EXHIBIT 1
LaserSight Incorporated
and
American Stock Transfer & Trust Company,
as Rights Agent
Rights Agreement
dated as of July 2, 1998
TABLE OF CONTENTS
Section 1. Certain Definitions
Section 2. Appointment of Rights Agent
Section 3. Issue of Right Certificates
Section 4. Form of Right Certificates
Section 5. Countersignature and Registration
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights
Section 8. Cancellation and Destruction of Right Certificates
Section 9. Reservation and Availability of Shares
Section 10. Preferred Shares Record Date
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights
Section 12. Certificate of Adjusted Purchase Price or Number of Shares
Section 13. Consolidation, Merger, Sale or Transfer of Assets or Earning Power
Section 14. Fractional Rights and Fractional Shares
Section 15. Rights of Action
Section 16. Agreement of Right Holders
Section 17. Right Certificate Holder Not Deemed a Stockholder
Section 18. Concerning the Rights Agent
Section 19. Merger or Consolidation or Change of Name of Rights Agent
Section 20. Duties of Rights Agent
Section 21. Change of Rights Agent
Section 22. Issuance of New Right Certificates
Section 23. Redemption
Section 24. Exchange
Section 25. Notice of Certain Events
Section 26. Notices
Section 27. Supplements and Amendments
Section 28. Successors
Section 29. Determinations and Actions by the Board of Directors
Section 30. Benefits of this Agreement
Section 31. Severability
Section 32. Governing Law
Section 33. Counterparts
Section 34. Descriptive Headings
Exhibit A Form of Certificate of Designation
Exhibit B Form of Right Certificate
Exhibit C Summary of Stockholder Rights Agreement
RIGHTS AGREEMENT
Rights Agreement, dated as of July 2, 1998 (the "Agreement"), between
LaserSight Incorporated, a Delaware corporation (the "Company"), and American
Stock Transfer & Trust Company, a New York corporation (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one Preferred Share Purchase Right (a "Right") for each Common Share
(as defined in Section 1 hereof) of the Company outstanding on the Record Date
(as defined in Section 1 hereof), each Right representing the right to purchase
one one-thousandth of a Preferred Share (as defined in Section 1 hereof) of the
Company, upon the terms and subject to the conditions set forth in this
Agreement, and has further authorized and directed the issuance of one Right
(subject to adjustment as provided herein) with respect to each Common Share
that shall become outstanding (i) between the Record Date and the earliest of
the Distribution Date, the Redemption Date and the Final Expiration Date (as
such terms are defined in Sections 3 and 7 hereof) or (ii) between the
Distribution Date and the earlier of the Redemption Date and the Final
Expiration Date as a result of the conversion into Common Shares of any
convertible securities of the Company or any of its Subsidiaries or as a result
of the exercise of any options, warrants or other rights to purchase Common
Shares of the Company, which convertible securities, options, warrants or other
rights were outstanding on the Distribution Date.
Accordingly, in consideration of the mutual agreements set forth in this
Agreement, 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" means any Person who or which, together
with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the aggregate number of Common Shares
of the Company then outstanding; provided, however that (i) in no event
shall any Exempt Person be deemed to be an Acquiring Person, (ii) no
Person shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reducing the
number of the Company's Common Shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15%
or more of the Common Shares then outstanding; provided, however, that
if a Person shall become the Beneficial Owner of 15% or more of the
Common Shares of the Company then outstanding by reason of share
acquisitions by the Company and shall, after such share acquisitions by
the Company, (A) acquire, in one or more transactions, beneficial
ownership of an additional number of Common Shares which exceeds the
lesser of 10,000 Common Shares or 0.25% of the then-outstanding Common
Shares and (B) beneficially own after such acquisition 15% or more of
the aggregate number of Common Shares of the Company then outstanding,
then such Person shall be deemed to be an "Acquiring Person," (iii) no
Person who or which, together with all Affiliates and Associates of such
Person, was the Beneficial Owner of 15% or more of the aggregate number
of Common Shares of the Company issued and outstanding as of 5:00 p.m.,
New York time, on July 2, 1998 shall be deemed to be an "Acquiring
Person" for purposes of this Agreement; provided, however, that if such
Person or any of its Affiliates and Associates, after 5:00 p.m., New
York time, on July 2, 1998, (A) acquires, in one or more transactions,
beneficial ownership of an additional number of Common Shares which
exceeds 2% of the then-outstanding Common Shares and (B) beneficially
owns after such acquisition 15% or more of the aggregate number of
Common Shares of the Company then outstanding, then such Person shall be
deemed to be an "Acquiring Person," and (iv) 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 paragraph (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 paragraph (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
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Regulations of the SEC under the Exchange Act, as in effect on the date
of this Agreement, provided that, notwithstanding any provision of such
Rule 12b-2 to the contrary, neither the Company nor any Subsidiary of
the Company shall be deemed, and none of their respective directors,
officers and agents shall be deemed solely by virtue of their
relationship with the Company or a Subsidiary of the Company, to be an
"Affiliate" or an "Associate" of any stockholder of the Company for
purposes 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 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 among underwriters and
selling group members with respect to a bona fide public
offering of securities), whether or not in writing, or upon the
exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner
of, or to beneficially own, securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or
any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange; or
(B) the right to vote (whether such right is exercisable
immediately or only after the passage of time) 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 or any of such
Person's Affiliates or Associates in response to a public proxy
or consent solicitation made pursuant to, and in accordance
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with, the applicable rules and regulations of the SEC
promulgated under the Exchange Act and (2) is not then
reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
of such other Person) with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement
or understanding (other than customary agreements with and among
underwriters and selling group members with respect to a bona
fide public offering of securities), whether or not in writing,
for the purpose of acquiring, holding, voting (other than
pursuant to a revocable proxy or consent as described in the
proviso to Section 1(c)(ii)(B) hereof) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of "Beneficial Ownership" to
the contrary, the phrases "then outstanding" or "issued and
outstanding," when used with reference to a Person's Beneficial
Ownership of securities of the Company, means the number of such
securities then issued and outstanding together with the number of such
securities not then issued and outstanding which such Person would be
deemed to beneficially own hereunder.
(d) "Board of Directors" means the Board of Directors of the
Company.
(e) "Business Day" means any day other than a Saturday, a
Sunday, or a day on which banking institutions in the City of New York
are authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date means 5:00 p.m., New
York time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m., New York time, on the next
succeeding Business Day.
(g) "Common Shares", when used with reference to the Company,
means the common stock, $.001 par value, of the Company or, when used
with reference to any Person other than the Company, means the capital
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stock (or other equity interest) with the greatest voting power of such
other Person or, if such Person is a Subsidiary of another Person, of
the Person or Persons which ultimately controls or control such
first-mentioned Person.
(h) "Company" means LaserSight Incorporated, a Delaware
corporation.
(i) "Distribution Date" is defined in Section 3.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Exempt Person" means (i) the Company, (ii) any Subsidiary
of the Company, and (iii) any employee benefit plan of the Company or
any anSubsidiary of the Company, or any entity holding Common Shares of
the Company for or pursuant to the terms of any such plan or related
trust.
(l) "Final Expiration Date" is defined in Section 7.
(m) "Person" means any individual, firm, corporation, limited
liability company, partnership or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(n) "Preferred Shares" means the Series E Junior Participating
Preferred Stock, par value $.001, of the Company having the rights,
preferences and limitations thereof set forth in the Form of Certificate
of Designation attached to this Agreement as Exhibit A.
(o) "Purchase Price" is defined in Section 4.
(p) "Record Date" means the Close of Business on July 13, 1998.
(q) "Redemption Date" is defined in Section 7
(r) "Redemption Price" is defined in Section 23.
(s) "Right Certificate" is defined in Section 3(a).
(t) "Rights Agent" means American Stock Transfer & Trust
Company, a New York corporation.
(u) "SEC" means the Securities and Exchange Commission.
(v) "Securities Act" means the Securities Act of 1933, as
amended.
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(w) "Shares Acquisition Date" means the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a filing with the SEC pursuant to Section 13(d) or
13(g) under the Exchange Act) by the Company or an Acquiring Person (or
any Affiliate or Associate of such Acquiring Person) that an Acquiring
Person has become such.
(x) "Subsidiary" of any Person means any corporation or other
entity of which a majority of either the voting power of the voting
equity securities or the equity interest is owned, directly or
indirectly, by such Person.
(y) "Summary of Rights" is defined in Section 3(b).
(z) The term "Trading Day" means a day on which the principal
national securities exchange on which the Common Shares are listed or
admitted to trading is open for the transaction of business or, if the
Common Shares are not listed or admitted to trading on any national
securities exchange, a day on which the Common Shares are quoted on the
Nasdaq Stock Market ("Nasdaq") or such other system then in use or, if
the Common Shares are not quoted by any such system, a Business Day.
(y) "Triggering Event" means any event described in Section
11(a)(ii) or Section 13(a) of this Agreement.
Any determination or interpretation required in connection with any of the
definitions contained in this Section 1 shall be made by the Board of Directors
in its good faith judgment, which determination shall be final and binding.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares of 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, the respective duties of which shall be determined by
the Company.
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Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the Close of Business on the tenth
day after the Shares Acquisition Date or (ii) the Close of Business on
the tenth Business Day (or such later date as may be determined by
action of the Board of Directors taken before any Person becomes an
Acquiring Person) after the date of the commencement of, or the first
public announcement of the intent to commence, a tender or exchange
offer by any Person (other than any Exempt Person), the consummation of
which would result in any Person becoming an Acquiring Person (including
with respect to both clauses (i) and (ii) any such date which is after
the date of this Agreement and prior to the issuance of the Rights; the
Close of Business on the earlier of such dates being herein referred to
as the "Distribution Date"), (x) the Rights will be evidenced (subject
to the provisions of paragraph (b) of this Section 3) by the
certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the Rights
will be transferable only in connection with and will be transferred by
the transfer of 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 by the Company, send) by
first-class, postage prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right for each Common Share so held,
subject to adjustment as provided in this Agreement. As of and after the
Close of Business on the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) On the Record Date or as soon as practicable thereafter, the
Company will send a copy of a Summary of Stockholder Rights Agreement,
in substantially the form attached hereto as Exhibit C (the "Summary of
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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 for Common Shares registered in the names of the holders
thereof together with a copy of the Summary of Rights. Until the Close
of Business on the Distribution Date (or, if earlier than the
Distribution Date, 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, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(c) Certificates issued for Common Shares (including, without
limitation, certificates issued in respect of reacquired Common Shares
referred to in the last sentence of this paragraph (c)) after the Record
Date but prior to the earliest of the Distribution Date, the Redemption
Date or the Final Expiration Date shall have impressed on, printed on,
written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between
LaserSight Incorporated, a Delaware corporation (the "Company"),
and American Stock Transfer & Trust Company, a New York
corporation (the "Rights Agent"), dated as of July 2, 1998 (the
"Rights Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such rights
will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor.
Under certain circumstances set forth in the Rights Agreement,
Rights held by a Person who is or becomes an Acquiring Person or
any Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement) and certain transferees thereof, whether
currently held by or on behalf of such person or by any
subsequent holder, shall become null and void.
With respect to such certificates containing the foregoing legend, until
the earlier of (i) the Distribution Date or (ii) the Final Expiration
Date, the Rights associated with the Common Shares represented by such
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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. If the Company purchases or otherwise acquires any Common
Shares after the Record Date but before the Distribution Date, any
Rights associated with such Common Shares shall be deemed cancelled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares 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
provisions of Section 22 hereof, the Right 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 number and
type of securities purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President, any of its Vice
Presidents or its Treasurer, either manually or by facsimile signature,
and have affixed thereto the Company's seal or a facsimile thereof, and
shall be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The Right
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Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. If any
officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned by
the Rights Agent and issued and delivered by the Company with the same
force and effect as though the Person who signed such Right Certificates
had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any Person who, at
the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although
at the date of the execution of this Rights Agreement any such Person
was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at an office or agency designated for such purpose,
books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 11(a)(iii) and Section
14 of this Agreement, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Certificates (other than Right Certificates representing
Rights that have been exchanged pursuant to Section 24 of this
Agreement) may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one one-thousandths of a
Preferred Share (or, following the occurrence of a Triggering Event,
Common Shares, and/or other securities, cash or other property, as the
case may be) as the Right Certificate or Right Certificates surrendered
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then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates
to be transferred, split up, combined or exchanged at the office or
agency of the Rights Agent designated for such purpose. Notwithstanding
anything in this Agreement to the contrary, 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 countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates, as
the case may be, as so requested. The Company may require payment of a
sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them,
and, at the Company's request, reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate
if mutilated, the Company will make and deliver a new Right Certificate
of like tenor to the Rights Agent for delivery to the registered holder
in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to the provisions of Section 11(a)(iii) of this
Agreement, the registered holder of any Right Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein) in
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whole or in part at any time after the Distribution Date upon surrender
of the Right Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights
Agent at the office or agency of the Rights Agent designated for such
purpose, together with payment of the Purchase Price for each one
one-thousandth of a Preferred Share (or, following the occurrence of a
Triggering Event, Common Shares and/or other securities, cash or other
property, as the case may be) as to which the Rights are exercised, at
or prior to the earlier of the Close of Business on (i) July 2, 2008
(the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 of this Agreement (the "Redemption
Date"), or (iii) the time at which such Rights are exchanged as provided
in Section 24 of this Agreement.
(b) The Purchase Price for each one one-thousandth of a
Preferred Share purchasable pursuant to the exercise of a Right shall
initially be $20.00 shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in lawful
money of the United States of America in accordance with paragraph (c)
of this Section 7.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied
by payment of the Purchase Price for the shares (or, following the
occurrence of a Triggering Event, Common Shares and/or other securities,
cash or other property, as the case may be) to be purchased and an
amount equal to any applicable transfer tax required to be paid by the
holder of such Right Certificate in accordance with Section 9 hereof by
certified check, cashier's check or money order payable to the order of
the Company, the Rights Agent shall thereupon promptly (i) requisition
from any transfer agent of the Preferred Shares (or make available, if
the Rights Agent is the transfer agent) 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, (ii) if
the Company shall have elected to deposit the Preferred Shares issuable
upon exercise of the Rights with a depositary agent, requisition from
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the depositary agent depositary receipts 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, (iii) when appropriate, requisition from the Company the amount
of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iv) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to
or upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder and
(v) when appropriate, after receipt, promptly deliver such cash to or
upon the order of the registered holder of such Right Certificate. If
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) of this Agreement, 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) If the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder
of such Right Certificate or to his duly authorized assigns, subject to
the provisions of Sections 11(a)(iii) and 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7
until the registered holder shall have completed and signed the
certificate contained in the form of election to purchase on the reverse
side of the Rights Certificate surrendered for such exercise and the
Company shall have been 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.
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Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares. The Company will
cause to be reserved and kept available for the exercise of Rights, out of its
authorized but unissued Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) or any Preferred Shares
(and, following the occurrence of a Triggering Event, Common Shares and/or other
securities) held in its treasury, such number of Preferred Shares (and,
following the occurrence of a Triggering Event, Common Shares and/or other
securities) as will be sufficient to permit the exercise in full of all
outstanding Rights.
So long as any securities purchasable upon the exercise of Rights are
listed on any 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 such exchange or approved for
listing on such exchange upon official notice of issuance.
The Company shall use its best efforts to (i) file, as soon as
practicable after the occurrence of a Triggering Event pursuant to Section
11(a)(ii) for which the consideration to be delivered by the Company upon the
exercise of the Rights has been determined in accordance with Section 11(a)(iv)
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hereof, or as soon as required by law following the Distribution Date, a
registration statement on an appropriate form under the Securities 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 Securities Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable or (B) the Final Expiration Date. The Company will also take such
action as may be appropriate under, or to ensure compliance with, the securities
or "blue sky" laws of the various states in connection with the exercise of the
Rights. The Company may temporarily suspend, for a period of time not to exceed
120 days after the Distribution Date, the exercisability of the Rights in order
to prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite registration or qualification in such jurisdiction shall have been
obtained.
The Company 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, 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 payment of the Purchase Price, be
duly and validly authorized and issued and fully paid and non-assessable.
The Company will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any Preferred Shares (or Common Shares
and/or other securities, as the case may be) upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Right Certificates to a Person
other than, or the issuance or delivery of certificates or depositary receipts
for the Preferred Shares (or Common Shares and/or other securities, as the case
15
may be) in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise, or to issue or deliver
any certificates or depositary receipts for Preferred Shares (or Common Shares
and/or other securities, as the case may be) upon the exercise of any Rights
until any such tax shall have been paid (any such tax being payable by the
holder of such Right Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each Person in whose name any
certificate for Preferred Shares (or Common Shares and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the 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 Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Shares (or
Common Shares and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares or securities on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares (or Common Shares and/or
other securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a holder of Preferred Shares
(or Common Shares and/or other securities, as the case may be) for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred Shares purchasable upon the
exercise of each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
16
(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, or in securities convertible
into, or exercisable for, 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), then the Purchase Price in
effect immediately prior to 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 then issuable upon the exercise of a
Right 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 (or
securities convertible into, or exercisable for, capital stock)
which, if such Right had been exercised immediately prior to
such time 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
that would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) of this Agreement, the adjustment
provided for in this Section 11(a)(i) shall be in addition to,
and shall be made before, any adjustment required pursuant to
Section 11(a)(ii) of this Agreement.
(ii) Subject to Section 24 of this Agreement, if any
Person, either alone or together with its Affiliates and
17
Associates, shall become an Acquiring Person, then each holder
of a Right (except as provided below) shall thereafter have a
right to receive, upon exercise thereof and in lieu of Preferred
Shares, 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, 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) of this Agreement)
on the date of the occurrence of such event. 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.
(iii) Notwithstanding any other provisions of this
Agreement to the contrary, from and after the occurrence of a
Triggering Event, any Rights that are beneficially owned by (A)
an Acquiring Person or any Associate or Affiliate of an
Acquiring Person, (B) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (C) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
became a transferee prior to or concurrently with the Acquiring
Person becoming such and received such Rights pursuant to either
(x) a transfer (whether or not for consideration) from the
Acquiring Person (or of any such Associate or Affiliate) to
holders of equity interests in such Acquiring Person (or of any
such Associate or Affiliate) or to any Person with whom the
Acquiring Person (or of any such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (y) a transfer which the Board of
Directors has reasonably determined is part of a plan,
18
arrangement or understanding which has as a primary purpose or
effect the avoidance of this Section 11(a)(iii), shall become
null and void without any further action and no holder of such
Rights shall thereafter have any right to exercise such Rights
under any provision of this Agreement. No Right Certificate
shall be issued at any time upon the transfer of any Rights to
any Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate thereof or to any nominee
of such Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to any
Person whose Rights would be void pursuant to the preceding
sentence shall be cancelled.
The Company may require (or cause the Rights Agent to
require) any Person who purports to exercise any Rights to
establish to the reasonable satisfaction of the Company that he,
she or it is not a Person whose Rights would be void pursuant to
the first sentence of the preceding paragraph of this Section
11(a)(iii).
The Company shall use all reasonable efforts to insure
that the provisions of this Section 11(a)(iii) are complied
with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(iv) 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 the foregoing subparagraph (ii), 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
19
Company which otherwise would have been issuable pursuant to
Section 11(a)(ii), which aggregate value shall be determined by
a majority of the Board of Directors. For purposes of the
preceding sentence, the value of the Common Shares shall be
determined pursuant to Section 11(d) hereof and the value of any
equity securities which a majority of the Board of Directors
determines to be a "common stock equivalent" (including the
Preferred Shares, in such ratio as the Board of Directors shall
determine) shall be deemed to have the same value as the Common
Shares. Any such election by the Board of Directors must be made
and publicly announced within 60 days following the date on
which the event described in Section 11(a)(ii) shall have
occurred. Following the occurrence of the event described in
Section 11(a)(ii), a majority of the Board of Directors then in
office may suspend the exercisability of the Rights for a period
of up to 60 days following the date on which the event described
in Section 11(a)(ii) shall have occurred to the extent that such
directors have not determined whether to exercise the Company's
right of election under this Section 11(a)(iv). 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) If 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 preference shares")) or securities convertible into
Preferred Shares or equivalent preference shares (or having a conversion
price per share, if a security convertible into Preferred Shares or
equivalent preference shares) less than the then-current per share
market price of the Preferred Shares (determined pursuant to Section
11(d) of this Agreement) on such record date, the Purchase Price to be
in effect after such record date shall be determined by multiplying the
20
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of Preferred Shares
and equivalent preference shares outstanding on such record date plus
the number of Preferred Shares and equivalent preference shares which
the aggregate offering price of the total number of Preferred Shares
and/or equivalent preference shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to
be offered) would purchase at such current market price and the
denominator of which shall be the number of Preferred Shares and
equivalent preference shares outstanding on such record date plus the
number of additional Preferred Shares and/or equivalent preference
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. If 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 and equivalent preference shares
owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and if
such rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) If 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, assets or shares of capital stock (other than a regular
cash dividend or a dividend payable in Preferred Shares) or subscription
rights or warrants (excluding those referred to in Section 11(b) of this
Agreement), the Purchase Price to be in effect after such record date
21
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 (as defined in Section 11(d) of this Agreement) 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 evidences
of indebtedness, assets or shares of capital stock 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 (as defined in Section 11(d) of this Agreement) 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
issuable upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and if such
distribution is not so made, the Purchase Price shall again be adjusted
to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
under Section 11(a)(iv), the "current per share market price" of any
security (a "Security" for the purpose of this Section 11(d)) on any
date shall be deemed to be the average of the daily closing prices per
share equivalent of such Security for the 30 consecutive Trading Days
immediately prior to such date, and for purposes of Section 11(a)(iv)
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
equivalent of such Security for the 30 consecutive Trading Days
immediately following such date; provided, however, that if the current
per share equivalent market price of the Security is determined with
respect to a date, which date follows the announcement by the issuer of
such Security of (A) a dividend or distribution on such Security payable
in such Security or securities convertible into such Security (other
than the Rights) or (B) any subdivision, combination or reclassification
of such Security, and which date precedes the expiration of 30 Trading
22
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. The closing price for each day shall be the
last sale price, regular way, or, if 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 a Security listed or admitted to
trading on the New York Stock Exchange or, if the Security is not listed
or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
the Security is listed or admitted to trading or, if the Security is not
listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by Nasdaq
or such other system then in use, or, if on any such date the Security
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. If on any
such date no market maker is making a market in the Security, the fair
value of such Security on such date as determined in good faith by the
Board of Directors shall be used. If the Security is not publicly held
or not so listed or traded, "current per share market price" shall mean
the fair value per share equivalent as determined in good faith by the
Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent.
(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) (other than the last sentence thereof). If the
Preferred Shares are not publicly traded, the "current per share
market price" of the Preferred Shares shall be conclusively
23
deemed to be the current per share market price of the Common
Shares as determined pursuant to Section 11(d)(i) (other than
the last sentence thereof) (appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring
after the date hereof), multiplied by one thousand. If neither
the Common Shares 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) Notwithstanding any provision of this Agreement to the
contrary, no adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
such price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the
nearest one ten-millionth of a Preferred Share or one ten-thousandth of
any other share or security as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three years
from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a) or Section 13(a) of this Agreement, the holder of any Right
thereafter exercised shall become entitled to receive any Common Shares
or other securities of the Company other than Preferred Shares,
thereafter the number of such other shares or securities so receivable
upon exercise of any Right shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Shares contained in this
Section 11 and the provisions of Sections 7, 9, 10, 13 and 14 of this
Agreement 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
24
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), upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase
Price, that number of one one-thousandths of a Preferred Share
(calculated to the nearest one ten-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.
25
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price as a result of the calculations made in Section
11(b) and (c) to adjust the number of Rights, in substitution for any
adjustment pursuant to Section 11(h), 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 one hundred-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to adjustment
of the Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any day thereafter, but, if the
Right Certificates have been issued, shall be at least 10 days later
than the date of the public announcement. If Right Certificates have
been issued, upon each adjustment of the number of Rights pursuant to
this Section 11(i), the Company shall, as promptly as practicable, cause
to be distributed to holders of record of Right Certificates on such
record date Right Certificates evidencing, subject to Section 14 of this
Agreement, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right Certificates so
to be distributed shall be issued, executed and countersigned in the
manner provided for herein (and may bear, at the option of the Company,
the adjusted Purchase Price) and shall be registered in the names of the
26
holders of record of Right Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a Preferred Share issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the
number of one one-thousandths of a Preferred Share which were expressed
in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the
Preferred Shares or other shares of capital stock 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 non-assessable Preferred Shares
or other such 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) After the earlier of the time that any Person becomes an
Acquiring Person and the Distribution Date, the Company will not, except
as permitted by Sections 23, 24 and 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
27
(n) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any consolidation or subdivision
of the Preferred Shares, issuance wholly for cash of any Preferred
Shares at less than the current market price, issuance wholly for cash
of Preferred Shares or securities which by their terms are convertible
into or exchangeable for Preferred Shares, dividends on Preferred Shares
payable in Preferred Shares or issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
(o) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i)
declare or pay any dividend on the Common Shares payable in Common
Shares or (ii) effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by payment of
dividends in Common Shares) into a greater or lesser number of Common
Shares, then in any such case (A) 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 (B) 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(o)
shall be made successively whenever such a dividend is declared or paid
or such a subdivision, combination or consolidation is effected.
28
Section 12. Certificate of Adjusted Purchase Price or Number of.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Shares or
the Preferred Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right in accordance with Section 25 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and
shall not be deemed to have knowledge of any such adjustment unless and until it
shall have received such certificate.
Section 13. Consolidation, Merger, Sale or Transfer of Assets or
Earning.
(a) If, directly or indirectly, at any time after the time that
any Person becomes an Acquiring Person, (i) the Company shall
consolidate with, or merge with and into, any other Person, (ii) any
Person shall consolidate with the Company, or merge with and into the
Company and the Company shall be the continuing or surviving corporation
of such merger and, in connection with such merger, all or part of the
Common Shares of the Company shall be changed into or exchanged for
stock or other securities of any other Person (or of the Company) or
cash or any other property, or (iii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company or one or more of its wholly-owned Subsidiaries), then,
and in each such case, proper provision shall be made so that (A) each
holder of a Right (except any Person whose Rights shall have become void
pursuant to Section 11(a)(iii) of this Agreement) 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
29
paid, non-assessable and freely tradeable Common Shares of the Principal
Party (as hereinafter defined), free and clear of all liens, rights of
call or first refusal, encumbrances or other adverse claims, as shall be
equal to the result obtained by (x) multiplying the then-current
Purchase Price by the number of one one-thousandths of a Preferred Share
for which a Right was exercisable immediately prior to the time that any
Person became an Acquiring Person and dividing that product by (y) 50%
of the current per share market price of the Common Shares of such
Principal Party (determined pursuant to Section 11(d) hereof) on the
date of consummation of such consolidation, merger, sale or transfer;
(B) the issuer of such Common Shares shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or transfer,
all the obligations and duties of the Company pursuant to this
Agreement; (C) the term "Company" shall thereafter be deemed to refer to
such issuer; and (D) such issuer 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. The provisions of this Section 13 shall similarly apply
to successive mergers or consolidations or sales or other transfers.
(b) The Company shall not enter into any transaction of the kind
listed in Section 13(a) 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 substantially diminish or eliminate the benefits
intended to be afforded by the Rights.
30
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and such
issuer shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger, sale or
transfer mentioned in paragraph (a) of this Section 13, such issuer
will:
(i) prepare and file a registration statement on an
appropriate form under the Securities Act, with respect to the
Rights and the securities purchasable upon exercise of the
Rights, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the
Expiration Date;
(ii) deliver to holders of the Rights historical
financial statements for such issuer 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.
(d) "Principal Party" means:
(i) in the case of any transaction described in clauses
(i) or (ii) of the first sentence of Section 13(a), the Person
that is the issuer of any securities into which Common Shares of
the Company are converted in such merger or consolidation, and
if no securities are so issued, the Person that is the surviving
entity of such merger or consolidation (including the Company if
applicable); and
(ii) in the case of any transaction described in clause
(iii) of the first sentence of Section 13(a), the Person that is
the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions;
31
provided, however, that in any such case described in clauses (d)(i) or (d)(ii)
of this Section 13: (x) 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; (y) 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
Common Shares having the greatest aggregate market value; and (z) 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 (x) and (y) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such Person 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.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there may be paid to the
registered holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, if no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the
New York Stock Exchange or, if the Rights are not listed or admitted to
32
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Rights
are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by Nasdaq or such
other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors. 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 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 may pay to the
registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Preferred Share. For
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 Section 11(d) hereof) for the Trading Day immediately prior
to the date of such exercise.
33
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of Common Shares upon exercise
of the Rights or to distribute certificates which evidence fractional
Common Shares. In lieu of fractional Common Shares, the Company may pay
the registered holders of Right Certificates at the time such Rights are
exercised as provided herein an amount in cash equal to the same
fraction of the current market value of one Common Share. For purposes
of this Section 14(c), the current market value of one Common Share
shall be the closing price of one Common Share (as determined pursuant
to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, and may otherwise act in respect of, his right
to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
34
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office or agency of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use its best efforts to
have any such injunction, order, decree or ruling lifted or otherwise
overturned as soon as possible.
35
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a 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 of this Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance with
the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, 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 in the premises.
The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, 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 its counsel as set forth in
Section 20 hereof.
36
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust or
stock transfer powers 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. If at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and if at that time any of the Right Certificates
shall not have been countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
If at any time the name of the Rights Agent shall be changed and at such
time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and if at that time any of the
Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be
37
full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with
such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking
or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed
by any one of the Chairman of the Board, the Chief Executive Officer,
the President, a 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 Right Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except
its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for
any changes in the exercisability of the Rights (including the Rights
becoming void pursuant to Section 11(a)(iii) of this Agreement) or any
adjustments in the terms of the Rights (including the manner, method or
38
amount thereof) provided for in Sections 3, 11, 13, 23 or 24 of this
Agreement or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after 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 to be issued
pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares will, when issued, be validly authorized and issued,
fully paid and non-assessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of this
Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from any one of the Chairman of the Board, the Chief Executive Officer,
the President, a 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 to be taken 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
39
shall not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued
employment thereof.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be,
has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise of transfer without first
consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this 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 registered holders of the Right Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed 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 registered holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States or of the States of Delaware, Florida or New York (or of any other
40
state of the United States so long as such corporation is authorized to do
business as a banking institution in the States of Delaware, Florida or New
York), in good standing, having an office in the States of Delaware, Florida or
New York, which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million or (b) an affiliate of a
corporation described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares or Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by the Board of Directors to reflect any adjustment or change
in the Purchase Price per share and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
41
Section 23. Redemption.
(a) 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 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 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. 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.
(b) Subject to the last sentence of Section 23(a) of this
Agreement, immediately upon the action of the Board of Directors
ordering the redemption of the Rights pursuant to Section 23(a) (or at
such later time as the Board of Directors may establish for the
effectiveness of such redemption), 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 the action of the Board of Directors
ordering the redemption of the Rights or the effectiveness of the
redemption of the Rights pursuant to Section 23(a), as the case may be,
the Company shall mail a notice of such 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
42
of redemption will state the method by which the payment of the
Redemption Price will be made. Except in connection with the purchase of
Common Shares prior to the Distribution Date, 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 of this Agreement.
Section 24. Exchange.
(a) The Board of Directors may, at its option, at any time after
the occurrence of a Triggering Event, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 11(a)(iii) of
this Agreement) for Common Shares at an exchange ratio of one Common
Share per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date of this
Agreement (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after any
Person (other an Exempt Person) 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) and
without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of
such Rights shall be to receive that number of Common Shares equal to
the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice 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
43
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)(iii) of this Agreement) 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 preference
shares, as such term is defined in Section 11(b) hereof) or any other
equity securities which a majority of the Board of Directors determines
to be a Common Share equivalent, for Common Shares exchangeable for
Rights, at the initial rate of one one-thousandth of a Preferred Share
(or equivalent preference share or other equity security determined to
be a Common Share equivalent) 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) If there shall not be sufficient Common Shares or Preferred
Shares issued but not outstanding or authorized but unissued to permit
any exchange of Rights as contemplated in accordance with this Section
24, the Company shall take all such action as may be necessary to
authorize additional Common Shares or Preferred Shares for issuance upon
exchange of the Rights.
(e) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional
Common Shares upon any exchange of Rights. In lieu of such fractional
Common Shares, the Company shall pay to the registered holders of the
Right Certificates with regard to which such fractional Common Shares
would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of
this paragraph (e), the current market value of a whole Common Share
shall be the closing price of a Common Share (as determined pursuant to
44
the second sentence of Section 11(d)(i) of this Agreement) for the
Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events.
(a) If the Company shall propose at any time after the
Distribution Date (i) to declare 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 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 any class or any other securities, rights
or options, (iii) to effect any reclassification of its Preferred Shares
(other than a reclassification involving only the subdivision of
outstanding Preferred Shares), (iv) to effect any consolidation or
merger into or with, or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to,
any other Person, (v) to effect the liquidation, dissolution or winding
up of the Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination
or consolidation of the Common Shares (by reclassification or otherwise
than by payment of dividends in Common Shares), then, in each such case,
the Company shall give to each holder of a Right Certificate, in
accordance with Section 26 of this Agreement, a notice of such proposed
action, which shall specify the record date for the purposes of such
stock dividend, or distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares and/or
Preferred Shares, if any such date is to be fixed, and such notice shall
be so given in the case of any action covered by clause (i) or (ii)
above at least 20 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 20 days prior to the date of the taking
of such proposed action or the date of participation therein by the
45
holders of the Common Shares and/or Preferred Shares, whichever shall be
the earlier. Failure to give any notice provided for in this Section 25,
however, or any defect therein, shall not affect the legality or
validity of any such action taken by the Company.
(b) If any of the events set forth in Section 11(a)(ii) or
Section 13(a) of this Agreement shall occur, then, in any such case, the
Company shall as soon as practicable thereafter give to each holder of a
Right Certificate, in accordance with Section 26 of this Agreement, a
notice of the occurrence of such event, which shall specify the event
and the consequences of the event to holders of Rights under Section
11(a)(ii) or Section 13(a) of this Agreement.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
LaserSight Incorporated
0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21 of this Agreement, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Executive Vice President
46
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments.
(a) The Company may from time to time supplement or amend this
Agreement without the approval of the Rights Agent, any holders of
Common Shares or any holders of Right Certificates in order to cure any
ambiguity, to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, or to
make any other provisions with respect to the Rights which the Company
may deem necessary or desirable; provided, however, (i) that no such
amendment or supplement shall be effected without the written consent of
the Rights Agent if it would adversely affect any right or create any
additional obligation of the Rights Agent under this Agreement and (ii)
that from and after such time as any Person becomes an Acquiring Person,
this Agreement shall not be amended (A) so as to make the Rights
redeemable if the Rights are not then redeemable in accordance with
Section 23(a) of this Agreement or (b) in any manner which would
adversely affect the interests of the holders of Rights (other than
holders of Rights which have become void pursuant to Section 11(a)(iii)
of this Agreement).
(b) To effect any amendment or supplement pursuant to this
Section 27, the Company shall deliver to the Rights Agent a copy,
certified by the Secretary or any Assistant Secretary of the Company, of
resolutions of the Board of Directors adopting such amendment or
supplement. Upon such delivery, the amendment or supplement shall be
deemed effective and shall be administered by the Rights Agent as part
of this Agreement in accordance with its terms.
47
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors. 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 (a) interpret the provisions of this Agreement, and (b) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purpose 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 Right Certificates and all other interested
parties, and (y) not subject the Board of Directors to any liability to the
holders of the Right Certificates.
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 the Right Certificates (and, prior to the Distribution
Date, the Common Shares) (and, after the Distribution Date, also the holders of
(i) securities of the Company or any of its Subsidiaries convertible into Common
Shares and (ii) any options, warrants or other rights to purchase Common Shares,
which convertible securities, options, warrants or other rights were outstanding
on the Distribution Date) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) (and,
after the Distribution Date, also any holder of any such convertible securities,
options, warrants or other rights).
48
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 Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
[This space intentionally left blank.]
49
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
LASERSIGHT INCORPORATED
Attest:
By /s/ Xxxxxxx X. Xxxxxx By /s/ Xxxxxxx X. Xxxxxx
---------------------------- -------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Secretary Title: President & CEO
AMERICAN STOCK TRANSFER & TRUST
COMPANY
Attest:
By /s/ Xxxxx Xxxxxx By /s/ Xxxxxxx X. Xxxxxx
--------------------------- -------------------------
Name: Xxxxx Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary Title: Vice President
50
Exhibit A
FORM
OF
CERTIFICATE OF DESIGNATION
OF
SERIES E JUNIOR PARTICIPATING PREFERRED STOCK
OF
LASERSIGHT INCORPORATED
(Pursuant to Section 151 of the
Delaware General Corporation Law)
-----------------------------
LaserSight Incorporated, 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 2, 1998:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of the Company (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Restated
Certificate of Incorporation, as amended to date (hereinafter called the
"Certificate of Incorporation"), the Board of Directors hereby creates a series
of Preferred Stock, par value $.001 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:
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 be 500,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series 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 issued by the Company
convertible into Series E Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock, par value $.001 per share (the "Preferred
Stock"), of the Company or 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 $.001 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 funds legally available for the purpose, quarterly
dividends payable in cash on the first day of January, April, July and
October in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of
a share of Series E Preferred Stock, in an amount per share (rounded to
the nearest cent) equal to the greater of (a) $1 or (b) subject to the
provision for adjustment hereinafter set forth, 1,000 times the
aggregate per share amount of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock since
the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series E Preferred
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 amount to which
holders of shares of Series E Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
(B) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series E Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date for
the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares,
or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares of
Series E Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series E Preferred Stock
in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of
holders of shares of Series E Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Series E
Preferred Stock shall have the following voting rights:
2
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series E Preferred Stock shall entitle the holder
thereof to 1,000 votes on all matters submitted to a vote of the
stockholders of the Company. 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
number of votes per share to which holders of shares of Series E
Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Certificate of Designation creating a series of Preferred Stock or
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
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. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series E Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of
Series E Preferred Stock outstanding shall have been paid in full, the
Company shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to
the Series E Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series E Preferred Stock, except dividends
paid ratably on the Series E Preferred Stock and all such parity
stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are
then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series E Preferred Stock, provided that the Company may at any
time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of any stock of the Company
ranking junior (as to dividends or upon dissolution, liquidation
and winding up) to the Series E Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series E Preferred Stock, or any
shares of stock ranking on a parity (either as to dividends or
3
upon liquidation, dissolution or winding up) with the Series E
Preferred Stock, except in accordance with a purchase offer made
in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith
will result in fair and equitable treatment among the respective
series or classes.
(B) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock
of the Company unless the Company could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series E Preferred
Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designation
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (A) to 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 $1,000 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, provided that the holders of shares of Series E Preferred Stock
shall be entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 1,000 times the
aggregate amount to be distributed per share to holders of shares of Common
Stock, or (B) to the holders of shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series E
Preferred Stock, except distributions made ratably on the Series E Preferred
Stock and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up. 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 (A) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 7. Consolidation, Merger, etc. In case the 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 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Company shall at any time declare or pay any dividend on the
4
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series 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 8. No Redemption. The shares of Series E Preferred Stock
shall not be redeemable.
Section 9. 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 Preferred Stock.
Section 10. Amendment. If any proposed amendment to the
Certificate of Incorporation would materially alter or change the preferences,
special rights or powers given to the Series E Preferred Stock so as to affect
the Series E Preferred Stock adversely, then the holders of the Series E
Preferred Stock shall be entitled to vote as a series upon such amendment, and
the affirmative vote of two-thirds of the outstanding shares of Series E
Preferred Stock shall be necessary to the adoption thereof, in addition to such
other vote as may be required by the General Corporation Law of the State of
Delaware.
Section 11. Fractional Shares. Fractional shares of Series E
Preferred Stock may be issued, but, unless the Board of Directors of the Company
shall otherwise determine, only in multiples of one one-thousandth of a share.
The holder of any fractional share of Series E Preferred Stock shall be entitled
to receive dividends, participate in distributions, exercise voting rights and
have the benefit of all other powers, preferences and rights relating to the
Series E Preferred Stock in the same proportion as such fractional share bears
to a whole share of Series E Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designation is executed
on behalf of the Company by its Chairman of the Board of Directors and attested
by its Secretary this 2nd day of July, 1998.
----------------------------------
Chairman of the Board of Directors
Attest:
Secretary
5
Exhibit B
[Form of Right Certificate]
Certificate No. R- Rights
NOT EXERCISABLE AFTER JULY 2, 2008 OR EARLIER IF REDEEMED OR EXCHANGED
IN ACCORDANCE WITH THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS HELD BY A PERSON
WHO IS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE
THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF, WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH
PERSON OR BY ANY SUBSEQUENT HOLDER, SHALL BECOME NULL AND VOID.
Right Certificate
LASERSIGHT INCORPORATED
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 2, 1998 (the "Rights Agreement") between LaserSight
Incorporated, a Delaware corporation (the "Company"), and American Stock
Transfer & Trust Company, a New York corporation (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement), and prior to 5:00 p.m., New York time, on
July 2, 2008 at the office or agency of the Rights Agent designated for such
purpose, or of its successor as Rights Agent, one one-thousandth of a fully paid
non-assessable share of Series E Junior Participating Preferred Stock, par value
$.001 per share (a "Preferred Share"), of the Company, at a purchase price of
$20.00 per one one-thousandth of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-thousandths of a Preferred Share which
may be purchased upon exercise thereof) set forth above, and the Purchase Price
per share set forth above, are the number and Purchase Price as of July 2, 1998,
based on the Preferred Shares as constituted at such date, and are subject to
adjustment as provided in the Rights Agreement.
Upon the occurrence of a Triggering Event, if the Rights evidenced by
this Right Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement), (ii) a transferee from an Acquiring Person or an Affiliate or
Associate of an Acquiring Person who becomes a transferee after the Acquiring
Person becomes such, or (iii) under certain circumstances specified in the
Rights Agreement, a transferee from an Acquiring Person or an Affiliate or
Associate of an Acquiring Person who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such, such Rights shall become
null and void and no holder thereof shall have any right with respect to such
Rights from and after the occurrence of any such Triggering Event.
As provided in the Rights Agreement, the Purchase Price and the number
of one one-thousandths of a Preferred Share which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, as the same may be amended from time to
time, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Right Certificates. Copies of the Rights Agreement are on
file at the principal executive offices of the Company and the above-mentioned
office or agency of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or agency of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Preferred Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Right Certificate (i) may be redeemed by the Company at its option at a
redemption price of $.01 per Right, (ii) entitle the holder to purchase the
number of Common Shares and/or, under certain circumstances, the number of
Preferred Shares, cash, other property or other securities with a value of twice
the exercise price, or (iii) may be exchanged, in whole or in part, by the
Company at its option for the number of Preferred Shares, Common Shares or other
securities with a market value equal to 50% of fair market value.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, 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 otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
2
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of
ATTEST: LASERSIGHT INCORPORATED
By
Secretary Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
By
Authorized Signature
3
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise Rights represented by the Right Certificate.)
To LASERSIGHT INCORPORATED:
The undersigned hereby irrevocably elects to exercise ________ Rights
represented by this Right 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 exercise of the Rights) and requests
that certificates for such securities be issued in the name of and delivered to:
Please insert Social Security
or other identifying number
-----------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert Social Security
or other identifying number
-----------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------------
Dated:
Signature
Signature Guaranteed:
(Signature must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.)
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are/ [ ] are not
being exercised by or on behalf of a person who is, was or became an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did/ [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate thereof.
Signature
Signature Guaranteed:
(Signature must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.)
2
[Form of Reverse Side of Right Certificate--continued]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto (Please print name
and address of transferee) this Right Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated:
Signature
Signature Guaranteed:
(Signature must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.)
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Right Certificate [ ] is/ [ ] is not being sold, assigned or
transferred by or on behalf of a Person who is, was or became an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did/ [ ] did not purchase or otherwise acquire the Rights
evidenced by this Right Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate thereof.
Signature
Signature Guaranteed:
(Signature must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.)
NOTICE
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Each signature to the foregoing Form of Assignment, the Form of Election
to Purchase, and the related Certificates, as the case may be, must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
If the Certificate set forth above in the Form of Assignment or the Form
of Election to Purchase, as the case may be, is not completed and signed, the
Company and the Rights Agent will deem the Rights evidenced by this Right
Certificate to be void as provided in Section 11(a)(iii) of the Rights Agreement
and such Form of Assignment or Form of Election to Purchase will not be honored.
Exhibit C
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
HELD BY A PERSON WHO IS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE
OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
AND CERTAIN TRANSFEREES THEREOF, WHETHER CURRENTLY HELD BY OR ON BEHALF
OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, SHALL BECOME NULL AND VOID.
LASERSIGHT INCORPORATED
SUMMARY OF STOCKHOLDER RIGHTS AGREEMENT
Background. On July 2, 1998, the Board of Directors of LaserSight
Incorporated, a Delaware corporation (the "Company"), declared a dividend of one
preferred share purchase right ("Right") on each outstanding share of the
Company's common stock, $.001 par value per share (the "Common Shares"), payable
to stockholders of record at the close of business on July 13, 1998 (the "Record
Date"). Except as described below, each Right, when exercisable, entitles the
holder thereof to purchase from the Company one one-thousandth of a share of
Series E Junior Participating Preferred Shares, par value $.001 per share (the
"Preferred Shares"), of the Company at an exercise price of $20.00 per one
one-thousandth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and American Stock Transfer & Trust
Company, a New York corporation, as Rights Agent.
Distribution Date. Until the earlier to occur of (i) 10 days following a
public announcement that a person or group of affiliated or associated persons
has become an "Acquiring Person" (as defined below) or (ii) 10 business days (or
such later date as may be determined by action of the Board of Directors prior
to such time as any person or group 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 a person or group
becoming an Acquiring Person (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced by Common Share certificates.
Acquiring Person. An "Acquiring Person" is a person or group of
affiliated or associated persons who have acquired beneficial ownership of 15%
or more of the outstanding Common Shares, other than the Company, any subsidiary
of the Company, or any employee benefit plan of the Company or its subsidiaries
("Exempt Persons"); provided, however that (i) in no event shall any Exempt
Person be deemed to be an Acquiring Person, (ii) no person shall become an
Acquiring Person as the result of an acquisition of Common Shares by the Company
which increases the proportionate number of shares beneficially owned by such
person and its affiliates and associates to 15% or more of the Common Shares
then outstanding (provided, however, that if such person becomes the beneficial
owner of 15% or more of the Common Shares then outstanding by reason of share
acquisitions by the Company and, after such share acquisitions, (A) acquires
beneficial ownership of an additional number of Common Shares which exceeds the
lesser of 10,000 Common Shares or 0.25% of the then-outstanding Common Shares
and (B) beneficially owns after such acquisition 15% or more of the aggregate
number of Common Shares then outstanding, then such person shall be deemed to be
an Acquiring Person), (iii) no person who, together with its affiliates and
associates, was the beneficial owner of 15% or more of the aggregate number of
Common Shares of the Company outstanding as of 5:00 p.m., New York time, on July
2, 1998 shall be deemed an Acquiring Person (provided, however, that if such
person or any of its affiliates and associates, after 5:00 p.m., New York time,
on July 2, 1998, (A) acquires beneficial ownership of an additional number of
Common Shares which exceeds 2% of the then-outstanding Common Shares and (B)
beneficially owns after such acquisition 15% or more of the aggregate number of
Common Shares of the Company then outstanding, then such person shall be deemed
to be an Acquiring Person), and (iv) if the Board of Directors of the Company
determines in good faith that a person who would otherwise be an Acquiring
Person 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, then such person shall not be deemed to be an
Acquiring Person for any purposes of the Rights Agreement.
Trading of Rights. The Rights Agreement provides that, until the
Distribution Date (or earlier redemption or expiration of the Rights), the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender for transfer of
any certificates for Common Shares 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 ("Right Certificates") will be mailed to holders of record
of the Common Shares as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
Exercisability. The Rights are not exercisable until the Distribution
Date. The Rights will expire on July 2, 2008 (the "Final Expiration Date"),
unless the Rights are earlier redeemed or exchanged by the Company, as described
below.
Exercise Price. The Purchase Price payable, and the number of Preferred
Shares or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion price,
less than the then-current market price of the Preferred Shares or (iii) upon
the distribution to holders of the Preferred Shares of evidences of
indebtedness, assets or capital stock (excluding regular periodic cash dividends
paid out of earnings or retained earnings or dividends payable in Preferred
Shares) or of subscription rights or warrants (other than those referred to
above). 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. The Company will not be required to issue fractional Common
Shares or Preferred Shares (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 may be made based on the market price of the Common Shares or Preferred
Shares on the last trading day prior to the date of exercise.
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Preferred Shares. Because of the nature of the Preferred Shares'
dividend, liquidation and voting rights, the value of the one one-thousandth
interest in a Preferred Share purchasable upon exercise of each Right should
approximate the value of one Common Share. Preferred Shares purchasable upon
exercise of the Rights will not be redeemable. Each Preferred Share will be
entitled to the greater of (1) a preferential quarterly dividend payment of
$1.00 per share, or (2) an aggregate dividend of 1,000 times the dividend
declared per Common Share. In the event of liquidation, the holders of the
Preferred Shares will be entitled to a preferential liquidation payment of
$1,000 per share, plus an amount equal to 1,000 times the aggregate amount to be
distributed per Common Share. Each Preferred Share will have 1,000 votes, voting
together with the Common Shares except as otherwise required by law. Finally, in
the event of any merger, consolidation or other transaction in which Common
Shares are exchanged, each Preferred Share will be entitled to receive 1,000
times the amount received per Common Share. These rights are protected by
customary antidilution provisions.
Flip-In. If any person or group becomes an Acquiring Person, then each
holder of a Right (other than Rights beneficially owned by the Acquiring Person,
any Associate or Affiliate thereof (as such terms are defined in the Rights
Agreement), and certain transferees thereof, which will be void) will have the
right to receive upon exercise of such Right that number of Common Shares (or,
in certain circumstances, cash, property or other securities of the Company)
having a market value of two times the exercise price of the Right.
Flip-Over. If at any time after the time that any person or group
becomes an Acquiring Person, the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated assets or
earning power are sold, proper provision will be made so that each holder of a
Right (other than Rights beneficially owned by the Acquiring Person, any
Associate or Affiliate thereof, and certain transferees thereof, which will be
void) will thereafter have the right to receive, upon the exercise thereof at
the then-current exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction will have a
market value of two times the exercise price of the Right.
Exchange of Rights. At any time after the time that any 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 beneficially owned by such
person or group, any Associate or Affiliate thereof, and certain transferees
thereof, which will be void), in whole or in part, at an exchange ratio of one
Common Share or one one-thousandth of a Preferred Share (or of a share of a
class or series of the Company's preferred stock having equivalent rights,
preferences and privileges) per Right (subject to adjustment).
Redemption of Rights. At any time prior to the time that any person
becomes an Acquiring Person, the Board of Directors of the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per Right, subject to
adjustment (the "Redemption Price"), which may (at the option of the Company) be
paid in cash, Common Shares or other consideration deemed appropriate by the
Board of Directors. 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; provided, however, that no redemption will be
permitted or required after the time that any person becomes an Acquiring
Person. Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of the Rights will be to
receive the Redemption Price.
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Amendment. The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights,
except that from and after such time as any person becomes an Acquiring Person
no such amendment may make the Rights redeemable if the Rights are not then
redeemable in accordance with the terms of the Rights Agreement or may adversely
affect the interests of the holders of the Rights.
No Rights as Stockholder. Until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends.
Rights Agreement Governs. This Summary is subject to all of the terms,
provisions and conditions of the Rights Agreement, as the same may be amended
from time to time, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. 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 July 7, 1998. Copies
of the Rights Agreement are also on file at the principal executive offices of
the Company and the principal office of the Rights Agent.
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