EXHIBIT 4.1
RIGHTS AGREEMENT
This Rights Agreement, dated as of April 14, 1998 (this
"Agreement"), is between MEDCO RESEARCH, INC., a Delaware corporation (the
"Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY (the "Rights Agent").
RECITALS
WHEREAS, the Board of Directors of the Company has determined
that it is desirable and in the best interests of the Company and its
shareholders for the Company to grant to each holder of shares of Common Stock,
without par value, of the Company (the "Common Shares") a right entitling such
holder to purchase, upon the terms and subject to the conditions set forth
herein, one-half of one Common Share for each Common Share so held at an initial
purchase price of $92.00 per whole Common Share, subject to adjustment as
provided herein; and
WHEREAS, on April 2, 1998, the Board of Directors of the
Company authorized and declared a dividend distribution of one right for each
Common Share outstanding at the close of business on April 14, 1998 (the "Record
Date"), entitling the holder thereof to purchase, upon the terms and subject to
the conditions hereinafter set forth, one-half of one Common Share for each
Common Share so held on the Record Date at an initial purchase price of $92.00
per Share, subject to adjustment as hereinafter provided (such rights are
hereinafter referred to as the "Rights") and also authorized and granted one
Right for each Common Share issued after the Record Date but prior to the
earlier of (i) the Distribution Date (in the case of Common Shares issued upon
conversion of the Company's convertible securities or upon exercise of employee
stock options, prior to the thirtieth day after the Distribution Date), (ii) the
Expiration Date (as defined in Section 1(i) below), or (iii) April 15, 2008 (the
"Final Expiration Date"), including, without limitation, Common Shares issued
upon conversion of the Company's convertible securities and upon exercise of
employee stock options and Common Shares which are treasury shares as of the
Record Date and subsequently become outstanding;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 20% or more of the Common Shares then outstanding, but shall
not include (i) the Company, any Subsidiary or any employee benefit or stock
ownership plan of the Company or any Person or entity organized, appointed or
established by the Company for or pursuant to any such plan, (ii) any Person who
becomes an Acquiring Person solely as a result of a reduction in the number of
Common Shares outstanding due to the repurchase of Common Shares by the Company
unless and until such time as (x) such Person or any Affiliate or Associate of
such Person shall thereafter become the Beneficial Owner of any additional
Common Shares, other than as a result of a stock dividend, stock split or
similar transaction effected by the Company in which all holders of Common
Shares are treated equally, or (y) any other Person who is the Beneficial Owner
of any Common Shares shall thereafter become an Affiliate or Associate of such
Person, or (iii) any Person who becomes the Beneficial Owner of 20% or more of
the Common Shares then outstanding in a transaction or series of transactions
which are approved in advance by the affirmative vote of a majority of the Board
of Directors of the Company and a majority of the Continuing Directors (an
"Approved Transaction") unless and until such Person shall purchase or otherwise
become the Beneficial Owner of additional Common Shares in a transaction or
series of transactions which are not approved in advance by the affirmative vote
of a majority the Board of Directors of the Company and a majority of the
Continuing Directors.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date hereof.
(c) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in
writing;
(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, 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 payment, or
(B) securities issuable upon exercise of Rights at any time
prior to the occurrence of a Triggering Event, or (C)
securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event which Rights were acquired by
such Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof or pursuant to Section 11(i) hereof in
connection with an adjustment made with respect to any Rights
which such Person or any of such Person's Affiliates or
Associates has the right to vote or dispose of pursuant to any
agreement, arrangement or understanding; or
(iii) which are beneficially owned, directly or indirectly,
by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any securities of the Company;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if
such Person has the right to vote such security pursuant to an
agreement, arrangement or understanding which (A) arises
solely from a revocable proxy given to such Person in response
to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations
of the Exchange Act and (B) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or
successor report);
provided, however, that nothing in this paragraph (c) shall cause a Person
engaged in business as an underwriter of securities to be deemed 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 (40) days after the date of such acquisition.
(d) "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
closed or are authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(f) "Common Shares" when used with reference to the Company
shall mean the Common Shares, without par value, of the Company or the shares of
the Company's Preferred Stock issued pursuant to Section 11(a)(iii) hereof;
provided that, if the Company is the continuing or surviving corporation in a
transaction described in Section 11(d)(ii) hereof, "Common Shares" when used
with reference to the Company shall mean the capital stock with the greatest
aggregate voting power of the Company or, if the Company is a subsidiary of
another corporation or business trust the corporation or business trust which
ultimately controls the Company. "Common Shares" when used with reference to any
corporation or business trust, other than the Company, shall mean the capital
stock with the greatest aggregate voting power of such corporation or business
trust or, if such corporation or business trust is a subsidiary of another
corporation or business trust, the corporation or business trust which
ultimately controls such first-mentioned corporation or business trust.
(g) "Continuing Director" shall mean (i) any member of the
Board of Directors of the Company who, while such Person is a member of the
Board, is not an Acquiring Person, an Affiliate or Associate of an Acquiring
Person or a representative of an Acquiring Person or of any such Affiliate or
Associate, and was a member of the Board prior to the date of this Agreement, or
(ii) any Person who becomes a member of the Board after the date of this
Agreement who, while such Person is a member of the Board, is not an Acquiring
Person, an Affiliate or Associate of an Acquiring Person or a representative of
an Acquiring Person or of any such Affiliate or Associate, if such Person's
nomination for election or election to the Board is recommended or approved by a
majority of the then Continuing Directors.
(h) "Distribution Date" shall have the meaning ascribed to
such term in Section 3 hereof.
(i) "Expiration Date" shall mean the earlier of (i) the date
on which the Rights are redeemed as provided in Section 23 hereof or (ii) the
time at which all exercisable Rights are exchanged as provided in Section 11(p)
hereof.
(j) "Flip-In Event" shall mean any event described in Section
11(a)(ii) hereof.
(k) "Flip-Over Event" shall mean any event described in
clauses (i), (ii) or (iii) of Section 11(d) hereof.
(l) "Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or otherwise) of such
entity.
(m) "Redemption Price" shall mean $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof.
(n) "Share Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person (by press release,
filing made with the Securities and Exchange Commission or otherwise) that an
Acquiring Person has become such.
(o) "Subsidiary" shall mean any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity
interests is owned, directly or indirectly, by the Company.
(p) "Triggering Event" shall mean any Flip-In Event or
Flip-Over Event.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall also be, prior to the
Distribution Date, the holders of the Common Shares) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment and hereby certifies that it complies with the requirements of the
New York Stock Exchange governing transfer agents and registrars. The Company
may from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable. Any actions which may be taken by the Rights Agent pursuant to the
terms of this Agreement may be taken by any such Co-Rights Agent.
Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the earlier
of (i) the close of business on the tenth Business Day after the Share
Acquisition Date (or such later date as the Board of Directors shall determine),
or (ii) the close of business on the tenth Business Day (or such later date as
the Board of Directors shall determine) after the date that a tender or exchange
offer by any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan 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) is first published or sent or given
within the meaning of Rule 14d-2(a) of the General Rules and Regulations under
the Exchange Act, if upon consummation thereof such Person would be the
Beneficial Owner of 20% or more of the Common Shares then outstanding (the
earlier of (i) and (ii) being herein referred to as the "Distribution Date"),
the Rights will be evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the certificates for Common Shares registered in the names of the
record holders thereof (which certificates for Common Shares shall also be
deemed to be Right Certificates) and not by separate Right Certificates, and the
right to receive Right Certificates will be transferable only in connection with
the transfer of Common Shares in the stock transfer books of the Company
maintained by the Company or its appointed transfer agent. As soon as
practicable after the Distribution Date, the Rights Agent will send, by
first-class, insured, postage prepaid mail (or such other method as the Company
shall deem appropriate), to each record holder of Common Shares as of the close
of business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the form of
Exhibit A hereto, evidencing one Right for each Common Share so held, subject to
adjustment, together with a notice setting forth the Purchase Price (as defined
in Section 4 hereof) as in effect on the Distribution Date. As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
Any Right Certificate issued pursuant to this Section 3 that
represents Rights which are beneficially owned by an Acquiring Person or any
Associate or Affiliate thereof and any Right Certificate issued at any time upon
the transfer of any Rights to an Acquiring Person or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate, and
any Right Certificate issued pursuant to Sections 6 or 11 hereof upon transfer,
exchange, replacement or adjustment of any other Right Certificate referred to
in this sentence, shall be subject to and (to the extent feasible) contain the
following legend or such similar legend as the Company may deem appropriate and
as is not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed, or to conform to usage:
The Rights represented by this Right Certificate were
issued to or acquired by a Person who was an
Acquiring Person or an Affiliate or an Associate of
an Acquiring Person (as such terms are defined in the
Rights Agreement). This Right Certificate and the
Rights represented hereby may become null and void in
the circumstances specified in the Rights Agreement.
provided, however, the failure of the Company to cause any Right Certificate to
contain such legend or any defect therein, shall not affect the legality or
validity of any provision of this Agreement, including provisions voiding Rights
held by any such Person.
(b) On the Record Date or as soon as reasonably practicable
thereafter, the Company will send a copy of a Summary of Rights to Purchase
Common Shares, in substantially the form attached hereto as Exhibit B (the
"Summary of Rights"), by first-class, postage prepaid mail (or such other method
as the Company shall deem appropriate), to each record holder of Common Shares
as of the close of business on the Record Date, at the address of such holder
shown on the records of the Company as of such date. With respect to
certificates for Common Shares outstanding as of the Record Date, until the
Distribution Date the Rights will be evidenced by such certificates for Common
Shares registered in the names of the holders thereof. Until the Distribution
Date (or the earlier of the Expiration Date or the Final Expiration Date), the
surrender for transfer of any certificate for Common Shares outstanding on the
Record Date, with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.
(c) Certificates for Common Shares issued (including, without
limitation, any certificates for Common Shares issued upon conversion of the
Company's convertible securities or upon exercise of employee stock options) or
surrendered for transfer or exchange after the Record Date but prior to the
earlier of the Distribution Date, the Expiration Date or the Final Expiration
Date, shall have stamped on, impressed on, printed on, written on or otherwise
affixed to them the following legend or such similar legend as the Company may
deem appropriate and as is not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Common Shares or the Rights may from time to time be
listed, or to conform to usage:
This Certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a
Rights Agreement between Medco Research, Inc. and
American Stock Transfer & Trust Company, dated as of
April 14, 1998 (the "Rights Agreement"), the terms
of which are hereby incorporated herein by reference
and a copy of which is on file at the principal
executive offices of Medco Research, Inc. Under
certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
Certificate. Medco Research, Inc. will mail to the
holder of this Certificate a copy of the Rights
Agreement without charge within five business days
after receipt of a written request therefor. Under
certain circumstances, Rights beneficially owned by
an Acquiring Person or any Affiliate or Associate
thereof (as such terms are defined in the Rights
Agreement) and any subsequent holder of such Rights
may become null and void.
With respect to certificates containing the legend described
above, until the Distribution Date the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate shall also constitute the
surrender for transfer of the Rights associated with the Common Shares
represented thereby.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates
(and the forms of election to purchase shares and of assignment to be printed on
the reverse thereof) shall be substantially the same as Exhibit A hereto with
such changes, marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Sections 11 and 22 hereof, the Right Certificates, whenever issued
and on their face, shall entitle the holders thereof to purchase such number of
Common Shares as shall be set forth therein at the price per whole share set
forth therein (the "Purchase Price"), but the number of such shares and the
Purchase Price shall be subject to adjustment as provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, President or Chief Financial Officer, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates nevertheless may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at one of its offices in New York, New York, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
Subject to the provisions of Section 14 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the close of business on
the earlier of the Expiration Date or the Final Expiration Date, any Right
Certificate or Certificates may be transferred, split up, combined or exchanged
for another Rights Certificate or Rights Certificates, entitling the registered
holder to purchase a like number of Common Shares as the Rights Certificate or
Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent in New York, New York, and thereupon the Rights Agent shall
countersign and deliver to the person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.
(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date and at or prior to the
Close of business on the earlier of the Expiration Date or the Final Expiration
Date upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at an
office of the Rights Agent designated for such purpose, together with an amount
in cash, in lawful money of the United States of America, by certified check or
bank draft payable to the order of the Company, equal to the Purchase Price for
each Common Share as to which such surrendered Rights are exercised or, if
applicable, the exercise price per Right specified in Sections 11(a)(ii) or
11(d) hereof, as the case may be, together with an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof; provided, however, that after
the later of the first occurrence of a Triggering Event and the Distribution
Date, in lieu of the cash payment payable to the Company referred to in this
sentence, the registered holder of a Right Certificate evidencing exercisable
Rights (which shall not include Rights that have become void pursuant to Section
11(a)(ii) hereof) may, at the option of the Company, exercise the Rights
evidenced thereby in whole or in part in accordance with this Section 7(a) upon
surrender of the Right Certificate as described above, together with the
election to exercise such Rights duly completed. With respect to any Rights as
to which such an election to exercise without payment of cash is made, the
holder shall receive, upon exercise, a number of Common Shares or other
securities, as the case may be, having a current per share market price
(determined pursuant to Section 11(e) hereof as of the date of the first
occurrence of any Triggering Event) equal to the excess of (i) the aggregate
current per share market price of the Common Shares or other securities
(determined pursuant to Section 11(e) hereof as of the date of the first
occurrence of any Triggering Event) that would have been issuable upon payment
of the cash amount as described above over (ii) the amount of cash that would
have been payable to the Company upon exercise absent such election.
(b) The Purchase Price shall initially be $92.00 per Common
Share purchased, (equivalent to $46.00 for each one-half of a Common Share), and
shall be subject to adjustment from time to time as provided in Section 11
hereof.
(c) Subject to Sections 7(d), 11(a)(ii), and 11(d) hereof,
upon receipt of a Right Certificate representing exercisable Rights with the
form of election to purchase duly executed, accompanied by either payment as
described above or a duly completed election to exercise without payment of
cash, the Rights Agent shall promptly (i) requisition from any transfer agent of
the Common Shares (or make available, if the Rights Agent is the transfer agent)
certificates representing the number of whole Common Shares to be purchased, and
the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, (ii) after receipt of such certificates cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, (iii) if appropriate, requisition from the Company the amount of cash to
be paid or depository receipts to be issued in lieu of the issuance of
fractional shares in accordance with Section 14 hereof or in lieu of the
issuance of Common Shares in accordance with Section 11(a)(iii) or 11(d) hereof,
and (iv) if appropriate, after receipt, deliver such cash (or depository
receipts, when appropriate) to or upon the order of the registered holder of
such Right Certificate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to any purported transfer, split up,
combination or exchange of any Right Certificate pursuant to Section 6 hereof or
exercise of a Right Certificate as set forth in this Section 7 unless the
registered holder of such Certificate shall have (i) completed and signed the
certificate following the form of assignment or the form of election to
purchase, as applicable, set forth on the reverse side of the Right Certificate
surrendered for such transfer, split up, combination, exchange or 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 have reasonably requested.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its stock transfer agents, be delivered to the Rights Agent for cancellation or
in canceled form or, if surrendered to the Rights Agent, shall be canceled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Right Certificate purchased
or acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to the Company, or shall, at
the written request of the Company, destroy such canceled Right Certificates,
and in such case shall deliver a certificate of destruction thereof to the
Company.
Section 9. RESERVATION AND AVAILABILITY OF COMMON SHARES. The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Common Shares, or any authorized
and issued Common Shares held in its treasury, the number of Common Shares that
will be sufficient to permit the exercise pursuant to Section 7 hereof of all
outstanding Rights; such number of Common Shares reserved and kept available
shall be adjusted from time to time, if and to the extent required, upon the
occurrence of any of the events described in Section 11 hereof.
So long as the Company's Common Shares are listed on a
national securities exchange, the Company shall endeavor to cause, from and
after such time as the Rights become exercisable, all Common Shares reserved for
issuance upon exercise of the Rights to be listed on such exchange upon official
notice of issuance.
The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Common Shares delivered upon
exercise of Rights shall be, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price, if required), duly and
validly authorized and issued, fully paid, nonassessable and freely tradeable
shares of Common Stock, free and clear of any liens, encumbrances and other
adverse claims and not subject to any rights of call or first refusal.
The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right Certificates
or of any Common Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates for the Common Shares in a name other than
that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise, or to issue or deliver any certificates for Common
Shares upon the exercise of any Rights until any such tax shall have been paid
(any such tax being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company's satisfaction
that no such tax is due.
The Company further consents and agrees to use its best
efforts to (i) file on an appropriate form, as soon as practicable following the
later to occur of a Triggering Event or the Distribution Date, a registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the securities issuable upon exercise of the Rights, (ii) cause
such registration statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities Act)
until the earliest of (A) the date as of which the Rights are no longer
exercisable for such securities, (B) the Expiration Date, and (C) the Final
Expiration Date. 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 the exercisability of the Rights in order to prepare and
file such registration statement and permit it to become effective, and upon any
such suspension the Company will issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as an
appropriate public announcement at such time as the suspension is no longer in
effect. Notwithstanding anything in this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite registration or
qualification in such jurisdiction shall not have been effected or the exercise
of the Rights shall not be permitted under applicable law.
Notwithstanding anything in this Agreement to the contrary,
the Company covenants and agrees that, after the Distribution Date, it will not,
except as permitted by Section 23 or Section 26 hereof, take any action if at
the time such action is taken it is reasonably foreseeable that such action will
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
In the event that the Company is obligated to pay cash and/or
distribute other property pursuant to Sections 11, 13, and 14 hereof, it will
make all arrangements necessary so that such cash and/or property are available
for distribution by the Rights Agent, if and when appropriate.
Section 10. COMMON SHARES RECORD DATE. Each person in whose
name any certificate for Common Shares is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Common Shares represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price, if required (and any applicable
transfer taxes), was made; provided, however, that if the date of such surrender
and payment is a date upon which the Common Shares 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 Common Shares transfer books of the Company are open. Prior to the
exercise pursuant to Section 7 hereof of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a
shareholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND TYPE OF
SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and type 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 that the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Common Shares payable
in Common Shares, (B) subdivide the outstanding Common Shares, (C) combine the
outstanding Common Shares into a smaller number of shares or (D) issue any
shares of its capital stock in a reclassification of the Common Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) or in Section 11(d) 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/or
the number and/or kind of shares of capital stock issuable on such date, shall
be proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Common Shares transfer books of the Company were
open, he would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification; provided,
however, that if the record date for any such dividend, subdivision, combination
or reclassification shall occur prior to the Distribution Date, the Company
shall make an appropriate adjustment to the Purchase Price (taking into account
any additional Rights which may be issued as a result of such dividend,
subdivision, combination or reclassification), in lieu of adjusting (as
described above) the number of Common Shares (or capital shares, as the case may
be) issuable upon exercise of the Rights. If an event occurs which would require
an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof or
Section 11(d) 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) or Section 11(d) hereof.
(ii) In the event that 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) who or which, together with all Affiliates and Associates of such Person,
shall become the Beneficial Owner of 20% or more of the Common Shares then
outstanding (other than in an Approved Transaction), then, and in each such
case, the Company shall make adjustments in the terms of the Rights so that each
holder of a Right, except as provided below, shall thereafter have a right to
receive, upon exercise thereof in accordance with the terms of this Agreement,
at an exercise price per Right equal to the product of two times the
then-current Purchase Price multiplied by the number of Common Shares for which
a Right was exercisable immediately prior to the first occurrence of a
Triggering Event, such number of Common Shares as shall equal the result
obtained by (x) multiplying the product of two times the then-current Purchase
Price by the number of Common Shares for which a Right was exercisable
immediately prior to the first occurrence of a Triggering Event and dividing
that product by (y) 50% of the current per share market price of the Common
Shares (determined pursuant to Section 11(e) hereof) on the date of the first
occurrence of a Triggering Event. Notwithstanding anything in this Agreement to
the contrary, from and after the later of the Distribution Date and the first
occurrence of a Flip-In Event, any Rights that are or were acquired or
beneficially owned (1) by any Acquiring Person (or any Affiliate or Associate of
such Acquiring Person or any transferee thereof) or (2) pursuant to a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this sentence, shall become null and void without any further
action, and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of the preceding sentence are complied with, but shall have no
liability to any holder of Rights Certificates or other Person as a result of
its failure to make any determinations with respect to an Acquiring Person or
its Affiliates, Associates or transferees hereunder.
(iii) Upon the occurrence of a Flip-In Event, if
there shall not be sufficient authorized but unissued Common Shares or
authorized and issued Common Shares held in treasury to permit the exercise in
full of the Rights in accordance with the foregoing subsection (ii), the
Directors of the Company shall use their best efforts promptly to authorize and,
subject to the provisions of Section 9 hereof, make available for issuance
additional Common Shares; provided, however, that if, at any time after 90
calendar days after the first occurrence of a Flip-In Event, there shall not be
sufficient Common Shares available for issuance upon the exercise of a Right,
then, at the option of the Company's Board of Directors in its sole discretion,
the Company shall either (1) issue shares of a series of its Preferred Stock
having voting, dividend and liquidation rights equivalent to those of the Common
Shares or (2) deliver, upon the surrender of such Right and without requiring
payment of the Purchase Price, Common Shares (to the extent available) and then
cash or other property or securities (to the extent permitted by applicable law
and any agreements or instruments to which the Company is a party in effect
immediately prior to the first occurrence of any Flip-In Event), which Common
Shares and cash shall have an aggregate value equal to the excess of (x) the
aggregate current per share market price (determined pursuant to Section 11(e)
hereof) of all the Common Shares issuable in accordance with subsection (ii) of
this Section 11(a) upon the exercise of a Right over (y) the product of the
then-current Purchase Price multiplied by the number of Common Shares for which
a Right was exercisable immediately prior to the first occurrence of a
Triggering Event. To the extent that any legal or contractual restrictions
prevent the Company from paying the full amount of cash payable in accordance
with the foregoing sentence, the Company shall pay to holders of the Rights as
to which such payments are being made, on a pro rata basis, all amounts which
are not then restricted. The Company shall continue to make payments on a pro
rata basis as funds become available until such payments have been paid in full.
(b) In the event that the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of Common Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Shares (or shares having the same
rights, privileges and preferences as the Common Shares ("equivalent common
shares")) or securities convertible into Common Shares or equivalent common
shares at a price per Common Share or equivalent common share (or having a
conversion price per share, if a security convertible into Common Shares or
equivalent common shares) less than the current per share market price of the
Common Shares (as determined pursuant to Section 11(e) hereof) on such record
date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of Common
Shares outstanding on such record date plus the number of Common Shares which
the aggregate offering price of the total number of Common Shares and/or
equivalent common shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price, and the denominator of which shall be the number
of Common Shares outstanding on such record date plus the number of additional
Common Shares and/or equivalent common shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid by
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes. Common Shares owned
by or held for the account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights, options
or warrants are not so issued, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(c) In the event that the Company shall fix a record date for
the making of a distribution to all holders of Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend at a rate not in
excess of 125% of the rate of the last cash dividend theretofore paid), assets,
stock (other than a dividend payable in Common Shares) or subscription rights,
options 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 per share market
price of the Common Shares (as determined pursuant to Section 11(e) hereof) on
such record date less the fair market value (as determined in good faith by the
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 the
portion of the cash, assets, stock or evidences of indebtedness so to be
distributed (in the case of regular periodic cash dividends at a rate in excess
of 125% of the rate of the last cash dividend theretofore paid, only that
portion in excess of 125% of such rate) or of such subscription rights, options
or warrants applicable to one Common Share, and the denominator of which shall
be such current per share market price of the Common Shares. Such adjustments
shall be made successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(d) In the event that, following the Share Acquisition Date,
directly or indirectly:
(i) the Company shall consolidate with, or merge with
or into, any other Person and the Company shall not be the continuing or
surviving corporation of such merger or consolidation; or
(ii) any Person shall consolidate with the Company, or
merge with or into the Company and
the Company shall be the continuing or surviving corporation of such merger or
consolidation and, in connection with such merger or consolidation, all or part
of the Common Shares shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property; or
(iii) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power (including, without limitation, securities
creating any obligation on the part of the Company and/or any of its
Subsidiaries) representing in the aggregate more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
Person or Persons;
then, and in each such case, proper provision shall be made so that (A) each
holder of a Right (except for Rights which are or become void as provided
herein) shall thereafter have the right to receive, upon the exercise thereof in
accordance with the terms of this Agreement at an exercise price per Right equal
to the product of two times the then-current Purchase Price multiplied by the
number of Common Shares for which a Right was exercisable immediately prior to
the first occurrence of a Triggering Event, such number of validly authorized
and issued, fully paid, nonassessable and freely tradeable Common Shares of the
Issuer (as such term is hereinafter defined), free and clear of any liens,
encumbrances and other adverse claims and not subject to any rights of call or
first refusal, as shall be equal to the result obtained by (x) multiplying the
product of two (2) times the then-current Purchase Price by the number of Common
Shares for which a Right is exercisable immediately prior to the first
occurrence of a Triggering Event and dividing that product by (y) 50% of the
current per share market price of the Common Shares of the Issuer (determined
pursuant to Section 11(e) hereof), on the date of consummation of such Flip-Over
Event; (B) the Issuer shall thereafter be liable for, and shall assume, by
virtue of the consummation of such Flip-Over Event, all the obligations and
duties of the Company pursuant to this Agreement; (C) the term "Company" shall
thereafter be deemed to refer to the Issuer; and (D) the Issuer shall take such
steps (including, without limitation, the reservation of a sufficient number of
its Common Shares to permit the exercise of all outstanding Rights) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may be
possible, in relation to its Common Shares thereafter deliverable upon the
exercise of the Rights. For purposes of this Section 11(d), "Issuer" shall mean
(A) in the case of any Flip-Over Event described in Sections 11(d)(i) or (ii)
above, the Person that is the continuing, surviving, resulting or acquiring
Person (including the Company as the continuing or surviving corporation of a
transaction described in Section 11(d)(ii) above), and (B) in the case of any
Flip-Over Event described in Section 11(d)(iii) above, the Person that is the
party receiving the greatest portion of the assets or earning power (including,
without limitation, securities creating any obligation on the part of the
Company and/or any of its Subsidiaries) transferred pursuant to such transaction
or transactions; provided, however, that, in any such case, (x) if (1) no class
of equity security of such Person is, at the time of such merger, consolidation
or transaction and has been continuously over the preceding 12-month period,
registered pursuant to Section 12 of the Exchange Act, and (2) such Person is a
Subsidiary, directly or indirectly, of another Person a class of equity security
of which is and has been so registered, the term "Issuer" shall mean such other
Person; and (y) in case such Person is a Subsidiary, directly or indirectly, of
more than one Person a class of equity security of two or more of which are and
have been so registered, the term "Issuer" shall mean whichever of such Persons
is the issuer of the equity security having the greatest aggregate market value.
Notwithstanding the foregoing, if the Issuer in any of the Flip-Over Events
listed above is not a corporation or other legal entity having outstanding
equity securities then, and in each such case, (A) if the Issuer is directly or
indirectly wholly owned by a corporation or other legal entity having
outstanding equity securities, then all references to Common Shares of the
Issuer shall be deemed to be references to the Common Shares of the corporation
or other legal entity having outstanding equity securities which ultimately
controls the Issuer, and (B) if there is no such corporation or other legal
entity having outstanding equity securities, (1) proper provision shall be made
so that the Issuer shall create or otherwise make available for purposes of the
exercise of the Rights in accordance with the terms of this Agreement a kind or
kinds of security or securities having a fair market value at least equal to the
economic value of the Common Shares which each holder of a Right would have been
entitled to receive if the Issuer had been a corporation or other legal entity
having outstanding equity securities and (2) all other provisions of this
Agreement shall apply to the issuer of such securities as if such securities
were Common Shares. The Company shall not consummate any Flip-Over Event unless
the Issuer shall have a sufficient number of authorized Common Shares (or other
securities as contemplated above) which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 11(d), and unless prior to such consummation the Company and the Issuer
shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in Section 11(d) and further providing that as
promptly as practicable after the consummation of any Flip-Over Event the Issuer
shall:
(A) prepare and file a registration statement under the
Securities Act, on an appropriate form, with respect to the Rights and the
securities issuable upon exercise of the Rights and shall use its best efforts
to cause such registration statement to (1) become effective as soon as
practicable after such filing and (2) remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the earlier of the
Expiration Date and the Final Expiration Date;
(B) take all 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; and
(C) deliver to holders of the Rights historical financial
statements for the Issuer and each of its Affiliates which comply in all
respects with the requirements for registration on Form 10 (or any successor
form) under the Exchange Act.
The provisions of this Section 11(d) shall similarly apply to successive mergers
or consolidations or sales or other transfers. In the event that a Flip-Over
Event occurs at any time after the occurrence of a Flip-In Event, the Rights
which have not theretofore been exercised shall thereafter become exercisable in
the manner described in this Section 11(d).
In the event that the Company shall be the continuing or
surviving corporation in a merger or consolidation referred to in subparagraph
(ii) above and Common Shares of the Company are required to be issued upon
exercise of the Rights following such merger or consolidation, and if there
shall not be sufficient authorized but unissued Common Shares or authorized and
issued Common Shares held in treasury to permit the exercise in full of the
Rights in accordance with the foregoing, the Directors of the Company shall use
their best efforts promptly to authorize and, subject to the provisions of
Section 9 hereof, make available for issuance additional Common Shares;
provided, however, that if,at any time after 90 calendar days after the first
occurrence of a Triggering Event, there shall not be sufficient Common Shares
available for issuance upon the exercise of a Right, then the Company shall
deliver, upon the surrender of such Right and without requiring payment of the
Purchase Price, Common Shares (to the extent available) and then cash or other
property or securities (to the extent permitted by applicable law and any
agreements or instruments to which the Company is a party in effect immediately
prior to the first occurrence of any Triggering Event), which Common Shares and
cash shall have an aggregate value equal to the excess of (x) the aggregate
current per share market price (determined pursuant to Section 11(e) hereof) of
all the Common Shares issuable in accordance with this Section 11(d) upon the
exercise of a Right over (y) the product of the then-current Purchase Price
multiplied by the number of Common Shares for which a Right was exercisable
immediately prior to the occurrence of the merger or consolidation referred to
in subparagraph (ii) above. To the extent that any legal or contractual
restrictions prevent the Company from paying the full amount of cash payable in
accordance with the foregoing sentence, the Company shall pay to holders of the
Rights as to which such payments are being made, on a pro rata basis, all
amounts which are not then restricted. The Company shall continue to make
payments on a pro rata basis as funds become available until such payments have
been paid in full.
(e) For the purpose of any computation hereunder, the "current
per share market price" of Common Shares on any date shall be deemed to be the
average of the daily closing prices per share of such Common Shares for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date; provided, however, that in the event that the current per share
market price of the Common Shares is determined during a period following the
announcement by the issuer of such Common Shares (i) of a dividend or
distribution on such Common Shares payable in such Common Shares or securities
convertible into such Common Shares or (ii) any subdivision, combination or
reclassification of such Common Shares, and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or distribution or the
record date for such subdivision, combination or reclassification, then, and in
each such case, the "current market price" shall be appropriately adjusted to
take into account ex-dividend trading or to reflect the current market price per
Common Share equivalent. 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 Common Shares 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 Common Shares are listed or admitted to trading or, if the Common
Shares 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 the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the Common
Shares 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 Common Shares selected by the Directors of the Company. The term "Trading
Day" shall mean any day on which the principal national securities exchange on
which the Common Shares are listed or admitted to trading is open for the
transaction of business or, if the Common Shares are not listed or admitted to
trading on any national securities exchange, a Monday, Tuesday, Wednesday,
Thursday or Friday on which banking institutions in the State of New York are
not authorized or obligated by law or executive order to close. If the Common
Shares are not publicly held or not so listed or traded, or not the subject of
available bid and asked quotes, "current per share market price" shall mean the
fair value per share as determined in good faith by the Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(f) Except as set forth below, no adjustment in the Purchase
Price shall be required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that any adjustments
which by reason of this Section 11(f) 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 thousandth of a share, as the case may be. Notwithstanding the first
sentence of this Section 11(f), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the date of the expiration of
the right to exercise any Rights.
(g) If, as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than Common Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the shares
contained in this Section 11, and the provisions of Sections 7, 9, 10 and 14
hereof with respect to the Common Shares shall apply on like terms to any such
other shares. In the event that the Rights become exercisable under both Section
11(a)(ii) and Section 11(d) hereof, a holder may, at his option, elect to
exercise Rights under either provision, but each Right may be exercised only
once.
(h) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Common Shares
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(i) Unless the Company shall have exercised its election as
provided in Section 11(j) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c) hereof each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
shares (calculated to the nearest thousandth) obtained by (i) multiplying (x)
the number of shares 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.
(j) The Company may elect, on or after the date of any
adjustment of the Purchase Price, to adjust the number of Rights in substitution
for any adjustment in the number of Common Shares purchasable upon the exercise
of a Right. Each of the Rights outstanding after such adjustment of the number
of Rights shall be exercisable for the number of Common Shares 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 thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment and, if known at the time,
the amount of the adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any day thereafter but, if the Right
Certificates have been issued, it shall be at least 10 calendar days later than
the date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(j) the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment or, at the option of the Company, in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(k) Irrespective of any adjustment or change in the Purchase
Price or the number or type of shares issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to express
the Purchase Price per whole share and the number of shares which were expressed
in the initial Right Certificate issued hereunder.
(l) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the Common
Shares issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
Common Shares at such adjusted Purchase Price.
(m) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the Common Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Common Shares and other capital
stock or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(n) Anything in Sections 11 (a) through (m), inclusive, hereof
to the contrary notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole discretion
shall determine to be advisable in order that any consolidation or subdivision
of the Common Shares, issuance wholly for cash of any of the Common Shares at
less than the current market price, issuance wholly for cash of Common Shares or
securities which by their terms are convertible into or exchangeable for Common
Shares, stock dividends or issuance of rights, options or warrants referred to
hereinabove in this Section 11, hereafter made by the Company to holders of its
Common Shares shall not be taxable to such shareholders.
(o) Notwithstanding any other provision of this Agreement, no
adjustment to the Purchase Price (other than pursuant to Section 11(n)), the
number of Common Shares (or fractions of a share) for which a Right is
exercisable or the number of Rights outstanding shall be made or be effective if
such adjustment would have the effect of reducing or limiting the benefits the
holders of the Rights would have had absent such adjustment, including, without
limitation, the benefits under Sections 11(a)(ii) and 11(d) hereof, unless the
terms of this Agreement are amended so as to preserve such benefits.
(p) Notwithstanding the provisions of Sections 11(a)(ii) and
11(d) hereof, the Board of Directors of the Company may, at its option, at any
time after the later of the Distribution Date and the first occurrence of a
Triggering Event, exchange all or part of the then-outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 11(a)(ii) hereof) for Common Shares at an exchange ratio
of one Common Share per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Directors ordering the exchange of any Rights
pursuant to this Section 11(p), and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right
with respect to such Rights thereafter of the holder of such Rights shall be to
receive that number of Common Shares equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. Promptly after the action of the
Directors of the Company ordering the exchange of any Rights pursuant to this
Section 11(p), the Company shall publicly announce such action, and within 10
calendar days thereafter shall give 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; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such exchange. Any
notice which is mailed or transmitted in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange shall state the method by which the exchange of the Common Shares for
Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant
to the provisions of Section 11(a)(ii)) held by each holder of Rights. In any
exchange pursuant to this Section 11(p), the Company, at its option, may
substitute for any Common Share exchangeable for a Right, (i) cash, (ii) debt
securities of the Company, (iii) other assets, or (iv) any combination of the
foregoing, in any event having an aggregate value which the Directors of the
Company shall have determined in good faith to be equal to the current per share
market price of one Common Share (determined pursuant to Section 11(e) hereof)
on the Trading Day immediately preceding the date of exchange pursuant to this
Section 11(p). The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares
upon the exchange of a Right. In lieu of such fractional Common Shares, the
Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional Common Shares would otherwise be issuable an
amount in cash equal to the same fraction of the current per share market price
of a whole Common Share (determined pursuant to Section 11(e) hereof) on the
Trading Day immediately preceding the date of exchange pursuant to this Section
11(p).
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Section 11 hereof, the
Company shall promptly prepare a certificate setting forth such adjustment
(including a description of any Rights which have become void as a result
thereof) and a brief statement of the facts accounting for such adjustment and
promptly file with the Rights Agent and with each transfer agent for the Common
Shares a copy of such certificate.
Section 13. NOTICE OF ADJUSTED PURCHASE PRICE OR NUMBER OR
TYPE OF SHARES TO HOLDERS OF RIGHTS. Whenever an adjustment is made as provided
in Section 11 hereof after the Distribution Date, the Company shall mail or
transmit a brief summary of such adjustment to each holder of a Right
Certificate in accordance with Section 25 hereof.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The
Company shall not be required to issue fractions of Rights or to distribute any
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid as promptly as practicable to the registered holders
of the Right Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed 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 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 Directors of the Company shall be used and
shall be conclusive for all purposes.
(b) The Company shall not be required to issue fractions of
shares upon exercise of the Rights or to distribute certificates which evidence
fractional shares. Fractions of Common Shares may, at the election of the
Company, be evidenced by depositary receipts pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of Common Shares. In lieu of fractional shares, the Company
may pay to the registered holders of Right Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one Common Share. For purposes of this Section
14(b), the current market value of a Common Share shall be the closing price of
a Common Share (as determined pursuant to the second sentence of Section 11(e)
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 his right to receive any fractional Rights or any fractional
shares upon exercise of a Right.
Section 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificates (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement, and they will be entitled to specific
performance of the obligations under this Agreement 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 accepting the same, consents and agrees with the Company, the Rights
Agent and every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates will
be transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent in New York, New York, duly endorsed or
accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Share certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Share
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, that the Company must use
reasonable efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Common Shares or of any
other securities of the Company which may at any time be issuable upon exercise
of the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with Section 7
hereof or exchanged pursuant to the provisions of Section 11(p) hereof.
Section 18. CONCERNING THE RIGHTS AGENT. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, suit, action, proceeding or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability. If the
Rights Agent asserts or intends to assert a right of indemnification under this
Section 18 in connection with a suit, action or proceeding, the Company shall
have the right, but not the obligation, to assume the responsibility for the
defense of any such suit, action or proceeding.
The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Right
Certificate or certificate for Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper person or persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT. Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
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 Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21 hereof. In case
at the time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Rights Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President or the Chief Financial Officer of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution and delivery hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 hereof (including any adjustment which results in
Rights becoming void) or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment or voidance); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any Common Shares to be issued
pursuant to this Agreement or any Right Certificate or as to whether any Common
Shares will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver, or cause to be performed, executed, acknowledged and
delivered, all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the President
or the Chief Financial Officer of the Company and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer.
(h) The Rights Agent, and any stockholder, director, officer
or employee of the Rights Agent, may buy, sell or deal in any of the Rights or
other securities of the Company, become pecuniarily interested in any
transaction in which the Company may be interested, contract with or lend money
to the Company or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct provided reasonable care was exercised in
the selection and continued employment thereof. The Rights Agent shall not be
under any duty or responsibility to insure compliance with any applicable
federal or state securities laws in connection with the issuance, transfer or
exchange of Right Certificates.
(j) The Rights Agent shall promptly remit to the Company any
funds paid to it upon exercise of the Rights pursuant to Section 7 hereof.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed or otherwise transmitted to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common Shares by
registered or certified mail (or such other method as the Company shall deem
appropriate), and to the holders of the Right Certificates by first-class mail
(or such other method as the Company shall deem appropriate). If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing business under the laws
of the United States or of the State of New York (or of any other state of the
United States so long as such corporation is authorized to do business as a
banking institution in the State of New York), in good standing, having a
principal office in the State of New York, 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 $10 million and which
shall otherwise meet any requirements imposed by the New York Stock Exchange on
transfer agents and registrars. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Shares and mail or transmit a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Directors to reflect
any adjustment or change in the Purchase Price and the number or kind or class
of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
Section 23. REDEMPTION. (a) Prior to the earlier of the
Expiration Date and the Final Expiration Date, the Directors of the Company
(with the concurrence of a majority of the Continuing Directors) may, at their
option, redeem all but not less than all of the then-outstanding Rights at the
Redemption Price at any time prior to the Close of business on the later of (i)
the Distribution Date and (ii) the Share Acquisition Date.
(b) Immediately upon the action of the Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Promptly after the action of the Directors ordering the
redemption of the Rights, the Company shall publicly announce such action.
Within 10 calendar days after ordering the redemption of the Rights, the Company
shall give notice of such redemption to the holders of the then outstanding
Rights by mailing or transmitting such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares; provided, however, that the failure to give, or any defect in,
any such notice shall not affect the validity of the redemption of the Rights.
Any notice which is mailed or transmitted in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. The notice of
redemption mailed or transmitted to the holders of Rights shall state the method
by which the payment of the Redemption Price will be made. The Company may, at
its option, pay the Redemption Price in cash, Common Shares (based upon the
current per share market price of the Common Shares, determined pursuant to
Section 11(e) hereof, at the time of redemption) or any other form of
consideration deemed appropriate by the Directors of the Company (based upon the
fair market value of such other consideration, determined by the Directors of
the Company in good faith) or any combination thereof.
(c) At any time following the Share Acquisition Date, the
Directors of the Company may relinquish their rights to redeem the Rights under
paragraph (a) above by duly adopting a resolution to that effect. Immediately
upon adoption of such resolution, the rights of the Directors under the portions
of this Section 23 specified in such resolution shall terminate without further
action and without any notice.
(d) Notwithstanding anything in this Section 23 to the
contrary, all rights of, and requirements for, redemption set forth above shall
terminate immediately and automatically upon the occurrence of any one or more
of the events set forth in Sections 11(a)(ii) or Sections 11(d)(i), (ii) or
(iii), hereof.
Section 24. NOTICE OF CERTAIN EVENTS. In case, after the
Distribution Date, the Company shall propose (a) to pay any dividend payable in
stock of any class to the holders of Common Shares or to make any other
distribution to the holders of Common Shares (other than a regular periodic cash
dividend at a rate not in excess of 125% of the rate of the last cash dividend
theretofore paid), (b) to offer to the holders of Common Shares rights, options
or warrants to subscribe for or to purchase any additional Common Shares or
shares of stock of any class or any other securities, rights or options, (c) to
effect any reclassification of its Common Shares (other than a reclassification
involving only the subdivision of outstanding Common Shares), (d) to effect any
consolidation or merger, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries, taken as a whole, to any other Person or Persons,
or (e) 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 Right
Certificate, in accordance with Section 25 hereof, a notice of such proposed
action specifying the record date for the purposes of such stock dividend,
distribution or offering of rights, options or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares, if any such date is to be fixed,
and such notice shall be so given, in the case of any action covered by clause
(a) or (b) above, at least 20 calendar days prior to the record date for
determining holders of the Common Shares for purposes of such action and, in the
case of any such other action, at least 20 calendar days prior to the date of
the taking of such proposed action or the date of participation therein by the
holders of the Common Shares, whichever shall be the earlier.
In case any of the events set forth in Section 11(a)(ii) or
Section 11(d) hereof shall occur, then, in any such case, the Company shall as
soon as practicable thereafter give to the Rights Agent and each holder of a
Right Certificate, in accordance with Section 25 hereof, a notice of the
occurrence of such event specifying the event and the consequences of the event
to holders of Rights.
Section 25. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent, or by the holder of any Right
Certificate, to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Medco Research, Inc.
X.X. Xxx 00000
Xxxxxxxx Xxxxxxxx Xxxx, XX 00000
Attention: Chief Financial Officer
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company, or by the holder of any
Right Certificate, to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
(or if given such other method as the Company shall deem appropriate). Notices
or demands authorized by this Agreement to be given or made by the Company or
the Rights Agent to the holder of any Right Certificate shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Rights Agent (or if given such other method as the Company shall deem
appropriate).
Section 26. SUPPLEMENTS AND AMENDMENTS. Prior to the
Distribution Date, the Board of Directors of the Company (with the concurrence
of a majority of the Continuing Directors) may, and the Rights Agent shall if
the Company so directs, supplement or amend any provision of this Agreement
without the approval of any holders of certificates representing Common Shares.
From and after the Distribution Date and subject to the penultimate sentence of
this Section 26, the Company and the Rights Agent may at any time and from time
to time supplement or amend this Agreement without the approval of any holders
of Rights solely in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions herein, to shorten or lengthen any time period hereunder or to make
any other provisions in regard to matters or questions arising hereunder which
the Company and the Rights Agent may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Rights (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person), as such;
provided, however, that this Agreement may not be supplemented or amended to
lengthen a time period relating to when the Rights may be redeemed at such time
as the Rights are not then redeemable or any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights. 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 Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price, the Purchase Price or the
number of Common Shares for which a Right is exercisable; provided, however,
that between April 15, 2001 and September 30, 2001 the Board of Directors shall
review the other provisions of this Agreement, including without limitation the
Final Expiration Date, to determine what amendments, if any, are necessary or
appropriate to effectuate better the purposes of this Agreement; and provided
further, however, that at any time prior to (i) a Share Acquisition Date or (ii)
the date that a tender or exchange offer 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 Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan) is
first published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act if upon consummation
thereof such Person would be the Beneficial Owner of 20% or more of the Common
Shares then outstanding, the Board of Directors of the Company may amend this
Agreement to increase the Purchase Price or extend the Final Expiration Date.
Prior to the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Stock.
Section 27. SUCCESSORS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder. The Company covenants and agrees that it shall not (i) consolidate
with, (ii) merge with or into, or (iii) sell or transfer to, in one or more
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries, taken as a whole, any
Acquiring Person or its Affiliates or Associates if at the time of or after such
consolidation, merger or sale there would be any charter or by-law provisions or
any rights, options, warrants or other instruments or securities outstanding or
agreements in effect or any other actions taken which would eliminate or
otherwise diminish the benefits intended to be afforded by the Rights.
Section 28. DETERMINATIONS AND ACTIONS BY THE DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding Common Shares of which any Person
is the Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3d(1)(i) of the General Rules and Regulations under the Exchange Act as
in effect as of the date hereof and as hereinafter amended but only to the
extent that any amendment thereto does not diminish the rights of any holder of
the Rights other than any Acquiring Person or an Affiliate or Associate of an
Acquiring Person. The Board of Directors of the Company (with, where
specifically provided for herein, the concurrence of the Continuing Directors)
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of Directors or
the Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations (including, for
purposes of clause (ii) below, all omissions with respect to the foregoing)
which are done or made by the Directors in good faith shall (i) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (ii) not subject the Directors to any
liability to the holders of the Right Certificates.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates.
Section 30. ACTION BY DIRECTORS. Whenever any action hereunder
or in connection with the Rights is required or permitted to be taken by the
Board of Directors of the Company, such action may be taken by the Executive
Committee of the Board or by any other duly authorized committee thereof (with,
where specifically provided for herein, the concurrence of the Continuing
Directors).
Section 31. 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
to the extent such terms, provisions, covenants and restrictions do not
adversely affect the interests of the holders of Rights (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person), as such. Without
limiting the foregoing, if any provision requiring any action hereunder to be
approved by a majority of Continuing Directors is held by any court of competent
jurisdiction or other authority to be invalid, void or unenforceable, such
determination shall then be made by the Board of Directors of the Company in
accordance with applicable law and the Company's Certificate of Incorporation
and By-Laws.
Section 32. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 33. COUNTERPARTS. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, this 14th day of April, 1998.
MEDCO RESEARCH, INC.
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
AMERICAN STOCK TRANSFER &
TRUST COMPANY
By: /s/ Xxxxxxx X'Xxxxx
Name: Xxxxxxx X'Xxxxx
Title: Vice President
EXHIBIT A
[Form of Right Certificate]
Certificate No. R- ____________ Rights
NOT EXERCISABLE AFTER APRIL 15, 2008 OR EARLIER IF REDEEMED.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE
WERE ISSUED TO OR ACQUIRED BY A PERSON WHO WAS AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 11(a)(ii) OR SECTION
11(d) OF THE RIGHTS AGREEMENT.]1
Right Certificate
MEDCO RESEARCH, INC.
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 April 14, 1998 (the "Rights Agreement") between Medco Research,
Inc., a Delaware corporation (the "Company"), and American Stock Transfer &
Trust Company (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M. (New York City time) on April 14, 2008 at the principal
office of the Rights Agent, or its successors as Rights Agent, in New York, New
York, one-half of one fully paid nonassessable Common Share, without par value
(a "Common Share") of the Company, at a purchase price of $92.00 per whole
Common Share (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of shares
which may be purchased upon exercise thereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of April 14, 2008,
based on the Common Shares as constituted on the close of business on such date.
----------
1 The portion of the legend in brackets shall be inserted only if applicable
and if the Company is able to identify the holder as an Acquiring Person or
an Affiliate or Associate of an Acquiring Person.
As provided in the Rights Agreement, the Purchase Price and
the number of Common Shares which may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent in New
York, New York, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Common Shares as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at a redemption
price of $.01 per Right, payable, at the election of the Company, in cash,
Common Shares of the Company or such other consideration as may be determined by
the Directors of the Company.
No fractional Common Shares will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Common
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, to give or withhold consent to any corporate action, to receive
notice of meetings or other actions affecting shareholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ___________.
MEDCO RESEARCH, INC.
Attest:_____________________ By: _______________________
Name:______________________
Title:_____________________
Countersigned:
AMERICAN STOCK TRANSFER &
TRUST COMPANY
By: _______________________
Name:______________________
Title:_____________________
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED, ____________________ hereby sells, assigns
and transfers unto __________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint Attorney, to transfer the within
Right Certificate on the books of the within-named Company, with full power of
substitution.
Dated:______________
---------------------------
Signature
Signature Guaranteed:
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 or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement); and
(2) After due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated:______________
---------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment must correspond to
the name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To Medco Research, Inc.:
The undersigned hereby irrevocably elects to exercise
______Rights represented by this Right Certificate to purchase the Common Shares
issuable upon the exercise of such Rights and requests that certificates for
such shares be issued in the name of:
-------------------------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------------------------
Social Security or other identifying number:
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
----------------------------------------------------------------
(Please print name and address)
----------------------------------------------------------------
Social Security or other identifying number:
Dated:______________
---------------------------
Signature
Signature Guaranteed:
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 or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement); and
(2) After due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated:____________________
---------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
EXHIBIT B
MEDCO RESEARCH, INC.
STOCKHOLDERS RIGHTS PLAN
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
On April 2, 1998, the Directors of Medco Research, Inc. (the
"Company") declared a dividend distribution of one right (a "Right") for each
outstanding Common Share, without par value (the "Common Shares"), of the
Company. The distribution is payable on April 15, 1998 to the shareholders of
record as of the close of business on April 14, 1998 (the "Record Date"). Each
Right initially entitles the registered holder to purchase from the Company
one-half of one Common Share at a price of $92.00 per whole share, subject to
adjustment (the "Purchase Price"). The description and terms of the Rights are
set forth in a Rights Agreement dated as of April 14, 1998 (the "Rights
Agreement") between the Company and American Stock Transfer & Trust Company, as
Rights Agent (the "Rights Agent").
Until the earlier of (i) ten Business Days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding Common Shares, or (ii) ten Business
Days following the commencement of a tender offer or exchange offer for 20% or
more of such outstanding Common Shares (in each case without the prior approval
of the Board of Directors) (the earlier of such dates being hereinafter called
the "Distribution Date"), the Rights will be evidenced, with respect to any of
the Common Share certificates outstanding as of the Record Date, by such Common
Share certificate with a copy of this Summary of Rights attached thereto. The
Rights Agreement provides that, until the Distribution Date, the Rights will be
transferred with and only with the Common Shares. Until the Distribution Date
(or earlier redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date upon transfer or new issuance of
Common Shares will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any certificates for Common Shares
outstanding as of the Record Date, even without a copy of this Summary of Rights
attached thereto, will also constitute the transfer of the Rights associated
with the Common Shares represented by such certificate. As soon as practicable
following the Distribution Date (as defined above), separate certificates
evidencing the Rights (the "Right Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on the Distribution Date
and such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on April 15, 2008, unless earlier redeemed by the Company
as described below.
The Purchase Price payable, and the number of Common Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Shares, (ii) upon the grant to holders of the Common Shares of certain rights,
options or warrants to subscribe for Common Shares or convertible securities at
less than the current market price of the Common Shares, or (iii) upon the
distribution to holders of the Common Shares of evidences of indebtedness, cash
(excluding regular periodic cash dividends at a rate not in excess of 125% of
the rate of the last cash dividend theretofore paid), assets, stock (other than
dividends payable in Common Shares) or of subscription rights, options or
warrants (other than those referred to above).
In the event that an Acquiring Person merges into the Company
and the Company's Common Shares are not changed or exchanged or a person or
group of affiliated or associated persons become the beneficial owner of 20% or
more of the Company's Common Shares, proper provision shall be made so that each
holder of a Right, other than Rights that are or were beneficially owned by the
Acquiring Person after the date upon which the Acquiring Person became such
(which Rights will thereafter be void), will thereafter have the right to
receive upon exercise thereof at the then current Purchase Price that number of
Common Shares having a market value of two times the Purchase Price (or, under
certain circumstances, an amount of cash or other property or securities having
a value equal to the Purchase Price). In the event that the Company is acquired
by an Acquiring Person in a merger or other business combination transaction or
50% or more of its assets or earning power are sold to an Acquiring Person
(other than in a transaction approved by the Company's shareholders), proper
provision shall be made so that each holder of a Right, other than Rights that
are or were beneficially owned by the Acquiring Person after the date upon which
the Acquiring Person became such (which Rights will thereafter be void), shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price, that number of Common Shares (or, under certain
circumstances, an economically equivalent security or securities) of the
surviving, resulting or acquiring person which at the time of such transaction
would have a market value of two times the Purchase Price (or, under certain
circumstances, an amount of cash equal to the Purchase Price). The Board of
Directors of the Company may, at its option, at any time after the later of the
Distribution Date and the first occurrence of a Triggering Event, exchange all
or part of the then-outstanding and exercisable Rights (other than Rights owned
by an Acquiring Person) for Common Shares at an exchange ratio of one Common
Share per Right.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares will be issued (other than
fractions which may, at the election of the Company, be evidenced by depositary
receipts), and in lieu thereof a payment in cash will be made based on the
market price of the Common Shares on the last trading day prior to the date of
exercise.
The Company may redeem the Rights in whole, but not in part,
at a price of $0.01 per Right (the "Redemption Price") at any time prior to the
later of (i) the Distribution Date and (ii) a public announcement that a person
or group of affiliated or associated persons has acquired beneficial ownership
of 20% or more of the outstanding Common Shares (or such later date as the
Directors may specify) and, under certain circumstances, upon a merger or
consolidation of the Company with or into a corporation which is not an
Acquiring Person. At the election of the Company, the Redemption Price may be
payable in cash, Common Shares, or such other consideration as the Company deems
appropriate. Immediately upon the action of the Directors of the Company
authorizing redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price. The Company will give notice of such redemption to the holders
of the then outstanding Rights by mailing such notice to all such holders at
their last addresses as they appear on the Registry Books of the Rights Agent.
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.
Prior to the Rights becoming exercisable, without the approval
of any holders of Rights, the Rights Agreement may be amended or supplemented by
the Company and the Rights Agent in any manner except for an amendment or
supplement which would change the Redemption Price, accelerate the Final
Expiration Date, reduce the Purchase Price or change the number of Common Shares
for which a Right is then exercisable. After the Distribution Date, the Rights
Agreement may be so amended or supplemented to cure ambiguity, correct or
supplement defective or inconsistent provisions or otherwise as the Company and
the Rights Agent may deem necessary or desirable and shall not adversely affect
the interests of the Rights holders.
A copy of the Rights Agreement is being filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
