EXHIBIT 99.1
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RIGHTS AGREEMENT
BETWEEN
XXXXXX LABORATORIES
AND
BANKBOSTON, N.A.
RIGHTS AGENT
DATED AS OF NOVEMBER 11, 1999
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TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions.............................................................................1
Section 2. Appointment of Rights Agent.....................................................................6
Section 3. Issuance of Right Certificates..................................................................6
Section 4. Form of Right Certificates......................................................................8
Section 5. Countersignature and Registration...............................................................9
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates...........................9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights..................................10
Section 8. Cancellation and Destruction of Right Certificates.............................................12
Section 9. Availability of Preferred Shares...............................................................13
Section 10. Preferred Shares Record Date...................................................................13
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights.........................................................................................14
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.....................................21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power .........................................................................................21
Section 14. Fractional Rights and Fractional Shares........................................................23
Section 15. Rights of Action...............................................................................24
Section 16. Agreement of Right Holders.....................................................................25
Section 17. Right Certificate Holder Not Deemed a Shareholder..............................................25
Section 18. Concerning the Rights Agent....................................................................26
Section 19. Merger or Consolidation or Change of Name of Rights Agent......................................26
Section 20. Duties of Rights Agent.........................................................................27
Section 21. Change of Rights Agent.........................................................................29
Section 22. Issuance of New Right Certificates.............................................................30
Section 23. Redemption.....................................................................................31
Section 24. Exchange.......................................................................................32
Section 25. Notice of Certain Events.......................................................................33
Section 26. Notices........................................................................................34
Section 27. Supplements and Amendments.....................................................................34
Section 28. Successors.....................................................................................35
Section 29. Benefits of this Agreement.....................................................................35
Section 30. Severability...................................................................................35
Section 31. Governing Law..................................................................................35
Section 32. Counterparts...................................................................................35
Section 33. Descriptive Headings...........................................................................36
Section 34. Determinations and Actions by the Board of Directors...........................................36
Exhibit A Form of Certificate of Designations, Preferences and Rights of the Preferred Shares
Exhibit B Form of Right Certificate
Exhibit C Summary of Shareholder Rights Plan
RIGHTS AGREEMENT
Rights Agreement, dated as of November 11, 1999 (this "Agreement"),
between Xxxxxx Laboratories, an Illinois corporation (the "Company"), and
BankBoston, N.A., a national banking association (the "Rights Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend of one Preferred Share purchase right (a "Right") for
each Common Share (as hereinafter defined) of the Company outstanding as of
the close of business on December 1, 1999 (the "Record Date"), each Right
representing the right to purchase one ten-thousandth of a Preferred Share
(as hereinafter defined), upon the terms and subject to the conditions herein
set forth, 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 Expiration Date (as such term is hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement,
the following terms have the meanings indicated:
"Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 10% or more of
the Common Shares of the Company then outstanding, but shall not include (i)
the Company, (ii) any Subsidiary (as such term is hereinafter defined) of the
Company, or (iii) any employee benefit plan of the Company or of any
Subsidiary of the Company or any Person holding Common Shares for or pursuant
to the terms of any such plan. Notwithstanding the foregoing, no Person that
was not a Solicitation Participant (as such term is hereinafter defined) in
connection with a Change in Control (as such term is hereinafter defined)
shall become an "Acquiring Person" as the result of (i) an acquisition of
Common Shares by the Company which, by reducing the number of Common Shares
outstanding, increases the proportionate number of Common Shares beneficially
owned by such Person to 10% or more of the Common Shares of the Company then
outstanding, or (ii) the acquisition by such Person of newly-issued Common
Shares directly from the Company (it being understood that a purchase from an
underwriter or other intermediary is not deemed for purposes hereof to be a
purchase directly from the Company); PROVIDED, HOWEVER, that if a Person
shall become the Beneficial Owner of 10% or more of the Common Shares of the
Company then outstanding by reason of share purchases by the Company or the
receipt of newly-issued Common Shares directly from the Company and shall,
after
such share purchases or direct issuance by the Company, become the Beneficial
Owner of any additional Common Shares of the Company, then such Person shall
be deemed to be an "Acquiring Person"; and PROVIDED, FURTHER, that any
transferee from such Person who becomes the Beneficial Owner of 10% or more
of the Common Shares of the Company then outstanding shall nevertheless be
deemed to be an "Acquiring Person". Notwithstanding the foregoing, if the
Board of Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph, has become such inadvertently, and
such Person divests as promptly as practicable (and in any event within ten
Business Days after notification by the Company) 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 paragraph, then such
Person shall not be deemed to be an "Acquiring Person" for any purposes of
this Agreement.
"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.
A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to have "beneficial ownership" of or "beneficially own" any securities:
(a) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(b) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (i) the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding, whether written or
oral (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities, or upon the exercise of conversion rights, exchange rights,
rights (other than these Rights), warrants or options, or otherwise;
PROVIDED, HOWEVER, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, (A) 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, (B) securities issuable upon exercise of Rights at any
time prior to the occurrence of a Triggering Event (as such term is
hereinafter defined) or (C) securities issuable upon exercise of Rights from
and after the occurrence of a Triggering Event, which Rights were acquired by
such Person or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) hereof ("Original Rights") or
pursuant to Section 11(i) or Section 22 hereof in connection with an
adjustment made with respect to Original Rights; (ii) the sole or shared
right to vote or dispose of (including any such right pursuant to any
agreement, arrangement or understanding, whether written or oral); PROVIDED,
HOWEVER, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own,
any security if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on Schedule 13D
under the Exchange Act (or any comparable or successor report); or (iii)
"beneficial ownership" (as determined pursuant to Rule 13d-3 (or any
successor rule) of the General Rules and Regulations under the Exchange Act);
(c) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person
or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding, whether written or oral (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent contemplated by the proviso
to clause (ii) of subparagraph (b) of this definition) or disposing of any
securities of the Company; or
(d) which are directly, indirectly or constructively owned by such
Person or any of such Person's Affiliates or Associates, within the meaning
of Section 958 of the U.S. Internal Revenue Code of 1986, as amended.
Notwithstanding anything in this definition of Beneficial Ownership
to the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.
Notwithstanding anything in this definition of Beneficial Ownership
to the contrary, any "clearing agency", as defined in Section 3(a)(23)(A) of
the Exchange Act, which is holding securities solely in its capacity as a
clearing agency, shall not be deemed to be the Beneficial Owner of such
securities.
"Board of Directors" and "Board of Directors of the Company" each
shall mean the members of the board of directors of the Company.
"Business Combination Transaction" shall mean any merger,
consolidation or other business combination transaction involving the
Company, any sale, lease, exchange, transfer or other disposition of all or
substantially all of the assets of the Company or any Subsidiary of the
Company, any tender offer or exchange offer for 10% or more of the Common
Shares of the Company then outstanding, any recapitalization, restructuring,
liquidation or dissolution of the Company or any acquisition by any Person of
Beneficial Ownership of 10% or more of the Common Shares of the Company then
outstanding.
"Business Day" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions in the Commonwealth of Massachusetts
are authorized or obligated by law or executive order to close.
"Change in Control" shall mean a change, resulting from one or more
Third Party Solicitations, in a majority of the directors of the Company in
office at the commencement of the first such Third Party Solicitation if,
prior to or in connection with or during the pendency of any such Third Party
Solicitations, any Solicitation Participant has proposed or initiated a
Business Combination Transaction involving the Company or any of its
Subsidiaries.
"close of business" on any given date shall mean 5:00 P.M., New York
City time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
"Common Shares" when used with reference to the Company shall mean
the shares of common stock, no par value (as such shares may be constituted
or designated, or as such par value may be changed, from time to time during
the term of this Agreement), of the Company. "Common Shares" when used with
reference to any Person other than the Company shall mean the capital stock
(or equity interest) with the greatest voting power of such other Person or
the equity securities or other equity interest having power to control or
direct the management of such other Person.
"Company" shall have the meaning set forth in the preamble hereto.
"current per share market price" shall have the meaning set forth in
Section 11(d) hereof.
"Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
"Dollars" or "$" shall mean U.S. dollars.
"equivalent Preferred Shares" shall have the meaning set forth in
Section 11(b) hereof.
"Exchange Act" shall mean the U.S. Securities Exchange Act of 1934,
as amended.
"Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
"Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
"Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
"Nasdaq" shall have the meaning set forth in Section 11(d)(i) hereof.
"NYSE" shall have the meaning set forth in Section 11(d)(i) hereof.
"Person" shall mean any individual, firm, corporation, partnership,
limited liability company or other entity, and shall include any successor
(by merger, or otherwise) of such entity.
"Preferred Shares" shall mean Series A Junior Participating
Preferred Shares, par value $1.00 per share, of the Company having the
rights, preferences and limitations set forth in the Form of Certificate of
Designations, Preferences and Rights of the Preferred Shares attached to this
Agreement as Exhibit A.
"Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
"Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
"Record Date" shall have the meaning set forth in the preamble
hereto.
"Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
"Right" shall have the meaning set forth in the preamble hereto.
"Rights Agent" shall have the meaning set forth in the preamble
hereto.
"Right Certificate" shall have the meaning set forth in Section 3(a)
hereof.
"Securities Act" shall mean the U.S. Securities Act of 1933, as
amended.
"Shareholder Approval" shall have the meaning set forth in
Section 23(a) hereof.
"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(d) of the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such.
"Solicitation Participant" shall mean, with respect to any Third
Party Solicitation, any Person that, directly or indirectly, made or
participated in the making of such Third Party Solicitation, or any Affiliate
or Associate of such Person.
"Special Meeting" shall have the meaning set forth in Section 23(a)
hereof.
"Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which a majority of the voting power of the
voting equity securities or equity interests is owned, directly or
indirectly, by such Person.
"Summary of Shareholder Rights Plan" shall have the meaning set
forth in Section 3(b) hereof.
"Third Party Solicitation" means any proxy or consent solicitations
made other than by the Company or the Board of Directors.
"Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.
"Triggering Event" shall mean any event described in Section
11(a)(ii) or Section 13(a) hereof.
"U.S." shall mean the United States of America.
Any determination or interpretation required in connection with any
of the definitions contained in this Section 1 shall be made by the Board of
Directors of the Company in its good faith judgment, which determination
shall be final and binding on the Rights Agent.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company 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 shall in no event be liable for, the acts or omissions of any such
co-Rights Agent.
Section 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the close of business on the tenth day
after the Shares Acquisition Date or (ii) the close of business on the
fifteenth 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 the commencement by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding Common
Shares for or pursuant to the terms of any such plan) of, or of the first
public announcement of the intention of any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such plan) to commence, a tender or exchange
offer the consummation of which would result in any Person becoming the
Beneficial Owner
of Common Shares aggregating 10% or more of the then outstanding Common
Shares (including any such date which is after the date of this Agreement and
prior to the issuance of the Rights; the earlier of such dates being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates for
Common Shares registered in the names of the holders thereof (which
certificates shall also be deemed to be certificates for Rights) and not by
separate certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying Common Shares (including a
transfer to the Company). The Company shall give the Rights Agent prompt
written notice of the Distribution Date.
As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will, after receipt of written notice
of the Distribution Date from the Company, countersign, and the Company will
send or cause to be sent (and the Rights Agent will, if requested, send, at
the expense of the Company) by first-class, insured, postage-prepaid mail, to
each record holder of Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit B hereto
(a "Right Certificate"), evidencing an aggregate number of Rights equal to
one Right for each Common Share so held. As of the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Shareholder Rights Plan, in
substantially the form of Exhibit C hereto (the "Summary of Shareholder
Rights Plan"), to each record holder of Common Shares as of the close of
business on the Record Date (other than any Acquiring Person or any Associate
or Affiliate of any Acquiring Person), at the address of such holder shown on
the records of the Company. With respect to certificates for Common Shares
outstanding as of the Record Date, until the Distribution Date, the Rights
will be evidenced by such certificates registered in the names of the holders
thereof, together with the Summary of Shareholder Rights Plan, and registered
holders of Common Shares shall also be the registered holders of the
associated Rights. Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the transfer of any
certificate for Common Shares outstanding on the Record Date, with or without
a copy of the Summary of Shareholder Rights Plan, shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
(c) Rights shall be issued in respect of all Common Shares which
are issued (whether originally issued or delivered from the Company's
treasury) after the Record Date but prior to the earliest of the Distribution
Date, the Redemption Date or the Final Expiration Date. Certificates
representing both Common Shares and Rights in accordance with this Section 3
which are executed and delivered (whether the Common
Xxxxxx represented thereby are originally issued, delivered from the
Company's treasury or are presented for transfer) by the Company (including,
without limitation, certificates representing reacquired Common Shares
referred to in the last sentence of this paragraph (c)) after the Record Date
but prior to the earliest of the Distribution Date, the Redemption Date or
the Final Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them a legend substantially equivalent to the following:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in the Rights Agreement between Xxxxxx
Laboratories (the "Company") and BankBoston, N.A., dated as of
November 11, 1999 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on
file at the principal offices of the Company. 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. The Company will mail to the holder
of this certificate a copy of the Rights Agreement, as in effect on
the date of mailing, without charge promptly after receipt of a
written request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights issued to, or held by, any Person who
is, was or becomes an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent
holder, shall become null and void.
Until the Distribution Date, the Rights associated with the Common Shares
shall be evidenced by the certificates representing the associated Common
Shares alone, and the transfer of any such certificate shall also constitute
the transfer of the Rights associated with the Common Shares represented
thereby. If the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with
such Common Shares shall be deemed canceled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common
Shares which are no longer outstanding.
Section 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of election to purchase
Preferred Shares and of assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation
promulgated pursuant thereto or with any rule or regulation of any stock
exchange or quotation service on which the Rights may from time to time be
listed, or to conform to usage. The Right Certificates shall be in a
machine printable format and in a form reasonably satisfactory to the Rights
Agent. Subject to the provisions of Sections 11, 13 and 24 hereof, the Right
Certificates shall show the date of countersignature and shall entitle the
holders thereof to purchase such number of one ten-thousandths of a Preferred
Share as shall be set forth therein at the price per one ten-thousandth of a
Preferred Share set forth therein (the "Purchase Price"), but the amount and
type of securities purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes an Acquiring Person,
or (iii) a transferee of an Acquiring Person (or such Associate or Affiliate)
who becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding,
whether written or oral, regarding the transferred Rights or (B) a transfer
which the Board of Directors otherwise concludes in good faith is part of a
plan, arrangement or understanding, whether written or oral, which has as a
primary purpose or effect avoidance of Section 7(e) hereof, and any Right
Certificate issued pursuant to Section 6 or Section 11 hereof upon the
transfer, exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent feasible and
otherwise reasonably identifiable as such) the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Right Certificate
and the Rights represented hereby may become void in the circumstances
specified in Section 7(e) of such Agreement.
The Company shall instruct the Rights Agent in writing of the Rights which
should be so legended and shall supply the Rights Agent with such legended
Right Certificates. The provisions of Section 7(e) shall apply whether or not
any Right Certificate actually contains the foregoing legend.
Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right
Certificates shall be executed on behalf of the Company by the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Accounting Officer or any Senior Vice President either
manually or by facsimile signature, shall have affixed thereto the Company's
seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned
by the Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall have signed any
of the Right Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates had not ceased
to be such officer of the Company; and any Right Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution
of such Right Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution of this
Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its office designated for such purpose, books for registration
and transfer of the Right Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 4(b), 7(e), 14 and 24
hereof, at any time after the close of business on the Distribution Date, and
at or prior to the close of business on the earlier of the Redemption Date or
the Final Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number
of Preferred Shares (or, following a Triggering Event, Common Shares, other
securities or property, as the case may be) as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Right Certificate or Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged at the
office of the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Right Certificate and
the Company shall have been provided with such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request. Thereupon the
Rights Agent shall, subject to Sections 4 and 7 hereof, countersign and
deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment by the holders of Right Certificates of a sum sufficient to cover any
tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate, if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Sections 11(a)(iii), 23(b) and 24(b) hereof) in
whole or in part at any time after the Distribution Date upon surrender of
the Right Certificate, with the form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the office of the Rights
Agent designated for such purpose, together with payment of the Purchase
Price with respect to each surrendered Right for the total number of
Preferred Shares (or other securities or property, as the case may be) as to
which the Rights are exercised, at or prior to the earliest of (i) the close
of business on November 10, 2009 (the "Final Expiration Date"), (ii) the time
at which the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date") or (iii) the time at which all exercisable Rights are
exchanged by the Company as provided in Section 24 hereof (such earliest date
being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one ten-thousandth of a Preferred
Share pursuant to the exercise of a Right shall initially be $200.00,
shall be subject to adjustment from time to time as provided in Sections 11
and 13 hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate on the
reverse side of the Right Certificate duly executed, accompanied by payment
of the Purchase Price for the shares (or other securities or property, as the
case may be) to be purchased and an amount equal to any applicable transfer
tax required to be paid by the holder of such Right Certificate in accordance
with Section 9 hereof by certified check, cashier's check or money order
payable to the order of the Company, the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent of the Preferred Shares
(or make available, if the Rights Agent is the transfer agent of the
Preferred Shares) certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) if the Company shall have elected to
deposit the Preferred Shares issuable upon exercise of the Rights with a
depositary agent, requisition from the depositary agent depositary receipts
representing such number of one ten- thousandths of a Preferred Share as are
to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent
therefor with the depositary agent) and the Company shall direct the
depositary agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of
issuance of fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause the same to
be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, deliver such cash referred
to in clause (ii) above to or upon the order of the registered holder of such
Right Certificate. If the Company is obligated to issue other securities
(including Common Shares) of the Company, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or property
are available for distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent and delivered to the registered holder of such
Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the occurrence of a Triggering Event, any Rights beneficially owned
by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes an
Acquiring Person, or (iii) a transferee of an Acquiring Person (or such
Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming an Acquiring Person 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, whether written or oral, regarding
the transferred Rights or (B) a transfer which is part of a plan, arrangement
or understanding (whether written or oral) which has as a primary purpose or
effect the avoidance of this Section 7(e), shall become null and void without
any further action, and any holder of such Rights shall thereupon have no
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise, from and after the occurrence of a Triggering
Event. The Company shall use all reasonable efforts to ensure that the
provisions of Section 4(b)
hereof and this Section 7(e) are complied with, but shall have no liability
to any holder of Rights with respect to any determinations regarding an
Acquiring Person or its Affiliates, Associates or transferees hereunder or
any failure to make any such determination. The Rights Agent will endeavor to
comply with the provisions hereof to the extent it has received instructions
from the Company concerning such matters.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless the certificate
contained in the form of election to purchase set forth on the reverse side
of the Right Certificate surrendered for such exercise shall have been
completed and signed by the registered holder thereof and the Company shall
have been provided with such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner), Affiliates or Associates of
such Beneficial Owner or holder, or any other Person with which such holder
or any of such holder's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for the purpose of
acquiring, holding, voting or disposing of any securities of the Company as
the Company shall reasonably request.
(g) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred
Shares (and, following the occurrence of a Triggering Event, Common Shares
and/or other securities) or any Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other securities) held
in its treasury, the number of Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other securities) that
will be sufficient to permit the exercise in full of all outstanding Rights.
(h) Notwithstanding any statement to the contrary contained in this
Agreement or in any Right Certificate, if either the Distribution Date or the
Shares Acquisition Date shall occur prior to the Record Date, the provisions
of this Agreement, including (without limitation) Sections 3 and 11(a)(ii),
shall be applicable to the Rights upon their issuance to the same extent such
provisions would have been applicable if the Record Date were the date of
this Agreement.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all canceled Right Certificates to
the Company, or shall, at the written
request of the Company, cause such Right Certificates to be destroyed, and in
such case cause a certificate of destruction to be delivered to the Company.
Section 9. AVAILABILITY OF PREFERRED SHARES. The Company covenants
and agrees that it will take all such action as may be necessary to ensure
that all Preferred Shares (and, following the occurrence of a Triggering
Event, Common Shares and/or other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such Preferred
Shares (and, following the occurrence of a Triggering Event, Common Shares
and/or other securities), subject to payment of the Purchase Price, be duly
and validly authorized and issued and fully paid and nonassessable shares.
The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares (or Common Shares and/or other
securities, as the case may be) upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Right Certificates to a person
other than, or the issuance or delivery of certificates or depositary
receipts for the Preferred Shares (or Common Shares and/or other securities,
as the case may be) in a name other than that of, the registered holder of
the Right Certificate evidencing Rights surrendered for exercise or to issue
or to deliver any certificates or depositary receipts for Preferred Shares
(or Common Shares and/or other securities, as the case may be) upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
Section 10. PREFERRED SHARES RECORD DATE. Each person in whose name
any certificate for Preferred Shares (or Common Shares and/or other
securities, as the case may be) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the shares
or securities represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; PROVIDED, HOWEVER, that if the date of such surrender and
payment is a date upon which the Preferred Shares (or Common Shares and/or
other securities, as the case may be) transfer books of the Company are
closed, such person shall be deemed to have become the record holder of such
shares or securities on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares (or Common Shares
and/or other securities, as the case may be) transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder
of a Right Certificate shall not be entitled to any rights of a holder of
Preferred Shares (or Common Shares and/or other securities, as the case may
be) for which the Rights shall be exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions or to exercise
any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF RIGHTS. The Purchase Price, the number and kind of shares covered by each
Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) If the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Shares payable in Preferred
Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of Preferred Shares or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and Section
7(e) hereof, the Purchase Price in effect immediately prior to the record
date for such dividend or the effective date of such subdivision, combination
or reclassification, as applicable, and the number and kind of shares of
capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which he
would have owned upon such exercise and been entitled to receive as a result
of such dividend, subdivision, combination or reclassification if such Right
had been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Company were open; PROVIDED, HOWEVER,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right. If an event occurs which
would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, if any Person
becomes an Acquiring Person, each holder of a Right, except as provided below
and in Section 7(e) hereof, shall thereafter have a right to receive, upon
exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one ten-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
the Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one ten-thousandths of a Preferred
Share for which a Right is then exercisable and (y) dividing that product by
50% of the then current per share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on the date of the occurrence
of such event. If any Person shall become an Acquiring Person and the Rights
shall then be outstanding, the Company shall not
take any action which would eliminate or diminish the benefits intended to be
afforded by the Rights.
(iii) In lieu of issuing Common Shares of the Company in
accordance with Section 11(a)(ii) hereof, the Company may, in the sole
discretion of the Board of Directors, elect to, and, if the Board of
Directors has not exercised the exchange right contained in Section 24 hereof
and there are not sufficient issued but not outstanding and authorized but
unissued Common Shares to permit the exercise in full of the Rights in
accordance with Section 11(a)(ii), the Company shall, take all such action as
may be necessary to authorize, issue or pay, upon the exercise of Rights,
cash (including by way of a reduction of the Purchase Price), property, or
other securities or any combination of the foregoing, having an aggregate
value equal to the value of the Common Shares of the Company which otherwise
would have been issuable pursuant to Section 11(a)(ii), which aggregate value
shall be determined by a majority of the Board of Directors. For purposes of
the preceding sentence, the value of the Common Shares shall be determined
pursuant to Section 11(d) hereof and the value of any equity securities which
a majority of the Board of Directors determines to be a "common stock
equivalent" (including the Preferred Shares, in such ratio as the Board of
Directors shall determine) shall be deemed to have the same value as the
Common Shares. Any such election by the Board of Directors must be made and
publicly announced within 60 days following the date on which the event
described in Section 11(a)(ii) shall have occurred. Following the occurrence
of the event described in Section 11(a)(ii), a majority of the Board of
Directors then in office may suspend the exercisability of the Rights for a
period of up to 60 days following the date on which the event described in
Section 11(a)(ii) shall have occurred to the extent that such directors have
not determined whether to exercise the Company's right of election under this
Section 11(a)(iii). In the event of any such suspension, the Company shall
issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent Preferred
Shares")) or securities convertible into Preferred Shares or equivalent
Preferred Shares at a price per Preferred Share or equivalent Preferred Share
(or having a conversion price per share, in the case of a security
convertible into Preferred Shares or equivalent Preferred Shares) less than
the then current per share market price of the Preferred Shares (as defined
in Section 11(d)) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price
in effect immediately prior to such record date by a fraction, the numerator
of which shall be the number of Preferred Shares outstanding on such record
date plus the number of Preferred Shares which the aggregate offering price
of the total number of Preferred Shares and/or equivalent Preferred Shares so
to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current
market price and the denominator of which shall be the number of Preferred
Shares outstanding on such record date plus the number of additional
Preferred Shares and/or equivalent Preferred Shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); PROVIDED, HOWEVER, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights
Agent. Preferred Shares owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed;
and if such rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then current per share market price of
the Preferred Shares on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent)
of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one
Preferred Share and the denominator of which shall be such current per share
market price of the Preferred Shares; PROVIDED, HOWEVER, that in no event
shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company to
be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and 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, other than
under Section 11(a)(iii) hereof, the "current per share market price" of any
security (a "Security" for the purpose of this Section 11(d)(i)) on any date
shall be deemed to be the average of the daily closing prices per share of
such Security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date, and for the purpose of
any computation under Section 11(a)(iii) hereof, the "current per
share market price" of a Security on any date shall be deemed to be the
average of the daily closing prices per share of such Security for thirty
(30) consecutive Trading Days immediately following such date; PROVIDED,
HOWEVER, that if the current per share market price of the Security is
determined during a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security payable in shares
of such Security or securities convertible into such shares (other than the
Rights), or (B) any subdivision, combination or reclassification of such
Security and prior to the expiration of 30 Trading Days after the ex-dividend
date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case,
the "current per share market price" shall be appropriately adjusted to
reflect the current market price per share equivalent (ex-dividend) of such
Security. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on The New York Stock Exchange, Inc.
("NYSE") or, if the Security is not listed or admitted to trading on the
NYSE, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by any
automated quotation system operated by The Nasdaq Stock Market, Inc.
("Nasdaq") or such other system then in use, or, if on any such date the
Security is not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in the Security selected by the Board of Directors of the Company. If
on any such date no market maker is making a market in the Security, the fair
value of such Security on such date (as determined in good faith by the Board
of Directors of the Company) shall be used. The term "Trading Day" shall mean
a day on which the principal national securities exchange on which the
Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be determined
in accordance with the method set forth in Section 11(d)(i). If the Preferred
Shares are not publicly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common Shares of the Company as determined pursuant to
Section 11(d)(i) (appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof), multiplied
by one thousand. If neither the Common Shares of the Company nor the
Preferred Shares are publicly held or so listed or traded, "current per share
market price" shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least 1% in the Purchase Price; PROVIDED,
HOWEVER, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest one ten-millionth of a Preferred Share
or one ten-thousandth of any other share or security, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction which requires such adjustment
or (ii) the date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
or Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other
than Preferred Shares, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the Preferred Shares contained in this Section
11, and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one ten-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 the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of one
ten-thousandths of a Preferred Share (calculated to the nearest ten-
millionth of a Preferred Share) obtained by (i) multiplying (x) the number of
ten-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 (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one ten-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one ten-thousandths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment
of the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein and
shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of ten-thousandths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of
ten-thousandths of a Preferred Share which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one ten-thousandth of the then par value, if any, of
the Preferred Shares issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid
and nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
of the Preferred Shares and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the Preferred Shares and
other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; PROVIDED, HOWEVER, that the Company shall deliver to such holder
a due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that it in its sole discretion shall determine to be advisable
in order that any consolidation or subdivision of the Preferred Shares,
issuance wholly for cash of any 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 hereinabove in Section 11(b),
hereafter made by the Company to holders of its Preferred Shares shall not be
taxable to such shareholders.
(n) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Sections 23, 24 and 27 hereof, take
(nor will it permit any of its Subsidiaries to take) any action if at the
time such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(o) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) combine or consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(n)), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section
11(n)), or (iii) sell or transfer (or permit any of its Subsidiaries to sell
or transfer), in one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more transactions
each of which complies with Section 11 (n)) if (x) at the time of or
immediately after such combination, consolidation, merger or sale there are
any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such combination, consolidation,
merger or sale, the stockholders of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) hereof shall
have received a distribution of Rights previously owned by such Person or any
of its Affiliates and Associates.
(p) If at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the
Common Shares payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares) into a greater or
lesser number of Common Shares, then in any such case (i) the number of one
ten-thousandths of a Preferred Share purchasable after such event upon proper
exercise of each Right shall be determined by multiplying the number of one
ten-thousandths of a Preferred Share so purchasable immediately prior to such
event by a fraction, the numerator of which is the number of Common Shares
outstanding immediately before such event and the denominator of which is the
number of Common Shares outstanding immediately after such event, and (ii)
each Common Share outstanding immediately after such event shall have issued
with respect to it that number of Rights which each Common Share outstanding
immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(p) shall be made successively
whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
(q) So long as the shares issuable upon the exercise of the Rights
may be listed on any national securities exchange or quotation service, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to be listed
on such exchange or quotation service upon official notice of issuance upon
such exercise.
(r) The Company shall use its best efforts to (i) file, as soon as
practicable following the first occurrence of a Triggering Event, a
registration statement under the Securities Act with respect to the
securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of
the Securities Act) until the Expiration Date. The Company will also take
such action with respect thereto as may be appropriate under the blue sky
laws of the various states. The Company may temporarily suspend, for a period
of time not to exceed 90 days, the exercisability of the Rights in order to
prepare and file such registration statement or in order to comply with such
blue sky laws. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or 13
hereof, the Company shall promptly (a) prepare a certificate setting forth
such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Shares or the Preferred Shares a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 25 hereof. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein contained
and may assume that no adjustment has been made unless and until it shall
have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) If after the Shares Acquisition Date, directly or indirectly,
(x) the Company shall consolidate with, or merge with and into, any other
Person, (y) any Person shall consolidate with the Company, or merge with and
into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with
such merger, all or part of the Common Shares shall be changed into or
exchanged for stock or other securities of any other Person (or the Company)
or cash or any other property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating
50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons other than the
Company or one or more of its wholly-owned Subsidiaries, then, and in each
such case, proper provision shall be made so that (i) each holder of a Right
(except as otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of ten-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 validly
authorized and issued, fully paid, non-assessable and freely tradeable Common
Shares of the Principal Party (as hereinafter defined), free and clear of all
liens, rights of call or first refusal, encumbrances or other adverse claims,
as shall equal the result obtained by (A) multiplying the then current
Purchase Price by the number of ten-thousandths of a Preferred Share for
which a Right is then exercisable (or, if such Right is not then exercisable
for a number of ten-thousandths of a Preferred Share, the number of such
fractional shares for which it was exercisable immediately prior to an event
described under Section 11(a)(ii) hereof) and dividing that product by (B)
50% of the then current per share market price of the Common Shares of such
Principal Party (determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue
of such consolidation, merger, sale or transfer, or otherwise, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such Principal Party;
and (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares in
accordance with Section 9 hereof) in connection with such consummation as may
be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) In the case of any transaction described in (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which Common Shares of the Company are converted in such
merger or consolidation, and if no securities are so issued, the Person that
is the continuing or surviving entity of such merger or consolidation
(including the Company if applicable); and
(ii) in the case of any transaction described in (z) of the
first sentence in Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions;
PROVIDED, HOWEVER, that in any such case described in clauses (b)(i) and
(b)(ii): (1) if the Common Shares of such Person are not at such time and
have not been continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Shares of which are and have been so
registered, "Principal Party" shall refer to such other Person; (2) in case
such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Shares of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of
the Common Shares having the greatest aggregate market value; and (3) in case
such Person is owned, directly or indirectly, by a joint venture formed by
two or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such party
were a "Subsidiary" of both or all of such joint venturers and the Principal
Parties in each such chain shall bear the obligations set forth in this
Section 13 in the same ratio as their direct or indirect interests in such
Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have sufficient Common
Shares authorized to permit the full exercise of the Rights and prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing that, as soon
as practicable after the date of any consolidation, merger or sale of assets
mentioned in paragraph (a) of this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective as soon
as practicable after such filing and (B) remain effective (with a prospectus
at all times meeting the requirements of the Securities Act) until the
Expiration Date;
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under the
Exchange Act; and
(iii) take such actions as may be necessary or appropriate
under the blue sky laws of the various states. The provisions of this Section
13 shall similarly apply to successive mergers or consolidations or sales or
other transfers. If one of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction described in
Section 11(a)(ii) hereof, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a).
(d) In no event shall the Rights Agent have any liability in respect
of any such Principal Party transactions, including, without limitation, the
propriety thereof. The Rights Agent may rely and be fully protected in
relying upon a certificate of the Company stating that the provisions of this
Section 13 have been fulfilled. Notwithstanding anything in this Agreement to
the contrary, the prior written consent of the Rights Agent must be obtained
in connection with any supplemental agreement which alters the rights or
duties of the Rights Agent.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there may be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on NYSE or, if the Rights are not listed or admitted to trading on
NYSE, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading or, if the
Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by
Nasdaq or such other system then in use or, if on any such date the Rights
are not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights, the fair value of
the Rights on such date as determined in good faith by the Board of Directors
of the Company shall be used.
(b) The Company shall not be required to issue fractional Preferred
Shares (other than integral multiples of one ten-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 ten-thousandth of a Preferred Share). Fractions of Preferred
Shares in integral multiples of one ten-thousandth of a Preferred Share may,
at the election of the Company, be evidenced by depositary receipts, pursuant
to an appropriate agreement between the Company and a depositary selected by
it; PROVIDED, that such agreement shall provide that the holders of such
depositary receipts shall have all the rights, privileges and preferences to
which they are entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred
Shares that are not integral multiples of one ten-thousandth of a Preferred
Share, the Company may pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one ten-thousandth of a
Preferred Share. For the purposes of this Section 14(b), the current market
value of one ten-thousandth of a Preferred Share shall be one ten-thousandth
of the closing price of a Preferred Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of Common Shares upon exercise of
the Rights or to distribute certificates which evidence fractional Common
Shares. In lieu of fractional Common Shares, the Company may pay to the
registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one Common Share. For purposes of this Section
14(c), the current market value of one Common Share shall be the closing
price of one Common Share (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares), may,
in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by
such Right Certificate in the manner provided in such Right Certificate and
in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right,
by accepting
the same, consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with appropriate forms and
certificates fully executed;
(c) the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common
Shares certificate made by anyone other than the Company or the Rights Agent)
for all purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or any other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority prohibiting or otherwise
restraining performance of such obligation.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a Shareholder or any
right to vote for the election of directors or upon any matter submitted to
Shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
Shareholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance
with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT. The Company agrees to
pay to the Rights Agent such compensation as shall be agreed to in writing
between the Company and the Rights Agent for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Agreement
and the exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without 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, without limitation, the costs
and expenses of defending against any claim (whether asserted by the Company,
a holder of Rights, or any other Person) of liability in the premises,
including reasonable attorney's fees and expenses.
The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
Right Certificate or certificate for the Preferred Shares or Common Shares or
for other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, opinion, notice,
instruction, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed and executed by the
proper person or persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
The provisions of this Section 18 shall survive the expiration of
the Rights and the termination of this Agreement.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT. Any corporation or other entity into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation or other entity resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or any
corporation or other entity succeeding to all or substantially all the stock
transfer or corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part
of any of the parties hereto; PROVIDED, that such corporation or other entity
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the
name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and
in this Agreement.
In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned
but not delivered, the
Rights Agent may adopt the countersignature under its prior name and deliver
Right Certificates so countersigned; and in case at that time any of the
Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations expressly imposed by this Agreement, and no implied
duties or obligations shall be read into this Agreement against the Rights Agent
upon the following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel of its selection
(who may be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Accounting Officer, any Senior Vice President or the Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for, and shall indemnify and hold harmless the Company from
and against, all losses, liabilities, costs, damages and expenses (including
attorneys' fees) arising out of, or in connection with, the Rights Agent's
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the
validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall
it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 7(e) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Section 3, 11, 13, 23 or 24, or the ascertaining of
the existence of facts that would require any such change or adjustment
(except with respect to the exercise of Rights evidenced by Right
Certificates after the Rights Agent's actual receipt of a certificate
furnished pursuant to Section 12 describing a change or adjustment); nor
shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares or
Common Shares to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares or Common Shares will, when
issued, be validly authorized and issued, fully paid and nonassessable, nor
shall the Rights Agent be responsible for the legality of the terms hereof in
its capacity as an administrative agent.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
the Chief Operating Officer, the Chief Financial Officer, any Senior Vice
President or the Secretary of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under this
Agreement and the date on and/or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any officer of the Company actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or its Subsidiaries or become pecuniarily
interested in any transaction in which the Company or its Subsidiaries may be
interested, or contract with or lend money to the Company or its Subsidiaries
or otherwise act as fully and freely as though it were not Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or its Subsidiaries or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise, transfer, split up, combination or exchange, the certificate
attached to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise, transfer, split up, combination or
exchange without first consulting with the Company.
(k) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(l) In addition to the foregoing, the Rights Agent shall be protected
and shall incur no liability for, or in respect of, any action taken or omitted
by it in connection with its administration of this Agreement if such acts or
omissions are in reliance upon (i) the proper execution of the certification
concerning beneficial ownership appended to the form of assignment and the form
of election to purchase attached hereto unless the Rights Agent shall have
actual knowledge that, as executed, such certification is untrue, or (ii) the
non-execution of such certification including, without limitation, any refusal
to honor any otherwise permissible assignment or election by reason of such
non-execution.
(m) The Company agrees to give the Rights Agent prompt written notice
of any event or ownership of which the Company has knowledge which would
prohibit the exercise or transfer of the Right Certificates.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon
30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares or Preferred Shares by registered or certified mail, and
to the holders of the Right Certificate by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificate by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor
to the Rights Agent. If the Company shall fail to make such appointment
within a period of 30 days after giving notice of such removal or after it
has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation, bank or
other entity organized and doing business under the laws of the United States
or of any other 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, at the
time of its appointment as Rights Agent, (a) has a combined capital and
surplus of at least $100,000,000 or (b) is an affiliate of an entity having a
combined capital and surplus of at least $100,000,000. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver
and transfer to the successor Rights Agent any property at the time held by
it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any
such appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right 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 and the number or kind or class of
shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of Common Shares following
the Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to Common Shares so issued or
sold pursuant to the exercise of
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company, and
(b) may, in any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Right Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences
to the Company or the Person to whom such Right Certificate would be issued,
and (ii) no such Right Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have been made in lieu of the
issuance thereof.
Section 23. REDEMPTION.
(a) Subject to the following sentence, the Board of Directors of the
Company may, at its option, at any time prior to such time as any Person becomes
an Acquiring Person, redeem all but not less than all of the then outstanding
Rights at a redemption price of $.0001 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter referred to as the
"Redemption Price"). If at any time prior to a Person becoming an Acquiring
Person there occurs a Change in Control, then the Rights may be redeemed
pursuant to this Section 23(a) only if (i) the Board of Directors (x) approves
such redemption, (y) recommends such redemption to the Company's shareholders
and (z) takes all steps necessary to call and hold a special meeting of the
Company's shareholders (a "Special Meeting") for the purpose of voting on such
redemption and (ii) at such Special Meeting the holders of at least 85% of the
Common Shares then outstanding approve ("Shareholder Approval") such redemption.
The Company may, at its option, pay the Redemption Price in cash, Common Shares
(based on the current per share market price of the Common Shares at the time of
redemption) or any other form of consideration deemed appropriate by the Board
of Directors. Subject to the Provisions of this Section 23(a), the redemption of
the Rights by the Board of Directors may be made effective at such time on such
basis and with such conditions as the Board of Directors in its sole discretion
may establish. If redemption of the Rights is to be effective as of a future
date, the Rights shall continue to be exercisable, subject to Section 7 hereof,
until the effective date of the redemption, provided that, subject to compliance
with the limitations that apply under this Section 23(a) following a Change in
Control, the Board of Directors may subsequently cause the Rights to be redeemed
at a date earlier than the scheduled effective date of the redemption.
(b) Immediately upon the action of the Board of Directors (subject, in
the event of a Change in Control, to Shareholder Approval of any redemption)
ordering the redemption of the Rights (or at the effective time of such
redemption established by the Board of Directors of the Company pursuant to
paragraph (a) of this Section 23), and without any further action and without
any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. The Company shall promptly give public notice,
with simultaneous written notice to the Rights Agent, of any such redemption;
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
such action of the Board of Directors (subject, in the event of a Change in
Control, to Shareholder Approval of any redemption) ordering the redemption
of the Rights or, if later, the effectiveness of the redemption of the Rights
pursuant to the last sentence of paragraph (a), the Company shall mail a
notice of redemption to all the holders of the then outstanding Rights at
their last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. The Company may, at
its option, discharge all of its obligations with respect to the Rights by
(i) issuing a press release announcing the manner of redemption of the
Rights, (ii) depositing with a bank or trust company having a capital and
surplus of at least $100,000,000, funds necessary for such redemption, in
trust, to be applied to the redemption of the Rights so called for redemption
and (iii) arranging for the mailing of the Redemption Price to the registered
holders of the Rights. Upon such action, all outstanding Right Certificates
shall be null and void without further action by the Company. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23, in Section 24 hereof, or in
connection with the purchase of Common Shares prior to the Distribution Date.
Section 24. EXCHANGE.
(a) The Company may, at its option, at any time after a Triggering
Event, upon resolution of a majority of the Board of Directors, exchange all or
part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 7(e) hereof)
for Common Shares at an exchange ratio of one Common Share per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being the
"Exchange Ratio"). Notwithstanding the foregoing, the Company shall not effect
such an exchange at any time after (i) a Change in Control or (ii) any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or any entity holding
Common Shares for or pursuant to the terms of any such plan) becomes the
Beneficial Owner of 50% or more of the then outstanding Common Shares.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number
of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice, with simultaneous written notice
to the Rights Agent, of any such exchange; PROVIDED, HOWEVER, that the
failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Shares (or equivalent Preferred Shares, as
such term is defined in Section 11(b) hereof) for Common Shares exchangeable
for Rights, at the initial rate of one ten-thousandth of a Preferred Share
(or equivalent Preferred Share) for each Common Share, as appropriately
adjusted to reflect adjustments in the Preferred Shares pursuant to the terms
thereof, so that the fraction of a Preferred Share delivered in lieu of each
Common Share shall have the same voting rights as one Common Share.
(d) If there shall not be sufficient Common Shares or Preferred Shares
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional Common Shares
or Preferred Shares for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
paragraph (e), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose at any time after the
Distribution Date (i) to pay any dividend payable in stock of any class to the
holders of its Preferred
Shares or to make any other distribution to the holders of its Preferred
Shares (other than a regular quarterly cash dividend), (ii) to offer to the
holders of its Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of any class or
any other securities, rights or options, (iii) to effect any reclassification
of its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any
consolidation or merger into or with, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person, (v) to effect the liquidation, dissolution or winding up of the
Company, or (vi) to declare or pay any dividend on the Common Shares payable
in Common Shares or to effect a subdivision, combination or consolidation of
the Common Shares (by reclassification or otherwise than by payment of
dividends in Common Shares), then, in each such case, the Company shall give
to each holder of a Right Certificate and to the Rights Agent, in accordance
with Section 26 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, or distribution of
rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding
up is to take place and the date of participation therein by the holders of
the Common Shares and/or Preferred Shares, if any such date is to be fixed,
and such notice shall be so given in the case of any action covered by clause
(i) or (ii) above at least 10 days prior to the record date for determining
holders of the Preferred Shares for purposes of such action, and in the case
of any such other action, at least 10 days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of
the Common Shares and/or Preferred Shares, whichever shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate and to the Rights Agent, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice shall
describe such event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof.
Section 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:
Xxxxxx Laboratories
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by
first-class mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
BankBoston, N.A.
c/o EquiServe Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company. Notices or demands sent by mail shall be deemed given or
made three Business Days after the date on which they are sent.
Section 27. SUPPLEMENTS AND AMENDMENTS. Subject to the restrictions
of this Section 27, the Company may from time to time, and the Rights Agent
shall, if so directed by the Company, supplement or amend any provision of
this Agreement without the approval of any holders of Right 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, or to amend, supplement, add or delete any provision hereof which the
Company may deem necessary or desirable, any such supplement or amendment to
be evidenced by a writing signed by the Company and the Rights Agent;
PROVIDED, HOWEVER, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be supplemented or amended in any
manner which would adversely affect the interests of the holders of Rights
(other than an Acquiring Person or an Affiliate or an Associate of an
Acquiring Person), and PROVIDED, FURTHER, that this Agreement shall not be
supplemented or amended after a Change in Control has occurred unless (i) the
Board of Directors first (x) approves such supplement or amendment, (y)
recommends such supplement or amendment to the Company's shareholders and (z)
takes all steps necessary to call and hold a Special Meeting for the purpose
of voting on such supplement or amendment and (ii) at such Special Meeting
Shareholder Approval of such supplement or amendment is obtained, if such
supplement or amendment would (x) adversely affect the interests of the
holders of the Rights (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or (y) in any way facilitate a Business
Combination Transaction to which a Solicitation Participant is a party. Prior
to the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Shares. Upon
the delivery of a certificate from an appropriate officer of the Company
which states that the proposed supplement or amendment is in compliance with
the terms of this Section, the Rights Agent shall execute such supplement or
amendment. Notwithstanding any other provision hereof, the Rights Agent's
consent
must be obtained regarding any amendment or supplement pursuant to this
Section 27 which alters the Rights Agent's rights or duties.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the Common Shares).
Section 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 31. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Illinois and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
Section 34. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.
Subject to the requirement for Shareholder Approval under certain circumstances
set forth in this Agreement, the Board of Directors of the Company shall have
the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board of Directors or the
Company or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement. All such
actions, interpretations and determinations (including, for purpose of clause
(ii) below, all
omissions with respect to the foregoing) which are done or made by the Board
of Directors in good faith, shall (i) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Right Certificates and all
other parties, and (ii) not subject the Board of Directors to any liability
to the holders of the Right Certificates.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
XXXXXX LABORATORIES
By: /s/ Xxxx X. xx Xxxx
Name: Xxxx X. xx Xxxx
Title: Senior Vice President,
Secretary and General Counsel
BankBoston, N.A., AS RIGHTS AGENT
By: /s/ Xxx Xxxxx
Name: Xxx Xxxxx
Title: Director, Client Services
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK OF
XXXXXX LABORATORIES
Pursuant to Section 6.10 of the Business Corporation Act
of the State of Illinois
The undersigned duly authorized officers of Xxxxxx Laboratories,
an Illinois corporation (the "Corporation"), in accordance with the
provisions of Section 6.10 of the Business Corporation Act of the State of
Illinois, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Restated Articles of Incorporation of the Corporation, as
amended, the Board of Directors on November 10, 1999, at a meeting duly
called and held, adopted the following resolution creating a series of
240,000 shares of Preferred Stock, par value $1.00 per share, designated as
Series A Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority granted to and vested in
the Board of Directors by the Restated Articles of Incorporation, as amended,
of the Corporation, the Board of Directors hereby creates a series of
preferred stock, par value $1.00 per share, of the Corporation (such
preferred stock being herein referred to as "Preferred Stock," which term
shall include any additional shares of preferred stock of the same class
heretofore or hereafter authorized to be issued by the Corporation),
consisting of 240,000 shares, and hereby fixes the designation and the voting
powers, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, as
follows:
SECTION 1. DESIGNATION AND AMOUNT. There shall be a series of
Preferred Stock of the Corporation which shall be designated as "Series A
Junior Participating Preferred Stock," par value $1.00 per share,
(hereinafter called "Series A Preferred Stock"), and the number of shares
constituting such series shall be 240,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors and by the
filing of a certificate pursuant to the provisions of the Business
Corporation Act of the State of Illinois stating that such increase or
reduction has been so authorized; PROVIDED, HOWEVER, that no decrease shall
reduce the number of shares of Series A Preferred Stock to a number less than
the number of shares of Series A Preferred Stock issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Corporation.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Preferred Stock with respect to dividends, the holders of
shares of Series A Preferred Stock shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the last business day of
March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to 10,000 times the aggregate per share
amount of all cash dividends (subject to the provision for adjustment
hereinafter set forth), and 10,000 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 (hereinafter defined) or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the common stock, no par value, of the Corporation
(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
Preferred Stock. In the event the Corporation shall at any time following
December 1, 1999 (i) declare any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine
the outstanding Common Stock into a smaller number of shares, then in each
such case the amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event under the preceding sentence
shall be adjusted by multiplying each such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) above at the time
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock).
(c) No dividend or distribution (other than a dividend payable in
shares of Common Stock) shall be paid or payable to the holders of shares of
Common Stock unless, prior thereto, all accrued but unpaid dividends to the
date of such dividend or distribution shall have been paid to the holders of
shares of Series A Preferred Stock.
(d) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix
a record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days prior to
the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each one ten-thousandth of a share of Series A Preferred Stock shall
entitle the holder thereof to one vote on all matters submitted to a vote of
the shareholders of the Corporation. In the event the Corporation shall at
any time following December 1, 1999 (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the number of votes per share to which holders
of shares of Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common Stock
and any other capital stock of the Corporation having general voting rights
shall vote together as one class on all matters submitted to a vote of
shareholders of the Corporation.
(c) (i) Whenever, at any time or times, dividends payable on any
share or shares of Series A Preferred Stock shall be in arrears in an
amount equal to at least six full quarterly dividends (whether or not
declared and whether or not consecutive), the holders of record of
the outstanding Preferred Stock shall have the exclusive right,
voting separately as a single class, to elect two directors of the
Corporation at a special meeting of shareholders of the Corporation
or at the Corporation's next annual meeting of shareholders, and at
each subsequent annual meeting of shareholders, as provided below. At
elections for such directors, the holders of shares of Series A
Preferred Stock shall be entitled to cast one vote for each one
ten-thousandth of a share of
Series A Preferred Stock held.
(ii) Upon the vesting of such right of the holders of the
Preferred Stock, the maximum authorized number of members of the
Board of Directors shall automatically be increased by two and the
two vacancies so created shall be filled by vote of the holders of
the outstanding Preferred Stock as hereinafter set forth. A
special meeting of the shareholders of the Corporation then
entitled to vote shall be called by the Chairman or the President
or the Secretary of the Corporation, if requested in writing by
the holders of record of not less than 10% of the Preferred Stock
then outstanding. At such special meeting, or, if no such special
meeting shall have been called, then at the next annual meeting of
shareholders of the Corporation, the holders of the shares of the
Preferred Stock shall elect, voting as above provided, two
directors of the Corporation to fill the aforesaid vacancies
created by the automatic increase in the number of members of the
Board of Directors. At any and all such meetings for such
election, the holders of a majority of the outstanding shares of
the Preferred Stock shall be necessary to constitute a quorum for
such election, whether present in person or by proxy, and such two
directors shall be elected by the vote of at least a plurality of
shares held by such shareholders present or represented at the
meeting. Any director elected by holders of shares of the
Preferred Stock pursuant to this Section may be removed at any
annual or special meeting, by vote of a majority of the
shareholders voting as a class who elected such director, with or
without cause. In case any vacancy shall occur among the directors
elected by the holders of the Preferred Stock pursuant to this
Section, such vacancy may be filled by the remaining director so
elected, or his successor then in office, and the director so
elected to fill such vacancy shall serve until the next meeting of
shareholders for the election of directors. After the holders of
the Preferred Stock shall have exercised their right to elect
directors in any default period and during the continuance of such
period, the number of directors shall not be further increased or
decreased except by vote of the holders of Preferred Stock as
herein provided or pursuant to the rights of any equity securities
ranking senior to or PARI PASSU with the Series A Preferred Stock.
(iii) The right of the holders of the Preferred Stock, voting
separately as a class, to elect two members of the Board of Directors
of the Corporation as aforesaid shall continue until, and only until,
such time as all arrears in dividends (whether or not declared) on
the Preferred Stock shall have been paid or declared and set apart
for payment, at which time such right shall terminate, except as
herein or by law expressly provided, subject to revesting in the
event of each and every subsequent default of the character
above-mentioned. Upon any termination of the right of the holders of
the shares of the Preferred Stock as a class to vote for directors as
herein provided, the term of office of all directors then in office
elected by the holders of Preferred Stock pursuant to this Section
shall terminate immediately.
Whenever the term of office of the directors elected by the
holders of the Preferred Stock pursuant to this Section shall
terminate and the special voting powers vested in the holders of
the Preferred Stock pursuant to this Section shall have expired,
the maximum number of members of the Board of Directors of the
Corporation shall be such number as may be provided for in the
By-laws of the Corporation or in a resolution of the Board of
Directors adopted pursuant thereto, irrespective of any increase
made pursuant to the provisions of this Section.
(d) Except as set forth herein, holders of Series A Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series
A Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such terms
as the Board of Directors, after consideration of
the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine
in good faith will result in fair and equitable treatment among
the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section, purchase or otherwise acquire such shares at such time and in such
manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation 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 to be created by resolution or resolutions of the
Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) Upon any voluntary liquidation, dissolution or winding up of
the Corporation, no distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Preferred Stock unless, prior thereto, the
holders of shares of Series A Preferred Stock shall have received $1.00 per
share, plus an amount per share equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment
(collectively, the "Series A Liquidation Preference"). Following the payment
of the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Preferred
Stock unless, prior thereto, the holders of shares of Common Stock shall have
received an amount per share (the "Common Adjustment") equal to the quotient
obtained by dividing (i) the Series A Liquidation Preference by (ii) 10,000
(as appropriately adjusted as set forth in subparagraph C below to reflect
such events as stock splits, stock dividends and recapitalizations with
respect to the Common Stock) (such number in clause (ii), the "Adjustment
Number"). Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Preferred Stock and Common Stock,
respectively, holders of Series A Preferred Stock and holders of shares of
Common Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio, on a per share basis, of
Adjustment Number to 1 with respect to such Preferred Stock and Common Stock,
on a per share basis, respectively.
(b) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference
and the liquidation
preferences of all other series of Preferred Stock, if any, which rank on a
parity with the Series A Preferred Stock, then such remaining assets shall be
distributed ratably to the holders of such parity shares in proportion to
their respective liquidation preferences.
(c) In the event the Corporation shall at any time following
December 1, 1999 (i) declare any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine
the outstanding Common Stock into a smaller number of shares, then in each
such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction
in which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
the shares of Series A Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 10,000 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at any time (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
SECTION 8. REDEMPTION. The shares of a Series A Preferred Stock
shall not be redeemable by the Corporation. The preceding sentence shall not
limit the ability of the Corporation to purchase or otherwise deal in such
shares of stock to the extent permitted by law.
SECTION 9. RANKING. The Series A Preferred Stock shall rank
junior to all other series of the Corporation's preferred stock (whether with
or without par value) as to the payment of dividends and the distribution of
assets, unless the terms of any such series shall provide otherwise.
SECTION 10. AMENDMENT. The Restated Articles of Incorporation of
the Corporation, as amended as of this date, shall not be amended in any
manner which would materially alter or change the powers, preferences or
special rights of the Series
A Preferred Stock so as to affect them adversely without the affirmative vote
of the holders of a majority or more of the outstanding shares of Series A
Preferred Stock, voting separately as a class.
SECTION 11. FRACTIONAL SHARES. Series A Preferred Stock may be
issued in fractional shares which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series A Preferred Stock.
The Restated Articles of Incorporation is to be further amended so
that the designation and number of shares of the class and series acted upon
in the forgoing resolution, and the relative rights, preferences and
limitations of such class and series, are as stated in the resolution.
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER NOVEMBER 10, 2009, OR EARLIER IF THE RIGHTS
EXPIRE UNDER CERTAIN CIRCUMSTANCES OR ARE REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY,
AT $.0001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT)
AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS 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 RIGHT CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*/
Right Certificate
Xxxxxx Laboratories
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 November 11, 1999 (the
"Rights Agreement"), between Xxxxxx Laboratories, an Illinois corporation
(the "Company"), and BankBoston, N.A., a national banking association (the
"Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to 5:00 p.m. (New
--------
*/ The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
York City time) on November 10, 2009, or notice of redemption or exchange at
the office of the Rights Agent (or its successors as Rights Agent) designated
for such purpose, one ten-thousandth of a fully paid non-assessable share of
Series A Junior Participating Preferred Stock, par value $1.00 per share,
(the "Preferred Shares") of the Company at a purchase price of $200.00 per
one ten-thousandth of a share (the "Purchase Price") upon presentation and
surrender of this Right Certificate with the appropriate Form of Election to
Purchase and related Certificate duly executed. The number of Rights
evidenced by this Right Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of December 1,
1999, based on the Preferred Shares as constituted at such date. Capitalized
terms not defined in this Right Certificate that are defined in the Rights
Agreement shall have the meanings ascribed to them in the Rights Agreement.
Upon the occurrence of a Triggering Event, if the Rights evidenced
by this Right Certificate are beneficially owned by (i) an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) under certain circumstances specified
in the Rights Agreement, a transferee of any such Acquiring Person, Associate
or Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right
with respect to such Rights from and after the occurrence of any such
Triggering Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of Preferred Shares or other securities, which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain
events.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Right
Certificates, which limitations of rights include the temporary suspension of
the exercisability of such Rights under certain circumstances specified in
such Rights Agreement. Copies of the Rights Agreement are available upon
written request to the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Right Certificate or other Right Certificates of
like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate number of Preferred
Shares as the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at
a redemption price of $.0001 per Right at any time prior to any Person
becoming an Acquiring Person; PROVIDED, HOWEVER, that following a Change in
Control the Rights may only be redeemed with the prior approval of at least
85% of the Common Shares then outstanding.
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 ten-thousandth of a Preferred Share, which may at the
election of the Company be evidenced by depository receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of
Preferred Shares or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof; or to give or withhold consent to any corporate action;
or to receive notice of meetings or other actions affecting shareholders
(except as provided in the Rights Agreement); or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by
this Right Certificate shall have been exercised as provided in the Rights
Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of ,
------------------ ----
ATTEST: (SEAL) XXXXXX LABORATORIES
By:
------------------------------- -------------------------------
Name: Name:
Title: Title:
Countersigned:
-------------------------------
By:
---------------------------
Authorized Signature
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Right Certificate.)
FOR VALUE RECEIVED ____________________________________________________________
hereby sells, assigns and transfers unto ______________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint Attorney, to transfer the
within Right Certificate on the books of the within-named Company, with full
power of substitution.
Date: ,
---------------------- ----
-------------------------------------
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: ,
------------------- ---- ---------------------------------
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented
by the Right Certificate.)
To: XXXXXX LABORATORIES
The undersigned hereby irrevocably elects to exercise _______ Rights
represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name
of:
Please insert social security
or other identifying number:
------------------------------------------------
-----------------------------------------------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:
------------------------------------------------
-----------------------------------------------------------------------------
(Please print name and address)
Dated:
----------------------, ---- --------------------------------------
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:
-------------------, ---- -------------------------------------
Signature
NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
EXHIBIT C
SUMMARY OF SHAREHOLDER RIGHTS PLAN
On November 10, 1999, the Board of Directors (the "Board of
Directors") of Xxxxxx Laboratories (the "Company") declared a dividend
distribution of one Right for each outstanding share of common stock, no par
value (the "Common Stock"), of the Company to shareholders of record at the
close of business on December 1, 1999 (the "Record Date"). Except as
described below, each Right, when exercisable, entitles the registered holder
to purchase from the Company one ten-thousandth of a share of Series A Junior
Participating Preferred Stock, par value $1.00 per share (the "Preferred
Stock"), at a price of $200.00 per one ten-thousandth of a share (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are
set forth in a Rights Agreement (the "Rights Agreement") between the Company
and BankBoston, N.A. as Rights Agent.
Initially, the Rights will automatically attach to all Common
Stock certificates representing shares then outstanding, and no separate
certificates evidencing the Rights (the "Right Certificates") will be
distributed. Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 10% or more of the outstanding shares of Common Stock
(the "Shares Acquisition Date") or (ii) 15 business days (or such later date
as may be determined by action of the Board of Directors prior to the time
that any person becomes an Acquiring Person) following the commencement of
(or a public announcement of an intention to make) a tender or exchange offer
if, upon consummation thereof, such person or group would be the beneficial
owner of 10% or more of such outstanding shares of Common Stock (the earlier
of such dates being called the "Distribution Date"), the Rights will be
evidenced by the Common Stock certificates and not by separate certificates.
The Rights Agreement also provides that, until the Distribution
Date, the Rights will be transferred with and only with the Common Stock.
Until the Distribution Date (or earlier redemption, expiration or termination
of the Rights), the transfer of any certificates for Common Stock, with or
without a copy of this Summary of Shareholder Rights Plan, will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificates. As soon as practicable following the
Distribution Date, Right Certificates will be mailed to holders of record of
the Common Stock as of the close of business on the Distribution Date and,
thereafter, such separate Right Certificates alone will evidence the Rights.
Any shares of Common Stock issued after the Distribution Date will generally
be accompanied by Right Certificates only if such shares of Common Stock are
issued pursuant to the exercise of options or under any employee plan or
arrangement or upon the exercise, conversion or exchange of other securities
issued by the Company, or in other circumstances where the issuance of
accompanying Right Certificates is deemed necessary or appropriate by the
Board of Directors.
The Rights are not exercisable until the Distribution Date and
will expire at the earliest of (i) November 10, 2009 (the "Final Expiration
Date"), (ii) upon redemption by the Company as described below or (iii) upon
exchange of all Rights for Common Stock as described below.
In the event that any person (other than the Company, its
affiliates or any person receiving newly-issued shares of Common Stock
directly from the Company) becomes the beneficial owner of 10% or more of the
then outstanding shares of Common Stock, each holder of a Right will
thereafter have the right to receive, upon exercise at the then current
exercise price of the Right, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to
two times the exercise price of the Right.
In the event that, at any time following the Shares Acquisition
Date, the Company is acquired in a merger or other business combination
transaction or 50% or more of the Company's assets or earning power are sold,
proper provision will be made so that each holder of a Right will thereafter
have the right to receive, upon exercise at the then current exercise price
of the Right, common stock of the acquiring or surviving company having a
value equal to two times the exercise price of the Right.
Notwithstanding the foregoing, following the occurrence of any of
the events set forth in the preceding two paragraphs, any Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will immediately become null and
void.
The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the Rights,
are subject to adjustment from time to time to prevent dilution, among other
circumstances, in the event of a stock dividend on, or a subdivision, split,
combination, consolidation or reclassification of, the Preferred Stock or the
Common Stock, or a reverse split of the outstanding shares of Preferred Stock
or the Common Stock.
At any time after the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 10% or more of
the outstanding Common Stock and prior to the acquisition by such person or
group of 50% or more of the outstanding Common Stock or the existence of a
Solicitation Participant, the Board of Directors may exchange the Rights
(other than Rights owned by such person or group, which have become void), in
whole or in part, at an exchange ratio of one share of Common Stock per Right
(subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1%
in the Purchase Price. The Company will not be required to issue fractional
shares of Preferred Stock or Common Stock (other than fractions in multiples
of one ten-thousandths of a share of Preferred Stock) and, in lieu thereof,
an adjustment in cash may be made based on the market price of the Preferred
Stock or Common Stock on the last trading date prior to the date of exercise.
Subject to the following paragraph, at any time after the date of
the Rights Agreement until the earlier of the time that a person becomes an
Acquiring Person or the Final Expiration Date, the Board of Directors may
redeem the Rights in whole, but not in part, at a price of $.0001 per Right
(the "Redemption Price"), which may (at the option of the Company) be paid in
cash, shares of Common Stock or other consideration deemed appropriate by the
Board of Directors. Upon the effectiveness of any action of the Board of
Directors ordering redemption of the Rights, the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.
If at any time prior to a person becoming an Acquiring Person (i)
there occurs a change (resulting from one or more proxy or consent
solicitations) in a majority of the directors in office at the commencement
of the first such solicitation and (ii) any person who is a participant in
any such solicitations (a "Solicitation Participant") has proposed or
initiated a business combination transaction involving the Company, then
approval of the holders of at least 85% of the outstanding shares of Common
Stock ("Shareholder Approval") would be required prior to any redemption of
the Rights or any amendment of the Rights Agreement that would adversely
affect the interests of holders of Rights or facilitate a transaction with a
Solicitation Participant.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
The provisions of the Rights Agreement may be amended by the Board
of Directors (subject to Shareholder Approval, if applicable), except that
any amendment adopted after the time that a person becomes an Acquiring
Person may not adversely affect the interests of holders of Rights.
As of October 31, 1999, there were 1,522,169,258 shares of Common
Stock outstanding and 76,592,025 shares of Common Stock reserved for issuance
under employee benefit plans. Each outstanding share of Common Stock on the
Record Date will receive one Right. 240,000 shares of Preferred Stock will be
reserved for issuance in the event of exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire the
Company without conditioning the offer on the Rights being redeemed or a
substantial number of Rights being acquired, and under certain circumstances
the Rights beneficially owned by such a person or group may become void. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors because the Board of Directors may, at its
option subject to Shareholder Approval, if applicable, at any time prior to
the time that any person becomes an Acquiring Person, redeem all (but not
less than all) of the then outstanding Rights at the Redemption Price.
A copy of the definitive Rights Agreement will be filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement
on Form 8-A. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement.
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF
WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
