PREFERRED SHARE PURCHASE RIGHTS PLAN
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RIGHTS AGREEMENT
BETWEEN
AMERIPATH, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY,
AS RIGHTS AGENT
DATED AS OF APRIL 8, 1999
TABLE OF CONTENTS
PAGE
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Section 1. Certain Definitions................................................................1
Section 2. Appointment of Rights Agent........................................................5
Section 3. Issuance of Rights Certificates....................................................5
Section 4. Form of Rights Certificates........................................................7
Section 5. Countersignature and Registration..................................................8
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates.......................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights......................9
Section 8. Cancellation and Destruction of Rights Certificates...............................11
Section 9. Reservation and Availability of Capital Stock.....................................11
Section 10. Preferred Stock Record Date.......................................................12
Section 11. Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights; Exchange of Rights for Shares of Common Stock.........................13
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..............22
Section 14. Fractional Rights and Fractional Shares...........................................24
Section 15. Rights of Action..................................................................24
Section 16. Agreement of Rights Holders.......................................................25
Section 17. Rights 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............................................................28
Section 22. Issuance of New Rights Certificates...............................................29
Section 23. Redemption and Termination........................................................29
Section 24. Notice of Certain Events..........................................................30
Section 25. Notices...........................................................................31
Section 26. Supplements and Amendments........................................................31
Section 27. Successors........................................................................32
Section 28. Determinations and Actions by the Board of Directors, etc.........................32
Section 29. Benefits of this Rights Plan......................................................33
Section 30. Severability......................................................................33
Section 31. Governing Law.....................................................................33
Section 32. Consent to Jurisdiction; Service of Process.......................................33
Section 33. Counterparts......................................................................34
Section 34. Descriptive Headings..............................................................34
Section 35. Consequential Damages.............................................................34
EXHIBITS
Exhibit A - Form of Certificate of Designations
Exhibit B - Form of Rights Certificate
Exhibit C - Form of Summary of Rights
RIGHTS AGREEMENT, dated as of April 8, 1999 (the "Rights Plan" or the
"Agreement"), by and between AMERIPATH, INC., a Delaware corporation (the
"Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY, a New York corporation
(the "Rights Agent").
RECITALS
WHEREAS, on April 8, 1999 (the "Rights Dividend Declaration Date"), the
Board of Directors of the Company authorized and declared a dividend
distribution of one preferred share purchase right (each, a "Right" and,
collectively, the "Rights") for each share of Common Stock, par value $0.01 per
share, of the Company outstanding at the close of business on April 19, 1999
(the "Record Date"), and has authorized the issuance of one Right (as such
number may hereinafter be adjusted pursuant to the provisions of Section 11(p)
hereof) for each share of Common Stock issued (as hereinafter defined) between
the Record Date and the earliest to occur of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined), all on the terms and subject to the conditions set forth in this
Agreement; and
WHEREAS, each Right shall initially represent the right to purchase one
one-thousandth of a Preferred Share (as defined below), upon the terms and
subject to the conditions hereinafter set forth. Preferred Shares shall mean
shares of Series A Junior Participating Preferred Stock, par value $.01 per
share, of the Company having the rights and preferences set forth in the Form of
Certificate of Designations attached to this Agreement as Exhibit A.
AGREEMENT -- SHARE PURCHASE RIGHTS PLAN
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Rights Plan, the
following terms have the meanings indicated (capitalized terms within any
definition shall have the meanings indicated elsewhere herein with respect to
such terms):
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial
Owner of fifteen percent (15.0%) or more of the shares of Common Stock then
outstanding. Notwithstanding the foregoing, the term "Acquiring Person"
shall not mean or include (i) the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan; (ii) any Person who
or which, together with all Affiliates and Associates of such Person, would
be an Acquiring Person solely by reason of a reduction in the number of
issued and outstanding shares of Common Stock of the Company pursuant to a
transaction or a series of related transactions voted on and approved by
the Board of Directors; provided, however, that in the event that such
Person described in the foregoing clause (ii) does not become an Acquiring
Person by reason of the foregoing clause (ii), such Person shall
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nonetheless become an Acquiring Person in the event such Person thereafter
acquires Beneficial Ownership of an additional 1.0% of the issued and
outstanding Common Stock of the Company, unless such additional Common
Stock ownership results solely from a subsequent reduction in the number of
issued and outstanding shares of Common Stock of the Company pursuant to a
transaction or a series of related transactions approved by the Board of
Directors; (iii) any Person who or which, together with all Affiliates and
Associates of such Person, would be an Acquiring Person solely by reason of
a transaction in which the Company (or one or more of its Subsidiaries)
acquires a business (whether such acquisition is accomplished by means of a
purchase of stock or assets, a merger, share exchange or otherwise) owned
by such Person in exchange (in whole or in part) for shares of Common Stock
of the Company pursuant to a transaction (or a series of related
transactions) approved by the Board of Directors (an "Approved Acquisition
Transaction"); provided, however, that in the event that such Person
described in the foregoing clause (iii) does not become an Acquiring Person
by reason of the foregoing clause (iii), such Person shall nonetheless
become an Acquiring Person in the event such Person thereafter acquires
Beneficial Ownership of an additional 1.0% of the issued and outstanding
Common Stock of the Company, unless such additional Common Stock ownership
results solely from a reduction in the number of issued and outstanding
shares of Common Stock of the Company (such as that described in clause
(ii) above), or a subsequent Approved Acquisition Transaction, pursuant to
a transaction or a series of related transactions approved by the Board of
Directors; or (v) any Person that on the date of this Rights Agreement is
the Beneficial Owner of fifteen percent (15%) or more of the outstanding
Common Stock unless and until such Person becomes the Beneficial Owner of
an additional one percent (1%) or more of the outstanding Common Stock.
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 provision, has
become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares of Common Stock so that such
Person would no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions, then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
(b) "Acquiring Person Transferee" shall have the meaning set forth in
Section 7(e) hereof.
(c) "Act" shall mean the Securities Act of 1933, as amended.
(d) "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
(e) "Associate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
(f) A Person shall be deemed the "beneficial owner" of, and shall be
deemed to "beneficially own", any securities:
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(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether
or not in writing) or upon the exercise of conversion rights, exchange
rights, rights (other than 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; or (B)
any security with respect to which such person has the right to vote
pursuant to any agreement, arrangement or understanding, if the
agreement, arrangement or understanding to vote such security (1)
arises solely from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act, and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable
or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person (or any of such Persons Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in proviso (B) to subparagraph (ii) of
this Section 1(f)) or disposing of any voting securities of the
Company; provided, however, that nothing in this Section 1(f) shall
cause a person engaged in business as an underwriter of securities to
be the "Beneficial Owner" of, or to "beneficially own," any securities
acquired through such person's participation in good faith in a firm
commitment underwriting until the expiration of forty days after the
date of such acquisition.
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.
(g) "Business day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
(h) "Close of business" on any given date shall mean 5:00 P.M., New
York time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York time, on the next succeeding
day which is a Business Day.
(i) "Common Stock" shall mean the common stock, par value $0.01 per
share, of the Company, except that "Common Stock" when used with reference
to any Person other than the Company shall mean the capital stock of such
Person with the greatest voting power, or the
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equity securities or other equity interest having power to control or
direct the management, of such Person.
(j) "Current market price" shall have the meaning set forth in Section
11(d) hereof.
(k) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(l) "Exchange Act" shall have the meaning set forth in Section 1(d)
hereof.
(m) "Exchange Ratio" shall have the meaning set forth in Section
11(r)(i) hereof.
(n) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(o) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(p) "Person" shall mean any individual, firm, company, corporation,
partnership, trust or other entity.
(q) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(r) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
(s) "Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
(t) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(u) "Right" and "Rights" shall have the meanings set forth in the
recitals at the beginning of this Rights Plan.
(v) "Rights Certificates" shall have the meaning set forth in Section
3(a) hereof.
(w) "Rights Dividend Declaration Date" shall have the meaning set
forth in the recitals at the beginning of this Rights Plan.
(x) "Section 11(a)(ii) Event" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(y) "Section 13 Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) hereof.
(z) "Stock Acquisition Date" shall mean the first date of a public
announcement (which, for purposes of this definition, shall include a
report filed pursuant to the Exchange Act) by the Company or an Acquiring
Person that a Person has become an Acquiring Person.
(aa) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which a majority of the voting securities
(or voting power of the voting equity securities or interests) is
beneficially owned, directly or indirectly, by such Person.
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(bb) "Summary of Rights" shall have the meaning set forth in Section
3(b) hereof.
(cc) "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
(dd) "Triggering Event" shall mean (or, as the case may be, the
earliest of) a Section 11(a)(ii) Event or any Section 13 Event.
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 other Agents or Co-Rights Agents as
it may deem necessary or desirable.
Section 3. ISSUANCE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the close of business on the tenth day after
the Stock Acquisition Date (or, if the tenth day after such date occurs before
the Record Date, the close of business on the Record Date), or (ii) the close of
business on the tenth business day (or such later date as may be determined by
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 Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such
plan) of, or of the first public announcement of the intention of any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the terms
of any such plan) to commence, a tender or exchange offer the consummation of
which would result in any Person becoming the beneficial owner of shares of
Common Stock of the Company aggregating 15% or more of the then outstanding
shares of Common Stock of the Company (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 referred to in clauses (i) and (ii) of this sentence being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock of the Company registered in the names of the
holders thereof (which certificates shall be deemed also to be Rights
Certificates) and not by separate certificates, and (y) the Rights (and the
right to receive Rights Certificates) will be transferable only in connection
with the transfer of the underlying shares of Common Stock of the Company
(including a transfer to the Company). As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights
Agent, if requested, will send) by first-class, insured, postage prepaid mail,
to each record holder of the Common Stock of the Company as of the close of
business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more rights certificate(s), in substantially the
form attached hereto as EXHIBIT B (the "Rights Certificates"), evidencing one
Right for each share of Common Stock so held (subject to adjustment as provided
herein). In the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p) hereof, at the time of
distribution of the Rights Certificates, the Company shall make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a) hereof)
so that Rights Certificates representing only whole numbers of Rights are
distributed and
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cash is paid in lieu of any fractional Rights. As of the Distribution Date, the
Rights will be evidenced solely by the Rights Certificates.
(b) As promptly as practicable following the Record Date, the Company will
send a copy of a Summary of Rights, in substantially the form attached hereto as
EXHIBIT C (the "Summary of Rights"), by first-class, postage prepaid mail, to
each record holder of the Common Stock of the Company as of the close of
business on the Record Date, at the address of such holder shown on the records
of the Company. With respect to certificates for the Common Stock outstanding as
of the Record Date, until the Distribution Date, the Rights will be evidenced by
such certificates for the Common Stock and the registered holders of the Common
Stock 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 (or surrender for transfer) of any certificates representing
shares of Common Stock outstanding on the Record Date, with or without a Summary
of Rights attached thereto, shall also constitute the transfer of the Rights
associated with the shares of Common Stock represented thereby.
(c) Rights shall also be issued (consistent with the provisions of
subsection (a) of this Section 3) in respect of all shares of Common Stock of
the Company which are issued after the Record Date but prior to the earliest of
the Distribution Date, the Redemption Date or the Final Expiration Date.
Certificates for shares of Common Stock (including, without limitation, any
reacquired shares referred to in the last sentence of this Section 3(c)) which
become outstanding after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
"This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between AmeriPath, Inc.
(the "Company") and American Stock Transfer & Trust Company, as Rights
Agent (the "Rights Agent"), dated as of April 8, 1999, as it may be amended
from time to time (the "Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain circumstances, as
set forth in the Agreement, such Rights (as defined in the Agreement) 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 Agreement, as in effect on the date of mailing, without charge
after the receipt of a written request therefor. Under certain
circumstances set forth in the Agreement, Rights issued to, or held or
beneficially owned by, any Person who becomes an Acquiring Person (as such
terms are defined in the Agreement), whether currently held by or on behalf
of such Person or by any subsequent holder, become null and void."
With respect to such certificate(s) containing the foregoing legend, until
the Distribution Date, the Rights associated with the Common Stock of the
Company represented by such certificate(s) shall be evidenced by such
certificate(s) alone, and the surrender for transfer of any such certificate(s)
shall also constitute the transfer of the Rights associated with the shares of
Common Stock of the Company represented thereby. In the event that the Company
purchases or acquires any Common Stock of the Company after the Record Date but
prior to the Distribution
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Date, any Rights associated with such reacquired Common Stock of the Company
shall be deemed cancelled and retired so that the Company shall not be entitled
to exercise any Rights associated with the shares of Common Stock of the Company
which are no longer outstanding.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to purchase
Preferred Shares and of assignment to be printed on the reverse thereof) shall
each be in substantially the form attached hereto as EXHIBIT B and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Rights Plan, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or stock quotation
or trading system on which the Rights may from time to time be listed or quoted
for trading, or to conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever distributed, shall be dated
as of the Record Date and shall entitle the holders thereof to purchase such
number of one one-thousandths of a Preferred Share as shall be set forth therein
at the price per one one-thousandth of a Preferred Share set forth therein (as
determined in accordance with Section 7(b) hereof, the "Purchase Price"), but
the number 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 Rights 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 thereof, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined, in its sole discretion, is part of a plan,
scheme, arrangement or understanding which has as a primary purpose or effect
the avoidance or circumvention of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights Certificate referred to
in this sentence, shall contain (to the extent feasible) the following legend:
"The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person, or an
Affiliate or Associate thereof (as such terms are defined in a Rights
Agreement between AmeriPath, Inc. (the "Company") and American Stock
Transfer & Trust Company, as Rights Agent (the "Agreement"). Accordingly,
this Rights Certificate and the Rights represented hereby become null and
void in the circumstances specified in Section 7(e) of the Agreement. The
Company will
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mail to the holder of this certificate a copy of the Agreement, as in
effect on the date of mailing, without charge after the receipt of a
written request therefor."
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its Chief Executive Officer or its President, either
manually or by facsimile signature, and shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Rights Certificates shall be manually or by facsimile signature
countersigned by the Rights Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall have signed any
of the Rights Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights 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 Rights Certificates had not ceased to be such officer
of the Company; and any Rights Certificates may be signed on behalf of the
Company by any person who, at the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company authorized to sign such
Rights Certificate, although at the date of the execution of this Rights Plan
any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office or offices designated as the appropriate place
for surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the name and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e) and Section 14
hereof, at any time after the close of business on the Distribution Date, and at
or prior to the close of business on the earlier of the Redemption Date and the
Final Expiration Date, any Rights Certificate or Rights Certificates (other than
any Right Certificates representing Rights that have become void pursuant to
Section 7(e) hereof or that have been exchanged pursuant to Section 11(r)
hereof) may be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder thereof to purchase
a like number of shares of one one-thousandths of a Preferred Share as the
Rights Certificate or Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the principal office or offices 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 Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate
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and shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e) and Section 14 hereof, countersign
and deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Rights 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 Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Subject to Sections 7(e), 11 and 13 and other provisions hereof, the
registered holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c) and Section 23(a)
hereof), in whole or in part, at any time after the Distribution Date, upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price for each one
one-thousandth of a Preferred Share (or other securities) as to which the Rights
evidenced by such Rights Certificate are exercised, at or prior to the earliest
of (i) the close of business on April 8, 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 the Rights are exchanged as
provided in Section 11(r) hereof (the earliest of (i), (ii) and (iii) being
sometimes herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-thousandth of a Preferred Share
purchasable pursuant to the exercise of a Right shall initially be $45.00, and
shall be subject to adjustment from time to time as provided in Section 11 or 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 Rights Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed,
accompanied by payment of the Purchase Price for each share to be purchased upon
exercise of such Rights, as set forth below, and an amount equal to any
applicable transfer tax required to be paid by the holder of such Rights
Certificate, the Rights Agent shall, subject to Section 20(j) hereof, thereupon
promptly (i) (A) requisition from any transfer agent of the Preferred Shares or
other securities to be purchased (or make available, if the Rights Agent is the
transfer agent for such shares) certificates for the total number of 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, in its
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sole discretion, to deposit the total number of shares issuable upon exercise of
the Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of shares as are to be
purchased (in which case certificates for the shares represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company will direct the depositary agent to comply with such request, (ii)
when appropriate, requisition from the Company the amount of cash, if any, to be
paid in lieu 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 Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) when appropriate, after receipt thereof, deliver such cash, if
any, to or upon the order of the registered holder of such Rights Certificate.
The payment of the Purchase Price and any applicable transfer taxes shall be
made in cash or by certified bank check or cashier's check payable to the
Company.
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Rights Plan to the contrary, from and
after the occurrence of a Section 11(a)(ii) Event, any Rights that are or were
acquired or beneficially owned by an Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) or an Acquiring Person Transferee (as such
term is defined below in this Section 7(e)), shall be and become null and void
without any further action, and no holder of such Rights (or of Rights
Certificates evidencing such Rights) shall have any rights whatsoever with
respect to such Rights (including, without limitation, any rights to exercise
such Rights), whether under any provision of this Rights Plan or otherwise. The
Company shall use all reasonable efforts to ensure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with, but shall have no
liability to any holder of Rights Certificates or any other Person as a result
of its failure to make any determinations with respect to an Acquiring Person or
their respective Affiliates, Associates or Acquiring Person Transferees
hereunder. No Rights Certificate(s) shall be issued pursuant to Section 3 hereof
that represents Rights beneficially owned by an Acquiring Person (or any
Associate or Affiliate thereof or any Acquiring Person Transferee) whose Rights
would be null and void pursuant to the preceding sentence; in addition, no
Rights Certificate(s) shall be issued at any time upon the transfer of any
Rights to an Acquiring Person (or any Associate or Affiliate thereof or any
Acquiring Person Transferee) whose Rights would be null and void pursuant to the
preceding sentence; and any Rights Certificate(s) delivered to the Rights Agent
for transfer to an Acquiring Person (or any Associate or Affiliate thereof or
any Acquiring Person Transferee) whose Rights would be null and void pursuant to
the preceding sentence shall be cancelled. For purposes of this Agreement, the
term "Acquiring Person Transferee" shall mean and include, with respect to
Rights (whether or not attached to shares of Common Stock), (i) a transferee of
an Acquiring Person (or of any Associate or Affiliate of such Acquiring Person)
who becomes a transferee after the Acquiring Person becomes such, or (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer
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(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights, or (B) a transfer which the Board of Directors
of the Company has determined, in its sole discretion, is part of a plan,
scheme, arrangement or understanding which has as a primary purpose or effect
the avoidance or circumvention of this Section 7(e).
(f) Notwithstanding anything in this Rights Plan to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Plan. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) Subject to the Company's rights in Section 11(q) or elsewhere herein to
otherwise fulfill its obligations hereunder, the Company covenants and agrees
that, from and after the Distribution Date, it will cause to be reserved and
kept available out of its authorized and unissued Preferred Shares or any
Preferred Shares held in its treasury, the number of Preferred Shares that, as
provided in this Rights Plan, will be sufficient to permit the exercise in full
of all outstanding Rights; provided, however, that the Company shall not be
required to reserve and keep available shares of Common Stock or other
securities sufficient to permit the exercise in full of all outstanding Rights
pursuant to the adjustments set forth in Section 11(a)(ii) or Section 13 hereof
unless the Rights become exercisable pursuant to such adjustments.
(b) So long as the Common Stock is listed on any national securities
exchange or listed or registered for quotation on any other market (including,
without limitation, the NASDAQ Stock Market ("NASDAQ")), the Company shall use
its best efforts to cause, from and after such time as the Rights become
exercisable, all Preferred Shares and/or other securities issuable pursuant to
outstanding Rights to be listed on such exchange upon official notice of
issuance upon such exercise.
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(c) The Company shall use its best efforts to (i) file, as soon as
practicable and as required by law following the Distribution Date, a
registration statement under the Act, with respect to the securities purchasable
upon exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities, and
(B) the date of the expiration or termination of the Rights. The Company will
also take such action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
or periods of time from time to time, not to exceed ninety (90) days in the
aggregate after the date set forth in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Rights Plan to the contrary, the Rights
shall not be exercisable in any jurisdiction unless or until the requisite
qualification in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such shares (subject to
payment of the Purchase Price therefore), be duly and validly authorized and
issued and fully paid and nonassessable shares.
(e) 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 Rights Certificates and of
any certificates for shares issued 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 Rights Certificates to a Person other
than, or the issuance or delivery of shares in respect of a name other than that
of, the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for shares in a
name other than that of the registered holder upon the exercise of any Rights
until such tax shall have been paid (any such tax being payable by the holder of
such Rights Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10. PREFERRED STOCK RECORD DATE. Each person in whose name any
certificate for a number of Preferred Shares or shares of Common Stock (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 such shares
represented thereby on, and such certificates shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the share transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the share transfer
books of the Company are open. Prior to the exercise of the Rights evidenced
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thereby, the holder of a Rights Certificate shall not be entitled to any rights
of a shareholder of the Company with respect to shares for which the Rights
shall be exercisable, including, without limitation, the right to vote (or
consent with respect thereto), to transfer, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any meeting or proceeding of the Company, except as
provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE; NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS; EXCHANGE OF RIGHTS FOR SHARES OF COMMON STOCK. 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) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Common Stock payable in shares of Common
Stock, (B) subdivide the outstanding shares of Common Stock, (C) combine the
outstanding Common Stock into a smaller number of shares, or (D) issue any
shares of its capital stock in a reclassification of the Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) or Section 7(e) hereof, the Purchase Price in
effect at the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be appropriately and
proportionately adjusted (including applicable adjustments under paragraph (p)
of this Section 11) so that the holder of any Right exercised after such time
shall be entitled to receive, upon payment of the Purchase Price then in effect,
the aggregate number and kind of shares of capital stock which, if such Right
had been exercised immediately prior to such date and at a time when the stock
transfer books of the Company were open, such holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of any Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of such Right. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event that, at any time after the Rights Dividend Declaration
Date, any Person shall become an Acquiring Person (such event being referred to
herein as a "Section 11(a)(ii) Event"), then, subject to Sections 11(r) and
23(a) and except as otherwise provided in this Section 11, each holder of a
Right (except as provided in Section 7(e) hereof) shall thereafter have the
right to receive, in accordance with the terms of this Agreement, upon exercise
thereof at a price equal to the then current Purchase Price multiplied by the
number of one one-thousandths of a Preferred Share for which the Right is then
exercisable, such number of shares of Common Stock of the Company as shall equal
the result obtained by (x) multiplying the then current Purchase Price by the
number of one one-thousandths of a Preferred Share for which a Right was
exercisable immediately prior to the first occurrence of the Section 11(a)(ii)
Event, and dividing that product by (y) 50% of the then current market price (as
determined pursuant to Section 11(d) hereof) per share of the Common Stock of
the Company on the date of the occurrence of such Section 11(a)(ii) Event. In
the event that there shall not be sufficient shares
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of Common Stock authorized or available for issuance to permit the exercise in
full of the Rights in accordance with this Section 11(a)(ii), the Company shall
take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exercise of the Rights. In the event the Company
shall, after good faith effort, be unable to take all such action as may be
necessary to authorize such additional shares of Common Stock, the Company shall
substitute, for each share of Common Stock that would otherwise be issuable upon
exercise of a Right, a number of Preferred Shares or fraction thereof such that
the current market price (as defined in paragraph (d) below) of one Preferred
Share multiplied by such number or fraction is equal to the current market price
of one Common Share as of the date of issuance of such Preferred Shares or
fraction thereof. In the event that any Person shall become an Acquiring Person
and the Rights shall then be outstanding, the Company shall not take any action
which would eliminate or diminish the benefits intended to be afforded by the
Rights as provided under this Agreement.
(b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Common Stock entitling them (for a period
expiring within forty-five (45) calendar days after such record date) to
subscribe for or purchase Common Stock (or shares having the same rights,
privileges and preferences as the shares of Common Stock ("equivalent common
stock")) or securities convertible into Common Stock or equivalent common stock
at a price per share of Common Stock or per share of equivalent common stock (or
having a conversion price per share, if a security convertible into Common Stock
or equivalent common stock) less than the current market price (as determined
pursuant to Section 11(d) hereof) per share of Common Stock 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 shares of
Common Stock outstanding on such record date, plus the number of shares of
Common Stock which the aggregate offering price of the total number of shares of
Common Stock and/or equivalent common stock 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 shares of Common Stock outstanding on such record
date, plus the number of additional shares of Common Stock and/or equivalent
common stock 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 by delivery of consideration part or all of which may be in a
form other than cash, the value of such consideration shall be as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent and the holders of the Rights. Shares of Common Stock owned by
or held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
-14-
(c) In case the Company shall fix a record date for a distribution to all
holders of Common Stock (including any such distribution made in connection with
a consolidation or merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular quarterly cash dividend
out of the earnings or retained earnings of the Company), assets (other than a
dividend payable in Common Stock, but including any dividend payable in stock
other than Common Stock) 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 current market price (as determined pursuant to Section 11(d)
hereof) per share of Common Stock 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 cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to a share of
Common Stock, and the denominator of which shall be such current market price
(as determined pursuant to Section 11(d) hereof) per share of Common Stock;
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. Such
adjustments shall be made successively whenever such a record date is fixed, and
in the event that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if such record
date had not been fixed.
(d) For the purpose of any computation hereunder, the "current market
price" per Preferred Share (subject to the second paragraph of this paragraph
(d)) or share of Common Stock (or per share of any other security) on any date
shall be deemed to be the average of the daily closing prices per share of such
security for the thirty (30) consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however, that in
the event that the current market price per share of the security is determined
during a period following the announcement by the issuer of such security of (A)
a dividend or distribution on such security payable in shares of such security
or securities convertible into shares of such security (other than the Rights),
or (B) any subdivision, combination or reclassification of such security, and
prior to the expiration of the requisite thirty (30) Trading Day period after
the ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification, then, and in each such case,
the "current market price" shall be properly adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the security in question is not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the security is listed or admitted to trading or, if the
security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use, or, if on any such date the security in
question is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional
-15-
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 shares 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 in question 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. If the security is not
publicly held or not so listed or traded, "current market price" per share shall
mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes of this
Rights Plan.
For the purpose of any computation hereunder, the "current market price"
per Preferred Share shall be determined in accordance with the preceding
paragraph. However, if the Preferred Shares are not publicly traded, the
"current market price" of a Preferred Share shall be conclusively deemed to be
the current market price per share of the Common Stock as determined pursuant to
the preceding paragraph (appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof),
multiplied by one thousand.
(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 one percent (1.0%) 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-millionth of a Preferred Share or
one-thousandth of a share of Common Stock or other share 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
(3) 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)(ii) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares or fraction of a share of capital stock other
than Common Stock, thereafter the number or fraction of such other shares so
receivable upon exercise of any Right and the Purchase Price thereof 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 Common Stock
contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and
the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Common
Stock 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 or otherwise hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of (or fraction
of) Preferred Shares or shares of Common Stock or other securities 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)
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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 one-thousandths of a Preferred Share
(calculated to the nearest one-millionth) obtained by (i) multiplying (x) the
number of one one-thousandths of a Preferred 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 lieu of any adjustment in the
number of one one-thousandths of a Preferred Share purchasable upon the exercise
of a Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of one one-thousandths of a Preferred
Share of Common Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
one-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 Rights Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights 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 Rights
Certificates on such record date Rights 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
Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of one one-thousandths of a Preferred Share issuable upon the exercise of
the Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-thousandths of
a Preferred Share which were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below one one-thousandth of the then stated or 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 such number of duly
authorized, fully paid and nonassessable Preferred Shares (or shares of
-17-
Common Stock or other securities issuable thereunder, as the case may be) at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the number
of Preferred Shares or shares of Common Stock or other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of Preferred Shares or shares of Common Stock and other capital stock
or securities of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that the Board of Directors of the Company shall determine in good
faith to be advisable in order that any (i) consolidation or subdivision of the
Common Stock, (ii) issuance wholly for cash of any shares of Common Stock at
less than the current market price, (iii) issuance wholly for cash of shares of
Common Stock or securities which by their terms are convertible into or
exchangeable for shares of Common Stock, (iv) stock dividends, or (v) issuance
of rights, options or warrants referred to in this Section 11, hereafter made by
the Company to holders of its Common Stock shall not be taxable to such
shareholders.
(n) The Company covenants and agrees that it shall not, at any time after
the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof) or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights, or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the shareholders 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.
(o) The Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Section 23 or Section 26 hereof or otherwise
specifically permitted by this Rights Plan, take (or permit any Subsidiary to
take) any action if at the time such action is taken
-18-
it is reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Rights Plan to the contrary notwithstanding, in the
event that the Company shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, then, (A) in
any such case the Purchase Price shall be adjusted by multiplying the Purchase
Price in effect prior to such occurrence by a fraction, the numerator of which
is the number of shares of Common Stock outstanding immediately before such
event and the denominator of which is the number of shares of Common Stock
outstanding immediately after such event, and (B) each share of Common Stock
outstanding immediately after such event shall have issued with respect to it
that number of Rights which each share of Common Stock outstanding immediately
prior to such event had issued with respect to it. The adjustments provided for
in this Section 11(p) shall be made successively whenever such a dividend is
declared or paid or such a subdivision, combination or consolidation is
effected.
(q) In lieu of issuing shares of Common Stock (and/or Preferred Shares) in
accordance with Section 11(a)(ii) hereof, the Board of Directors may, if the
number of shares of Common Stock which are authorized by the Company's
Certificate of Incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with Section 11(a)(ii) hereof, the
Board of Directors shall, to the extent permitted by applicable law and any
material agreements then in effect to which the Company is a party, (A)
determine the value of the shares of Common Stock (the "Adjustment Shares")
issuable upon the exercise of a Right immediately after the adjustments provided
for in Section 11(a)(ii) (the "Current Value"), and (B) with respect to each
Right (other than Rights which have become void pursuant to the provisions
hereof), make adequate provision to substitute for any or all such Adjustment
Shares, upon payment of the applicable Purchase Price, (1) cash, (2) other
equity securities of the Company (including, without limitation, shares, or
units of shares, of preferred stock which are deemed in good faith by the Board
of Directors to have substantially the same value as shares of Common Stock
(such shares or units of shares of preferred stock are herein called "Common
Stock equivalents")), (3) debt securities of the Company, (4) other assets, (5)
a reduction of the Purchase Price, or (6) any combination of the foregoing
having a value which, when added to the value of the shares of Common Stock
(and/or Preferred Shares) actually issued upon exercise of such Right, shall
have an aggregate value equal to the Current Value, where such aggregate value
has been determined in good faith by the Board of Directors based upon the
advice of a nationally recognized independent investment banking firm selected
in good faith by the Board of Directors; provided that if the Company shall not
have made adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the date (the "Section 11(a)(ii) Trigger
Date") which is the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's right of redemption pursuant to
Section 23(a) expires, then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the Purchase
Price, shares of Common Stock (to the extent available) and Preferred Shares and
then, if necessary, cash, which shares and cash have an aggregate value equal to
the excess of (x)
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the Current Value over (y) the Purchase Price for the number of shares (or
fraction of a share) for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event. If, upon the occurrence of a
Section 11(a)(ii) Event, the number of shares of Common Stock that are
authorized by the Company's Certificate of Incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights are
not sufficient to permit exercise in full of the Rights in accordance with
Section 11(a)(ii) hereof, and if the Board of Directors shall determine in good
faith that it is likely that sufficient additional shares of Common Stock could
be authorized for issuance upon exercise in full of the Rights, then, if the
Board of Directors so elects, the thirty (30) day period set forth above may be
extended to the extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder
approval for the authorization of such additional shares (such thirty (30) day
period, as it may be extended, is herein called the "Substitution Period"). To
the extent that the Company determines that some action must be taken pursuant
to the first or second sentence of this Section 11(q), the Company (x) shall
provide, subject to Section 7(e) hereof and the last sentence of this Section
11(q), that such action shall apply uniformly to all outstanding Rights, and (y)
may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such times as the suspension is no longer in effect. For
purposes of this Section 11(q), the value of the Common Stock shall be the
current market price per share of the Common Stock on the Section 11(a)(ii)
Trigger Date and the per share or per unit value of any "Common Stock
equivalent" shall be deemed to equal the current market price per share of the
Common Stock on such date. The Board of Directors may, but shall not be required
to, establish procedures to allocate the right to receive Common Stock upon the
exercise of the Rights among holders of Rights pursuant to this Section 11(q).
(r) (i) The Board of Directors of the Company may at its option at any time
after any Person becomes an Acquiring Person, exchange shares of Common Stock
for 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), at an exchange ratio of one (1.0) share of Common Stock per Right,
appropriately adjusted to reflect any adjustment in the number of Rights
pursuant to Section 11(a)(i) hereof (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board
of Directors shall not be empowered to effect such exchange at any time after
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding Common
Stock for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the shares of Common Stock then outstanding.
(ii) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (i) of
this Section 11(r) and without any further action and without any notice,
the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of
shares of Common Stock equal to the number of such Rights held by such
holder multiplied by the
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Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all 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 Stock for Rights will be effected and, in the event
of any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.
(iii) In the event that there shall not be sufficient shares of Common
Stock available for issuance to permit any exchange of Rights as
contemplated in accordance with this Section 11(r), the Company shall
either take such action as may be necessary to authorize additional shares
of Common Stock for issuance upon exchange of the Rights or, alternatively,
at the option and in the sole discretion of the Board of Directors, in lieu
of issuing Common Stock in exchange for each such Right, (x) pay cash in an
amount equal to the Current Value (as hereinafter defined), (y) issue debt
or equity securities or a combination thereof (which may include Preferred
Shares), having a value equal to the Current Value, where the value of such
securities shall be determined by the Board of Directors in good faith
based upon the advice of a nationally recognized investment banking firm
selected by the Board of Directors, or (z) deliver any combination of cash,
property, Common Stock and/or other securities having a value equal to the
Current Value (again, where the value of such securities shall be
determined by the Board of Directors in good faith based upon the advice of
a nationally recognized investment banking firm selected by the Board of
Directors). For purposes of this paragraph (iii) only, the term "Current
Value" shall mean the product of the current market price per share of
Common Stock (determined pursuant to Section 11(d) as of the Stock
Acquisition Date) multiplied by the number of shares of Common Stock for
which the Right otherwise would be exchangeable if there were sufficient
shares available. To the extent that the Company determines that some
action need be taken pursuant to clauses (x), (y) or (z) of this paragraph
(iii), the Board of Directors may temporarily suspend the exercisability of
the Rights for a period of up to ninety (90) days following the Stock
Acquisition Date, in order to seek any authorization of additional shares
of Common Stock and/or to decide the appropriate form of distribution to be
made pursuant to this paragraph (iii) and to determine the value thereof.
In the event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with the transfer agent for the
Common Stock, a copy of such certificate, and (c) mail a brief summary thereof
to each holder of a Rights Certificate (or, if prior to the Distribution Date,
to each holder of a certificate representing shares of Common Stock) in
accordance with Section 25 hereof.
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Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) In the event that, following the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), and the Company shall not be the continuing
or surviving corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof) shall consolidate with, or merge with or into, the Company, and
the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person 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 transaction or a
series of related 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 any Subsidiary of the
Company in one or more transactions each of which complies with Section 11(o)
hereof), then, and in each such case, proper provisions shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof, in accordance
with the terms of this Rights Plan, such number of duly and validly authorized
and issued, fully paid, nonassessable and freely tradable shares of Common Stock
of the Principal Party (as such term is hereinafter defined), not subject to any
liens, encumbrances, rights of first refusal or other adverse claims, as shall
be equal to the result obtained by (1) multiplying the then current Purchase
Price by the number of one one-thousandths of a Preferred Share for which a
Right is exercisable immediately prior to the first occurrence of a Section 13
Event, and dividing that product (which product, following the first occurrence
of a Section 13 Event, shall be the aggregate "Purchase Price" for all the
securities that may be purchased pursuant to the Right upon the adjustment
pursuant to this clause (i) and for all purposes of this Rights Plan) by (2) 50%
of the current market price (determined pursuant to Section 11(d) hereof) per
share of the Common Stock of such Principal Party on the date of consummation of
such Section 13 Event; (ii) such Principal Party (i.e., the issuer of such
shares) shall thereafter be liable for, and shall assume, by virtue of such
Section 13 Event, all the obligations and duties of the Company pursuant to this
Rights Plan; (iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock in accordance with the provisions of this Rights
Plan) in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Section 11(a)(ii) hereof shall be of no effect following the first occurrence
of any Section 13 Event.
(b) "Principal Party" shall mean:
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(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted
in such merger or consolidation, and if no securities are so issued, the
Person that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions; provided, however, that in any such case,
(1) if the Common Stock of such Person is not at such time and has not been
continuously over the preceding twelve (12) month period registered under
Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, "Principal Party" shall refer to such other Person; and (2) in
case such Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks 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 Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer (or any other transaction constituting a Section 13 Event) unless
the Principal Party shall have a sufficient number of authorized shares of its
Common Stock which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and 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 (or any other transaction constituting a Section 13 Event), the
Principal Party will:
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date; and
(ii) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates which comply in all
respects with the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a). The
Company shall not enter into any transaction of the kind referred to in this
Section 13 if at the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or arrangements which,
as a result of the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the Rights.
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Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(p) hereof, or to
distribute Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would be otherwise
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed 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 fractions of Preferred
Shares (other than integral multiples of one one-thousandths of a Preferred
Share) or fractions of shares of Common Stock or other securities upon exercise
or exchange of the Rights or to distribute certificates which evidence such
fractional shares. In lieu of fractional shares of Common Stock or Preferred
Shares, the Company may pay to the registered holders of Rights Certificates at
the time such Rights are exercised or exchanged as herein provided an amount in
cash equal to (A) in the case of fractional Common Stock, the same fraction of
the current market value of a share of Common Stock and (B) in the case of a
fractional portion of a Preferred Share, the same fraction of the current market
value of one Preferred Share. For purposes of this Section 14(b), the current
market value of a share shall be the closing price of such share (as determined
pursuant to Section 11(d) hereof) for the Trading Day immediately prior to the
date of such exercise.
(c) The holder of a Right, by the acceptance of the Right, expressly waives
such holder's right to receive any fractional Rights or any fractional shares
upon exercise or exchange of a Right, except as permitted by this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Rights Plan are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may
-24-
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 Rights Certificate and in this Rights Plan. Without limiting
the foregoing or any remedies available to the holders of the Rights, it is
specifically acknowledged that the holders of the Rights would not have an
adequate remedy at law for any breach of this Agreement, and shall 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 RIGHTS HOLDERS. Every holder of a Right by
acceptance of the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer
and with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent,
subject to the second sentence of Section 7(e) hereof, shall be required to
be affected by any notice to the contrary; and
(d) notwithstanding anything in this Rights Plan to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Rights Plan by reason of any preliminary
or permanent injunction or other order, decree or ruling issued by a court
of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligations.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote (or consent
with respect to), receive dividends or be deemed for any purpose whatsoever the
holder of any Preferred Shares (or any portion thereof) or shares of Common
Stock or of 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 Rights Certificate be construed to confer upon the
holder of any Rights Certificate, 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, proceedings
or other actions affecting shareholders (except as provided in Section 24
hereof), or to receive
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dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and disbursements and
other disbursements incurred in the administration and execution of this Rights
Plan and the exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration of this Rights
Plan.
(b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Rights Plan in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Rights Plan without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; PROVIDED, HOWEVER, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Rights Plan any of the Rights Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Rights Plan.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name
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1
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Rights Plan.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties
and obligations imposed by this Rights Plan upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel acceptable to
the Company (who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this Rights Plan
the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person
and the determination of "current market price") be proved or established
by the Company prior to taking or suffering any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company and delivered to
the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Rights Plan in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be under any responsibility in respect
of the validity of this Rights Plan 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 Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Rights Plan or
in any Rights Certificate; nor shall it be responsible for any adjustment
required under the provisions of Section 11 or Section 13 hereof or
responsible for the manner, method or amount of any such adjustment (except
with respect to the exercise of Rights evidenced by Rights Certificates
after actual notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued
pursuant to this Rights Plan or any Rights Certificate or as to whether any
shares of Common Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(e) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Rights Plan.
(f) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President, any Vice President, the Secretary
or the Treasurer of the Company, and to apply to such officers
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for advice or instructions in connection with its duties, and it shall not
be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer.
(g) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Rights Plan. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(h) 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, however, reasonable
care was exercised in the selection and continued employment thereof.
(i) No provision of this Rights Plan 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.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting
with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Rights Plan
upon sixty (60) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock or Preferred Shares, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to the transfer agent of the Common Stock
or Preferred Shares, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of sixty (60) 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
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation organized and doing business
under the laws of the United States or of any state of
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the United States, in good standing, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000. 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 and records at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock
and Preferred Shares and mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for in
this Section 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 RIGHTS CERTIFICATES. Notwithstanding any of the
provisions of this Rights Plan or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Rights Plan. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee 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 Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights 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 Rights Certificate would be issued, and (ii)
no such Rights 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 AND TERMINATION.
(a) The Board of Directors of the Company may at its option at any time
prior to the earlier of (i) the time that any Person becomes an Acquiring
Person, or (ii) the Final Expiration Date, redeem all but not less than all of
the then outstanding Rights at a redemption price of $0.005 per Right, as such
amount may be appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price"). The redemption of the
Rights pursuant to this Section 23(a) may be made effective at such time, on
such basis and with such conditions as the Board of Directors of the Company, in
its sole discretion, may establish.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to paragraph (a) of this Section
23, and without any further
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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 for each Right so held. Promptly after the action of the Board
of Directors ordering the redemption of the Rights, the Company shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at each holder's
last address as it appears upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the Transfer Agent for the
Common Stock; provided, however, that the failure to give, or any defect in, any
such notice shall not affect the validity of such redemption. 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. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or purchase
for value any Rights at any time in any manner other than that specifically set
forth in this Section 23 or in Section 11(r) hereof, and other than in
connection with the purchase of shares of Common Stock prior to the Distribution
Date.
Section 24. 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
Common Stock or to make any other distribution to the holders of Common Stock
(other than a regular quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of Common Stock rights
or warrants to subscribe for or to purchase any additional shares of Common
Stock or shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Common Stock (other than
a reclassification involving only the subdivision of outstanding shares of
Common Stock), or (iv) to effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), 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 transaction or a series of related transactions, of 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each holder of a
Rights Certificate, to the extent feasible and in accordance with Section 25
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, 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 shares of Common Stock, 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 twenty (20) days prior to the
record date for determining holders of the shares of Common Stock for purposes
of such action, and in the case of any such other action, at least twenty (20)
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Common Stock whichever
shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii) hereof shall
occur, then, in any such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a
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Rights Certificate, to the extent feasible and in accordance with Section 25
hereof, a notice of the occurrence of such event, which shall specify the event
and the consequences of the event to holders of Rights under Section 11(a)(ii)
hereof, and (ii) all references in the preceding paragraph to Common Stock shall
be deemed thereafter to refer, if appropriate, to other securities.
(c) The failure to give notice required by this Section 24 or any defect
therein shall not affect the legality or validity of the action taken by the
Company or the vote on any such action.
Section 25. NOTICES. Notices or demands authorized by this Rights Plan to
be given or made by the Rights Agent or by the holder of any Rights 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:
AmeriPath, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: President
Subject to the provisions of Section 21, any notice or demand authorized by
this Rights Plan to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Notices or demands authorized by this Rights Plan to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage pre-paid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 26. SUPPLEMENTS AND AMENDMENTS. The Company may, and the Rights
Agent shall if the Company so directs, from time to time, supplement or amend
this Agreement without the approval of any holder(s) of Rights Certificates in
order to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
or to make, change or effect any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such supplement or
amendment to be approved by the Board of Directors and 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 amended in any manner which would adversely affect the interests of the
holders of Rights. Without limiting the foregoing, the Company may, at any time
prior to such time as any Person becomes an Acquiring Person, amend this
Agreement to lower the percentage thresholds set forth in Sections 1(a) and 3(a)
-31-
hereof to not less than the greater of (a) the sum of .001% and the largest
percentage of the outstanding shares of Common Stock then known by the Company
to be beneficially owned by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or any Subsidiary of
the Company, or any entity holding shares of Common Stock for or pursuant to the
terms of any such plan) and (b) 10.0%. Upon the delivery of a certificate from
an appropriate officer of the Company which states that the proposed supplement
or amendment is in compliance with the terms of this Section 26, the Rights
Agent shall execute such supplement or amendment. Notwithstanding anything
contained in this Rights Plan to the contrary, no supplement or amendment may be
made after the time that any Person becomes an Acquiring Person unless such
supplement or amendment does not adversely affect the interests of the holders
of Rights.
Section 27. SUCCESSORS. All the covenants and provisions of this Rights
Plan 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. In
the event that prior to the Distribution Date the Board of Directors approves
the Company's consummation of a merger with a subsidiary incorporated in a State
other than Delaware primarily for the purpose of effecting a "reincorporation"
of the Company from Delaware to such other State, then the Board in its
discretion upon the advice of counsel shall make such adjustments and
modifications to this Agreement as necessary or appropriate to conform this
Agreement to the law of such other State and shall take such further action in
the Board's discretion to provide for and to cause the Company's successor and
its shareholders to succeed to the respective rights and obligations of the
Company and its shareholders hereunder, subject, however, to the Board's rights
to otherwise amend or modify this Agreement hereunder.
Section 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. For
all purposes of this Rights Plan, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Rights Plan and to exercise all
rights and powers specifically granted to the Board or to the Company, or as may
be necessary or advisable in the administration of this Rights Plan, including,
without limitation, the right and power to (i) interpret the provisions of this
Rights Plan and (ii) make all determinations deemed necessary or advisable for
the administration of this Rights Plan (including a determination to redeem or
not redeem the Rights, to exchange the Rights or to amend or supplement this
Rights Plan). All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties and (y) not subject the Board to any liability
to the holders of the Rights.
The Board may at any time and from time to time (and upon the occurrence of
a Triggering Event shall forthwith) establish and set aside one or more funds
(in such amount or amounts as the Board shall deem necessary or desirable),
whether in trust, escrow or other
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segregated accounts (regardless of whether any such fund is combined for
administrative purposes with any other fund or funds established by the Company,
for the purpose of assuring that adequate resources are available to the Board
of Directors to enable them to carry out their prescribed functions, and to
maintain their authority and powers, under this Agreement, or to fulfill their
fiduciary obligations to the shareholders of the Company. Without limiting the
generality of the statement of purposes contained in the next preceding
sentence, the fund or funds so established shall, on demand of a majority of the
Directors, be made available to the Board for the purposes of (i) seeking
affirmatively to establish, or to defend, the validity of this Agreement,
including, without limitation, this Section 28, and (ii) seeking affirmatively
to establish, or to defend, the validity and/or propriety of any action taken
(or omitted to be taken) by the Board pursuant to this Agreement, the
Certificate of Incorporation or the Bylaws or applicable provisions of the
Delaware General Corporation Law. The establishment by the Board, and
utilization by the Board of Directors, of any fund or funds established pursuant
to this paragraph shall be separate and apart from, and shall not detract from,
diminish or otherwise affect adversely, any rights or protections afforded,
conferred or given to the Company's Directors pursuant to the Certificate of
Incorporation of the Company or its Bylaws.
Section 29. BENEFITS OF THIS RIGHTS PLAN. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) 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 Rights Certificates (and, prior to the Distribution
Date, the registered holders of the Common Stock).
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.
Without limiting the foregoing, if any provision requiring that a determination,
vote or approval be made by less than the entire Board (or at a time or with the
concurrence of a group of directors consisting of less than the entire Board) is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable, such determination, vote or approval shall then be made by the
full Board of Directors in accordance with applicable law and the Company's
Certificate of Incorporation and By-laws.
Section 31. GOVERNING LAW. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State, except that from and after the
time that there is a successor to the Company under this Agreement pursuant to a
reincorporation as contemplated by Section 27 hereof, this Section 31 shall
thereupon apply the law of the State in which the successor is incorporated
instead of Delaware law.
Section 32. CONSENT TO JURISDICTION; SERVICE OF PROCESS. The Company, the
Rights Agent and the holders of the Rights Certificates hereby irrevocably
submit to the jurisdiction of the state or federal courts located in Palm Beach
County, Florida in connection with any suit,
-33-
action or other proceeding arising out of or relating to this Rights Plan and
the transactions contemplated hereby, and hereby agree not to assert, by way of
motion, as a defense, or otherwise in any such suit, action or proceeding that
the suit, action or proceeding is brought in an inconvenient forum, that the
venue of the suit, action or proceeding is improper or that this Rights Plan or
the subject matter hereof may not be enforced by such courts.
Section 33. COUNTERPARTS. This Agreement may be executed in counterparts
and both of such counterparts shall for all purposes be deemed to be an
original, and such counterparts shall together constitute but one and the same
instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Rights Plan are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 35. CONSEQUENTIAL DAMAGES. Neither party to this Agreement shall be
liable to the other party or any third party for consequential damages.
-34-
IN WITNESS WHEREOF, the parties hereto have caused this Rights Plan to be
duly executed and attested, all as of the date first above written
AMERIPATH, INC.
By: /s/ XXXXX X. NEW
-----------------------------------------
Xxxxx X. New, Chairman of the Board,
President and Chief Executive Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ XXXXXXX X. XXXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
-35-
EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
AMERIPATH, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
---------------------------
AMERIPATH, Inc., a corporation organized and existing under the Delaware
General Corporation Law (hereinafter called the "Corporation"), hereby certifies
that the following resolution was adopted by the Board of Directors of the
Corporation pursuant to Section 151 of the Delaware General Corporation Law at a
meeting duly called and held on ________________________, 1999.
Pursuant to the authority granted to and vested in the Board of Directors
of this Corporation (hereinafter called the "Board of Directors" or the "Board")
in accordance with the provisions of the Corporation's Certificate of
Incorporation, the Corporation hereby creates a series of Preferred Stock, par
value $.01 per share, of the Corporation (the "Preferred Stock"), and hereby
states the designation and number of shares, and fixes the relative rights,
preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be ______________. Such number of shares may be increased or
decreased by resolution of the Board of Directors; PROVIDED, that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Series
A Preferred Stock with
A-1
respect to dividends, the holders of shares of Series A Preferred Stock, in
preference to the holders of Common Stock, par value $.01 per share (the "Common
Stock"), of the Corporation, and of any other junior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first day
of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth, 1,000 times the aggregate per
share amount of all cash dividends, and 1,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared
on the Common Stock since the immediately preceding Quarterly Dividend Payment
Date or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A Preferred Stock.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of 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) of this Section immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares
of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series A Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of
A-2
Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
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 share of Series A Preferred Stock shall entitle the holder thereof to
1,000 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series 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, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock, 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 stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no 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, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which
A-3
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 junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock, provided that
the Corporation may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the 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 4,
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 cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall have
received $1.00 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
and further provided that the holders of shares of Series A Preferred Stock
shall be entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 1,000 times the
aggregate amount to be distributed per share to holders of shares of Common
Stock, or (2) to the holders of shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
A-4
winding up. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under the proviso
in clause (1) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of 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 each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 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 declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series 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. NO REDEMPTION. The shares of Series A Preferred Stock shall not
be redeemable.
Section 9. RANK. The Series A Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets, junior to all series of
any other class of the Corporation's Preferred Stock.
Section 10. AMENDMENT. The Certificate of Incorporation of the Corporation
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 at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single class. At any time when there are no shares of Series A
Preferred Stock outstanding, the number, designation, preferences and rights of
the Series A Preferred Stock as set forth in this Certificate of Designations
may be amended by the Board of Directors in the manner provided in Section 151
and as otherwise permitted under the Delaware General Corporation Law.
A-5
Section 11. FRACTIONAL SHARES. The holder of any fractional share of Series
A Preferred Stock issued by the Corporation shall have the proportional rights
of a holder of a share of Series A Preferred Stock to the extent of the
fractional amount of the share held. For example, a holder of one one-thousandth
of a share of Series A Preferred Stock would have one one-thousandth of the
rights of a holder of one share of the Series A Preferred Stock (e.g., the
holder of one one-thousandth of a share would have one vote on matters subject
to a vote of holders of the Series A Preferred Stock, as compared to a whole
share which has 1,000 votes).
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf
of the Corporation by its Chairman of the Board as of ___________________, 1999.
AMERIPATH, INC.
By:_________________________________________
Xxxxx X. New, Chairman of the Board,
President and Chief Executive Officer
A-6
EXHIBIT B
FORM OF RIGHTS CERTIFICATE
___________________, INC.
Certificate No. R-___________________________________________________ Rights
NOT EXERCISABLE AFTER ___________, 2009 OR EARLIER IF REDEEMED OR EXCHANGED
BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $____ PER RIGHT, AND TO EXCHANGE, 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 PLAN) AND ANY TRANSFEREE
OR SUBSEQUENT HOLDER OF THE RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS PLAN). ACCORDINGLY,
THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY BECOME NULL AND VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.] (1)
----------
(1) The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
B-1
RIGHTS CERTIFICATE
This certifies that _________________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of __________, 1999 (the "Rights
Plan"), between ___________________, Inc., a Delaware corporation (the
"Company"), and ____________________ (the "Rights Agent"), to purchase from the
Company at any time prior to 5:00 P.M. (New York time) on ____________, 2009 at
the office or offices of the Rights Agent designated for such purpose, or its
successor(s) as Rights Agent, one one-thousandth of a fully paid, non-assessable
share of the Company's Series A Junior Participating Preferred Stock, par value
$0.01 per share (the "Preferred Shares") (or in certain circumstances, cash,
property or other securities), at a purchase price of $___.00 per one
one-thousandth of a Preferred Share (the "Purchase Price"), upon presentation
and surrender of this Rights Certificate with the Form of Election to Purchase
and related Certificate duly executed. The Purchase Price shall be paid in cash.
The number of Rights evidenced by this Rights 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 _________, __1999, based on the Company's Common Stock and Preferred Shares
as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined
in the Rights Plan), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Plan), or (ii) an Acquiring
Person Transferee (as such term is defined in the Rights Plan), such Rights
become null and void and no holder hereof shall have any right with respect to
such Rights from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Plan, the Purchase Price and the number and kind
of shares of the Company's capital stock or other securities which may be
purchased upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain events,
including Triggering Events (as such term is defined in the Rights Plan).
This Rights Certificate, and the Rights evidenced hereby, are subject to
all of the terms, provisions and conditions of the Rights Plan, which terms,
provisions and conditions are hereby incorporated herein by reference and made a
part hereof and to which Rights Plan reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder and thereunder of the Rights Agent, the Company and the
holders of the Rights Certificates, which limitations of rights include (without
limitation) the temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Plan. In the event of any
conflict or inconsistency between the terms, provisions and conditions of Rights
as set forth in the Rights Plan and those described or set forth in this Rights
Certificate, the terms, provisions and conditions set forth in the Rights Plan
shall govern and prevail. Copies of the Rights Plan are on file at the
above-mentioned office of the Rights Agent and are also available upon written
request to the Rights Agent.
B-2
If this Rights Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised. This Rights
Certificate, with or without other Rights Certificates, upon surrender at the
principal office or offices of the Rights Agent designated for such purpose, may
be exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of Preferred Shares as the Rights evidenced by the Rights Certificate or
Rights Certificates surrendered shall have entitled such holder to purchase.
Subject to the terms, provisions and conditions of the Rights Plan, the
Rights evidenced by this Certificate (i) may be redeemed by the Company at its
option at a redemption price of $____ per Right or (ii) may be exchanged in
whole or in part for shares of Common Stock. The Rights Plan is also subject to
amendment and supplement by the Company, on the terms and conditions set forth
in the Rights Plan.
No fractional shares of Common Stock or Preferred Shares (other than
integral multiples of one one-thousandth of a Preferred Share) will be issued
upon the exercise of any Right or Rights evidenced hereby, but in lieu thereof a
cash payment will be made, as provided in the Rights Plan.
No holder of this Rights Certificate shall be entitled to vote (or consent
with respect to) or receive dividends or be deemed for any purpose the holder of
any Preferred Shares or shares of Common Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Plan 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 or proceeding 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 Plan), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Plan.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
B-3
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of ______________, 19__
ATTEST:___________________________ ___________________, INC.
By:_______________________________ By:_______________________________
Name: Name:
Title: Title:
Countersigned:
[RIGHTS AGENT]
By:_______________________________
Authorized Signature
B-4
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED __________________________________________ hereby sells,
assigns and transfers unto _____________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together will all right, title and interest
therein, and does hereby irrevocably constitute and appoint
________________________________ Attorney, to transfer the within Rights
Certificate on the books of the within-named Company, with full power of
substitution.
Dated:_____________________, 19__
_____________________________________
Signature
SIGNATURE GUARANTEE:
B-5
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person,
an Acquiring Person Transferee or an Affiliate or Associate thereof (as
such terms are defined under the Rights Plan);
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is or was or subsequently became an
Acquiring Person, an Acquiring Person Transferee or an Affiliate or
Associate thereof (as such terms are defined under the Rights Plan).
Dated:_______________, 19__
_____________________________________
Signature
SIGNATURE GUARANTEE:
B-6
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
B-7
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: [Company Name]:
The undersigned hereby irrevocably elects to exercise _______________
Rights represented by this Rights 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
and delivered to:
Please insert social security or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please insert social security or other identifying number)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights 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)
________________________________________________________________________________
(Please insert social security or other identifying number)
Dated: ______________, 19__
_____________________________________
Signature
SIGNATURE GUARANTEE:
B-8
NOTICE
The signature to the foregoing Form of Election to Purchase must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
B-9
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person, an Acquiring Person Transferee or an Affiliate or Associate thereof
(as such terms are defined under the Rights Plan);
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is or was or became an Acquiring
Person, an Acquiring Person Transferee or an Affiliate or Associate thereof
(as such terms are defined under the Rights Plan).
Dated:_________________, 19__
_____________________________________
Signature
SIGNATURE GUARANTEE:
B-10
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
B-11
EXHIBIT C
[AMERIPATH, INC. LETTERHEAD]
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
_____________ __, 1999
To Our Shareholders:
On ___________, 1999, your Board of Directors adopted a share purchase
rights plan (the "Rights Plan") and declared a dividend distribution of one
right (a "Right") for each outstanding share of common stock, par value $0.01
per share (the "Common Stock"), of the Company to shareholders of record at the
close of business on ___________, 1999. Each Right entitles the registered
holder to purchase from the Company one one-thousandth of a share of the
Company's Series A Junior Participating Preferred Stock (the "Preferred Shares")
(or in certain circumstances, cash, property or other securities) at a price of
$___.00 per one one-thousandth of a Preferred Share (the "Purchase Price"),
subject to adjustment. This letter describes the Board's reasons for adopting
the Rights Plan and summarizes certain material terms of the Rights Plan.
FLIP-IN
In the event that any person or group of affiliated or associated persons
acquires beneficial ownership of 15% or more of the outstanding shares of Common
Stock (an "Acquiring Person"), each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter be void), will
thereafter have the right to receive upon exercise that number of Common Shares
having a market value of two times the exercise price of the Right. Issuances
(and consequent beneficial ownership) of Common Stock (at or in excess of such
15% threshold) by the Company in connection with certain acquisition
transactions effected by the Company and approved by the Board of Directors are
excepted from this provision.
FLIP-OVER
If the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold
after a person or group has become an Acquiring Person, each holder of a Right
(other than Rights beneficially owned by the Acquiring Person, which will be
void) will thereafter have the right to receive that number of shares of common
stock of the acquiring company which at the time of such transaction will have a
market value of two times the exercise price of the Right.
C-1
DISTRIBUTION DATE
The distribution date is the earlier of:
(i) 10 days following a public announcement that a person or group of
affiliated or associated persons have acquired beneficial ownership of 15%
or more of the outstanding shares of Common Stock; or
(ii) 10 business days (or such later date as may be determined by
action of the Board of Directors of the Company prior to such time as any
person or group of affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would result in
the beneficial ownership by a person or group of 15% or more of the
outstanding shares of Common Stock.
TRANSFER AND DETACHMENT
Until the Distribution Date, the Rights will be evidenced, with respect to
any of the Common Stock certificate(s) outstanding as of the Record Date, by
such Common Stock certificate(s). Until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with and
only with the shares of Common Stock, no separate rights certificates will be
issued and transfer of Common Stock certificates will also constitute transfer
of these Rights.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the shares of Common Stock as of the close of business on
the Distribution Date, and such separate Right Certificates alone will
thereafter evidence the Rights.
EXERCISABILITY
The Rights are not exercisable until the Distribution Date. The Rights will
expire on _____________, 2009 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, on the terms and conditions set forth in
the Rights Plan (as described below).
ADJUSTMENTS
The Purchase Price payable, and the number of Preferred Shares or shares of
Common Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution in the
event of stock dividends, stock splits, reclassifications, or certain
distributions with respect to the Common Stock. The number of outstanding Rights
and the number of Preferred Shares or shares of Common Stock issuable upon
exercise of each Right are also subject to adjustment if, prior to the
Distribution Date, there is a stock split of the Common Stock or a stock
dividend on the Common Stock payable in shares of Common Stock or subdivisions,
consolidations or combinations of the Common Stock. With certain exceptions, no
adjustment in the Purchase Price will be required until cumulative
C-2
adjustments require an adjustment of at least 1.0% in such Purchase Price. No
fractional shares will be issued (other than integral multiples of one
one-hundredth of a Preferred Share) and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Shares or Common Stock,
as the case may be, on the last trading day prior to the date of exercise.
PREFERRED SHARES
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 1,000 times the dividend declared per share of Common
Stock. In the event of liquidation, the holders of the Preferred Shares will be
entitled to a minimum preferential liquidation payment of $1.00 per share but
will be entitled to an aggregate payment of 1,000 times the payment made per
share of Common Stock. Each Preferred Share will have 1,000 votes, voting
together with the Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which Common Stock is exchanged, each
Preferred Share will be entitled to receive 1,000 times the amount received per
share of Common Stock. These rights are protected by customary antidilution
provisions.
The value of the one one-thousandth interest in a Preferred Share
purchasable upon exercise of each Right should, because of the nature of the
Preferred Shares' dividend, liquidation and voting rights, approximate the value
of one share of Common Stock.
EXCHANGE
At any time after any person or group becomes an Acquiring Person, and
prior to the acquisition by any such person or group of 50% or more of the
outstanding shares of Common Stock, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by the Acquiring Person, which will
have become void), in whole or in part, for shares of Common Stock, at an
exchange ratio of one share of Common Stock (or, in certain instances, one
one-thousandth of a Preferred Share) per Right (subject to adjustment).
REDEMPTION
At any time prior to any person or group becoming an Acquiring Person, the
Board of Directors of the Company may redeem the Rights, in whole but not in
part, at a price of $.005 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time on such basis with such conditions
as the Board of Directors in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.
AMENDMENTS
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an amendment
to lower the "15%" thresholds described above to not less than the greater of
(i) the sum of .001% and the largest percentage of the outstanding shares of
Common Stock then known to the Company to be beneficially owned by any person or
group of affiliated or associated persons and (ii) 10%, except
C-3
that from and after such time as any person or group of affiliated or associated
persons becomes an Acquiring Person no such amendment may adversely affect the
interests of the holders of the Rights.
INTERPRETATION; BOARD APPROVALS
The Board of Directors of the Company has the sole authority to administer
the Rights Plan and to exercise all rights and powers granted to the Board or to
the Company, or as are advisable in the administration of the Rights Plan,
including the power to (i) interpret the provisions of the Rights Plan and (ii)
make all determinations appropriate for the administration of the Rights Plan
(including a determination to redeem or not redeem the Rights, to exchange the
Rights or to amend the Rights Plan). All such interpretations and determinations
in good faith are final and binding on the parties (including the Rights
holders) and do not subject the Board (or the directors) to any liability to the
holders of Rights.
RIGHTS AND HOLDERS
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.
FURTHER INFORMATION
A copy of the Agreement setting forth the Rights Plan has been filed with
the Securities and Exchange Commission as an Exhibit to a Registration Statement
on Form 8-A dated ______________, 1999. A copy of the Rights Plan is available
free of charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Agreement, which is hereby incorporated herein by reference.
C-4
