EXHIBIT 4.1
RIGHTS AGREEMENT
between
ORTHODONTIC CENTERS OF AMERICA, INC.
and
EQUISERVE TRUST COMPANY, N.A.,
as Rights Agent
Dated as of March 3, 2004
TABLE OF CONTENTS
Page
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Section 1. CERTAIN DEFINITIONS......................................................................... 1
Section 2. APPOINTMENT OF RIGHTS AGENT................................................................. 7
Section 3. ISSUE OF RIGHTS CERTIFICATES................................................................ 7
Section 4. FORM OF RIGHTS CERTIFICATES................................................................. 8
Section 5. EXECUTION, AUTHENTICATION AND DELIVERY...................................................... 10
Section 6. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE......................................... 10
Section 7. MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES................................... 11
Section 8. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS............................... 12
Section 9. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES......................................... 13
Section 10. RESERVATION AND AVAILABILITY OF SHARES...................................................... 14
Section 11. RECORD DATE................................................................................. 14
Section 12. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND TYPE OF SHARES OR NUMBER OF RIGHTS................. 15
Section 13. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.................................. 21
Section 14. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER........................ 21
Section 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES..................................................... 22
Section 16. RIGHTS OF ACTION............................................................................ 23
Section 17. AGREEMENT OF RIGHTS HOLDERS................................................................. 24
Section 18. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.......................................... 24
Section 19. CONCERNING THE RIGHTS AGENT................................................................. 25
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Page
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Section 20. DUTIES OF RIGHTS AGENT...................................................................... 25
Section 21. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT................................... 27
Section 22. CHANGE OF RIGHTS AGENT...................................................................... 27
Section 23. ISSUANCE OF NEW RIGHTS CERTIFICATES......................................................... 28
Section 24. REDEMPTION.................................................................................. 28
Section 25. MANDATORY REDEMPTION AND EXCHANGE........................................................... 29
Section 26. NOTICE OF CERTAIN EVENTS.................................................................... 30
Section 27. SECURITIES LAWS REGISTRATIONS............................................................... 31
Section 28. NOTICES..................................................................................... 32
Section 29. SUPPLEMENTS AND AMENDMENTS.................................................................. 32
Section 30. SUCCESSORS.................................................................................. 33
Section 31. BENEFITS OF THIS AGREEMENT.................................................................. 33
Section 32. SEVERABILITY................................................................................ 33
Section 33. GOVERNING LAW............................................................................... 33
Section 34. COUNTERPARTS................................................................................ 33
Section 35. DESCRIPTIVE HEADINGS........................................................................ 33
Section 36. BOARD OF DIRECTORS.......................................................................... 33
Section 37. FORCE MAJEURE............................................................................... 34
EXHIBITS
EXHIBIT A - Form of Certificate of Designation of Series A Junior Participating
Preferred Stock of Orthodontic Centers of America, Inc................................ A-1
EXHIBIT B - Form of Rights Certificate............................................................ B-1
EXHIBIT C - Summary of Rights to Purchase Preferred Shares........................................ C-1
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RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT ("Agreement"), dated as of March 3, 2004, is
between ORTHODONTIC CENTERS OF AMERICA, INC., a Delaware corporation ("OCA"),
and EQUISERVE TRUST COMPANY, N.A., as Rights Agent.
RECITALS:
WHEREAS, the Board of Directors, having determined its actions to be in
the best interests of OCA, has authorized the creation of Rights, has authorized
and directed the issuance to the holders of record of Common Shares (as defined
below) of OCA outstanding as of the Close of Business (as defined below) on
March 3, 2004 (the "Record Date"), of one Right with respect to each Common
Share of OCA outstanding on the Record Date, and has further authorized and
directed the issuance of one Right with respect to each Common Share that shall
become outstanding between the Record Date and the earlier of the Distribution
Date, the Redemption Date and the Final Expiration Date (each as defined below);
and
WHEREAS, the Board of Directors has authorized and directed that the
terms and conditions under which the Rights are to be distributed, including,
without limitation, those affecting the exercise thereof, the securities or
other property to be acquired thereby and the purchase price to be paid
therefor, shall be set forth in a written agreement between OCA and a rights
agent.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
AGREEMENT:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the following
terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 20% or more of the Voting Shares then outstanding, but shall not include OCA,
any Subsidiary of OCA, any employee benefit plan of OCA or of any Subsidiary of
OCA or any trustee of or fiduciary with respect to any such plan when acting in
such capacity. Notwithstanding the foregoing:
(i) no Person shall become an "Acquiring Person" solely as the
result of an acquisition of Voting Shares by OCA which, by reducing the
number of shares outstanding, increases the proportionate percentage of
shares beneficially owned by such Person to the amount of Voting Shares
necessary for such person to become an Acquiring Person; PROVIDED,
HOWEVER, that, if a Person shall become the Beneficial Owner of the
amount of Voting Shares necessary for such person to become an
Acquiring Person by reason of share purchases by OCA and shall, after
such share purchases by OCA and at a time when such Person is the
Beneficial Owner of the amount of Voting Shares necessary for such
person to become an Acquiring Person, become the Beneficial Owner of
any additional Voting Shares, then such Person shall be deemed to be an
"Acquiring Person"; and
(ii) if the Board of Directors determines in good faith that a
Person who would otherwise be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this Section 1(a), has become
such inadvertently (including, without limitation, because (A) such
Person was unaware that he or it was the Beneficial Owner of a
percentage of Voting Shares that would otherwise cause such person to
be an "Acquiring Person" or (B) such Person was aware of the extent to
which he or it is the Beneficial Owner of Voting Shares but had no
actual knowledge of the consequences of being such a Beneficial Owner
under this Agreement) and without any intention of changing or
influencing control of OCA, and such Person divests as promptly as
practicable, but in any event within the time period directed by the
Board of Directors, a sufficient number of Common Shares so that such
Person would no longer be an "Acquiring Person," as defined pursuant to
the foregoing provisions of this Section 1(a), then such Person shall
not be deemed to be or to have become an "Acquiring Person" for any
purposes of this Agreement during any period of time (1) prior to the
time the members of the Board of Directors shall have become aware that
such Person had become an "Acquiring Person" (but for the provisions of
this subsection (ii)), (2) during which the members of the Board of
Directors are making the determination called for under this subsection
(ii), and (3) during which such Person is divesting himself or itself
of a sufficient number of Voting Shares so that such Person would no
longer be an "Acquiring Person."
Nothing in this Section 1(a) shall affect the effect or application of
Section 8(e).
(b) "Agreement" shall mean this Rights Agreement as the same may be
hereafter amended from time to time.
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act as in effect on the date of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "own beneficially" any securities which (without duplication):
(i) such Person or any of such Person's Affiliates or
Associates has the right to acquire (whether such right is exercisable
immediately or only after the passage of time, compliance with
regulatory requirements, the fulfillment of a condition or otherwise)
pursuant to any oral or written agreement, arrangement or understanding
(other than customary agreements with and between underwriters and
selling group members (A) with respect to a bona fide public offering
of securities or (B) in connection with a placement of securities
pursuant to Rule 144A under the Securities Act), or upon the exercise
of conversion rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; or the right to vote
pursuant to any agreement, arrangement or understanding; PROVIDED,
HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, (1) 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 (2) securities issuable upon
exercise of Rights at any time prior to any Person becoming an
Acquiring Person;
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(ii) such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of
or has "beneficial ownership" of (as determined pursuant to Rule 13d-3
of the Exchange Act) or has a "pecuniary interest" or an "indirect
pecuniary interest" in (as determined pursuant to Rule 16a-1(a)(2) of
the Exchange Act), in either case including pursuant to any agreement,
arrangement or understanding, whether or not in writing; PROVIDED,
HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or
to "beneficially own," any security under this subparagraph (2) as a
result of an agreement, arrangement or understanding to vote such
security (A) which arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (B) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates
or Associates has any oral or written agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members (A) with respect to a bona fide
public offering of securities or (B) in connection with a placement of
securities pursuant to Rule 144A under the Securities Act) for the
purpose of acquiring, holding, voting (other than voting pursuant to a
revocable proxy as contemplated by the proviso to subparagraph (ii) of
this paragraph) or disposing of any securities of OCA.
Notwithstanding anything in this definition to the contrary, the phrase
"then outstanding," when used with reference to a Person's Beneficial Ownership
of securities of OCA (or to the number of such securities "beneficially owned"),
shall mean the number of such securities then issued and outstanding together
with the number of such securities not then actually issued and outstanding
which such Person would be deemed to own beneficially hereunder.
(e) "Board of Directors" means the Board of Directors of OCA.
(f) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the Commonwealth of Massachusetts are
authorized or obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00 P.M., Eastern
Time, on such date; PROVIDED, HOWEVER, that if such date is not a Business Day
it shall mean 5:00 P.M., Eastern Time, on the next succeeding Business Day.
(h) "Closing Price", with respect to any security, shall mean the last
sale price, regular way, on a specific Trading Day or, in case no such sale
takes place on such Trading Day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if such security is not then listed
or
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admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which such security is listed or
admitted to trading or, if such security is not then listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotations System or such other system then in use, or, if on any such
Trading Day such security is not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in such security selected by the Board of Directors. If such
security is not publicly held or so listed or traded, "Closing Price" shall mean
the fair value per unit of such security as determined in good faith by the
Board of Directors, whose determination shall be described and the Closing Price
set forth in a statement filed with the Rights Agent.
(i) "Common Shares" when used with reference to OCA shall mean shares
of capital stock of OCA which have no preference over any other class of stock
with respect to dividends or assets, which are not redeemable at the option of
OCA and with respect to which no sinking, purchase or similar fund is provided
and shall initially mean the shares of Common Stock, $.01 par value per share,
of OCA. "Common Shares" when used with reference to any Person other than OCA
shall, if used with reference to a corporation, mean the capital stock (or
equity interest) with the greatest voting power of such other Person or, if such
other Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person and, if used with reference to
any other Person, mean the equity interest in such Person (or, if the net worth
determined in accordance with generally accepted accounting principles of
another Person (other than an individual) which controls such first-mentioned
Person is greater than such first-mentioned Person, then such other Person) with
the greatest voting power or managerial power with respect to the business and
affairs of such Person. Common Shares used without reference to OCA or any other
Person shall be deemed to refer to Common Shares of OCA unless the context
otherwise requires.
(j) "Company" shall mean Orthodontic Centers of America, Inc., a
Delaware corporation, and its successors.
(k) "Company Order" means a written request or order signed in the name
of OCA by its Chairman of the Board, its President, its Chief Executive Officer,
its Chief Operating Officer or a Vice President, and by its Chief Financial
Officer, its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Rights Agent.
(l) "Corporate Trust Office" means the principal office of the Rights
Agent at which it administers its corporate trust business, which, in the case
of EquiServe Trust Company, N.A., shall, until hereafter changed, be its office
at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
(m) "Distribution Date" shall mean the Close of Business on the earlier
of (1) the tenth Business Day after the Shares Acquisition Date or (2) the tenth
Business Day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of commencement by any Person (other than OCA, any Subsidiary of OCA,
any employee benefit plan of OCA or of any Subsidiary of OCA, or any trustee of
or fiduciary with respect to any such plan when acting in such capacity) of, or
after the date of the first public announcement of, the intent of any Person
(other than OCA, any Subsidiary of OCA, any employee benefit plan of OCA or of
any Subsidiary of OCA, or any trustee of or fiduciary with respect to any such
plan when acting in such capacity) to commence
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a tender or exchange offer, the consummation of which would result in any Person
becoming an Acquiring Person; PROVIDED, HOWEVER, that an occurrence described in
clause (2) of this definition above shall not cause the occurrence of the
Distribution Date if the Board of Directors shall, prior to the Close of
Business on such tenth Business Day (or such later date as described in clause
(2) above), determine that such tender or exchange offer is spurious, unless,
thereafter, the Board of Directors shall make a contrary determination, in which
event the Distribution Date shall occur on the later to occur of the Close of
Business on such tenth Business Day (or the Close of Business on such later date
as described in clause (2) above) and the Close of Business on the date of such
latter determination.
(n) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and any successor statute thereto.
(o) "Final Expiration Date" shall mean the Close of Business on March
2, 2014.
(p) "Person" shall mean any individual, firm, corporation, partnership,
limited partnership, limited liability company, joint venture, association,
trust, unincorporated organization, group or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(q) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, $.01 par value per share, of OCA having the
rights and preferences set forth in the form of Certificate of Designation of
Series A Junior Participating Preferred Stock of Orthodontic Centers of America,
Inc. attached hereto as EXHIBIT A, and, to the extent that there is not a
sufficient number of shares of Series A Junior Participating Preferred Shares
outstanding to permit the full exercise of the Rights, any other authorized
shares of preferred stock, $.01 par value per share, of OCA having rights and
preferences substantially identical to such Series A Junior Participating
Preferred Shares.
(r) "Purchase Price" shall mean the initial price at which the holder
of a Right may, subject to the terms and conditions of this Agreement, purchase
one one-thousandth (1/1000) of a Preferred Share (which initial price is set
forth in Section 8(b) hereof), as such price shall be adjusted pursuant to the
terms of this Agreement.
(s) "Record Date" shall have the meaning provided in the recitals to
this Agreement.
(t) "Redemption Date" shall mean the time at which the Rights are
redeemed pursuant to Section 24 herein or the time at which all of the Rights
are mandatorily redeemed and exchanged pursuant to Section 25 hereof.
(u) "Redemption Price" shall have the meaning specified in Section
24(b) herein.
(v) "Right" shall mean one preferred share purchase right which
initially represents the right of the registered holder thereof to purchase one
one-thousandth (1/1000) of a Preferred Share upon the terms and subject to the
conditions set forth herein.
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(w) "Rights Certificate" shall mean a certificate, in substantially the
form of EXHIBIT B attached to this Agreement, evidencing the Rights registered
in the name of the holder thereof.
(x) "Rights Agent" shall mean EquiServe Trust Company, N.A. and any
successor thereto appointed in accordance with the terms hereof, in its capacity
as agent for OCA and the holders of the Rights pursuant to this Agreement.
(y) "Rights Register" and "Rights Registrar" shall have the meanings
specified in Section 6.
(z) "Securities Act" shall mean the Securities Act of 1933, as amended,
and any successor statute thereto.
(aa) "Shares Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition shall include without
limitation a report filed pursuant to Section 13 or Section 16 of the Exchange
Act) by OCA or an Acquiring Person that an Acquiring Person has become such.
(bb) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the outstanding capital stock or other equity
interests having ordinary voting power in the election of directors or similar
officials is owned, directly or indirectly, by such Person.
(cc) "Summary of Rights" shall mean a Summary of Rights to Purchase
Preferred Shares in substantially the form attached as EXHIBIT C to this
Agreement.
(dd) "Trading Day" shall mean a day on which the principal national
securities exchange on which any of the Voting Shares are listed or admitted to
trading is open for the transaction of business or, if none of the Voting Shares
is listed or admitted to trading on any national stock exchange, a Business Day.
(ee) "Voting Shares" shall mean (1) the Common Shares of OCA and (2)
any other shares of capital stock of OCA entitled to vote generally in the
election of directors or entitled to vote together with the Common Shares in
respect of any merger or consolidation of OCA, any sale of all or substantially
all of OCA's assets or any liquidation, dissolution or winding up of OCA.
Whenever any provision of this Agreement requires a determination of whether a
number of Voting Shares comprising a specified percentage of such Voting Shares
is, was or will be beneficially owned or has been voted, tendered, acquired,
sold or otherwise disposed of or a determination of whether a Person has offered
or proposed to acquire a number of Voting Shares comprising such specified
percentage, the number of Voting Shares comprising such specified percentage of
Voting Shares shall in every such case be deemed to be the number of Voting
Shares comprising the specified percentage of all OCA's then outstanding Voting
Shares.
(ff) "Wholly-Owned Subsidiary" of a Person shall mean any corporation
or other entity all the outstanding capital stock or other equity interests of
which having ordinary voting power in the election of directors or similar
officials (other than directors' qualifying shares or similar interests) are
owned, directly or indirectly, by such Person.
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SECTION 2. APPOINTMENT OF RIGHTS AGENT. OCA hereby appoints the Rights Agent to
act as agent for OCA 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 of OCA) in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. OCA may from time to time
appoint such co-Rights Agents as it may deem necessary or desirable upon ten
(10) days prior written notice to the Rights Agent. The Rights Agent shall have
no duty to supervise, and in no event be liable for, the acts or omissions of
any such co-Rights Agent.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the Distribution Date, (1) outstanding Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section 3) (A)
with respect to Common Shares that are held in certificated form, by the
certificates for outstanding Common Shares of OCA and not by separate Rights
Certificates and (B) with respect to Common Shares that are held in book-entry
form, by a notation in the records of the Rights Agent (and the records of OCA's
transfer agent if different from the Rights Agent), and (2) the right to receive
Rights Certificates will be transferable only in connection with the transfer of
Common Shares of OCA. As soon as practicable after the Distribution Date, OCA
will prepare and execute, and the Rights Agent will countersign and send, by
first-class, insured, postage-prepaid mail, to each record holder of Common
Shares of OCA as of the Close of Business on the Distribution Date, at the
address of such holder shown on the stock transfer records of OCA, a Rights
Certificate evidencing one Right for each Common Share so held, subject to
adjustments as provided herein. From and after the Distribution Date, the Rights
will be evidenced solely by such Rights Certificates.
(b) On the Record Date, or as soon thereafter as practicable, OCA will
send a copy of a Summary of Rights, by first-class, postage-prepaid mail, to
each record holder of Common Shares of OCA as of the Close of Business on the
Record Date, at the address of such holder shown on the stock transfer records
of OCA. With respect to Common Shares outstanding on the Record Date, the
certificates evidencing such Common Shares shall thereafter also evidence the
outstanding Rights (as such Rights may be amended or supplemented) distributed
with respect thereto until the Distribution Date and the registered holders of
Common Shares shall also be the registered holders of the associated Rights.
Until the Distribution Date (or, if earlier, the Redemption Date or Final
Expiration Date), the surrender for registration of transfer or exchange of (1)
any certificate for Common Shares outstanding as of the Close of Business on the
Record Date, with or without a copy of the Summary of Rights attached thereto,
and (2) any Common Shares held in book-entry form, shall also constitute the
surrender for registration of transfer or exchange of the outstanding Rights
associated with the Common Shares represented thereby.
(c) OCA agrees that, at any time after the Record Date and prior to the
Distribution Date (or, if earlier, the Redemption Date or Final Expiration Date)
at which it issues any of its Common Shares upon original issue or out of
treasury, it will concurrently distribute to the holder of such Common Shares
one Right for each such Common Share, which Right shall be subject to the terms
and provisions of this Agreement and will evidence the right to purchase the
same number of one one-thousandth (1/1000) of a Preferred Share at the same
Purchase Price as the Rights then outstanding.
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(d) Certificates for Common Shares issued after the Record Date but
prior to the earliest of the Distribution Date, the Redemption Date and the
Final Expiration Date, whether upon registration of transfer or exchange of
Common Shares outstanding on the Record Date or upon original issue or out of
treasury thereafter, shall also be deemed to be certificates for the Rights and
shall have impressed on, printed on, written on or otherwise affixed to them the
following legend or such similar legend as OCA may deem appropriate and as is
not inconsistent with the provisions of this Agreement:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Orthodontic
Centers of America, Inc. ("OCA") and EquiServe Trust Company, N.A., as
it may be amended (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of OCA. 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. OCA will mail to the holder of this certificate a copy of
the Rights Agreement without charge after receipt of a written request
therefor. As described in the Rights Agreement, Rights issued to or
acquired by any Acquiring Person or any Affiliate or Associate thereof
(each as defined in the Rights Agreement), whether currently held by or
on behalf of such Person or by any subsequent holder, shall, under
certain circumstances, become null and void.
With respect to certificates containing the foregoing legend, until the earlier
of the Distribution Date or the Final Expiration Date, outstanding Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender of any such certificate
for registration of transfer or exchange of the Common Shares evidenced thereby
shall also constitute surrender for registration of transfer or exchange of the
outstanding Rights (as such Rights may be amended or supplemented) associated
with the Common Shares represented thereby. The failure to print the foregoing
legend on any certificate or any other defect therein shall not affect in any
manner whatsoever the application or interpretation of the provisions of Section
8(e) hereof.
(e) If OCA purchases or acquires any of its Common Shares after the
Record Date, but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that OCA shall not be
entitled to exercise any Rights associated with the Common Shares which are no
longer outstanding.
SECTION 4. FORM OF RIGHTS CERTIFICATES.
(a) The form of Rights Certificates (and the forms of election to
purchase Preferred Shares (or other securities) and of assignment to be printed
on the reverse thereof) shall in form and substance be substantially the same as
Exhibit B hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as OCA may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed or as may be
8
necessary to conform to usage. Subject to the provisions of Section 23 hereof,
the Rights Certificates, whenever issued, shall be dated as of the date of
authentication thereof, but, regardless of any adjustments of the Purchase Price
or the number of Preferred Shares (or other securities) as to which a Right is
exercisable (whether pursuant to this Agreement or any future amendments or
supplements to this Agreement), or both, occurring after the Record Date and
prior to the date of such authentication, such Rights Certificates may, on their
face, without invalidating or otherwise affecting any such adjustment, expressly
entitle the holders thereof to purchase such number of Preferred Shares at the
Purchase Price per one one-thousandth (1/1000) of a Preferred Share as to which
a Right would be exercisable if the Distribution Date were the Record Date; no
adjustment of the Purchase Price or the number of Preferred Shares (or other
securities) as to which a Right is exercisable, or both, effected subsequent to
the date of authentication of any Rights Certificate shall be invalidated or
otherwise affected by the fact that such adjustment is not expressly reflected
on the face or in the provisions of such Rights Certificate.
(b) Pending the preparation of definitive Rights Certificates, OCA may
execute, and upon Company Order the Rights Agent shall authenticate and send, by
first-class, insured, postage-prepaid mail, to each record holder of Common
Shares of OCA as of the Close of Business on the Distribution Date, temporary
Rights Certificates which are printed, lithographed, typewritten, mimeographed
or otherwise produced substantially of the tenor of the definitive Rights
Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Rights Certificates may determine, as evidenced by their
execution of such Rights Certificates.
(c) If temporary Rights Certificates are issued, OCA will cause
definitive Rights Certificates to be prepared without unreasonable delay. After
the preparation of definitive Rights Certificates, the temporary Rights
Certificates shall be exchangeable for definitive Rights Certificates, upon
surrender of the temporary Rights Certificates at the Corporate Trust Office of
the Rights Agent, without charge to the holder. Upon surrender for cancellation
of any one or more temporary Rights Certificates, OCA shall execute and the
Rights Agent shall authenticate and deliver in exchange therefor one or more
definitive Rights Certificates, evidencing a like number of Rights. Until so
exchanged, the temporary Rights Certificates shall in all respects be entitled
to the same benefits under this Agreement as definitive Rights Certificates.
(d) Any Rights Certificate issued pursuant to Section 3(a) or Section
23 hereof that represents Rights beneficially owned by (1) an Acquiring Person
or any Associate or Affiliate of an Acquiring Person, (2) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (3) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
avoidance of Section 8(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 7 hereof upon transfer, exchange,
9
replacement or adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances specified in
Section 8(e) of such Agreement.
SECTION 5. EXECUTION, AUTHENTICATION AND DELIVERY.
(a) The Rights Certificates shall be executed on behalf of OCA by its
Chairman of the Board, its President, its Chief Executive Officer, its Chief
Operating Officer or one of its Vice Presidents, attested by its Secretary or
one of its Assistant Secretaries. The signature of any of these officers on the
Rights Certificates may be manual or facsimile.
(b) Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of OCA shall bind OCA,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Rights Certificates or
did not hold such offices at the date of authentication of such Rights
Certificates. At any time and from time to time after the execution and delivery
of this Agreement and prior to the Distribution Date, OCA may deliver Rights
Certificates executed by OCA to the Rights Agent for authentication, together
with a Company Order for the authentication and delivery of such Rights
Certificates; and the Rights Agent in accordance with such Company Order shall
authenticate and deliver such Rights Certificates as provided in this Agreement
and not otherwise.
(c) No Rights Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on such
Rights Certificate a certificate of authentication substantially in the form
provided for herein executed by the Rights Agent by manual signature, and such
certificate upon any Rights Certificate shall be conclusive evidence, and the
only evidence, that such Rights Certificate has been duly authenticated and
delivered hereunder.
SECTION 6. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. From and after
the Distribution Date and prior to the earlier of the Redemption Date and the
Final Expiration Date, OCA shall cause to be kept at the Corporate Trust Office
of the Rights Agent a rights register (a "Rights Register") in which, subject to
such reasonable regulations as it may prescribe, OCA shall provide for the
registration of Rights Certificates and of transfers of Rights. The Rights Agent
is hereby appointed the registrar and transfer agent (the "Rights Registrar")
for the purpose of registering Rights Certificates and transfers of Rights as
herein provided and the Rights Agent agrees to maintain such Rights Register in
accordance with such regulations so long as it continues to be designated as
Rights Registrar hereunder.
10
Upon surrender to the Rights Agent for registration of transfer of any
Rights Certificate, OCA shall execute, and the Rights Agent shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Rights Certificates evidencing a like number of Rights.
At the option of the holder, Rights Certificates may be exchanged for
other Rights Certificates upon surrender of the Rights Certificates to be
exchanged to the Rights Agent. Whenever any Rights Certificates are so
surrendered for exchange, OCA shall execute, and the Rights Agent shall
authenticate and deliver, the Rights Certificates which the holder making the
exchange is entitled to receive.
All Rights Certificates issued upon any registration of transfer or
exchange of Rights Certificates shall be the valid obligations of OCA,
evidencing the same Rights, and entitled to the same benefits under this
Agreement, as the Rights Certificates surrendered upon such registration of
transfer or exchange.
Every Rights Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by OCA or the Rights Agent) be duly
endorsed, or accompanied by a written instrument of transfer in form
satisfactory to OCA and the Rights Registrar duly executed, by the holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Rights Certificates, but OCA may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Rights Certificates, other than
exchanges not involving any transfer.
The provisions of this Section 6 shall be subject to the provisions of
Section 4(d), Section 8(e) and Section 15.
SECTION 7. MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES.
(a) If any mutilated Rights Certificate is surrendered to the Rights
Agent, OCA shall execute and the Rights Agent shall authenticate and deliver in
exchange therefor a new Rights Certificate of like tenor, for a like number of
Rights and bearing a registration number not contemporaneously outstanding.
(b) If there shall be delivered to OCA and the Rights Agent (1)
evidence to their satisfaction of the destruction, loss or theft of a Rights
Certificate and (2) such security or indemnity, if any, as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to OCA or the Rights Agent that such Rights Certificate has
been acquired by a bona fide purchaser, OCA shall execute and upon its request
the Rights Agent shall authenticate and deliver, in lieu of any such destroyed,
lost or stolen Rights Certificate, a new Rights Certificate of like tenor, for a
like number of Rights and bearing a registration number not contemporaneously
outstanding.
11
(c) Upon the issuance of any new Rights Certificate under this Section
7, OCA may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Rights Agent) connected
therewith.
(d) Every new Rights Certificate issued pursuant to this Section 7 in
lieu of any destroyed, lost or stolen Rights Certificate shall constitute an
additional contractual obligation of OCA, whether or not the destroyed, lost or
stolen Rights Certificate shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Agreement equally and proportionately
with any and all other Rights Certificates duly issued hereunder.
(e) The provisions of this Section 7 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Rights
Certificates.
SECTION 8. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Subject to the provisions of Section 8(e) hereof, the registered
holder of any Rights 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 Rights Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at its Corporate Trust Office, together with payment of the Purchase Price
for each one one-thousandth (1/1000) of a Preferred Share (or other securities)
as to which the Rights are exercised, at or prior to the earliest of (1) the
Close of Business on the Final Expiration Date, (2) the time of redemption on
the Redemption Date or (3) the time at which such Rights are mandatorily
redeemed and exchanged as provided in Section 25 hereof.
(b) The Purchase Price for each one one-thousandth (1/1000) of a
Preferred Share pursuant to the exercise of a Right shall initially be $40.00,
shall be subject to adjustment from time to time as provided in Sections 12 and
14 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the securities to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of such
Rights Certificate in accordance with Section 10 in cash, or by certified check
or cashier's check payable to the order of OCA, the Rights Agent shall thereupon
promptly (1) (A) requisition from any transfer agent of the Preferred Shares (or
other securities) certificates for such number of one one-thousandths of a
Preferred Share (or other securities) as are to be purchased and registered in
such name or names as may be designated by the registered holder of such Rights
Certificate or, if appropriate, in the name of a depositary agent or its
nominee, and OCA hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) if OCA shall have elected to deposit the total number
of Preferred Shares issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from such depositary agent appointed by OCA,
depositary receipts representing such number of one one-
12
thousandths of a Preferred Share as are to be purchased and registered in such
name or names as may be designated by such holder (in which case certificates
for the Preferred Shares represented by such receipts shall be deposited by the
transfer agent with such depositary agent), and OCA hereby directs such
depositary agent to comply with all such requests, (2) when appropriate,
requisition from OCA the amount of cash to be paid in lieu of issuance of
fractional shares in accordance with Section 15 hereof, (3) promptly after
receipt of such certificates or depositary receipts registered in such name or
names as may be designated by such holder, cause the same to be delivered to or
upon the order of the registered holder of such Rights Certificate and (4) when
appropriate, after receipt, promptly deliver such cash to or upon the order of
such holder. In the event that OCA is obligated to issue other securities
(including Common Shares) of OCA, pay cash and/or distribute other property
pursuant to Section 12(a) hereof, OCA will make all arrangements necessary so
that other securities, cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate.
(d) If the registered holder of the Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equal to the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Rights Certificate or to his duly
authorized assigns, subject to the provisions of Section 15 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, if any
Person shall become an Acquiring Person, thereafter any Rights beneficially
owned by (1) such Acquiring Person or an Associate or Affiliate of such
Acquiring Person, (2) a transferee of such Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (3) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which at least a majority of
the Board of Directors has determined is part of a plan or an agreement,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 8(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. OCA shall use all reasonable efforts to insure that the provisions of
this Section 8(e) and Section 4(d) hereof are complied with, but shall have no
liability to any holder of Rights Certificates or other Person as a result of
its failure to make any determinations with respect to any Acquiring Person or
its Affiliates, Associates or transferees hereunder.
SECTION 9. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up or
exchange shall, if surrendered to OCA or to any of its other agents, be
delivered to the Rights Agent for such purpose and for cancellation or, if
surrendered to the Rights Agent for such purpose, shall be canceled by it. No
Rights Certificates shall be authenticated in lieu of or in exchange for any
Rights Certificates canceled as provided in this Section 9 except as expressly
permitted by any of the provisions of this Agreement. OCA shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificate
13
purchased or acquired by OCA otherwise than upon the exercise thereof. The
Rights Agent shall deliver all canceled Rights Certificates to OCA, or shall,
pursuant to a Company Order, destroy such canceled Rights Certificates and in
such case shall deliver a certificate of destruction thereof to OCA.
SECTION 10. RESERVATION AND AVAILABILITY OF SHARES.
(a) OCA covenants and agrees that it will use its reasonable best
efforts to cause to be reserved and kept available out of its authorized and
unissued Preferred Shares or any Preferred Shares held in its treasury, the
number of Preferred Shares that will be sufficient to permit the exercise in
full of all outstanding Rights.
(b) OCA further covenants and agrees that it will, from and after the
Distribution Date, use its reasonable best efforts to cause to be reserved and
kept available out of its authorized and unissued Common Shares or any Common
Shares held in its treasury, the number of Common Shares of OCA that will be
sufficient to permit the exercise in full of all outstanding Rights if adjusted
pursuant to Section 12(a)(ii).
(c) OCA covenants and agrees that it will take all such action as may
be necessary to ensure that all Preferred Shares or Common Shares of OCA issued
upon exercise of Rights shall (subject to payment of the Purchase Price) at the
time of delivery of the certificates representing any such Preferred Shares or
Common Shares be duly authorized, validly issued, fully paid and nonassessable.
OCA further covenants and agrees that it will pay when due and payable any and
all federal and state transfer taxes and charges which may be payable in respect
of the issuance or delivery of the Rights Certificates or of any Preferred
Shares (or depositary receipts therefor) or Common Shares of OCA upon the
exercise of Rights. OCA shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or in respect of the issuance or delivery
of certificates or depositary receipts for the Preferred Shares or Common Shares
of OCA upon exercise of Rights evidenced by Rights Certificates in a name other
than that of, the registered holder of the Rights Certificate evidencing Rights
surrendered for transfer or exercise or to issue or deliver any certificates or
depositary receipts for Preferred Shares or Common Shares of OCA upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Rights Certificate at the time of surrender
thereof) or until it has been established to OCA's satisfaction that no such tax
is due.
(d) So long as the Common Shares issuable and deliverable upon the
exercise of the Rights may be listed on any national securities exchange, OCA
shall use its best efforts to promptly cause, from and after such time as the
Rights become exercisable, all Common Shares and other securities reserved for
such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
SECTION 11. RECORD DATE. Each Person in whose name any certificate for Preferred
Shares or Common Shares of OCA is issued upon the exercise of, or upon mandatory
redemption and exchange of, Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Shares or Common Shares
14
represented thereby on, and such certificate shall be dated, (a) in the case of
the exercise of Rights, the date upon which the Rights Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made, or (b) in the case of the mandatory
redemption and exchange of Rights, the date of such mandatory redemption and
exchange; PROVIDED, HOWEVER, that, if the date of such surrender and payment or
mandatory redemption and exchange is a date upon which the transfer books of OCA
for its Preferred Shares or Common Shares, as the case may be, are closed, such
Person shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day on which such
transfer books of OCA are open. Prior to the exercise of (or the mandatory
redemption and exchange of) the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a holder of Preferred Shares
(or Common Shares of OCA) for which the Rights shall be exercisable, including
without limitation the rights to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of OCA, except as provided herein.
SECTION 12. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND TYPE OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number and kind of shares of capital stock of
OCA covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 12.
(a) (i) If OCA 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 OCA is the continuing or surviving corporation), except as
otherwise provided in this Section 12(a), the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised thereafter shall be entitled to receive,
upon payment of the Purchase Price for the number of one one-thousandths of a
Preferred Share for which a Right was exercisable immediately prior to such
date, the aggregate number and kind of shares of capital stock which, if such
Right had been duly exercised immediately prior to such date (at a time when the
Preferred Shares transfer books of OCA were open), such holder would have
acquired upon such exercise and been entitled to receive upon payment or
effectuation of such dividend, subdivision, combination or reclassification;
PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of OCA issuable upon exercise of one Right. If an event occurs
which would require an adjustment under both Section 12(a)(i) and Section
12(a)(ii), the adjustment provided for in this Section 12(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 12(a)(ii).
(ii) Subject to action of the Board of Directors pursuant to Section 25
of this Agreement, if any Person shall become an Acquiring Person, unless the
event causing such Person to become an Acquiring Person is (A) a transaction
described in Section 14 hereof, or (B)
15
an acquisition of Common Shares pursuant to a tender offer or an exchange offer
for all outstanding Common Shares at a price and on terms determined by the
Board of Directors (excluding members of the Board of Directors who are
representatives, nominees or Affiliates of an Acquiring Person), after receiving
advice from one or more investment banking firms, to be (1) at a price that is
fair to stockholders (taking into account all factors that such members of the
Board deem relevant including, without limitation, prices that could reasonably
be achieved if OCA or its assets were sold on an orderly basis designed to
realize maximum value) and (2) otherwise in the best interests of its
stockholders, each holder of a Right shall thereafter have a right to receive,
upon exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-thousandths of a Preferred Share for which a
Right is then exercisable, in accordance with the terms of this Agreement and in
lieu of Preferred Shares, such number of Common Shares of OCA as shall equal the
result obtained by (x) multiplying the then current Purchase Price by the number
of one one-thousandths of a Preferred Share for which a Right is then
exercisable and dividing that product by (y) 50% of the then current per share
market price of OCA's Common Shares (determined pursuant to Section 12(d)) on
the date such Person became an Acquiring Person. If any Person shall become an
Acquiring Person and the Rights shall then be outstanding, OCA shall not take
any action which would eliminate or diminish the benefits intended to be
afforded by the Rights.
(iii) In the event that the number of Common Shares that are authorized
by OCA's certificate of incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are not sufficient
to permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 12(a), OCA shall: (A) determine the excess of
(1) the value of the Common Shares issuable upon the exercise of a Right (the
"Current Value"), over (2) the Purchase Price (such excess, the "Spread"), and
(B) with respect to each Right, make adequate provision to substitute for such
Common Shares, upon exercise of the Rights and payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common
Shares or other equity securities of OCA (including, without limitation, shares,
or units of shares, of preferred stock which the Board of Directors of OCA has
deemed to have the same value as shares of Common Shares (such shares of
preferred stock, "Common Share Equivalents")), (4) debt securities of OCA, (5)
other assets, or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has been determined by
the Board of Directors of OCA based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of OCA; PROVIDED,
HOWEVER, that if OCA shall not have made adequate provision to deliver value
pursuant to clause (B) above within 30 days following the first occurrence of a
Shares Acquisition Date, then OCA 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 OCA shall determine in good faith that it is likely that
sufficient additional Common Shares could be authorized for issuance upon
exercise in full of the Rights, the thirty-day period set forth above may be
extended to the extent necessary, but not more than ninety days after the Shares
Acquisition Date, in order that OCA may seek stockholder approval for the
authorization of such additional shares (such period, as it may be extended, the
"Substitution Period"). To the extent that OCA determines that some action need
be taken pursuant to the first and/or second sentences of this Section
12(a)(iii), OCA (x) shall provide, subject to Section 8(e) hereof, that such
action shall apply uniformly to all outstanding Rights, and (y) may suspend the
16
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, OCA shall
promptly notify the Rights Agent in writing of such suspension and shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect (with prompt written notice to the Rights
Agent that such suspension is no longer in effect). For purposes of this Section
12(a)(iii), the value of Common Shares shall be the current market price (as
determined pursuant to Section 12(d) hereof) per share of the Common Shares on
the Shares Acquisition Date and the value of any Common Stock Equivalent shall
be deemed to have the same value as the Common Shares on such date.
(b) If OCA 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 or exchangeable for Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred share
(together with any additional consideration required upon conversion or exchange
in the case of a security convertible into or exchangeable for Preferred Shares
or equivalent preferred shares), less than the current per share market price of
the Preferred Shares (determined pursuant to Section 12(d) on such record date),
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares which the
aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (together with the aggregate of any
additional consideration required upon conversion or exchange in the case of any
convertible or exchangeable securities so to be offered) would purchase at such
current market price and the denominator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into or for which the convertible or exchangeable
securities so to be offered are initially convertible or exchangeable);
PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of OCA issuable upon the exercise of one Right. In case all or
part of such subscription or purchase price may be paid in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors, whose determination shall be described in a statement
filed with the Rights Agent. Preferred Shares owned by or held for the account
of OCA or any of its Subsidiaries shall not be deemed outstanding for the
purpose of any computation described in this Section 12(b). The adjustment
described in this Section 12(b) shall be made successively whenever such a
record date is fixed; and, if none of such rights, options or warrants are so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) If OCA 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 OCA 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
17
subscription rights or warrants (excluding those referred to in Section 12(b)),
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the then current per share market
price of the Preferred Shares (determined pursuant to Section 12(d)) on such
record date, less the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent) of the portion of the assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants applicable to
one Preferred Share and the denominator of which shall be such current per share
market price of the Preferred Shares; PROVIDED, HOWEVER, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of OCA issuable upon exercise
of one Right. Such adjustments shall be made successively whenever such a record
date is fixed; and, if such distribution is not so made, the Purchase Price
shall again be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current per
share market price" of any security (a "Security" for the purpose of this
Section 12(d)) 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
immediately prior to, but not including, such date; PROVIDED, HOWEVER, that, if
the issuer of such Security announces (A) a dividend or distribution on such
Security payable in shares of such Security or Securities convertible into such
Security 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, occurs during
such period of 30 Trading Days, then, and in each such case, the current per
share market price of such Security shall be appropriately adjusted to reflect
the current market price per share equivalent of such Security.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Shares shall be determined in the same
manner as set forth above for Common Shares in paragraph (i) of this Section
12(d). If the current per share market price of the Preferred Shares cannot be
determined in the manner provided above, the "current per share market price" of
the Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common Shares (determined in the manner provided above)
multiplied by one thousand.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; PROVIDED, HOWEVER, that any adjustments which by reason of this Section
12(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 12
shall be made to the nearest cent or to the nearest ten-thousandth of a Common
Share or other share or one ten-millionth of a Preferred Share, as the case may
be, and references herein to the "number of one one-thousandths of a Preferred
Share" (or similar phrases) shall be construed to include fractions of one
one-thousandth of a Preferred Share. Notwithstanding the first sentence of this
Section 12(e), any adjustment required by this Section 12 shall be made no later
than the earlier of (1) three years from the date of the transaction which
requires such adjustment or (2) the thirtieth day preceding the Final Expiration
Date.
18
(f) If as a result of an adjustment made pursuant to Section 12(a), the
holder of any Right thereafter exercised shall become entitled to receive any
shares of capital stock of OCA other than Preferred Shares, thereafter the
number of such other shares so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares contained
in this Section 12, and the provisions of this Agreement, including without
limitation Sections 8, 10, 11 and 14, with respect to the Preferred Shares shall
apply on like terms to any such other shares.
(g) All Rights originally issued by OCA subsequent to any adjustment
made to the Purchase Price hereunder shall, whether or not the Rights
Certificate evidencing such Rights reflects such adjusted Purchase Price,
evidence the right to purchase, at the adjusted Purchase Price, the number of
one one-thousandths of a Preferred Share purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless OCA shall have exercised its election as provided in Section
12(i), upon each adjustment of the Purchase Price pursuant to Section 12(b) or
12(c), each Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted Purchase Price
per one one-thousandth of a Preferred Share, that number of one one-thousandths
of a Preferred Share obtained by (1) multiplying (x) the number of
one-thousandths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (2) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) OCA may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights outstanding in lieu of any
adjustment in the number of one one-thousandths of a Preferred Share purchasable
upon the exercise of a Right. Each Right outstanding after such adjustment of
the number of Rights shall be exercisable for the number of one one-thousandths
of a Preferred Share for which a Right was exercisable immediately prior to such
adjustment of the Purchase Price. Each Right held of record prior to such
adjustment of the number 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. OCA
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 Rights
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. Until such record date, however, any adjustment in the
number of one one-thousandths of a Preferred Share for which a Right shall be
exercisable made as required by this Agreement shall remain in effect. If Rights
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 12(i), OCA shall, as promptly as practicable, cause to
be distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 15 hereof, the additional
Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of OCA, shall cause to be distributed to such holders of
record in substitution and replacement for the Rights Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof, if required
by OCA, new Rights Certificates evidencing all the Rights to which such
19
holders shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and authenticated in the manner provided
for herein and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-thousandths of a Preferred Share issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-thousandths of a Preferred Share which were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-thousandth of the amount of consideration per
Preferred Share determined by the Board of Directors to be capital, or below one
one-thousandth of the par value, if any, per Preferred Share issuable upon
exercise of the Rights, OCA agrees to take such corporate action as is within
its power, including without limitation appropriate action by its Board of
Directors, and which is, in the opinion of its counsel, necessary in order that
OCA may validly and legally issue fully paid and nonassessable one
one-thousandths of Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 12 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, OCA may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date of the
Preferred Shares or other capital stock or securities of OCA, if any, issuable
upon such exercise over and above the Preferred Shares or other capital stock or
securities of OCA, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; PROVIDED, HOWEVER, that OCA
shall deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 12 to the contrary notwithstanding, OCA
shall be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 12, as and to the extent
that it in its sole discretion shall determine to be advisable in order that any
combination or subdivision of the Preferred Shares, issuance wholly for cash of
any of the Preferred Shares at less than the current market price, issuance
wholly for cash of Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares, dividends on Preferred
Shares payable in Preferred Shares or issuance of rights, options or warrants
referred to in subsection (b) of this Section 12, hereafter effected by OCA to
holders of its Preferred Shares shall not be taxable to such stockholders.
(n) If at any time prior to the Distribution Date, OCA shall (1)
declare or pay any dividend on the Common Shares payable in Common Shares or (2)
effect a subdivision or combination of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares) into a greater or
lesser number of Common Shares, then in any such case (A) the Purchase Price in
effect at the time of the record date for such dividend or of the effective date
of such subdivision or combination shall be adjusted by multiplying such
Purchase Price by a fraction, the numerator of which is the number of Common
Shares
20
outstanding immediately before such event and the denominator of which is the
number of Common Shares outstanding immediately after such event, and (B) the
number of Rights outstanding immediately after such event shall be adjusted,
either through cancellation of outstanding Rights or through distribution of
additional Rights (but without duplication of OCA's obligations under Section
3(c)), so that the certificate evidencing each Common Share outstanding
immediately after such event shall also evidence the associated Right to
purchase the same number of one one-thousandths of a Preferred Share as to which
a Right would have entitled the holder thereof to purchase immediately prior to
such event. The adjustment provided for in this Section 12(n) shall be made
successively whenever such a dividend is declared or paid or such a subdivision
or combination is effected. If an event occurs which would require an adjustment
under Section 12(a)(ii) and this Section 12(n), the adjustments provided for in
this Section 12(n) shall be in addition and prior to any adjustment required
pursuant to Section 12(a)(ii).
SECTION 13. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES. Whenever
an adjustment is made as provided in Section 12 or 14 hereof, OCA 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 of OCA and
the Preferred Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of record of a Rights Certificate in accordance with
Section 28 hereof.
SECTION 14. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER. If, directly or indirectly at any time after a Person has become an
Acquiring Person, (a) OCA shall consolidate with, or merge with and into, any
other Person and OCA is not the continuing or surviving corporation, (b) any
Person shall merge with and into OCA and OCA shall be the continuing or
surviving corporation of such merger and, in connection with any such merger,
all or part of the Common Shares of OCA shall be changed into or exchanged for
stock or other securities of any other Person (or OCA) or cash or any other
property, or (c) OCA shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or a series of two or
more transactions, assets of OCA or its Subsidiaries which constitute more than
50% of the assets or which produce more than 50% of the earning power of OCA and
its Subsidiaries (taken as a whole) to any Person or any Affiliate or Associate
of such Person other than OCA or one or more of its Wholly-Owned Subsidiaries,
then, and in each such case, OCA agrees that, as a condition to engaging in any
such transaction, it will make or cause to be made proper provision so that (1)
each holder of a Right (except as otherwise provided herein) shall thereafter
have the right to receive, upon the exercise thereof in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such number of Common
Shares of such other Person (including OCA as successor thereto or as the
surviving corporation) or, if such other Person is a Subsidiary of another
Person, of the Person or Persons (other than individuals) which ultimately
control such first-mentioned Person, as shall be equal to the result obtained by
(x) multiplying the then current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right is then exercisable
(without taking into account any adjustment previously made pursuant to Section
12(a)(ii)) and dividing that product by (y) 50% of the current per share market
price of
21
the Common Shares of such other Person (determined pursuant to Section 12(d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; (2) the issuer of such Common Shares shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of OCA pursuant to this Agreement; (3) the term
"Company," as used herein, shall thereafter be deemed to refer to such issuer;
and (4) such issuer shall take such steps (including without limitation the
reservation of a sufficient number of shares of its Common Shares in accordance
with Section 10) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the Common Shares thereafter deliverable upon
the exercise of the Rights. OCA shall not enter into any transaction of the kind
referred to in this Section 14 if at the time of such transaction there are
outstanding any rights, warrants, instruments or securities or any agreement,
understanding or arrangements which, as a result of the consummation of such
transaction, would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights. OCA shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto OCA and such issuer
shall have executed and delivered to the Rights Agent an agreement supplemental
to this Agreement complying with the provisions of this Section 14. The
provisions of this Section 14 shall similarly apply to successive mergers or
consolidations or sales or other transfers. For the purposes of this Section 14,
50% of the assets of OCA and its Subsidiaries shall be determined by reference
to the book value of such assets as set forth in the most recent consolidated
balance sheet of OCA and its Subsidiaries (which need not be audited) and 50% of
the earning power of OCA and its Subsidiaries shall be determined by reference
to the mathematical average of the operating income resulting from the
operations of OCA and its Subsidiaries for the two most recent full fiscal years
as set forth in the consolidated and consolidating financial statements of OCA
and its Subsidiaries for such years; PROVIDED, HOWEVER, that, if OCA has, during
such period, engaged in a transaction or series of transactions that
individually or in the aggregate involved a significant amount of assets
(determined by reference to Item 2, Instruction 4 to Form 8-K), the
determination of the earning power of OCA shall be made by reference to the pro
forma operating income of OCA and its Subsidiaries giving effect to such
transactions as if they had occurred at the commencement of such two-year
period.
SECTION 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) OCA shall not be required to issue or distribute Rights
Certificates which evidence fractional Rights. If, on the Distribution Date or
thereafter, as a result of any adjustment effected pursuant to Section 12(i) or
otherwise hereunder, a Person would otherwise be entitled to receive a Rights
Certificate evidencing a fractional Right, OCA shall, in lieu thereof, pay or
cause to be paid to such Person an amount in cash equal to the same fraction of
the current market value of a whole Right. For the purpose of this Section
15(a), the current market value of a whole Right shall be the Closing Price of
the Rights for the Trading Day immediately prior to, but not including, the date
on which such fractional Rights would have been otherwise issuable.
(b) OCA shall not be required to issue fractions of Preferred Shares
(other than fractions which are integral multiples of one one-thousandth of a
Preferred Share) upon exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share). Fractions of
22
Preferred Shares in integral multiples of one one-thousandth of a Preferred
Share may, at the election of OCA, be evidenced by depositary receipts, pursuant
to an appropriate agreement between OCA and a depositary selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Shares. If, on the Distribution
Date or thereafter, as a result of any adjustment effected hereunder in the
number of one one-thousandths of a Preferred Share as to which a Right has
become exercisable, a Person would otherwise be entitled to receive a fractional
Preferred Share that is not an integral multiple of one one-thousandth of a
Preferred Share, OCA shall, in lieu thereof, pay to such Person at the time such
Right is exercised as herein provided an amount in cash equal to the same
fraction (which is not an integral multiple of one one-thousandth of a Preferred
Share) of the current market value of one Preferred Share. For purposes of this
Section 15(b), the current market value of a Preferred Share shall be the
Closing Price of a Preferred Share for the Trading Day immediately prior to, but
not including, the date of such exercise.
(c) Should any adjustment contemplated by Section 12(a)(ii) or any
mandatory redemption and exchange contemplated by Section 25 occur, OCA shall
not be required to issue fractions of Common Shares upon exercise of the Rights
or to distribute certificates which evidence fractional Common Shares. If after
any such adjustment or mandatory redemption and exchange, a Person would
otherwise be entitled to receive a fractional Common Share of OCA upon exercise
of any Rights Certificate or upon mandatory redemption and exchange as
contemplated by Section 25, OCA shall, in lieu thereof, pay to such Person at
the time such Right is exercised as herein provided or upon such mandatory
redemption and exchange an amount in cash equal to the same fraction of the
current market value of one Common Share. For purposes of this Section 15(c),
the current market value of a Common Share shall be the Closing Price of a
Common Share for the Trading Day immediately prior to the date of such exercise
or the date of such mandatory redemption and exchange.
(d) The holder of a Right by the acceptance thereof expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise or mandatory redemption and exchange of a Right (except as provided
above).
SECTION 16. RIGHTS OF ACTION.
(a) All rights of action in respect of the obligations and duties owed
to the holders of the Rights under this Agreement are vested in the registered
holders of the Rights; and, without the consent of the Rights Agent or of the
holder of any other Rights, any registered holder of any Rights may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding, judicial or otherwise, against OCA to enforce, or
otherwise to act in respect of, such holder's right to exercise such Rights in
the manner provided in the Rights Certificate evidencing such Rights and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.
23
(b) No right or remedy herein conferred upon or reserved to the
registered holder of Rights is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy, whether hereunder or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right or
remedy.
(c) No delay or omission of any registered holder of Rights to exercise
any right or remedy accruing hereunder shall impair any such right or remedy or
constitute a waiver of any default hereunder or an acquiescence therein. Every
right and remedy given hereunder or by law to such holders may be exercised from
time to time, and as often as may be deemed expedient, by such holders.
SECTION 17. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right, by accepting
the same, consents and agrees with OCA and the Rights Agent and with every other
holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares of OCA;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the Corporate Trust Office of the Rights Agent duly endorsed or accompanied by a
proper instrument of transfer;
(c) OCA and the Rights Agent may deem and treat the Person in whose
name the Rights 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 Rights Certificates or the associated Common Shares certificate
made by anyone other than OCA or the Rights Agent) for all purposes whatsoever,
and neither OCA nor the Rights Agent shall be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
OCA nor the Rights Agent shall have any liability to any holder of a Right or
other Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree, judgment or ruling (whether interlocutory or final) issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; PROVIDED,
HOWEVER, OCA must use its best efforts to have any such order, decree, judgment
or ruling lifted or otherwise overturned as soon as possible.
SECTION 18. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No holder, as
such, of any Right (whether or not then evidenced by a Rights Certificate) shall
be entitled to vote, receive dividends or be deemed for any purpose the holder
of Preferred Shares, Common Shares of OCA or any other securities of OCA which
may at any time be issuable on
24
the exercise (or mandatory redemption and exchange) of the Rights represented
thereby, nor shall anything contained herein or in any Rights Certificate be
construed to confer upon any such holder, as such, any of the rights of a
stockholder of OCA, including without limitation any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, to give or withhold consent to any corporate action, to receive
notice of meetings or other actions affecting stockholders (except as provided
in Section 26) or to receive dividends or subscription rights or otherwise.
SECTION 19. CONCERNING THE RIGHTS AGENT.
(a) OCA 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. OCA also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, liability or expense,
incurred without gross negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability in the
premises.
(b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Preferred Shares, Common Shares or other
securities of OCA, Company Order, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of its counsel as set forth in
Section 20 hereof.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which OCA and the holders of Rights Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for OCA), 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 OCA prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by any one of the Chairman of the Board, the President,
the Chief Executive Officer, the Chief Operating Officer, any Vice President,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of OCA
25
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 OCA or any other
Person only for its own gross negligence, bad faith or willful misconduct.
Anything in this Agreement to the contrary notwithstanding, in no event shall
the Rights Agent be liable for special, indirect or consequential loss or damage
of any kind whatsoever (including, but not limited to, lost profits), even if
the Rights Agent has been advised of the likelihood of such loss or damage and
regardless of the form of action.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except its authentication thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by OCA only.
(e) The Rights Agent shall not have any responsibility with respect to
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or with respect to the validity or
execution of any Rights Certificate (except its authentication thereof); nor
shall it be responsible for any breach by OCA of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor shall it be
responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 12(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Sections 3, 12, 14, 24 and 25, or the ascertainment of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Rights 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 Rights Certificate or as to whether any
Preferred Shares or Common Shares will, when issued, be duly authorized, validly
issued, fully paid and nonassessable.
(f) OCA agrees that it will perform, execute, acknowledge and deliver
or cause to be performed, executed, acknowledged and delivered all such further
and other acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, the Chief Executive Officer,
the Chief Operating Officer, any Vice President, the Chief Financial Officer,
the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary
of OCA, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such
officer.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of OCA or become
26
pecuniarily interested in any transaction in which OCA may be interested, or
contract with or lend money to OCA or otherwise act as fully and freely as
though it were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for OCA.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss of OCA resulting from any such act, default, neglect or
misconduct provided reasonable care was exercised in the selection and continued
employment thereof.
SECTION 21. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the corporate trust or stock
transfer business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such Person would be eligible for appointment as a successor
Rights Agent under the provisions of Section 22. If at the time such successor
Rights Agent shall succeed to the agency created by this Agreement any of the
Rights Certificates shall have been authenticated but not delivered, any such
successor Rights Agent may adopt the authentication of the predecessor Rights
Agent and deliver such Rights Certificates so authenticated, and, if at that
time any of the Rights Certificates shall not have been authenticated, any
successor Rights Agent may authenticate such Rights Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
If at any time the name of the Rights Agent shall be changed and at
such time any of the Rights Certificates shall have been authenticated but not
delivered, the Rights Agent may adopt the authentication under its prior name
and deliver Rights Certificates so authenticated; and, in case at that time any
of the Rights Certificates shall not have been authenticated, the Rights Agent
may authenticate such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
SECTION 22. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon 30
days notice in writing mailed to OCA and to each transfer agent for the Common
Shares of OCA and the Preferred Shares by registered or certified mail, and to
the holders of the Rights Certificates by first-class mail. OCA may remove the
Rights Agent or any successor Rights Agent upon 30 days notice in writing,
mailed to the Rights
27
Agent or successor Rights Agent, as the case may be, and to each transfer agent
for the Common Shares of OCA and the Preferred Shares by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. In the
event the transfer agency relationship in effect between OCA and the Rights
Agent terminates, the Rights Agent will be deemed to resign automatically on the
effective date of such termination; provided that any requisite notice will be
sent by the terminating party in accordance with this section. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
OCA shall appoint a successor to the Rights Agent. If OCA shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the registered holder of a
Rights Certificate (or, prior to the Distribution Date, of Common Shares), then
any registered holder of a Rights Certificate (or, prior to the Distribution
Date, of Common Shares) may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by OCA or by such a court, shall be either (a) a Person organized and doing
business under the laws of the United States or of any state of the United
States, which is authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million or (b) an Affiliate of a
Person described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, OCA
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent for the Common Shares of OCA and the Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 22, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
SECTION 23. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, OCA may, at its
option, issue new Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or change in the
Purchase Price per share and the number or kind or class of shares or other
securities purchasable under the Rights Certificates made in accordance with the
provisions of this Agreement.
SECTION 24. REDEMPTION.
(a) The Rights may be redeemed by action of the Board of Directors
pursuant to paragraph (b) of this Section 24, or may be redeemed and exchanged
by action of the Board of Directors pursuant to Section 25 herein, but shall not
be redeemed in any other manner.
(b) The Board of Directors may, at its option, at any time prior to the
time any Person becomes an Acquiring Person redeem all but not less than all of
the then outstanding Rights at a redemption price of one thousandth of one cent
($0.00001) per Right then outstanding, appropriately adjusted to reflect any
adjustment in the number of Rights outstanding pursuant to Section 12(i) herein
(such redemption price being hereinafter referred to as the "Redemption Price").
Any such redemption of the Rights by the Board of Directors may be made
effective at
28
such time, on such basis and with such conditions as the Board of Directors in
its sole discretion may establish.
(c) The right of the registered holders of Rights Certificates to
exercise the Rights evidenced thereby or, if the Distribution Date has not
theretofore occurred, the inchoate right of the registered holders of Rights to
exercise the same shall, without notice to such holders or to the Rights Agent
and without further action, terminate and be of no further force or effect
effective as of the time of adoption by the Board of Directors of a resolution
authorizing and directing the redemption of the Rights pursuant to paragraph (b)
of this Section 24 (or, alternatively, if the Board of Directors qualified such
action as to time, basis or conditions, then at such time, on such basis and
with such conditions as the Board of Directors may have established pursuant to
such paragraph (b)); thereafter, the only right of the holders of Rights shall
be to receive the Redemption Price. OCA shall promptly give public notice of any
redemption resolution pursuant to paragraph (b) of this Section 24; PROVIDED,
HOWEVER, that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 days after the adoption of any
redemption resolution pursuant to paragraph (b) of this Section 24, OCA shall
give notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agents for the Common Shares. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption shall state
the method by which the payment of the Redemption Price will be made.
(d) Neither OCA nor any of its Affiliates or Associates may acquire
(other than, in the case of such Affiliates and Associates, in their capacity as
holders of Common Shares of OCA), redeem or purchase for value any Rights at any
time in any manner other than as specifically set forth in this Section 24 or in
Section 25 herein, and other than in connection with the purchase of Common
Shares prior to the Distribution Date.
SECTION 25. MANDATORY REDEMPTION AND EXCHANGE.
(a) The Board of Directors may, at its option, at any time after any
Person becomes an Acquiring Person, issue Common Shares of OCA in mandatory
redemption of, and in exchange for, all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null and
void pursuant to the provisions of Section 8(e) hereof) at an exchange ratio of
one Common Share for each two Common Shares for which each Right is then
exercisable pursuant to the provisions of Section 12(a)(ii) hereof.
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such redemption and exchange at any time after any Person (other than
OCA, any Subsidiary of OCA, any employee benefit plan of OCA or of any such
Subsidiary, or any trustee of or fiduciary with respect to any such plan when
acting in such capacity), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Voting Shares then
outstanding.
(b) Immediately upon the action of the Board of Directors ordering the
mandatory redemption and exchange of any Rights pursuant to subsection (a) of
this Section 25 and without
29
any further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall
be to receive such number of Common Shares as is provided in paragraph (a) of
this Section 25. OCA shall promptly give public notice of any such redemption
and exchange; PROVIDED, HOWEVER, that the failure to give, or any defect in,
such notice shall not affect the validity of such redemption and exchange. OCA
promptly shall mail a notice of any such redemption and exchange to all the
holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of mandatory redemption and exchange shall state the method by
which the redemption and exchange of the Common Shares for Rights will be
effected and, in the event of any partial redemption and exchange, the number of
Rights which will be redeemed and exchanged. Any partial redemption and exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become null and void pursuant to the provisions of Section 8(e)
hereof) held by each holder of Rights.
(c) In any mandatory redemption and exchange pursuant to this Xxxxxxx
00, XXX, xx its option, may substitute Preferred Shares (or equivalent preferred
shares, as such term is defined in Section 12(b) hereof) for Common Shares, at
the initial rate of one one-thousandth of a Preferred Share (or equivalent
preferred share) for each Common Share, as appropriately adjusted.
(d) In any exchange pursuant to this Section 25, OCA, at its option,
may substitute for any Common Shares exchangeable for a Right (i) Common Share
Equivalents, (ii) cash, (iii) debt securities of OCA, (iv) other assets, or (v)
any combination of the foregoing, having an aggregate value which the Board of
Directors shall have determined in good faith to be equal to the current market
price of one Common Share (determined pursuant to Section 12(d) hereof) on the
Trading Day immediately preceding the date of exchange pursuant to this Section
25.
SECTION 26. NOTICE OF CERTAIN EVENTS. If OCA shall, on or after the Distribution
Date, propose (a) to pay any dividend or other distribution payable in stock of
any class of OCA or any Subsidiary of OCA to the holders of its Preferred
Shares, (b) to distribute to the holders of its Preferred Shares rights or
warrants to subscribe for or to purchase any additional Preferred Shares or
shares of stock of any class or any other securities, rights or options, (c) to
make any other distribution to the holders of its Preferred Shares (other than a
regular quarterly cash dividend), (d) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (e) to effect any consolidation or merger into
or with, or to effect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of OCA and its
Subsidiaries (determined as provided in Section 14 herein) to, any other Person
(other than OCA or a Wholly-Owned Subsidiary or Wholly-Owned Subsidiaries), (f)
to effect the liquidation, dissolution or winding up of OCA or (g) if the Rights
have theretofore become exercisable with respect to Common Shares pursuant to
Section 12(a)(ii) herein, to declare or pay any dividend or other distribution
on the Common Shares payable in Common Shares or in stock of any other class of
OCA or any Subsidiary of OCA or to effect a subdivision or combination of the
Common Shares (by reclassification or otherwise than by payment of dividends in
Common Shares) then, in each such case, OCA shall give to each holder of a
Rights
30
Certificate, in accordance with Section 28 hereof, notice of such proposed
action, which shall specify the date of authorization by the Board of Directors
of, and record date for, such stock dividend or such distribution of rights or
warrants or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, winding up, subdivision or combination
is to take place and the date of participation therein by the holders of the
Common Shares of OCA or the Preferred Shares, or both, if any such date is to be
fixed. Such notice shall be so given in the case of any action covered by clause
(a), (b) or (g) above at least 20 days prior to the record date for determining
holders of the Preferred Shares or of the Common Shares of OCA, as the case may
be, for purposes of such action, and in the case of any such other action, at
least 20 days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Preferred Shares or Common
Shares of OCA, as the case may be, whichever shall be the earlier.
If any of the events set forth in Section 12(a)(ii) of this Agreement
shall occur, then, in any such case, OCA shall as soon as practicable thereafter
give to each holder of a Rights Certificate, in accordance with Section 28
hereof, a notice of the occurrence of such event, which shall specify the event
and the consequences of the event to holders of Rights under Section 12(a)(ii)
hereof.
SECTION 27. SECURITIES LAWS REGISTRATIONS. To the extent legally required, OCA
agrees that it will prepare and file, as soon as practicable following the
Distribution Date, and will use its best efforts to cause to be declared
effective, a registration statement under the Securities Act registering the
offering, sale and delivery of the Preferred Shares issuable upon exercise of
the Rights, and OCA will, thereafter, use its best efforts to maintain such
registration statement (or another) continuously in effect so long as any Rights
remain outstanding and exercisable with respect to Preferred Shares. Should the
Rights become exercisable with respect to securities of OCA or one of its
Subsidiaries other than Preferred Shares, OCA agrees that it will, to the extent
legally required, promptly thereafter prepare and file, or cause to be prepared
and filed, and will use its best efforts to cause to be declared effective, a
registration statement under such Act registering the offering, sale and
delivery of such other securities and OCA will, thereafter, use its best efforts
to maintain such registration statement (or another) continuously in effect so
long as any outstanding Rights are exercisable with respect to such securities.
OCA further agrees to use its best efforts, from and after the Distribution
Date, to qualify or register for sale the Preferred Shares or other securities
of OCA or one of its Subsidiaries issuable upon exercise of the Rights under the
securities or "blue sky" laws (to the extent legally required thereunder) of all
jurisdictions in which registered holders of Rights Certificates reside
determined by reference to the Rights Register. OCA may temporarily suspend, for
a period of time not to exceed ninety days after the Distribution Date, the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension OCA shall
promptly notify the Rights Agent in writing of such suspension and shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect (with prompt written notice to the Rights
Agent that such suspension is no longer in effect). Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, the
31
exercise thereof shall not be permitted under applicable law or a registration
statement shall not have been declared effective.
SECTION 28. NOTICES. Notices or demands authorized by this Agreement to be given
or made by the Rights Agent or by the holder of any Rights Certificate to or on
OCA 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:
Orthodontic Centers of America, Inc.
0000 X. Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxx 00000
Subject to the provisions of Section 22 hereof, any notice or demand
authorized by this Agreement to be given or made by OCA or by the holder of any
Rights 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 OCA) as follows:
EquiServe Trust Company, N.A.
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Client Administration
Telephone: (000) 000-0000
Notices or demands authorized by this Agreement to be given or made by OCA or
the Rights Agent to the holder of any Rights Certificate shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the Rights Register of OCA or,
prior to the Distribution Date, on the stock transfer records for the Common
Shares of OCA.
SECTION 29. SUPPLEMENTS AND AMENDMENTS. OCA may from time to time supplement or
amend this Agreement (which supplement or amendment shall be evidenced by a
writing signed by OCA and the Rights Agent) without the approval of any holders
of any certificates representing Common Shares or any holders of Rights
Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions herein, to make any other provisions in regard to matters or
questions arising hereunder, or to add, delete, modify or otherwise amend any
provision, which OCA may deem necessary or desirable, including without
limitation extending the Final Expiration Date; PROVIDED THAT the period during
which the Rights may be redeemed may not be extended at a time when the Rights
are not then redeemable; PROVIDED FURTHER, HOWEVER, that, from and after the
Shares Acquisition Date, any such amendment or supplement shall not materially
and adversely affect the interests of the holders of Rights Certificates other
than an Acquiring Person or transferees of such Acquiring Person. Without
limiting the foregoing, the Board of Directors may by resolution adopted at any
time prior to such time as any Person becomes an Acquiring Person amend this
Agreement to lower the threshold set forth in the definition of Acquiring Person
herein from 20% to a percentage not less than the greater of any percentage
greater than the largest percentage of the outstanding Voting Shares then known
to OCA to be beneficially
32
owned by any Person (other than OCA, any Subsidiary of OCA, any employee benefit
plan of OCA or of any Subsidiary of OCA, or any trustee of or fiduciary with
respect to any such plan when acting in such capacity) and 10%, if the Board of
Directors shall determine that a Person whose interests are adverse to OCA and
its stockholders may seek to acquire control of OCA. Upon the delivery of a
certificate from an appropriate officer of OCA, which states that the proposed
supplement or amendment is in compliance with the terms of this Section 29 and,
provided such supplement or amendment does not change or increase the Rights
Agent's rights, duties, liabilities or obligations hereunder, the Rights Agent
shall execute such supplement or amendment.
SECTION 30. SUCCESSORS. All the covenants and provisions of this Agreement by or
for the benefit of OCA or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
SECTION 31. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any Person other than OCA, the Rights Agent and the
registered holders of the Rights any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of OCA, the Rights Agent and the registered holders of the Rights.
SECTION 32. SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
SECTION 33. GOVERNING LAW. This Agreement and each Rights Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made and performed
entirely within such State.
SECTION 34. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
SECTION 35. DESCRIPTIVE HEADINGS. Descriptive headings of the several Sections
of this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
SECTION 36. BOARD OF DIRECTORS. The Board of Directors shall have the exclusive
power and authority to administer this Agreement and to exercise the rights and
powers specifically granted to the Board of Directors or to OCA. All such
actions, calculations, interpretations and determinations that are done or made
by the Board of Directors in good faith shall be final, conclusive and binding
on OCA, the Rights Agent, the holders of the Rights, as such, and all other
Persons. The Rights Agent shall always
33
be entitled to assume that OCA's Board of Directors acted in good faith and
shall be fully protected and incur no liability in reliance thereon.
SECTION 37. FORCE MAJEURE. Notwithstanding anything to the contrary contained
herein, the Rights Agent shall not be liable for any delays or failures in
performance resulting from acts beyond its control including, without
limitation, acts of God, terrorist acts, war or civil unrest.
34
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.
ORTHODONTIC CENTERS OF AMERICA, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxxxxx, Xx.
-------------------------------------
Xxxxxxxxxxx X. Xxxxxxxxx, Xx.
Chairman of the Board, President and
Chief Executive Officer
EQUISERVE TRUST COMPANY, N.A.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Xxxxxx X. Xxxxx
Managing Director
35
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
ORTHODONTIC CENTERS OF AMERICA, INC.
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
Orthodontic Centers of America, Inc., a Delaware corporation ("OCA"),
through the undersigned duly authorized officer, in accordance with the
provisions of Sections 103 and 151 of the General Corporation Law of the State
of Delaware, DOES HEREBY CERTIFY:
That, the Board of Directors of OCA on March 3, 2004, pursuant to the
authority conferred upon the Board of Directors by the Restated Certificate of
Incorporation of OCA (the "Certificate of Incorporation") and in accordance with
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, adopted the following resolution creating a series of Preferred Stock,
par value $.01 per share:
RESOLVED, that, pursuant to the authority expressly granted to and
vested in the Board of Directors of OCA in accordance with the provisions of
Article 4(b) of the Restated Certificate of Incorporation, a series of 500,000
shares of the Preferred Stock of the Company, par value $.01 per share, be, and
it hereby is, created and that the voting powers, designations, preferences and
relative, participating, optional and other special rights of the shares of such
series, and the qualifications, limitations or restrictions thereof are as
follows:
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK:
(a) DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Junior Preferred Stock") and the number of shares constituting the Series A
Junior Preferred Stock shall be 500,000. Such number of shares may be increased
or decreased by resolution of the Board of Directors; PROVIDED, that no decrease
shall reduce the number of shares of Series A Junior Preferred Stock to a number
less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by OCA
convertible into Series A Junior Preferred Stock.
(b) DIVIDENDS AND DISTRIBUTIONS.
(i) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and
superior to the Series A Junior Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Preferred Stock, in
preference to the holders of Common Stock, $.01 par value per share
(the "Common
A-1
Stock"), of OCA, and of any other junior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable on
the first business day of February, May, August and November in each
year (each such date being referred to herein as a "Quarterly Dividend
Payment Date") as provided in paragraphs (ii) and (iii) of this Section
(b) in an amount per share (rounded to the nearest cent) equal to the
greater of (A) $1.00 in cash or (B) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share
amount (payable in cash) of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock since
the immediately preceding Quarterly Dividend Payment Date or with
respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Junior
Preferred Stock. If OCA shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Junior Preferred Stock
were entitled immediately prior to such event under clause (B) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that was outstanding
immediately prior to such event.
(ii) OCA shall declare a dividend or distribution on the
Series A Junior Preferred Stock as provided in paragraph (i) of this
Section (b) immediately after it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common
Stock); PROVIDED that, if no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $1.00 per share payable in cash on the
Series A Junior Preferred Stock shall nevertheless accrue and be
cumulative on the outstanding shares of Series A Junior Preferred Stock
as provided in paragraph (iii) of this Section (b).
(iii) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of
such shares, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Junior Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Junior Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable
on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time
A-2
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Junior Preferred Stock
entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
(c) VOTING RIGHTS. The holders of shares of Series A Junior Preferred
Stock shall have the following voting rights:
(i) Subject to the provisions for adjustment hereinafter set
forth, each share of Series A Junior Preferred Stock shall entitle the
holder thereof to 1,000 votes on all matters submitted to a vote of the
stockholders of OCA. If OCA shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination of the outstanding shares of Common Stock
(by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Junior Preferred Stock
were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that was outstanding immediately prior to such event.
(ii) Except as otherwise provided herein, in the Certificate
of Incorporation, as it may be amended from time to time, in any other
Certificate of Designation creating a series of Preferred Stock or any
similar stock, or by law, the holders of shares of Series A Junior
Preferred Stock and the holders of shares of Common Stock and any other
capital stock of OCA having general voting rights shall vote together
as one class on all matters submitted to a vote of stockholders of OCA.
(iii) Except as set forth herein or as otherwise provided by
law, holders of Series A Junior Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
(d) CERTAIN RESTRICTIONS.
(i) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Preferred Stock as
provided in Section (b) are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Junior Preferred Stock outstanding
shall have been paid in full, or declared and a sum sufficient for the
payment therefor be set apart for payment and be in the process of
payment, OCA shall not:
(A) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Junior Preferred Stock;
(B) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation,
A-3
dissolution or winding up) with the Series A Junior Preferred
Stock, except dividends paid ratably on the Series A Junior
Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
(C) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series A Junior Preferred Stock, PROVIDED that OCA may at
any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of OCA
ranking junior (as to both dividends and upon dissolution,
liquidation or winding up) to the Series A Junior Preferred
Stock; or
(D) redeem or purchase or otherwise acquire for
consideration any shares of Series A Junior Preferred Stock or
any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with
the Series A Junior Preferred Stock, except in accordance with
a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair
and equitable treatment among the holders of the respective
series or classes.
(ii) OCA shall not permit any subsidiary of OCA to purchase or
otherwise acquire for consideration any shares of stock of OCA unless
OCA could, under paragraph (i) of this Section (d), purchase or
otherwise acquire such shares at such time and in such manner.
(e) REACQUIRED SHARES. Any shares of Series A Junior Preferred Stock
purchased or otherwise acquired by OCA in any manner whatsoever shall be retired
and canceled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth herein, in the Certificate of
Incorporation, or in any other Certificate of Designation creating a series of
Preferred Stock or any similar stock or as otherwise required by law.
(f) LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
dissolution or winding up of OCA, no distribution shall be made (i) to the
holders of shares of stock ranking junior (either as to dividends or as to
amounts payable upon liquidation, dissolution or winding up) to the Series A
Junior Preferred Stock unless, prior thereto, the holders of Series A Junior
Preferred Stock shall have received an amount per share (rounded to the nearest
cent) equal to the greater of (A) $1,000 per share, or (B) an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount to be distributed per share to holders of Common
Stock, plus, in either case, an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment, or
(ii) to the holders of stock ranking on a parity (either as to dividends or as
to
A-4
amounts payable upon liquidation, dissolution or winding up) with the Series
A Junior Preferred Stock, except distributions made ratably on the Series A
Junior Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such Shares are entitled upon such
liquidation, dissolution or winding up. If OCA shall at any time declare or pay
any dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Junior Preferred Stock were entitled immediately
prior to such event under the proviso in clause (i)(B) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
was outstanding immediately prior to such event.
(g) CONSOLIDATION, MERGER, ETC. If OCA 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
or any other property, or any combination thereof, then in any such case each
share of Series A Junior Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the aggregate amount of
stock, securities, cash or any other property (payable in kind), or any
combination thereof, as the case may be, into which or for which each share of
Common Stock is changed or exchanged. If OCA shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series A
Junior Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that was outstanding immediately prior to such
event.
(h) REDEMPTION. The shares of Series A Junior Preferred Stock shall not
be redeemable. So long as any shares of Series A Junior Preferred Stock remain
outstanding, OCA shall not purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Preferred Stock unless OCA
shall substantially concurrently also purchase or acquire for consideration a
proportionate number of shares of Series A Junior Preferred Stock.
(i) RANK. The Series A Junior Preferred Stock shall rank, with respect
to payment of dividends and the distribution of assets, junior to all series of
any other class of OCA's Preferred Stock; provided that any class or series of
OCA's Preferred Stock hereafter created may expressly provide that such class or
series shall be pari passu with the Series A Preferred Stock with respect to the
payment of dividends and distributions, voting rights and/or distributions upon
liquidation, dissolution or winding up of OCA.
(j) AMENDMENT. The Certificate of Incorporation of OCA shall not be
amended in any manner which would materially alter or change the powers,
preferences, privileges or special
A-5
rights of the Series A Junior Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series A Junior Preferred Stock, voting together as a
single class.
IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of OCA by its Chairman of the Board, President and Chief Executive
Officer, and attested by its Secretary, this 3rd day of March, 2004.
ORTHODONTIC CENTERS OF AMERICA, INC.
By:
-------------------------------------
Xxxxxxxxxxx X. Xxxxxxxxx, Xx.
Chairman of the Board, President and
Chief Executive Officer
ATTEST:
--------------------------------
Xxxxxxxxxxx X. Xxxxxxxxx, Xx.
Secretary
A-6
EXHIBIT B
Form of Rights Certificate
Certificate No. R -__________ _____ Rights
NOT EXERCISABLE AFTER MARCH 2, 2014 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.00001 PER RIGHT AND
TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS DEFINED IN
SECTION 1 OF THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID.
ORTHODONTIC CENTERS OF AMERICA, INC.
Rights 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 Rights Agreement, dated as of March 3, 2004 (the "Rights
Agreement"), between ORTHODONTIC CENTERS OF AMERICA, INC., a Delaware
corporation ("OCA"), and _______________ (the "Rights Agent"), to purchase from
OCA at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 p.m., New Orleans, Louisiana time, on March
2, 2014, at the Corporate Trust Office of the Rights Agent (or at the office of
its successor as Rights Agent), one one-thousandth (1/1000) of a fully paid
non-assessable share of Series A Junior Participating Preferred Stock, $.01 par
value per share (the "Preferred Shares"), of OCA, at a purchase price of
$40.00 per one one-thousandth (1/1000) of a Preferred Share (the "Purchase
Price"), upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase duly executed. The number of Rights evidenced by
this Rights Certificate (and the number of one one-thousandths of a Preferred
Share which may be purchased upon exercise hereof) set forth above, and the
Purchase Price set forth above, are the number and Purchase Price as of March 3,
2004, based on the Preferred Shares as constituted at such date. As provided in
the Rights Agreement, the Purchase Price and the number of one one-thousandths
of a Preferred Share which may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification and adjustment
upon the happening of certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, OCA and the holders of the Rights Certificates. Copies of the
Rights Agreement are on file at the principal executive offices of OCA and the
Corporate Trust Office of the Rights Agent.
B-1
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the Corporate Trust Office of the Rights Agent, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of Preferred Shares as the Rights evidenced by the Rights Certificate or
Rights Certificates surrendered shall have entitled such holder to purchase. If
this Rights Certificate shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by OCA at a redemption price of $.00001
per Right or (ii) may be exchanged by OCA in whole or in part for Preferred
Shares or shares of OCA's common stock, $.01 par value per share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share, which may, at the election
of OCA, be evidenced by depositary receipts), but in lieu thereof a cash payment
will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of OCA which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of OCA or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be entitled to any benefit under the
Rights Agreement or be valid or obligatory for any purpose until it shall have
been authenticated by the Rights Agent.
WITNESS the facsimile signatures of the proper officers of OCA and its
corporate seal.
Dated as of ________________, ____.
ATTEST: ORTHODONTIC CENTERS OF AMERICA, INC.
By:
--------------------------------- -----------------------------------
Name: Name:
---------------------------- ---------------------------------
Title: Title:
--------------------------- --------------------------------
B-2
Authentication:
This is one of the Rights Certificates referred to in the within-mentioned
Rights Agreement.
________________,
as Rights Agent
By:
------------------------------
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Rights Certificate)
FOR VALUE RECEIVED, _______________________ hereby sells, assigns and
transfers unto _________________________________________________________ (Please
print name and address of transferee) this Rights Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint __________________ Attorney, to transfer the within Rights Certificate
on the books of the within-named Company, with full power of substitution.
B-3
Dated as of ___________________, ____.
------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of NASD Regulation, Inc., or a commercial bank or
trust company having an office or correspondent in the United States.
--------------------------------------------
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this
Rights Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
------------------------------------
Signature
[Form of Reverse Side of Rights Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate)
TO ORTHODONTIC CENTERS OF AMERICA, INC.
The undersigned hereby irrevocably elects to exercise _____________
Rights represented by this Rights Certificate to purchase the Preferred Shares
(or other securities) issuable upon the exercise of such Rights and requests
that certificates for such Preferred Shares (or other securities) be issued in
the name of:
B-4
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
Rights Certificate, a new Rights Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security or other identifying number:
---------------------
------------------------------------------------------
(Please print name and address)
Dated as of _____________, ____.
------------------------------------
Signature
[Form of Reverse Side of Rights Certificate -- continued]
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of NASD Regulation, Inc., or a commercial bank or
trust company having an office or correspondent in the United States.
------------------------------------------------------
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this
Rights Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
------------------------------------
Signature
-------------------------------------------------
B-5
NOTICE
The signature in the foregoing Form of Assignment or Form of Election
to Purchase must conform to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, OCA and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
B-6
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On March 3, 2004, the Board of Directors of Orthodontic Centers of
America, Inc. ("OCA"), authorized the issuance of one preferred share purchase
right (a "Right") with respect to each outstanding share of common stock, $.01
par value (the "Common Shares"), of OCA. The rights were issued on March 3, 2004
to the holders of record of Common Shares on that date. Each Right entitles the
registered holder to purchase from OCA one one-thousandth of a share of Series A
Junior Participating Preferred Stock, $.01 par value (the "Preferred Shares"),
of OCA at a price of $40.00 per one one-thousandth of a Preferred Share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") dated as of
March 3, 2004, between OCA and EquiServe Trust Company, N.A., as Rights Agent
(the "Rights Agent").
DETACHMENT OF RIGHTS; EXERCISE. Initially, the Rights will attach to
all Common Share certificates representing outstanding shares and no separate
Rights Certificate will be distributed. The Rights will separate from the Common
Shares and a "Distribution Date" will occur upon close of Business (as defined
in the Rights Agreement) on the earlier of (i) 10 business days following a
public announcement that a person or group of affiliated or associated persons
has become an Acquiring Person, or (ii) 10 business days following the
commencement or announcement of an intention to commence a tender offer or
exchange offer the consummation of which would result in a person or group
becoming an Acquiring Person, subject to the right of the Board of Directors to
defer the occurrence of a Distribution Date upon the occurrence of an event
described in this clause (ii).
In general, a person becomes an Acquiring Person if such person or a
group of which such person is a member becomes the beneficial owner of 20% or
more of OCA's outstanding common stock.
Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced with respect to any of the Common
Shares outstanding on March 3, 2004, by the certificates representing such
Common Shares with a copy of this Summary of Rights attached thereto, (ii) the
Rights will be transferred with and only with the Common Shares, (iii) new
Common Share certificates issued after March 3, 2004, upon transfer or new
issuance of the Common Shares will contain a notation incorporating the Rights
Agreement by reference, and (iv) the surrender for transfer of any certificates
for Common Shares outstanding as of March 3, 2004, even without such notation or
a copy of this Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Shares represented by such
certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Rights 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 Rights Certificates alone will thereafter
evidence the Rights.
C-1
The Rights are not exercisable until the Distribution Date. The Rights
will expire on March 2, 2014 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or the Rights are earlier redeemed or exchanged by
OCA as described below.
If a person or group were to become an Acquiring Person, then each
Right then outstanding (other than Rights beneficially owned by the Acquiring
Person which would become null and void) would become a right to buy that number
of Common Shares (or under certain circumstances, the equivalent number of one
one-thousandths of a Preferred Share or other assets or securities of OCA) equal
to two times the Purchase Price of the Right divided by the market value of the
Common Shares at the time of such acquisition.
At any time after a person or group of affiliated or associated persons
becomes an Acquiring Person, if OCA were acquired in a merger or other business
combination transaction or more than 50% of its consolidated assets or earning
power were sold, proper provision will be made so that each holder of a Right
will thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price of the Right, that number of shares of common stock of
the acquiring company equal to two times the Purchase Price of the Right divided
by the market value of the Common Shares at the time of such acquisition.
PREFERRED SHARES. The dividend and liquidation rights, and the
non-redemption feature, of the Preferred Shares are designed so that the value
of one one-thousandth of a Preferred Share purchasable upon exercise of each
Right will approximate the value of one Common Share. The Preferred Shares
issuable upon exercise of the Rights will be non-redeemable and rank junior to
all other series of OCA's preferred stock. Each whole Preferred Share will be
entitled to receive a quarterly preferential dividend in an amount per share
equal to the greater of (i) $1.00 in cash, or (ii) in the aggregate, 1,000 times
the dividend declared on each Common Share. In the event of liquidation, the
holders of the Preferred Shares will be entitled to receive a preferential
liquidation payment equal to the greater of (i) $1,000 per share, or (ii) in the
aggregate, 1,000 times the payment made on each Common Share. In the event of
any merger, consolidation or other transaction in which Common Shares are
exchanged for or changed into other stock or securities, cash or other property,
each whole Preferred Share will be entitled to receive 1,000 times the amount
received per Common Share. Each whole Preferred Share shall be entitled to 1,000
votes on all matters submitted to a vote of the stockholders of OCA, and
Preferred Shares shall generally vote together as one class with the Common
Stock and any other capital stock entitled to vote thereon on all matters
submitted to a vote of stockholders of OCA.
The offer and sale of the Preferred Shares issuable upon exercise of
the Rights will be registered with the Securities and Exchange Commission and
such registration will not be effective until the Rights become exercisable.
ANTIDILUTION AND OTHER ADJUSTMENTS. The number of one one-thousandths
of a Preferred Share or other securities or property issuable upon exercise of
the Rights, and the Purchase Price payable, are subject to customary adjustments
from time to time to prevent dilution.
The number of outstanding Rights and the number of one one-thousandths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common
C-2
Shares or subdivisions, consolidations or combinations of the Common Shares
occurring, in any such case, prior to the Distribution Date.
EXCHANGE OPTION. At any time after a person or group of affiliated or
associated persons has become an Acquiring Person and before the acquisition by
a person or group of 50% or more of the outstanding Voting Shares, the Board of
Directors may, at its option, issue Common Shares (or Preferred Shares) in
mandatory redemption of, and in exchange for, all or part of the then
outstanding and exercisable Rights (other than Rights owned by such person or
group which would become null and void) at an exchange ratio of one Common Share
(or one one-thousandth of a Preferred Share) for each two Common Shares for
which each Right then outstanding is then exercisable, subject to adjustment.
REDEMPTION OF RIGHTS. At any time prior to the time that a person or
group has become an Acquiring Person, the Board of Directors of OCA may redeem
all but not less than all the then outstanding Rights at a price of $0.00001 per
Right (the "Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon the action of
the Board of Directors ordering redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
NO RIGHTS AS STOCKHOLDER. Until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder of OCA, including,
without limitation, the right to vote or to receive dividends.
AMENDMENT OF RIGHTS. The terms of the Rights may be amended by the
Board of Directors of OCA without the consent of the holders of the Rights,
including an amendment to extend the Final Expiration Date, and, provided a
Distribution Date has not occurred, to extend the period during which the Rights
may be redeemed, except that after the first public announcement that a person
or group has become an Acquiring Person, no such amendment may materially and
adversely affect the interests of the holders of the Rights other than the
Acquiring Person and transferees of the Acquiring Person.
THIS SUMMARY DESCRIPTION OF THE RIGHTS DOES NOT PURPORT TO BE COMPLETE
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS AGREEMENT, WHICH IS
HEREBY INCORPORATED HEREIN BY REFERENCE.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
March 3, 2004. A copy of the Rights Agreement is available free of charge from
OCA.
C-3
