Exhibit 4.2
--------------------------------------------------------------------------------
NovaMed Eyecare, Inc.
and
American Stock Transfer & Trust Company
Rights Agent
Rights Agreement
Dated as of July 7, 1999
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Section 1. Certain Definitions.............................................. 1
Section 2. Appointment of Rights Agent...................................... 4
Section 3. Issuance of Rights Certificates.................................. 4
Section 4. Form of Rights Certificates...................................... 6
Section 5. Countersignature and Registration................................ 7
Section 6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.......................................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.... 9
Section 8. Cancellation and Destruction of Rights Certificates.............. 10
Section 9. Availability of Capital Stock.................................... 11
Section 10. Preferred Shares Record Date..................................... 12
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights................................................. 13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares....... 20
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power............................................................ 20
Section 14. Fractional Rights and Fractional Shares.......................... 23
Section 15. Rights of Action................................................. 24
Section 16. Agreement of Rights Holders...................................... 25
Section 17. Rights Certificate Holder Not Deemed a Stockholder............... 25
Section 18. Concerning the Rights Agent...................................... 25
Section 19. Merger or Consolidation or Change of Name of Rights Agent........ 26
Section 20. Duties of Rights Agent........................................... 27
Section 21. Change of Rights Agent........................................... 29
Section 22. Issuance of New Rights Certificates.............................. 30
Section 23. Redemption....................................................... 30
Section 24. Exchange......................................................... 31
Section 25. Notice of Certain Events......................................... 32
Section 26. Notices.......................................................... 33
Section 27. Supplements and Amendments....................................... 34
Section 28. Determination and Actions by the Board of Directors, etc......... 34
Section 29. Successors....................................................... 35
Section 30. Benefits of this Agreement....................................... 35
Section 31. Severability..................................................... 35
Section 32. Governing Law.................................................... 35
Section 33. Counterparts..................................................... 35
Section 34. Descriptive Headings............................................. 35
i
Page
----
Exhibit A - Form of Certificate of Designations of Series E Junior
Participating Preferred Stock of NovaMed Eyecare, Inc. .........A-1
Exhibit B - Form of Rights Certificate......................................B-1
Exhibit C - Summary of Rights to Purchase Preferred Shares..................C-1
ii
RIGHTS AGREEMENT
----------------
Agreement, dated as of July 7, 1999, between NovaMed Eyecare, Inc., a
Delaware corporation (the "Company"), and American Stock Transfer & Trust
Company, a ________________________________________(the "Rights Agent").
The Board of Directors of the Company (the "Board of Directors") has
authorized and declared a dividend of one preferred share purchase right (a
"Right") for each Common Share (as hereinafter defined) of the Company
outstanding on July 12, 1999 (the "Record Date"), each Right representing the
right to purchase one one-thousandth of a Preferred Share (as hereinafter
defined), upon the terms and subject to the conditions herein set forth, and has
further authorized and directed the issuance of one Right with respect to each
Common Share that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined).
Accordingly, 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 (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as hereinafter defined) of 15% or more of the Common
Shares of the Company then outstanding, but shall not include (i) the
Company, (ii) any Subsidiary (as hereinafter defined) of the Company, (iii)
any employee benefit plan of the Company or any Subsidiary of the Company,
(iv) any entity organized, appointed or established by the Company for, or
pursuant to the terms of, any such plan, or (v) any member or members of
the Xxxxxx Family. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of (a) an acquisition of Common Shares by
the Company which, by reducing the number of Common Shares outstanding,
increases the proportionate number of Common Shares beneficially owned by
such Person to 15% or more of the Common Shares of the Company then
outstanding or (b) the acquisition by such Person of newly issued Common
Shares directly from the Company (it being understood that a purchase from
an underwriter or other intermediary is not directly from the Company);
provided, however, that if a Person becomes the Beneficial Owner of 15% or
more of the Common Shares of the Company then outstanding by reason of
share purchases by the Company or the receipt of newly-issued Common Shares
directly from the Company and, after such share purchases or direct
issuance by the Company, becomes the Beneficial Owner of any additional
Common Shares of the Company and is the Beneficial Owner of 15% or more of
the Common Shares of the Company then outstanding, then such Person shall
be deemed to be an "Acquiring Person". Notwithstanding the foregoing, if
the Board of Directors determines in good faith that a Person who would
otherwise be an "Acquiring
Person", as defined pursuant to the foregoing provisions of this Section
1(a), has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person would
no longer be an Acquiring Person, as defined pursuant to the foregoing
provisions of this Section 1(a), then such Person shall not be deemed to be
an "Acquiring Person" for any purposes of this Agreement.
(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 Exchange Act (as hereinafter defined) as in effect on the date of
this Agreement.
(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 beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (A) the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities), or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, (x) securities tendered pursuant to
a tender or exchange offer made by or on behalf of such Person or any
of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (y) securities
issuable upon exercise of Rights at any time prior to the occurrence
of a Triggering Event (as hereinafter defined) or (z) 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 (the "Original
Rights") or pursuant to Section 11(i) hereof in connection with an
adjustment made with respect to any Original Rights; or (B) the sole
or shared right to vote or dispose pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act and (2) is not also
then reportable on Schedule 13D or Schedule 13G under the Exchange Act
(or any comparable or successor report); or (C) "beneficial ownership"
of (as
2
determined pursuant to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which
such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding, whether written or oral
(other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), for the purpose of acquiring, holding, voting (except to
the extent contemplated by the proviso to Section 1(c)(ii)(B)) or
disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which
such Person would be deemed to own beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banking institutions in Illinois 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.,
Chicago, Illinois time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 P.M., Chicago, Illinois time, on
the next succeeding Business Day.
(f) "Common Shares" shall mean the shares of Common Stock, par value
$.01 per share, of the Company, except that when the context refers to
"Common Shares" of any Person other than the Company such term shall mean
the capital stock (or equity interest) of such other Person with the
greatest voting power, or the equity securities or other equity interest
having power to control or direct the management of such Person.
(g) "Distribution Date" shall have the meaning set forth in Section 3
hereof.
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(i) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(j) "Person" shall mean any individual, trust, firm, corporation,
partnership, limited liability company or other entity, and shall include
any successor (by merger or otherwise) of such entity.
3
(k) "Preferred Shares" shall mean shares of Series E Junior
Participating Preferred Stock, par value $.01 per share, of the Company
having the rights and preferences set forth in the Form of Certificate of
Designations attached to this Agreement as Exhibit A.
---------
(l) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(m) "Section 11(a)(ii) Event" shall mean an event described in
Section 11(a)(ii) hereof.
(n) "Shares Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has
become such.
(o) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person.
(p) "Triggering Event" shall mean a Section 11(a)(ii) Event or an
event described in Section 13(a) hereof.
(q) "Xxxxxx Family" shall mean Xxxxxxx X. Xxxxxx, his spouse, heirs
and any group (within the meaning of Section 13(d)(3) of the Exchange Act)
of which any of the foregoing Persons is a member for purposes of
acquiring, holding or disposing of Common Shares, any trust established by
or for the benefit of any of the foregoing and any other Person controlled
by or for the benefit of any of the foregoing.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
---------------------------
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issuance of Rights Certificates.
-------------------------------
(a) Until the earlier of (i) the Close of Business on the tenth day
after the Shares Acquisition Date or (ii) the Close of Business on the
tenth Business Day (or such later date as may be determined by action of
the Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person (other
than the Company, any member or members of the Xxxxxx Family, any
Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company or any person or entity organized, appointed
or established by the Company for, or pursuant to the terms of, any such
plan) of, or of the first public announcement of the
4
intention of any Person (other than the Company, any member or members of
the Xxxxxx Family, any Subsidiary of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company or any person or entity
organized, appointed or established by the Company for, or pursuant to the
terms of, any such plan) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming the Beneficial
Owner of Common Shares aggregating 15% or more of the then outstanding
Common Shares (including any such date which is after the date of this
Agreement and prior to the issuance of the Rights; the earlier of such
dates being herein referred to as the "Distribution Date"), (x) the Rights
will be evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be certificates for
Rights) and not by separate certificates, (y) the Rights will be
transferable only in connection with the transfer of Common Shares and (z)
each transfer of Common Shares (including a transfer to the Company) shall
constitute a transfer of the Rights associated with such Common Shares. As
soon as practicable after the Distribution Date, the Company will prepare
and execute, the Rights Agent will countersign, and the Company will send
or cause to be sent (and the Rights Agent will, if requested, send) by
first-class, insured, postage-prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the address
of such holder shown on the records of the Company, a Rights Certificate,
in substantially the form of Exhibit B hereto (a "Rights Certificate"),
---------
evidencing one Right for each Common Share so held. As of the Distribution
Date, the Rights will be evidenced solely by such Rights Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred
Shares, in substantially the form of Exhibit C hereto (the "Summary of
---------
Rights"), by first-class, postage-prepaid mail, 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. With respect
to certificates for Common Shares outstanding as of the Record Date, until
the Distribution Date, the Rights will be evidenced by such certificates
registered in the names of the holders thereof together with a copy of the
Summary of Rights attached thereto. Until the Distribution Date (or the
earlier of the Redemption 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 which become outstanding
(including, without limitation, reacquired Common Shares referred to in the
last sentence of this Section 3 (c)) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
5
This certificate also evidences and entitles the holder hereof to certain
rights as set forth in a Rights Agreement between NovaMed Eyecare, Inc. and
American Stock Transfer & Trust Company dated as of July 7, 1999 (the
"Rights Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive offices
of NovaMed Eyecare, 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. NovaMed Eyecare, Inc.
will mail to the holder of this certificate a copy of the Rights Agreement,
without charge, after receipt of a written request therefor. As described
in the Rights Agreement, Rights issued to any Person who becomes an
Acquiring Person or any Associate or Affiliate thereof (as such terms are
defined in the Rights Agreement) shall become null and void.
With respect to such certificates containing the foregoing legend, 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
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that the Company shall not
be entitled to exercise any Rights associated with the Common Shares which are
no longer outstanding.
Section 4. Form of Rights Certificates
---------------------------
(a) The Rights Certificates and the forms of election to purchase and of
assignment to be printed on the reverse thereof, shall be substantially the same
as Exhibit B hereto, and may have such marks of identification or designation
---------
and such legends, summaries or endorsements printed thereon as 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 terms, provisions and restrictions elsewhere
herein, the Rights Certificates shall entitle the holders thereof to purchase
such number of one one-thousandths of a Preferred Share as shall be set forth
therein at the price per one one-thousandth of a Preferred Share set forth
therein (the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price shall be
subject to adjustment as provided herein.
6
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii)
a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person became an Acquiring
Person, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming an Acquiring Person and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any continuing
agreement, arrangement or understanding, whether written or oral, regarding
the transferred Rights or (B) a transfer which the Board of Directors has
determined in good faith is part of a plan, arrangement or understanding,
whether written or oral, which has as a primary purpose or effect avoidance
of the second paragraph of Section 11(a)(ii) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and void
in the circumstances specified in the second paragraph of Section
11(a)(ii) of the Rights Agreement.
The provisions of the second paragraph of Section 11(a)(ii) shall apply
whether or not any Rights Certificate actually contains the foregoing legend.
Section 5. Countersignature and Registration. The Rights Certificates
---------------------------------
shall be executed on behalf of the Company by its Chairman of the Board, its
Chief Executive Officer, its President, any of its Vice Presidents, or its
Treasurer, either manually or by facsimile signature, shall have affixed thereto
the Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless countersigned.
In case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the Person who signed such Rights Certificates had not ceased to be such officer
of the Company; and any Rights Certificate may be signed on behalf of the
Company by any Person who, at the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company to sign such Rights
Certificate (as described in the first
7
sentence of this Section 5), 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 its principal office, books for registration and transfer of the Rights
Certificates of each series issued hereunder. Such books shall show the names
and addresses of the respective holders of the Rights Certificates, the number
of Rights evidenced on its face by each of the Rights Certificates and the date
of each of the Rights Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Rights
------------------------------------------------------
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
----------------------------------------------------------------------
(a) Subject to the provisions of Sections 4(b), 14 and 24 hereof,
at any time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the earlier of the Redemption Date or the
Final Expiration Date, any Rights Certificate or Rights Certificates (other
than Rights Certificates representing Rights that have become void pursuant
to Section 11(a)(ii) hereof or that have been exchanged pursuant to Section
24 hereof) 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 one one-thousandths of a Preferred Share (or
Common Shares, other securities or property, as the case may be) as the
Rights Certificate or Rights Certificates surrendered then entitle such
holder to purchase. Any registered holder desiring to transfer, split-up,
combine or exchange any Rights Certificate or Rights Certificates 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. Neither the Rights Agent nor the Company shall be obligated to take
any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have completed and
signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall reasonably
request. Thereupon, the Rights Agent shall, subject to Sections 4 and
11(a)(ii) hereof, countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any
transfer, split-up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and,
at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate, if mutilated, the
Company will make and
8
deliver a new Rights Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
-------------------------------------------------------------
(a) Subject to Section 11(a)(ii) hereof, the registered holder of
any valid Rights Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c) hereof) in whole
or in part at any time after the Distribution Date upon surrender of the
Rights Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office of the Rights Agent, together with payment of the
Purchase Price (as defined below) for each one one-thousandth of a
Preferred Share (or Common Shares, other securities, cash or property, as
the case may be) as to which the Rights are exercised, at or prior to the
earliest of (i) the close of business on July 11, 2009 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the "Redemption Date"), or (iii) the time at
which such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-thousandth of a Preferred
Share to be issued upon exercise of a Right shall initially be $110.00,
shall be subject to adjustment from time to time as provided in Sections 11
and 13 hereof and shall be payable in lawful money of the United States of
America in accordance with Section 7(c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate on the
reverse side of the Rights Certificate duly executed, accompanied by
payment of the aggregate Purchase Price for the Preferred Shares (or other
securities or property, as the case may be) to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of
such Rights Certificate in accordance with Section 9 hereof by wire
transfer, certified check, cashier's check or money order payable to the
order of the Company, or such other payment method reasonably required by
the Company, the Rights Agent shall thereupon promptly (i) (A) requisition
from any transfer agent of the Preferred Shares (or make available if the
Rights Agent is the transfer agent of the Preferred Shares) certificates
for the number of Preferred Shares to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests
or (B) requisition from the depositary agent depositary receipts as
provided in Section 14(b) hereof, representing such number of one one-
thousandths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent and the Company
hereby directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company or such other entity the amount
of cash to be paid in lieu of issuance of fractional shares in accordance
with Section 14 hereof, (iii) after receipt of such certificates or
depositary
9
receipts, cause the same to be delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) when appropriate, after
receipt, deliver such cash to, or upon the order of, the registered holder
of such Rights Certificate. In the event that the Company elects or is
obligated to issue other securities (including Common Shares) of the
Company, pay cash and/or distribute other property pursuant to Section
11(a)(iii) hereof, the Company will make all arrangements necessary so that
such other securities, cash and/or property are available for distribution
by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Rights 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 a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
(f) Notwithstanding any statement to the contrary contained in this
Agreement or in any Rights Certificate, if the Distribution Date or the
Shares Acquisition Date shall occur prior to the Record Date, the
provisions of this Agreement, including (without limitation) Sections 3 and
11(a)(ii), shall be applicable to the Rights upon their issuance to the
same extent such provisions would have been applicable if the Record Date
were the date of this Agreement.
Section 8. Cancellation and Destruction of Rights Certificates. All
---------------------------------------------------
Rights Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such canceled Rights Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
10
Section 9. Availability of Capital Stock.
-----------------------------
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred
Shares (and, following the occurrence of a Distribution Date, out of its
authorized and unissued Common Shares and/or other securities or out of its
authorized and issued shares held in its treasury), the number of Preferred
Shares (or Common Shares and/or other securities, as the case may be) that
will be sufficient to permit the exercise in full of all outstanding Rights
as provided in this Agreement.
(b) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares (or Common
Shares and/or other securities, as the case may be) delivered upon exercise
of Rights shall be, at the time of delivery of the certificates for such
Preferred Shares (or Common Shares and/or other securities, as the case may
be) (subject to any necessary payment of the Purchase Price), duly and
validly authorized and issued and fully paid and nonassessable shares.
(c) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Rights
Certificates or of any Preferred Shares (or Common Shares and/or other
securities, as the case may be) upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Rights Certificates to a
Person other than, or the issuance or delivery of certificates or
depositary receipts for the Preferred Shares (or Common Shares and/or other
securities, as the case may be) in a name other than that of, the
registered holder of the Rights Certificate evidencing Rights surrendered
for exercise or to issue or to deliver any certificates or depositary
receipts for Preferred Shares (or Common Shares and/or other securities, as
the case may be) upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to
the Company's reasonable satisfaction that no such tax is due.
(d) So long as the Preferred Shares (and, following the occurrence
of a Distribution Date, Common Shares and/or other securities, as the case
may be) issuable and deliverable upon the exercise of the Rights may be
listed on any inter-dealer quotation system or national securities
exchange, the Company shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all shares reserved for such
issuance to be listed on one such system or exchange upon official notice
of issuance upon such exercise.
(e) The Company shall use its best efforts to (i) file on the
appropriate form, as soon as practicable following the earliest date after
the first occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise
11
of the Rights has been determined hereunder, a registration statement under
the Securities Act of 1933, as amended (the "Act"), with respect to the
securities purchasable 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
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the Final Expiration Date. The
Company may temporarily suspend, for a period of time not to exceed ninety
(90) days after the date set forth in clause (i) of the first sentence of
this Section 9(e), the exercisability of the Rights in order to prepare and
file such registration statement and permit it to become effective. Upon
any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer
in effect. In addition, if the Company shall determine that a registration
statement is required following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights until such time as a
registration statement has been declared effective. 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. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not
have been obtained, the exercise thereof shall not be permitted under
applicable law or a registration statement shall not have been declared
effective.
Section 10. Preferred Shares Record Date. Each Person in whose name any
----------------------------
certificate for Preferred Shares (or Common Shares and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Shares (or Common
Shares and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the applicable
Purchase Price (and any applicable transfer taxes) was made (or Rights were duly
surrendered in exchange for Common Shares pursuant to Section 24 hereof);
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Shares (or Common Shares and/or other securities, as the
case may be) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Preferred Shares
(or Common Shares and/or other securities, as the case may be) transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Rights Certificate shall not be entitled to any rights of a
holder of Preferred Shares (or Common Shares and/or other securities, as the
case may be) for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
12
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
----------------------------------------------------------
Number of Rights. The Purchase Price, the number and kind of shares covered by
----------------
and obtainable upon exercise of each Right, and the number of Rights
outstanding, are subject to adjustment from time to time as provided in this
Section 11 and Section 13 hereof.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding Preferred
Shares, (C) combine the outstanding Preferred Shares into a smaller
number of Preferred Shares or (D) issue any shares of its capital
stock in a reclassification of the Preferred Shares (including any
such reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the Purchase Price in
effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification,
and the number and kind of shares of capital stock issuable on such
date, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time
when the Preferred Shares transfer books of the Company were open,
such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. If an event occurs which would
require adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 hereof, in the event any
Person shall become an Acquiring Person, each holder of a valid Right
shall thereafter have a right to receive, upon exercise thereof at a
price equal to the then current Purchase Price multiplied by the
number of one one-thousandths of a Preferred Share for which a Right
is then exercisable, in accordance with the terms of this Agreement,
and in lieu of Preferred Shares, such number of Common Shares of the
Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-thousandths of a
Preferred Share for which a Right is then exercisable, and dividing
that product by (y) 50% of the then current per share market price of
the Company's Common Shares (determined pursuant to Section 11(d)
hereof) on the date of the occurrence of the event described above. In
the event that any Person shall become an Acquiring Person and the
Rights shall then be outstanding, the Company shall not take any
action which would eliminate or diminish the benefits intended to be
afforded by the Rights.
13
From and after the time when a Person becomes an Acquiring
Person (a "Section 11(a)(ii) Event") any Rights that are or were
acquired or beneficially owned by (i) any Acquiring Person or any
Associate or Affiliate of such Acquiring Person, (ii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person became an Acquiring
Person or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming an Acquiring Person
and receives such Rights pursuant to either (A) a transfer (whether or
not for consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or
understanding, whether written or oral, regarding the transferred
Rights or (B) a transfer which the Board of Directors has determined
in good faith is part of a plan, arrangement or understanding, whether
written or oral, which has as a primary purpose or effect the
avoidance of this second paragraph of this Section 11(a)(ii), shall
each be void and any holder of such Rights shall thereafter have no
exercise or any other rights whatsoever with respect to such Rights
under any provision of this Agreement or otherwise. No Rights
Certificate shall be issued pursuant to Section 3, this Section
11(a)(ii) or Section 24 that represents Rights beneficially owned by
an Acquiring Person or any Associate or Affiliate thereof whose Rights
would be void pursuant to the preceding sentence; no Rights
Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person or any Associate or Affiliate thereof
whose Rights would be void pursuant to the preceding sentence or to
any nominee of such Acquiring Person, Associate or Affiliate; and any
Rights Certificate delivered to the Rights Agent for transfer to an
Acquiring Person, Associate or Affiliate thereof whose Rights would be
void pursuant to the preceding sentence shall be canceled.
(iii) In lieu of issuing Common Shares of the Company in
accordance with Section 11(a)(ii) hereof, the Company may, in the sole
discretion of the Board of Directors, elect to (and, in the event that
the Board of Directors has not exercised the exchange right contained
in Section 24 hereof and there are not sufficient issued but not
outstanding and authorized but unissued Common Shares to permit the
exercise in full of the Rights in accordance with Section 11(a)(ii)
hereof, the Company shall) take all such action as may be necessary to
authorize, issue or pay, upon the exercise of the Rights, cash
(including by way of a reduction of the Purchase Price), property,
other securities or any combination thereof having an aggregate value
equal to the value of the Common Shares of the Company which otherwise
would have been issuable pursuant to Section 11(a)(ii), which
aggregate value shall be determined by the Board of Directors. For
purposes of the preceding sentence, the value of the Common Shares
shall be determined pursuant to Section 11(d) hereof and the value of
any equity securities which the Board of Directors determines to be a
"common stock equivalent"
14
(including the Preferred Shares, in such ratio as the Board of
Directors shall determine) shall be deemed to have the same value as
the Common Shares. Any such election by the Board of Directors must be
made and publicly announced within 60 days following the date on which
the event described in Section 11(a)(ii) shall have occurred.
Following the occurrence of the event described in Section 11(a)(ii),
the Board of Directors may suspend the exercisability of the Rights
for a period of up to 60 days following the date on which the event
described in Section 11(a)(ii) shall have occurred to the extent that
the Board of Directors has not determined whether to exercise the
Company's right of election under this Section 11(a)(iii). In the
event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling
them (for a period expiring within 45 calendar days after such record date)
to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than
the then current per share market price of the Preferred Shares (as defined
in Section 11(d)) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares outstanding on
such record date plus the number of Preferred Shares which could be
purchased at the current per share market price for the aggregate offering
price of the total number of Preferred Shares and/or equivalent preferred
shares so to be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) and the denominator of which
shall be the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right.
In case such subscription price may be paid in a consideration part or all
of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with
the Rights Agent. Preferred Shares owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not
been fixed.
15
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price
to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share market
price of the Preferred Shares on such record date, less the fair market
value (as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights
Agent) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one
Preferred Share and the denominator of which shall be such current per
share market price of the Preferred Shares; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the
Company to be issued upon exercise of one Right. Such adjustments shall be
made successively whenever such a record date is fixed; and in the event
that such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
per share market price" of any security (a "Security" for the purpose of
this Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices (determined as provided in the next sentence) per
share of such Security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date, and for the purpose of
any computation under Section 11(a)(iii) hereof, the "current per share
market price" of a Security on any date shall be deemed to be the average
of the daily closing prices per share of such Security for the 30
consecutive Trading Days immediately following such date; provided,
however, that in the event that the current per share market price of the
Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such
shares (other than the Rights), or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30 Trading
Days after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then,
and in each such case, the current per share market price shall be
appropriately adjusted to reflect the current market price per share
equivalent of such Security as if such dividend, distribution, combination
or reclassification has not been declared. 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 on the Nasdaq National
Market or, if the Security is listed or admitted for trading on a national
exchange,
16
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading, or, if the Security
is not listed on the Nasdaq National Market or listed or admitted to
trading on any national securities exchange, the last quoted price or, if
not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by any other system then in use, or,
if on any such date the Security is not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by the
Board of Directors. The term "Trading Day" shall mean a day on which the
inter-dealer quotation system or principal national securities exchange on
which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to
trading on any inter-dealer quotation system or national securities
exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the "current
per share market price" of the Preferred Shares shall be determined in
accordance with the method set forth in Section 11(d)(i) hereof. If the
Preferred Shares are not publicly traded, the "current per share market
price" of the Preferred Shares shall be conclusively deemed to be the
current per share market price of the Common Shares as determined pursuant
to Section 11(d)(i) (appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof),
multiplied by one-hundred. If neither the Common Shares nor the Preferred
Shares are publicly held or so listed or traded, "current per share market
price" shall mean the fair value per share as determined in good faith by
the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest one
one-millionth of a Preferred Share or one ten-thousandth of any other share
or security, as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than Preferred
Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Preferred Shares contained in Sections 11(a), 11(b) and
11(c), and the
17
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths
of a Preferred Share purchasable from time to time hereunder upon exercise
of the Rights all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i) hereof, upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and 11(c) hereof, each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-thousandths of a Preferred Share (calculated to the
nearest one one-millionth of a Preferred Share) obtained by (i) multiplying
(x) the number of one one-thousandths of a share covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-thousandths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of
the Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least 10 days later than the
date of the public announcement. If Rights Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for
the Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall
be entitled
18
after such adjustment. Rights Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for herein and
shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-thousandths of a Preferred Share issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-thousandths of a Preferred Share which were expressed in the initial
Rights Certificates issued hereunder, without prejudice to the validity of
such Rights Certificate(s) or the application of the provisions hereof.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-thousandth of the then par value, if any,
of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully
paid and nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date of the Preferred Shares and other capital stock or securities
of the Company, if any, issuable upon such exercise over and above the
Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in Preferred Shares
or issuance of rights, options or warrants referred to in Section 11(b),
hereafter made by the Company to holders of its Preferred Shares shall not
be taxable to such stockholders.
(n) In the event that at any time after the date of this Agreement and
prior to the Shares Acquisition Date, the Company shall (i) declare or pay
any dividend on the
19
Common Shares payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares) into a greater or
lesser number of Common Shares, then in any such case (i) the number of one
one-thousandths of a Preferred Share purchasable after such event upon
proper exercise of each Right shall be determined by multiplying the number
of one one-thousandths of a Preferred Share so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and the denominator
of which is the number of Common Shares outstanding immediately after such
event, and (ii) each Common Share outstanding immediately after such event
shall have issued with respect to it that number of Rights which each
Common Share outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section 11(n) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
----------------------------------------------------------
Whenever an adjustment is made as provided in Section 11 and 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common Shares or the
Preferred Shares a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Rights Certificate in accordance with Section 25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
--------------------------------------------------------------
Power.
-----
(a) If, after the Shares Acquisition Date, directly or indirectly,
(w) the Company shall consolidate with, or merge with and into, any other
Person, (x) any Person shall consolidate with the Company, or merge with
and into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger or
consolidation all or part of the outstanding Common Shares are changed into
or exchanged for stock or other securities of any other Person (or the
Company) or cash or any other property, (y) the Company shall sell,
mortgage or otherwise transfer (or one or more of its Subsidiaries shall
sell, mortgage or otherwise transfer), in one or more transactions, assets
or earning power aggregating 50% or more of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any Person other
than the Company or one or more of its wholly-owned Subsidiaries, or (z)
any Acquiring Person or any Associate or Affiliate of any such Acquiring
Person, at any time after the date of this Agreement, directly or
indirectly, (A) shall, in one transaction or a series of transactions,
transfer any assets to the Company or to any of its Subsidiaries in
exchange (in whole or in part) for Common Shares, for shares of other
equity securities of the Company or for securities exercisable for or
convertible into shares of equity securities of the Company (Common Shares
or otherwise) or otherwise obtain from the Company, with or without
consideration, any additional shares of such equity securities or
securities exercisable for or convertible into shares of such equity
securities
20
(other than pursuant to a pro rata distribution to all holders of Common
Shares), (B) shall sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise acquire or dispose of assets, in one transaction or a
series of transactions, to, from or with the Company or any of its
Subsidiaries without obtaining a written opinion from a nationally
recognized investment banking firm that the terms of such transaction or
arrangement are no less favorable to the Company than the Company would be
able to obtain in arm's-length negotiation with an unaffiliated third
party, (C) shall sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise acquire or dispose of in one transaction or a series
of transactions, to, from or with the Company or any of the Company's
Subsidiaries (other than incidental to the lines of business, if any,
engaged in as of the date hereof between the Company and such Acquiring
Person or Associate or Affiliate) assets having an aggregate fair market
value of more than $5,000,000, (D) shall receive any compensation from the
Company or any of the Company's Subsidiaries other than compensation for
full-time employment as a regular employee at rates in accordance with the
Company's (or its Subsidiaries') past practices, or (E) shall receive the
benefit, directly or indirectly (except proportionately as a stockholder
and except if resulting from a requirement of law or governmental
regulation), of any loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantage provided by the
Company or any of its Subsidiaries, then, and in each such case, (i) each
holder of a Right (except as otherwise provided herein) shall thereafter
have the right to receive, upon the exercise thereof at a price equal to
the then current Purchase Price multiplied by the number of one one-
thousandths of a Preferred Share for which a Right is then exercisable in
accordance with the terms of this Agreement, and in lieu of Preferred
Shares, such number of validly authorized and issued, fully paid, non-
assessable and freely tradeable Common Shares of the Principal Party (as
hereinafter defined) not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall equal the result obtained
by (A) multiplying the then current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right is then exercisable
and dividing that product by (B) 50% of the then current per share market
price of the Common Shares of the Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such consolidation,
merger, sale or transfer; (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such consolidation, merger, sale
or transfer, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party; and (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of
its Common Shares in accordance with Section 9 hereof) in connection with
such consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in relation
to the Common Shares thereafter deliverable upon the exercise of the
Rights.
21
(b) "Principal Party" shall mean:
(i) In the case of any transaction described in (w) or (x) of
the first sentence of Section 13(a) hereof, the Person that is the
issuer of any securities into which Common Shares of the Company are
converted in such merger or consolidation, and if no securities are so
issued, the Person that is the surviving entity of such merger or
consolidation (including the Company if applicable); and
(ii) in the case of any transaction described in (y) or (z) of
the first sentence in Section 13(a) hereof, the Person that is the
party receiving the greatest portion of the assets, securities,
earning power or other benefit transferred pursuant to such
transaction or transactions;
provided, however, that in any such case described in clauses (b)(i) and
-------- -------
(b)(ii): (1) if the Common Shares of such Person are not at such time and
have not been continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Shares of which are and
have been so registered, "Principal Party" shall refer to such other
Person; (2) in case such Person is a Subsidiary, directly or indirectly, of
more than one person, the Common Shares of two or more of which are and
have been so registered, "Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Shares having the greatest aggregate
market value; and (3) in case such Person is owned, directly or indirectly,
by a joint venture formed by two or more Persons that are not owned,
directly or indirectly, by the same person, the rules set forth in (1) and
(2) above shall apply to each of the chains of ownership having an interest
in such joint venture as if such party were a "Subsidiary" of both or all
of such joint venturers and the Principal Parties in each such chain shall
bear the obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the total of such
interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have sufficient Common
Shares authorized to permit the full exercise of the Rights and prior
thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in Sections 13(a) and 13(b) hereof and further providing
that, as soon as practicable after the date of any consolidation, merger,
sale or transfer mentioned in Section 13(a) hereof, the Principal Party
will:
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, and will use its best efforts to
cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Final Expiration Date;
22
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act; and
(iii) take such actions as may be necessary or appropriate under
the blue sky laws of the various states.
The Company shall not enter into any transaction of the kind referred
to in this Section 13 if at the time of such transaction there are any
rights, warrants, instruments or securities outstanding or any agreements
or arrangements which, as a result of the consummation of such transaction,
would eliminate or substantially diminish the benefits intended to be
afforded by the Rights. The provisions of this Section 13 shall similarly
apply to successive mergers, consolidations, sales or transfers.
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of Rights
or to distribute Rights Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional
Rights would 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 principal national
securities exchange or the Nasdaq National Market 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 or the Nasdaq National
Market, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by any
other system then in use, or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors. If on any such date no such market
maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors shall be
used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other
than fractions which are integral multiples of one one-thousandth of a
Preferred Share). Fractions of Preferred Shares in integral multiples of
23
one one-thousandth of a Preferred Share may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; provided,
that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which
they are entitled as beneficial owners of the Preferred Shares represented
by such depositary receipts. In lieu of fractional Preferred Shares that
are not integral multiples of one one-thousandth of a Preferred Share, the
Company shall pay to the registered holders of Rights 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 Preferred Share.
For the purposes of this Section 14(b), the current market value of a
Preferred Share shall be the closing price of a Preferred Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Distribution Date, the Company
shall not be required to issue fractions of Common Shares upon exercise of
the Rights or to distribute certificates which evidence fractional Common
Shares. In lieu of fractional Common Shares, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction
of the current market value of one Common Share. For purposes of this
Section 14(c), the current market value of one Common Share shall be the
closing price of one Common Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior
to the date of such exercise.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
----------------
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Rights 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 Rights Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in its own behalf and for its own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, its right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
24
Section 16. Agreement of Rights Holders. Every holder of a Right, by
---------------------------
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Rights Certificates will be
transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent, duly endorsed or accompanied
by a proper instrument of transfer and with appropriate forms and
certificates fully executed;
(c) the Company and the Rights Agent may deem and treat the Person
in whose name the Rights Certificate (or, prior to the Distribution Date,
the associated certificate for Common Shares) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificates or the
associated certificate for Common Shares made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or any other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority
prohibiting or otherwise restraining performance of such obligation.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder,
--------------------------------------------------
as such, of any Rights Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to the
---------------------------
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time,
25
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without 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 arising, directly or indirectly, therefrom. In no case shall the
Rights Agent be liable for special, indirect, incidental or consequential loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if the Rights Agent has been advised of the possibility of such loss or
damage.
The Rights Agent shall be protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in connection with, its
administration of this Agreement in reliance upon any Rights Certificate or
certificate for the Preferred Shares or Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
---------------------------------------------------------
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer or
corporate trust 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 Rights 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 Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in its
changed name;
26
and in all such cases such Rights Certificates shall have the full force
provided in the Rights 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 Rights 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 omi tted by it in good faith and in accordance with
such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman
of the Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the Company and delivered to
the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant
to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Section 3,
11, 13, 23 or 24 hereof, or the ascertaining of the existence of facts that
would require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after actual notice
that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares
27
(or Common Shares and/or other securities, as the case may be) to be issued
pursuant to this agreement or any Rights Certificate or as to whether any
Preferred Shares (or Common Shares and/or other securities, as the case may
be) 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,
prior to the Shares Acquisition Date, instructions with respect to the
performance of its duties hereunder from any one of the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the
Secretary or the Treasurer of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and it shall not
be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company, or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not 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.
Section 21. Change of Rights Agent. The Rights Agent or any successor
----------------------
Rights Agent may resign and thereafter be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Shares or
Preferred Shares by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a
28
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 Rights Certificate
(who shall, with such notice, submit his Rights Certificate for inspection by
the Company), then the registered holder of any Rights Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be either (A) a corporation organized and doing business under the laws of
the United States or of any state of the United States, in good standing,
authorized under such laws to exercise corporate trust or stock transfer powers,
and subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million or (B) an affiliate of such a corporation.
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares
or Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
-----------------------------------
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by the Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement.
Section 23. Redemption.
----------
(a) The Rights may be redeemed by action of the Board of Directors
pursuant to Section 23 (b) hereof and shall not be redeemed in any other
manner.
(b) The Board of Directors may, at its option, at any time prior
to such time as any Person becomes an Acquiring Person, redeem all, but not
less than all, of the then outstanding Rights at a redemption price of $.01
per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price").
The redemption of the Rights by the Board of Directors may be made
effective at such time on such basis and with such conditions as the Board
of Directors in its sole discretion may establish. If redemption of the
Rights is to be effective as of a future date, the Rights shall
29
continue to be exercisable, subject to Section 11(a)(ii) hereof, until the
effective date of the redemption, provided that nothing contained herein
shall preclude the Board of Directors from subsequently causing the Rights
to be redeemed at a date earlier than the previously scheduled effective
date of the redemption. The Company may, at its option, pay the Redemption
Price in cash, Common Shares (based on the current per share market price
of the Common Shares at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
(c) Immediately upon the action of the Board of Directors ordering
the redemption of the Rights pursuant to Section 23(b) hereof (or at the
effective time of such redemption established by the Board of Directors
pursuant to Section 23(b) hereof), and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. The Company shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or any defect in,
any such notice shall not affect the validity of such redemption. Within 10
days after such action of the Board of Directors ordering the redemption of
the Rights pursuant to Section 23(b) hereof or if later, the effectiveness
of the redemption of the rights pursuant to the last sentence of Section
23(b), the Company shall mail a notice of redemption to all the holders of
the then outstanding Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Common Shares. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption
Price will be made. The Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights, (ii) depositing with a
bank or trust company having a capital and surplus of at least $100
million, funds necessary for such redemption, in trust, to be applied to
the redemption of the Rights so called for redemption and (iii) arranging
for the mailing of the Redemption Price to the registered holders of the
Rights; then, and upon such action, all outstanding Rights Certificates
shall be null and void without further action by the Company. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Common Shares prior to the
Shares Acquisition Date.
Section 24. Exchange.
--------
(a) The Board of Directors may, at its option, at any time after
any Person becomes an Acquiring Person, 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
30
transaction occurring after the date hereof. Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at
any time after any Person (other than the Company, any member or members of
the Xxxxxx Family, any Subsidiary of the Company, any employee benefit plan
of the Company or any such Subsidiary, or any entity holding Common Shares
for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of
50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to Section 24(a) hereof and without any
further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of Common Shares equal to the number of
valid Rights held by such holder. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the Common 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) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Shares (or equivalent preferred shares, as
such term is defined in Section 11(b) hereof) for Common Shares
exchangeable for Rights, at the initial rate of one one-thousandth of a
Preferred Share (or equivalent preferred share) for each Common Share, as
appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Shares pursuant to the terms thereof, so that the fraction of a
Preferred Share delivered in lieu of each Common Share shall have the same
voting rights as one Common Share.
(d) In the event that there shall not be sufficient Common Shares or
Preferred Shares issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary to
authorize additional Common Shares or Preferred Shares for issuance upon
exchange of the Rights.
(e) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company shall pay to
the registered holders of the Rights
31
Certificates with regard to which such fractional Common Shares would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Common Share. For the purposes of this
Section 24(e), the current market value of a whole Common Share shall be
the closing price of a Common Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior
to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
------------------------
(a) In case the Company shall propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to
make any other distribution to the holders of its Preferred Shares (other
than a regular quarterly cash dividend), (ii) to offer to the holders of
its Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any
consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, of 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company, or (vi) to declare or pay any dividend on the
Common Shares payable in Common Shares or to effect a subdivision,
combination or consolidation of the Common Shares (by reclassification or
otherwise), then, in each such case, the Company shall give to each holder
of a Rights Certificate, in accordance with Section 26 hereof, a notice of
such proposed action, which shall specify the record date for such event,
and the date of participation therein by the holders of the Common Shares
and/or Preferred Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii)
above at least 10 days prior to the record date for determining holders of
the Preferred Shares for purposes of such action, and in the case of any
such other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable thereafter give
to each holder of a Rights Certificate, in accordance with Section 26
hereof, a notice of the occurrence of such event, which notice shall
describe such event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to
-------
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
32
NovaMed Eyecare, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxx
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company may from time to
--------------------------
time supplement or amend this Agreement without the approval of any holders of
Rights Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner which would
adversely affect the interests of the holders of Rights (except the interests of
any Acquiring Person and its Affiliates and Associates).
Section 28. Determination and Actions by the Board of Directors, etc..
---------------------------------------------------------
The Board of 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, without limitation, a
determination to redeem or not redeem the Rights or to amend the Agreement and
whether any proposed amendment adversely affects the interests of the holders of
Rights Certificates). For all purposes of this Agreement, any calculation of
the number of Common Shares or other securities outstanding at any particular
time, including for purposes of determining the particular percentage of such
outstanding Common Shares or any other securities of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of Rule
13d-
33
3(d)(1)(I) of the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights Certificates and all other
parties unless the Board of Directors specifically states that such action,
calculations, interpretation or determination is not final, conclusive and
binding, and (y) not subject the Board of Directors to any liability to the
holders of the Rights Certificates.
Section 29. Successors. All the covenants and provisions of this
----------
Agreement by, or for the benefit of, the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 30. 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 valid Rights 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
valid Rights Certificates (and, prior to the Distribution Date, the Common
Shares).
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.
Section 32. Governing Law. This Agreement and each Rights Certificate
-------------
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 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.
34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
NOVAMED EYECARE, INC.
Attest:
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
--------------------------- ---------------------------
Name: Xxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx, President and CEO
Title: Corporate Secretary
AMERICAN STOCK TRANSFER
& TRUST COMPANY,
as Rights Agent
Attest:
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
--------------------------- ---------------------------
Name: Xxxxx Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary Title: Vice President
Exhibit A
---------
FORM
of
CERTIFICATE OF DESIGNATIONS
of
Series E JUNIOR PARTICIPATING PREFERRED STOCK
of
NOVAMED EYECARE, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
------------------------------------------
NOVAMED EYECARE, INC., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Company"), hereby certifies that the following resolution was adopted by the
Board of Directors of the Company as required by Section 151 of the General
Corporation Law at a meeting duly called and held on July 7, 1999:
RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of this Company (hereinafter called the "Board of Directors" or the
"Board") in accordance with the provisions of the Company's Certificate of
Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $.01 per share (the "Preferred Stock"), of the Company and
hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:
Series E Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
----------------------
designated as "Series E Junior Participating Preferred Stock" (the "Series E
Preferred Stock") and the number of shares constituting the Series E Preferred
Stock shall initially be 50,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease
--------
shall reduce the number of shares of Series E Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities or rights issued by the
Company convertible into Series E Preferred Stock and further
-----------
A-1
provided that the Board of Directors shall increase the number of shares
--------
constituting the Series E Preferred Stock to the extent necessary for the
Company to have available sufficient shares of such Series E Preferred Stock
available to fulfill all of the Company's obligations to holders of securities
and Rights of the Company.
Section 2. Dividends and Distributions.
---------------------------
(A) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior to the
Series E Preferred Stock with respect to dividends, the holders of shares
of Series E Preferred Stock, in preference to the holders of Common Stock,
par value $.01 per share (the "Common Stock"), of the Company, and of any
other junior stock, shall be entitled to receive, when, as and if declared
by the Board of Directors out of the funds legally available for the
purpose, dividends payable when and as dividends are declared on the Common
Stock in an amount, subject to the provision for adjustment hereinafter set
forth, equal to 1000 times the aggregate per share amount of all cash
dividends, and 1000 times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions, declared on the Common
Stock (except as provided in the next sentence). In the event the Company
shall at any time declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares of Series E
Preferred Stock were entitled immediately prior to such event under the
preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Company shall declare a dividend or distribution on the
Series E Preferred Stock as provided in paragraph (A) of this Section 2
immediately after it declares a dividend or distribution on the Common
Stock.
Section 3. Voting Rights. The holders of shares of Series E Preferred
-------------
Stock shall have the following voting rights:
(A) Each share of Series E Preferred Stock shall entitle the holder
thereof to 1000 votes on all matters submitted to a vote of the
stockholders of the Company.
(B) Except as otherwise provided herein, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock, or
by law, the holders of shares of Series E Preferred Stock and the holders
of shares of Common Stock
A-2
and any other capital stock of the Company having general voting rights
shall vote together as one class on all matters submitted to a vote of
stockholders of the Company.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series E Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. Reacquired Shares. Any shares of Series E Preferred Stock
-----------------
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock subject to
the conditions and restrictions on issuance set forth herein, in the Company's
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
Section 5. Liquidation, Dissolution or Winding Up. Upon any liquidation,
--------------------------------------
dissolution or winding up of the Company, no distribution shall be made (1) to
the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series E Preferred Stock unless,
prior thereto, the holders of shares of Series E Preferred Stock shall have
received an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1000 times the aggregate amount to be
distributed per share to holders of shares of Common Stock. In the event the
Company shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series E Preferred Stock were
entitled immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 6. Consolidation, Merger, etc. In case the Company shall enter
---------------------------
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for, or changed into, other stock or
securities, cash and/or any other property, then in any such case each share of
Series E Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Company shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than
A-3
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of shares of
Series E Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. No Redemption. The shares of Series E Preferred Stock shall
-------------
not be redeemable.
Section 8. Rank. The Series E Preferred Stock shall rank, with respect
----
to the payment of dividends and the distribution of assets, junior to all series
of any other class of the Company's Preferred Stock.
Section 9. Amendment. The Certificate of Incorporation of the Company
---------
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series E Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series E Preferred Stock, voting
together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf
of the Company by its President and Chief Executive Officer and attested by its
Secretary this 7th day of July, 1999.
-------------------------------------
Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
Attest:
------------------------
------------------------
Secretary
A-4
Exhibit B
---------
Form of Rights Certificate
Certificate No. ____ _____ Rights
NOT EXERCISABLE AFTER JULY 11, 2009 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT, AND ARE
VOIDABLE AND SUBJECT TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN THE SECOND PARAGRAPH OF SECTION 11(a)(ii) OF THE RIGHTS AGREEMENT.]*
Rights Certificate
NovaMed Eyecare, 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 July 7, 1999 (the "Rights Agreement") between NovaMed
Eyecare, Inc., a Delaware corporation (the "Company"), and American Stock
Transfer & Trust Company, a ______________ ___________________ (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.,
Chicago, Illinois time on July 11, 2009 at the principal office of the Rights
Agent, or at the office of its successor as Rights Agent, one one-thousandth of
a fully paid nonassessable share of Series E Junior Participating Preferred
Stock, par value $.01 per share (the "Preferred Shares"), of the Company, at a
purchase price of $110.00 per one one-thousandth of a Preferred Share (the
"Purchase Price"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase and the Certificate duly executed.
-----------------
* The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
B-1
The number of Rights evidenced by this Rights Certificate (and the number of one
one-thousandths of a Preferred Share which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are the number
and Purchase Price as of July 7, 1999, based on the Preferred Shares as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of one one-thousandths of a Preferred Share which may be
purchased upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right or (ii) may be exchanged in whole or in part for Preferred Shares
or shares of the Company's Common Stock, par value $.01 per share, on the terms
set forth in the Rights Agreement.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandths of a Preferred Share, 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 Rights Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of 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
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or
B-2
otherwise, until the Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of __________________.
ATTEST: NOVAMED EYECARE, INC.
By:
------------------- ---------------------------------------
Countersigned:
________________________, as Rights Agent
By:
----------------------------
Authorized Signature
B-3
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED, ______________________________ hereby sells, assigns
and transfers unto _____________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
------------------------------------------------------------------------
(Please print social security or other identifying number of transferee)
this Rights Certificate, together with all interest therein, and does hereby
irrevocably constitute and appoint ___________________ Attorney, to transfer the
within Rights Certificate on the books of the within-named Company, with full
power of substitution.
Dated:
-----------------------
---------------------------------------
Signature
Signature Guaranteed: __________________________________________________________
Signature must be guaranteed by an Eligible Guarantor Institution as
defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
B-4
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 Person (as such terms are defined
in the Rights Agreement);
(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 any such Person.
Dated:
---------------------------
-----------------------------------------
Signature
Signature Guaranteed: __________________________________________________________
NOTICE
------
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
The signature must be guaranteed by an Eligible Guarantor Institution
as defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
B-5
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Rights Certificate.)
To: NovaMed Eyecare, Inc.
The undersigned hereby irrevocably elects to exercise _____________ Rights
represented by this Rights Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights (or such other securities of the Company or of
any other person which may be issuable upon the exercise of the Rights) and
requests that certificates for such Preferred Shares be issued in the name of:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------
(Please insert social security or other identifying number)
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------
(Please insert social security or other identifying number)
Dated:
---------------------------
-----------------------------------------
Signature
Signature Guaranteed: __________________________________________________________
Signatures must be guaranteed by an Eligible Guarantor Institution as
defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
B-6
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 Person (as such terms are
defined in the Rights Agreement);
(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 any such Person.
Dated:
---------------------------
-----------------------------------------
Signature
Signature Guaranteed: __________________________________________________________
NOTICE
------
The signatures to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
The signature must be guaranteed by an Eligible Guarantor Institution
as defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
B-7
NOTICE
------
In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
B-8
Exhibit C
---------
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES UNDER PLAN ADOPTED BY
NOVAMED EYECARE, INC.
On July 7, 1999, the Board of Directors of NovaMed Eyecare, Inc. (the
"Company") declared a dividend of one Right for each outstanding share of common
stock (a "Right"), par value $.01 per share (the "Common Shares"), of the
Company. The dividend is payable on July 12, 1999 (the "Record Date") to the
stockholders of record on that date. Each Right entitles the registered holder
to purchase from the Company one one-thousandth of a share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the "Preferred
Shares"), of the Company at a price of $110.00 per one one-thousandth of a
Preferred Share (the "Purchase Price"), subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and American Stock Transfer & Trust Company, as
Rights Agent (the "Rights Agent").
Until the earlier of (i) the close of business on the tenth day after the
first public announcement that a person or group of affiliated or associated
persons have acquired beneficial ownership of 15% or more of the outstanding
Common Shares (an "Acquiring Person"), or (ii) the close of business on the
tenth day (or such later date as may be determined by action of the Company's
Board of Directors prior to such time as any person becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a tender
offer or exchange offer the consummation of which would result in the beneficial
ownership of such person or group of 15% or more of such outstanding Common
Shares (the earlier of such dates being called the "Distribution Date"), the
Rights will be evidenced by the Common Share certificates, will be transferable
only by the transfer of the Common Shares associated with such Rights and any
transfer of the Common Shares (including a transfer to the Company) will
constitute a transfer of the Rights. As described below, after a person or
group becomes an Acquiring Person, the Rights may not be redeemed or amended.
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 legend 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
such notation or a copy of this Summary of Rights being attached, will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business
C-1
on the Distribution Date and such separate Rights Certificates alone will
evidence the Rights. Each Right is exercisable for one-one thousandth of a
Preferred Share at any time after the Distribution Date.
The Rights are not exercisable for Common Shares until a person, entity or
group becomes an Acquiring Person. The Rights will expire on July 11, 2009 (the
"Final Expiration Date"), unless the Final Expiration Date is extended or unless
the Rights are redeemed earlier by the Company, in each case, as described
below.
If a person or group of affiliated or associated persons becomes an
Acquiring Person, each holder of a Right (other than those described in the next
sentence) will thereafter have the right to receive, upon exercise, Common
Shares (or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the Purchase Price of the Right. All
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be void.
At any time after the first date of public announcement by the Company or
an Acquiring Person than an Acquiring Person has become such, if (i) the Company
is the surviving corporation in a merger with any other company or entity, (ii)
the Company is acquired in a merger or other business combination transaction,
(iii) 50% or more of the Company's consolidated assets or earning power are
sold, or (iv) an Acquiring Person engages in certain "self-dealing" transactions
with the Company, each holder of a Right (other than those whose Rights have
become void) will thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price of the Right, that number of shares
of common stock of the surviving or acquiring company which at the time of such
transaction will have a market value of two times the Purchase Price of such
Right.
At any time after a person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
Common Shares, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which have become void), in
whole or in part, without any additional payment, for Common Shares at an
exchange ratio of one Common Share (or of a share of a class or series of the
Company's preferred shares having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
C-2
At any time prior to a person or group becoming an Acquiring Person, the
Board of Directors of the Company may redeem all, but not less than all, of the
Rights at a price of $.01 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Any of the provisions of the Rights may be amended by the Board of
Directors of the Company in order to cure any ambiguity or to make any other
changes which the Board deems necessary or desirable. However, after a person
or group becomes an Acquiring Person, any such amendment must not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person).
[A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
________________, 1999.] 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.
C-3