate trust office of the
Rights Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number and kind of shares as the Rights
evidenced by the Right Certificate or Right Certificates surrendered shall
have entitled such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Right Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Right Certificate may be redeemed by the Company at its option at a
redemption price (in cash or shares of Common Stock or other securities of
the Company deemed by the Board of Directors of the Company to be at least
equivalent in value) of $.001 per Right (which amount may be subject to
adjustment as provided in the Rights Agreement) at any time prior to the
earlier of (i) the close of business on the tenth day following the first
date of public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such and (ii) the Final Expiration Date.
The Company may, but shall not be required to, issue fractions of a
Preferred Share (other than one one-hundredth of a Preferred Share or any
integral multiple thereof) or distribute certificates which evidence
fractions of a Preferred Share upon the exercise of any Right or Rights
evidenced hereby. In lieu of issuing fractional shares, the Company may
elect to make a cash payment as provided in the Rights Agreement for
fractions of a share other than one one-hundredth of a share or any integral
multiple thereof or to issue certificates or utilize a depository
arrangement as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed, for any purpose, the holder of the
Preferred Shares or 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 shareholder of the Company, including, without
limitation, any right to vote for the election of directors or upon any
other matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or other distributions or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in accordance with the
provisions of the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of _____________.
[CORPORATE SEAL]
ATTEST: ▇▇▇▇▇▇▇▇▇▇ LABORATORIES, INC.
______________________________ By:__________________________
Name:_________________________ Name:________________________
Title:________________________ Title:_______________________
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:___________________________
Authorized Signature
[On Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer Rights evidenced by the Right Certificate.)
FOR VALUE RECEIVED,______________________________________ hereby sells,
assigns and transfers unto__________________________________________________
(Please print name and address of transferee)
____________________________________________________________________________
________________ of the Rights evidenced by this Right Certificate, together
with all right, title and interest therein, and does hereby irrevocably
constitute and appoint____________________________________ Attorney-in-Fact,
to transfer such Rights on the books of the within-named Company, with full
power of substitution.
Dated:________________
____________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a participant in a Securities Transfer
Association recognized signature program.
Certification of Status
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate that are assigned
by the foregoing Assignment [ ] are [ ] are not being sold, assigned
or transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] 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 thereof (as such terms are
defined in the Rights Agreement).
Dated:________________
____________________________________________
Signature
[On Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires
to exercise Rights represented by the Right Certificate.)
To: ▇▇▇▇▇▇▇▇▇▇ LABORATORIES, INC.
The undersigned hereby irrevocably elects to exercise _________________
Rights represented by this Right Certificate to purchase the Preferred
Shares (or other shares) issuable upon the exercise of such Rights and
requests that certificates for such shares be issued in the name of:
Please insert social security
or other identifying number ________________________________________________
____________________________________________________________________________
(Please print name and address)
____________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number ________________________________________________
____________________________________________________________________________
(Please print name and address)
____________________________________________________________________________
Dated:________________
____________________________________________
Signature
[On Reverse Side of Right Certificate -- continued]
Signature Guaranteed:
Signatures must be guaranteed by a participant in a Securities Transfer
Association recognized signature program.
Certification of Status
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate that are being
exercised pursuant to the foregoing Election to Purchase [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] 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 thereof (as such terms are
defined in the Rights Agreement).
Dated:________________
____________________________________________
Signature
NOTICE
The signature(s) in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name(s) written upon the
face of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the Certification of Status 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 such terms are defined in the
Rights Agreement) and such Assignment or Election to Purchase will not be
honored.
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On September 19, 1991, the Board of Directors of ▇▇▇▇▇▇▇▇▇▇
Laboratories, Inc. (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 (the "Common Shares"), of the Company. The
dividend was paid on October 15, 1991 (the "Record Date") to the
shareholders of record on that date. In addition, the Company authorized
the issuance of one Right with respect to each Common Share that becomes
outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined). Each Right initially entitled the registered holder
to purchase from the Company one one-hundredth of a share of Series D
Preferred Stock, par value $100 per share (the "Preferred Shares"), of the
Company at a price of $80 per one one-hundredth of a Preferred Share (the
"Initial Purchase Price"), subject to adjustment. Also on September 19,
1991, the Company and Ameritrust Company National Association, as rights
agent, entered into a Rights Agreement (the "Original Rights Agreement")
containing the terms and conditions of the distribution and execution of the
Rights.
Effective as of October 21, 1998, the Company and American Stock
Transfer & Trust Company, as successor rights agent (the "Rights Agent"),
entered into Amendment No. 1 to the Original Rights Agreement ("Amendment
No. 1") amending the Original Rights Agreement in certain respects.
On September 27, 2001, the Board of Directors of the Company authorized
the renewal, extension, amendment and restatement of the Original Rights
Agreement (as amended by Amendment No. 1), which was due to expire on
October 15, 2001, and approved the Amended and Restated Rights Agreement,
which was executed effective as of October 15, 2001 (the "Amended Rights
Agreement") by the Company and the Rights Agent. In addition to other
changes that it makes, the Amended Rights Agreement (1) extends the Final
Expiration Date (as hereinafter defined) from October 15, 2001 to October
15, 2011; (2) lowers the threshold level of beneficial ownership that
triggers exercisability of the Rights from 20% to 15% of the Company's
outstanding Common Shares; (3) reduces the Initial Purchase Price for one
one-hundredth of a Preferred Share from $80 to $20 (the "Purchase Price"),
subject to adjustment; (4) provides for the issuance of Rights with respect
to Common Shares that become outstanding after the Distribution Date (as
hereinafter defined) and prior to the earlier of the Redemption Date (as
hereinafter defined) and the Final Expiration Date (as hereinafter defined);
and (5) decreases the Redemption Price (as hereinafter defined) from $.01 to
$.001 per Right.
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired beneficial ownership of 15% or more of the
outstanding Common Shares and (ii)10 business days (or such later date as
may be determined by action of the Board of Directors of the Company prior
to such time as any person or group of affiliated or associated persons
becomes an Acquiring Person) following the commencement of, or first public
announcement of an intention to commence, a tender offer or exchange offer
the consummation of which would result in the beneficial ownership by a
person or group of affiliated or associated persons of 15% or more of the
outstanding Common Shares (the earlier of such dates being herein referred
to as the "Distribution Date"), the Rights will be evidenced, with respect
to any of the Common Share certificates outstanding as of the Record Date,
by such Common Share certificate with a copy of this Summary of Rights
attached thereto.
The Amended 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 Common Shares. Until the Distribution
Date (or earlier redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date, upon transfer or new issuance of
Common Shares, will contain a notation incorporating the Amended Rights
Agreement by reference. Until the Distribution Date (or earlier redemption
or expiration of the Rights), the surrender for transfer of any certificates
for Common Shares outstanding on or after the Record Date, even without such
notation or a copy of this Summary of Rights being attached thereto, will
also constitute the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as
of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on October 15, 2011 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed
or exchanged by the Company, in each case, as described below.
The Purchase Price payable, and the number of Preferred Shares 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 Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at
a price, or securities convertible into Preferred Shares with a conversion
price, less than the then current market price of the Preferred Shares or
(iii) upon the distribution to holders of the Preferred Shares of evidences
of indebtedness or assets (excluding regular periodic cash dividends paid
out of earnings or retained earnings or dividends payable in Preferred
Shares) or of subscription rights or warrants (other than those referred to
above).
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject
to adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
subject to redemption by the Company. Each Preferred Share will be entitled
to receive a dividend payable in cash, stock or otherwise when, as and if
declared by the Board of Directors. In the event of liquidation, the
holders of the Preferred Shares will be entitled to a minimum preferential
liquidation payment of $100 per share but will be entitled to an aggregate
payment of 100 times the payment made per Common Share. Each Preferred
Share will have 100 votes, voting together with the Common Shares. Finally,
in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount received per Common Share. These rights are
protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a
Preferred Share purchasable upon exercise of each Right should approximate
the value of one Common Share.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision will be made so that
each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will thereafter be null and void and
nontransferable), will thereafter have the right to receive upon exercise
that number of Common Shares of the Company having a market value of two
times the exercise price of the Right. In the event that the Company is
acquired in a merger or other business combination transaction or 50% or
more of its consolidated assets or earning power are sold after a person or
group of affiliated or associated persons has become an Acquiring Person,
proper provision will be made so that each holder of a Right will thereafter
have the right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common stock of the
acquiring company which at the time of such transaction will have a market
value of two times the exercise price of the Right.
At any time after any person or group of affiliated or associated
persons becomes an Acquiring Person and prior to the acquisition by such
person or group of 50% or more of the outstanding Common Shares, the Board
of Directors of the Company may exchange the Rights (other than Rights owned
by such person or group, which will have become null and void and
nontransferable), in whole or in part, at an exchange ratio of one Common
Share, or one one-hundredth of a Preferred Share (or of a share of a class
or series of the Company's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
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. The Company may, but will not be required to, issue
fractions of a Preferred Share. In lieu of issuing fractional Preferred
Shares, the Company may utilize a depositary arrangement or, in the case of
a fractional Preferred Share other than one one-hundredth of a Preferred
Share or any integral multiple thereof, pay to the person entitled to
receive such fractional share an amount in cash based on the market price of
the Preferred Shares on the last trading day prior to the date of exercise
of the Right to purchase such fractional share.
At any time prior to the earlier of the Final Expiration Date and the
close of business on the tenth day following a public announcement that an
Acquiring Person has become such, the Board of Directors of the Company may
redeem the Rights in whole, but not in part, at a price of $.001 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. The time at which the
Rights are redeemed by the Company is herein referred to as the "Redemption
Date." Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right thereafter of the holders of
Rights will be to receive the Redemption Price.
At any time prior to the Distribution Date and subject to the last
sentence of this paragraph, 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 without limitation an amendment to lower certain
thresholds described above to not less than the greater of (i) the sum of
0.001% and the largest percentage of the outstanding Common Shares then
known by the Company to be beneficially owned by any person or group of
affiliated or associated persons and (ii) 10%. From and after the
Distribution Date and subject to applicable law, 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 to, among other things, make any other provisions
in regard to matters under the Amended Rights Agreement that the Company may
deem necessary or desirable and that will not adversely affect the interests
of the holders of the Rights (other than an Acquiring Person or an affiliate
or associate of an Acquiring Person). The terms of the Rights may not be
amended to (i) reduce the Redemption Price with respect to any redemption of
Rights that occurs prior to the Final Expiration Date (except as required by
antidilution provisions) or (ii) provide for a Final Expiration Date that is
earlier than October 15, 2011.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
The Preferred Shares will rank, with respect to the payment of
dividends and as to distributions of assets upon liquidation, dissolution or
winding up of the Company, junior to all other series of preferred stock of
the Company, unless the Board of Directors of the Company shall specifically
determine otherwise in fixing the powers, preferences and relative,
participating, optional and other special rights of the shares of any such
other series and the qualifications, limitations and restrictions thereof.
A copy of the Amended Rights Agreement has been filed with the
Securities and Exchange Commission as an exhibit to Post-Effective Amendment
No. 2 to the Company's Registration Statement on Form 8-A/A dated October
15, 2001. A copy of the Amended 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
Amended Rights Agreement, which is hereby incorporated herein by reference.